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Operator: Good afternoon, everyone, and welcome to the webcast of Alphatec Holdings, Inc.'s fourth quarter and full year 2025 financial results. We would like to remind everyone that participants on the call will make forward-looking statements. These statements are based on current expectations and are subject to uncertainties that could cause actual results to differ materially. These uncertainties are detailed in documents filed regularly with the SEC. During this call, you may hear the company refer to non-GAAP or adjusted measures. Reconciliations of these measures to U.S. GAAP can be found in the supplemental financial tables included in today's press release, which identify and quantify all excluded items and provide management's view of why this information is useful to investors. Leading today's call will be Alphatec Holdings, Inc.'s Chairman and CEO, Patrick Miles, and CFO, J. Todd Koning. I will now turn the call over to Patrick Miles. Patrick Miles: Thank you much, Tiffany, and welcome, everybody, to the Q4 2025 financial results call. You will realize that there will be some forward-looking statements, so please read this at your leisure. So clearly, some very good things are going on at Alphatec Holdings, Inc., and doing some special things. I would call that uniquely positioned and say uniquely positioned in a market that remains disrupted. I think we are benefiting significantly from a 100% spine focus. I think there is no question about it. We are leading in lateral and advancing it. Clearly more complex things. Deformity leadership is in our midst. EOS Insight is out and available and wreaking havoc, meaning it is providing information. We built an infrastructure for a long run. I would tell you that we have durable and profitable sales growth for as far as the eye can see. And so when we talk about profitable growth, Q4 2025 highlights are $213,000,000 in revenue, which is a 20% revenue growth; 21% surgical revenue growth in Q4; 20% revenue growth in established territories—that is same-store sales; 23% new surgeons; $33,000,000 in adjusted EBITDA; and $8,000,000 in free cash flow. So for the full year, it is $764,000,000, which is $153,000,000 in year-over-year growth, which is fantastic. And congratulations to the Alphatec Holdings, Inc. faithful, which is 25% total revenue growth, which gave us an adjusted EBITDA of $93,000,000, which is 12% of revenue. And we had free cash flow of $3,000,000, improving significantly, I shall say. From a key procedural advancement, we continue to evolve our technology and cannot be more proud of the team. So in 2025, we saw the release of our bone mineral density test out of EOS, a lot of EOS Insight pediatric tools, a lot of work in cervical with regard to the retractor and with regard to the segmental plating system, SPS. We have a full line of 3D-printed implants, which have been released. We have a corpectomy device, which has been released, and a number of different biologics. So I would say a productive year. And with that, I will have Todd review some of the financial metrics. J. Todd Koning: Alright. Well, thank you, Patrick, and good afternoon, everyone. I will begin with fourth-quarter revenue performance. Total revenue in the fourth quarter was $213,000,000, up $36,000,000, 20% year over year, and up $16,000,000 sequentially from the third quarter. Revenue was comprised of $190,000,000 in surgical revenue and $23,000,000 in EOS revenue. Fourth-quarter surgical revenue grew 21% year over year and 7% sequentially, representing $33,000,000 of incremental revenue. Procedural volume growth of 21% was driven by continued surgeon adoption, with net new surgeon users increasing 23% in the quarter. Average revenue per procedure was flat, consistent with expectations. In the U.S., revenue per case increased 1.4%, with lateral and cervical both up 6%, partially offset by procedural mix towards cervical cases. U.S. growth was offset by a 120 basis point mix headwind from the international business, which carries a lower average revenue per case. Same-store sales in the U.S. grew 20% year over year, demonstrating strong growth within the established territories. EOS revenue increased to $23,000,000, up 14% year over year. As we exit 2025 and begin 2026, I have never felt better about the sustainability of our top-line growth. First, we continue to dominate the lateral space with increasing clinical relevance of our integrated ecosystem, supported by disciplined expansion of the sales channel. Not only are we taking share in lateral, more importantly, we are expanding the addressable market as we train and develop more surgeons who previously treated patients primarily from a posterior approach. We see this phenomenon clearly in statistics that track surgeon utilization over time, which I will address later in this presentation. Secondly, 2025 showed burgeoning influence in deformity. Once again, it is our strategy of increasing clinical relevance with an integrated ecosystem that is driving adoption. EOS is the unparalleled gold standard in deformity imaging. The growth in our installed base of EOS Edge systems has given us access to accounts that we previously had no access to. In addition to that, we are seeing implant usage within six months of adoption of EOS Insight grow at almost double our average growth rate. The EOS Insight opportunity is significant, as it is currently installed on only a small percentage of the EOS Edge base. All of this comes together when you see the accelerating momentum in surgeon user growth. The last February 2025 showed the highest level of surgeon growth in the last two years. One consequence of our growth in deformity is that it caused a shift in the seasonality of our business. We have all gotten used to the dramatic sequential increase in the fourth quarter. This year's impact was less pronounced, as both second and third quarters were marked by strong deformity volumes. What initially looks like deceleration is masking underlying momentum. Similarly, year-over-year growth in Q4 was less than year-over-year growth in Q2 and Q3, partially due to the seasonality of the deformity business and partially due to the variation in quarter-by-quarter contribution of commercial expansion in the 2024 comparable year. You can see from the chart on the left that we have grown consistently over time, and the chart on the right shows that our $33,000,000 in surgical revenue dollar growth in Q4 was strong and consistent with our historical contribution. When you step back and look at the annual growth in dollars, it allows you to— Operator: Ladies and gentlemen, this is the operator. I apologize, but there will be a slight delay in today's conference. Please hold, and the call will resume momentarily. Thank you for your patience. Ladies and gentlemen, this is the operator. I apologize for the technical issues. I would now like to turn the call back over to— J. Todd Koning: Well, thank you, Tiffany, and I apologize for the technical issues on the line there. So I will start with the Q4 P&L highlights. Turning to the remainder of the P&L, fourth-quarter non-GAAP gross margin was 70.5%, flat sequentially and up 80 basis points compared to the previous year, driven by mix, product mix, volume leverage, and improving asset efficiency. Non-GAAP R&D was $14,000,000 in the fourth quarter. R&D investment was up year over year by $5,000,000 in absolute dollars, reflecting our continued investment in the long-term growth of the business. Non-GAAP R&D expense was approximately 6.5% of sales in the quarter, with top-line growth driving over 100 basis points of leverage year over year. Non-GAAP SG&A of $118,000,000 was approximately 55% of sales in the fourth quarter. SG&A grew 12% year over year compared to our 20% increase in revenue, which drove over 400 basis points of operating margin expansion. We continue to leverage the company's foundational infrastructure investments and improve our variable selling expense, which accounts for about half of the improvement. The remaining half of the SG&A improvement, or 120 basis points, came from leveraging the depreciation associated with our prior-year instrument investments. We reported total non-GAAP operating expense of $132,000,000, which was approximately 62% of sales. Our operating expense investments reflect continued prioritization of strategic growth initiatives supporting sales expansion and new product development. While our foundational infrastructure is in place, we continue to expand the sales force, build out procedural solutions, and integrate technology, data, and information into the operating room experience. The operating leverage we are seeing reflects structural improvements in variable costs and the scalability of the infrastructure we have built. I will turn next to adjusted EBITDA, which grew by 61% year over year to $33,000,000, delivering nearly 400 basis points of improvement compared to the prior-year period. The drop-through on the year-over-year revenue growth to adjusted EBITDA in the quarter was 35% as we lapped the impact of the cost rationalization actions we took early in 2024. We are driving meaningful margin expansion that aligns with the priorities outlined in our long-range plan and is a result of disciplined execution. Our fourth-quarter exit rate of 16% adjusted EBITDA margin reinforces confidence in our 2026 guidance and long-range plan commitments. I will turn next to full-year 2025 results. Total revenue was $764,000,000, up 25% compared to the prior year. The $764,000,000 in revenue was comprised of $687,000,000 in surgical revenue and $77,000,000 in EOS revenue. Surgical revenue grew 26% compared to 2024, driven by procedural volume growth of 22% and average revenue per procedure growth of 3%. EOS revenue was $77,000,000, up 15% year over year. Non-GAAP gross margin was 70.2%, flat compared to the prior year, driven by volume leverage and asset efficiency. Non-GAAP R&D for the full year was $57,000,000 and approximately 7% of sales, an improvement of 140 basis points compared to the prior year. Non-GAAP SG&A was $449,000,000 and approximately 59% of sales, an improvement of 790 basis points compared to the prior year. 2025 adjusted EBITDA was $93,000,000 and approximately 12% of sales, a year-over-year improvement of $63,000,000 and 720 basis points compared to 2024. The drivers of leverage improvement for the full year were consistent with those that we saw in the fourth quarter. Drop-through of incremental revenue dollars to total adjusted EBITDA was 41% for the full year, up significantly from the 31% in 2024. While investing for future growth, we delivered industry-leading revenue growth and significant margin expansion at scale. We are becoming the company we set out to build. Now turning to the balance sheet. We ended the fourth quarter with $161,000,000 in cash on hand. Additionally, we had access to $60,000,000 of available borrowing on a revolving credit line, which was undrawn at the quarter end, making our total cash and available cash $221,000,000. Our positive free cash flow of $8,000,000 in the quarter was again at the favorable end of the $6,000,000 to $8,000,000 range we previously communicated. We generated $21,000,000 of cash from operating activities while continuing to invest in surgical instruments. Free cash flow for the full year was $3,000,000. The company generated $45,000,000 in cash from operating activities during this year while investing $42,000,000 back into the business to fuel growth. 2025 marks our first full year of free cash flow, representing a clear transition to a business that generates cash. We enter 2026 with a strong cash position and the ability to self-fund growth while continuing to strengthen the balance sheet. Next, I will provide detail on full-year 2026 outlook. Continued adoption of our procedural approach is expected to drive revenue growth of 17% to approximately $890,000,000, consistent with the outlook shared in the January preannouncement. This includes surgical revenue of approximately $805,000,000, supported by mid-teens volume growth and low single-digit revenue per surgery growth, and EOS revenue of approximately $85,000,000. This next slide provides context on how our revenue growth algorithm will continue to drive growth in 2026 and beyond. I will begin with surgeon adoption, which is fueled by the impact of Alphatec Holdings, Inc. clinical distinction and our unique procedural approach. You can see in the chart on the left that the growth of new surgeon users has consistently been strong, growing another 20% in 2025. Another consistent and recurring contributor to volume growth is surgeon utilization. The chart on the right depicts the steady ramp in utilization that each of our new surgeon cohorts has demonstrated over time. We compel surgeons to clinical distinction, often beginning with lateral. That initial adoption creates a halo effect across additional procedures, driving predictable utilization growth over time. Each new surgeon relationship that we develop typically unlocks a multiyear utilization growth opportunity. The underlying case utilization for the existing surgeons in each of the past several years has averaged growth in the mid-teens if a store supported by existing surgeons alone, before accounting for incremental new surgeon additions. To recap our financial outlook for 2026, we expect continued strong revenue growth to drive incremental profit margin expansion. We are beginning to see measurable gross margin improvement driven by asset efficiency and cost improvement efforts and expect margins to approach 71% as we exit 2026. We will continue to invest in our priorities, which are expanding the sales channel and new development. Growing operating expenses at approximately 11% while growing revenue at 17% will fuel nearly 400 basis points of operating margin improvement compared to 2025. Given our strong profitability performance in the fourth quarter, we are increasing adjusted EBITDA guidance for the full year 2026 to $134,000,000. The chart on the next slide depicts the consistency of the profitability progress we are making and the tremendous power of our business model to drive future profitability. Our adjusted EBITDA guidance of $134,000,000 will generate an adjusted EBITDA margin of 15% for the full year. Given the profitable revenue growth we generated this year, we continue to self-fund the investment in instruments and inventory to support our future revenue growth. After accounting for cash interest, excess and obsolete inventory, and other working capital requirements, we expect to generate $110,000,000 of operating before incremental asset investment. While we will see our investment in inventory and instruments reflect the $0.75 on the dollar growth relationship, expect to deliver at least $20,000,000 of free cash flow. We are delivering durable revenue growth, expanding profitability, and increasing cash generation, all at scale. The operating discipline across the organization is translating growth into sustainable financial strength. Most importantly, we remain focused on helping surgeons perform better surgery, because that is the foundation for long-term value creation. With that, I will turn the call back to Patrick. Patrick Miles: Thanks much, Todd, and Todd just reviewed the reflection of our work, and so it gives me the opportunity to share with you guys how we are serving the field. J. Todd Koning: And I would tell you that our strategy, if nothing else, is steadfast— Patrick Miles: consistent. J. Todd Koning: We are creating clinical distinction mostly through proceduralization at this point. It is clearly compelling adoption. Patrick Miles: And we continue to expand and elevate our sales force. J. Todd Koning: And so when we speak of clinical distinction, clearly, we have created unrivaled leadership in lateral. It is our growth engine. Patrick Miles: The reason for the continued applied learnings associated with increasing complexity in its application. PTP is being applied to more challenging pathologies. A foundational reason why surgeons have confidence in applying PTP to more complex pathologies is our neuromonitoring platform. It is far and away best in class. It is unique to Alphatec Holdings, Inc. It is a significant moat to precluding others from doing what we are doing. J. Todd Koning: No platform exists outside of SafeOp— Patrick Miles: that provides automated monitoring of not only the nerve location, but also the nerve health. When we think of lateral sophistication, we cannot be more excited about Valence. Valence will continue to serve as a centerpiece of our intraoperative strategy. It is purpose-built to be seamlessly integrated into our spine procedures, namely PTP. Valence is a fully integrated platform that provides both navigation and robotically controlled precision when and where required. It is part of the design workflow of surgery. So it is not anything other than part of the surgery as we have designed it. We are very excited for controlled release throughout 2026, and as the replacement cycle for Stealth avails itself, we will happily assert ourselves. We think our timing and the product is very, very good. So we often talk about our best days are yet ahead. Much of that stems from having a minority market share in an established market, and little in an untapped market. So we think that we can extend lateral surgery through PTP not only in what was traditionally a $1,000,000,000 market space, but also across TLIF and PLIF. We will continue to earn share in the fastest growing segments of spine surgery, and there remains much untapped opportunity. So when we talk about our growth machine, it is predicated on expanding surgeon users and increased utilization. We have reviewed that reasonably clearly. That is what has driven our more than double the outsized growth of anyone else in the space. The reason surgeons adopt is that when we see a prospective operative candidate, a patient, they do not think widgets. They think, what spine procedure can I apply to help this patient? They want a fully thought out and designed contemplation of how to address specific pathology. When they experience that, it creates trust. That trust creates confidence, or a halo, into earning more of their practice. This is how utilizations increase. More surgical success creates more confidence and more users. More confidence creates more utilization. We have earned our customers' confidence. No doubt. J. Todd Koning: You do not grow 25% a year without winning more customers and earning more of their business. From lateral, we go to deformity. Patrick Miles: The number of variables that undermine success in deformity surgery is innumerable. Hence, an end-to-end requirement for an ecosystem. It is not just to help with screw placement that is required for success in deformity. It is the ability to assess through a standing, full-body, weight-bearing image. The magic is that this image is not only standardized, but it is also the standard in deformity surgery. The ability to understand alignment via AI-generated automated alignment measures and bone mineral density in the same scan, again, is unique to Alphatec Holdings, Inc. It clearly elevates the field. It is information that should be available to all who do deformity surgery. To then create a 3D model of those images to better understand and simulate surgery is vitally important. We are building a structured dataset through the modeling of these images to provide predictive analytics that better inform surgical plans. J. Todd Koning: We will then integrate this information into the optics— Patrick Miles: operative experience, surveillance, and collect data to confirm we got what we intended. An example of— J. Todd Koning: how we apply this information to surgery, pediatric surgery, is pictured above. Patrick Miles: Take the most coveted image—standing full-body weight-bearing image—get automated alignment measures with EOS Insight, create a model and 3D plan. Nobody can get a low-dose axial image without EOS 3D reconstruction. To understand the rotational aspect of the deformity is highly valuable. Now we proceduralize with our patient positions, understand where the correction is intraoperatively, assure we have best-in-class implants and instruments to facilitate the correction, and then use SafeOp to assure that there are no neural issues. Most companies only make implants. J. Todd Koning: When Alphatec Holdings, Inc. thinks about how to address pathology, we think in terms of all the elements required— Patrick Miles: for optimal patient outcomes. It is not a small difference. We have started to translate revenue not only through the capital sales of EOS, in the patient-specific implants that are created from the EOS scan. Our ability to understand the specific implant requirements, their reflection on spine correction, and how the spine functions over time is unique to Alphatec Holdings, Inc. Not only do we have a unique axial informatics set for alignment, also bone mineral density. J. Todd Koning: Understanding the underlying bone quality enables greater predictability in what type of surgery will be tolerated. Patrick Miles: Often, the operation is on an elderly or sick patient whose bone quality has been compromised. This again is unique to Alphatec Holdings, Inc. I hope this gives you some insight into our end-to-end ecosystem and why we know that we are advancing the field of spine with our proprietary-driven procedural ecosystem. As if there is another example required that Alphatec Holdings, Inc. is playing the long game, we have signed an exclusive distribution partnership with Theradaptive. Our current knowledge suggests that we will have the next BMP on the spine market. BMP is currently a $700,000,000 product for a competitive spine company. The market is huge, and we are confident that in several years, we will have the most advanced BMP in existence. It will be easy to use. It will have familiar handling. J. Todd Koning: It will have two to three times faster bone formation than the gold standard. Patrick Miles: That is 3,325% higher molar osteoinductivity than the current alternative, and projected to have the highest safety margin of any BMP on the market. So we cannot be more excited about our relationship with Theradaptive and the expectation of what that will provide our procedural strategy. So we have built a foundation from which to scale. We are in a position for long-term profitable growth. J. Todd Koning: We will continue to lever— Patrick Miles: our infrastructure investments— J. Todd Koning: integrate data and informatics platforms into the surgical experience, expand and evolve the procedural approaches, proliferate an algorithm-based sales growth model, deepen partnerships with leading hospital systems and academic institutions, and drive focal international growth. So from a financial outlook, it has been reviewed: $890,000,000 commitment for 2026 in revenue, $134,000,000 in adjusted EBITDA, which— Patrick Miles: is 15% and $20,000,000 in cash flow. I would tell you that we are unique, and there are zero ways about it. And so I would also say that we are the preferred destination in spine. We are executing on the long game with discipline and conviction. We are the preferred destination for both surgeons and sales talent. Our growth is sustainable because our innovation and execution are aligned. So with that, we will take questions. We will now open for questions. In consideration of others, please limit yourself to one question. The first question comes from Mathew Blackman with TD Cowen. Mathew Blackman: Good afternoon, everybody. Can you hear me okay? Yeah, we have you loud and clear, Matt. Great. Thanks, Todd, and I apologize. I am going to ask two questions. I am sorry for breaking the rules right out of the gate. The first one, if you will just indulge me: the shares are trading off after the market. I just want to make sure I am not missing something. So just to recap, Q4, you had already preannounced the revenues, came in in line. EBITDA was a new input, and that came in about 10% higher than consensus. Then 2026, you had already preannounced the revenue guidance of $890,000,000 in that same release in January, but you have now taken up the EBITDA guidance for 2026. I just want to make sure I am capturing all the moving parts and not missing something. J. Todd Koning: That is all correct, Matt. Mathew Blackman: Alright. I appreciate that. Maybe, Todd, if you could, you did mention in your prepared remarks that a complex contribution may be changing the seasonal patterns. I was hoping you could help us with the cadence for 2026, maybe even just starting with the first quarter. I think consensus is about $202,000,000 revenues, $90,000,000 in EBITDA. Is that the right spot to be? And any commentary on how the rest of the year should play out? And I will leave it at that, I swear. J. Todd Koning: Yeah, I think if you look at the full-year growth of 17% and think, as we think about the seasonality of our revenue—and I think you look at the increased seasonality in Q2 and Q3—I am kind of looking at 2025 as being probably where I would like to get folks in terms of the revenue seasonality. And so if you think about the first quarter was about 22.1% of sales in 2025, 24.5% in Q2, and about 25.5% in Q3. And so I think those are kind of the starting point that we are thinking about just to respect the seasonality that we saw on the basis of the guidance that we have. Mathew Blackman: Okay, and the EBITDA pattern should be similar as well? J. Todd Koning: Yeah, I think so. I mean, I think it is probably a little bit more drop-through in the first quarter over the average, and probably a little bit lower than that in the balance of the year to kind of get you to the 32% overall. Mathew Blackman: Okay. Alright. Thank you. I will hop back in the queue. Appreciate it. J. Todd Koning: Yep. Patrick Miles: The next question comes from Benjamin Charles Haynor with Lake Street Capital Markets. Benjamin Charles Haynor: Good afternoon, gentlemen. Thanks for taking the question. Just curious on what you are seeing out in the field in terms of attracting the sales folks that you want. Are you still getting the pick of the litter? And then any territories you are seeing particular strength or penetration in that maybe had not been bright spots in the past? Patrick Miles: Yeah, Ben, this is Patrick. I would say that we have a very clear hiring algorithm, and it is going exactly as one would expect. I would tell you, when we say things like we are the preferred destination, it is our subtle desire to send the message that people are coming our way. And so, without getting into specifics in terms of territorial dynamics, I would tell you that there is great demand for our portfolio both via the surgeons and the people who want to sell it. Benjamin Charles Haynor: Thank you very, very much for taking the questions. Operator: That concludes our question-and-answer session. I will now turn the call back over to Patrick for closing remarks. Patrick Miles: Yeah. Thanks very much for those on the call, and I appreciate your interest in Alphatec Holdings, Inc., and we look forward to the continuation of a long, profitable run. Thanks. Operator: Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.
Operator: Good day, and thank you for standing by. Welcome to the SPX Technologies, Inc. Fourth Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your speaker today, Mark Carano, Chief Financial Officer. Please go ahead. Mark A. Carano: Thank you, operator, and good afternoon, everyone. Thanks for joining us. With me on the call today is Eugene Joseph Lowe, our President and Chief Executive Officer. A press release containing our fourth quarter and full year results was issued today after market close. You can find the release and our earnings slide presentation, as well as a link to a live webcast of this call, in the Investor Relations section of our website at sdx.com. I encourage you to review our disclosure and discussion of GAAP results in the press release and to follow along with the slide presentation during our prepared remarks. A replay of the webcast will be available on our website. As a reminder, portions of our presentation and comments are forward-looking and subject to safe harbor provisions. Please also note the risk factors in our most recent SEC filings. Our comments today will largely focus on adjusted financial results, and comparisons will be to the results of continuing operations only. You can find detailed reconciliations of historical adjusted figures from their respective GAAP measures in the appendix to today's presentation. Our adjusted earnings per share exclude intangible amortization expense, acquisition and integration-related costs, nonservice pension items, and changes in the estimated value of equity security, among other items. Finally, we are meeting with investors at various events during the upcoming months. And with that, I will turn the call over to Gene. Eugene Joseph Lowe: Thanks, Mark. Good afternoon, everyone, and thank you for joining us. On the call today, we will provide you with an update on our consolidated and segment results for the fourth quarter and full year of 2025. We will also provide full year guidance for 2026. We had a strong close to the year. We grew full year adjusted EBITDA and adjusted EPS by 21% with strong performance by both segments. In addition, we continue to advance our value creation initiatives. Organically, we made further progress on our efforts to expand capacity within our HVAC segment to meet the growing demand for our highly engineered solutions. During the fourth quarter, we completed the purchase of a new 459,000 square foot facility in Madison, Alabama, which will have capabilities to produce our data center and custom air handling solutions. Inorganically, we recently announced the additions of Thermalek, Air Enterprises, and Ron Industries to the HVAC segment. These strategic acquisitions strengthen our position in the attractive electric heat and engineered air movement markets. Also, today, we are introducing our 2026 midpoint guidance, which implies approximately 20% adjusted EBITDA growth at the midpoint. Turning to high-level results. For the fourth quarter, we grew revenue by 19.4%, driven by the benefit of recent acquisitions and organic growth in both segments. Adjusted EBITDA increased by approximately 22% year over year, with 50 basis points of margin expansion. As always, I would like to update you on our value creation initiatives. Demand for our custom air handling and data center cooling products remains strong. To capture the growing demand, we are investing in expanding capacity at several of our existing HVAC facilities, including Ingenia’s Maribel and Cooling Products’ Olathe locations, and have recently added two new facilities to further accelerate our expansion efforts. During last quarter’s call, we announced the addition of a facility in Tennessee that will produce Tamco highly engineered aluminum dampers, which are seeing strong demand within the data center market. Production in this facility is expected to begin by the end of this quarter and steadily ramp throughout the year. Additionally, in Q4, we completed the purchase of the facility in Madison, Alabama, that will have flexible manufacturing capabilities to produce both our custom air handling and data center solutions, including our new Olympus Max product. We expect to have assembly capabilities toward the latter half of this year and initial production capabilities in 2027. We expect the expansion-related investments across all of our HVAC facilities to require approximately $100,000,000 of capital in 2026, in addition to approximately $60,000,000 invested in 2025. We anticipate these investments will enable nearly half of our HVAC segment’s revenue growth in 2026 and add roughly $700,000,000 of incremental capacity once at full production, supporting substantial growth in both data center and custom air handling volume. We have also continued to advance our inorganic growth initiatives. During 2026, we completed two strategic acquisitions in our HVAC segment that strengthened our positions in the attractive electric heating and engineered air movement markets. I am very pleased to welcome our new colleagues to the SPX Technologies, Inc. team. In the engineered air movement market, Air Enterprises and Ron Industries, only the air handling segment of Crawford United, advance our strategy to build a market-leading position by expanding our portfolio of custom air handling solutions and enhancing our capabilities with the coil offering. The combination of complementary technologies, design capabilities, and manufacturing footprint strengthens our ability to serve customers in the attractive healthcare, institutional, and commercial markets. Thermolac, located in Montreal, is a natural extension of our electric heat strategy, adding a complementary custom duct heating solution and broader geographic reach to enhance the value we deliver to customers throughout the North American commercial, industrial, and multifamily markets. The combination of Thermolac’s exceptional service, quality, and strong Canadian presence with our established electric heat channels in the U.S. provides significant opportunity for growth. And now, I will turn the call over to Mark to review our financial results. Mark A. Carano: Thanks, Gene. Our fourth quarter results were strong. Year over year, adjusted EPS grew by 25% to $1.88. Full year adjusted EPS grew by 21% to $6.76, or toward the upper end of our guidance range of $6.65 to $6.80. For the quarter, total company revenues increased 19.4% year over year, driven by the acquisitions of KTS, and Sigma and Omega, as well as organic growth. Consolidated segment income grew by $27,000,000, or 21%, to $156,000,000, while consolidated segment margin increased 30 basis points. For the quarter, in our HVAC segment, revenue grew by 16.4% year over year, with 5.5% inorganic growth and a modest FX tailwind. On an organic basis, revenue increased 10.3%, with solid growth in both cooling and heating. Segment income grew by $17,000,000, or 18%, while segment margin increased 40 basis points. The increases in segment income and margin were largely driven by higher volume and associated operating leverage. Segment backlog at quarter end was $585,000,000, up 22% organically year over year. For the quarter, in our Detection and Measurement segment, revenue increased 26.3% year over year. The KTS acquisition contributed growth of 23.2% and FX was a modest tailwind. On an organic basis, revenue increased 1.7%, primarily driven by higher project volume. Segment income grew by $10,000,000, or 27%. Margin increased 20 basis points. The increases in segment income and margin were primarily driven by higher volume, including the benefit of KTS. Segment backlog at quarter end was $350,000,000, up 43% organically year over year. Turning now to our financial position at the end of the year. We ended the year with $366,000,000 of cash on hand and total debt of $502,000,000. Our leverage ratio, as calculated under our bank credit agreement, was approximately 0.3x at year end. Including the effect of the recently announced acquisitions, leverage ratio was 1.0x. Full year adjusted free cash flow was $294,000,000, reflecting a 90% conversion of adjusted net income, inclusive of the approximately $60,000,000 invested to support our capacity expansion. Moving on to our guidance. Today, we introduced full year 2026 guidance inclusive of the recently announced acquisitions: Thermalek, and Air Enterprises and Ron Industries. Now Crawford United’s industrial and transportation products businesses are not included in our guidance. They will be reported in discontinued operations while we seek a suitable buyer. We anticipate total company revenue in a range of $2,535,000,000 to $2,605,000,000 and segment income margin in a range of 24.6% to 25.1%. We expect adjusted EBITDA to be in a range of $590,000,000 to $620,000,000. At the midpoint, this implies year over year growth of approximately 20% and a margin of approximately 23.5%. Our adjusted EPS guidance range of $7.60 to $8.00 reflects approximately 15% growth at the midpoint. In our HVAC segment, including the recent acquisitions, we anticipate revenue in a range of $1,800,000,000 to $1,840,000,000 and segment margin in a range of 24.5% to 25%. In our Detection and Measurement segment, we anticipate revenue in a range of $735,000,000 to $765,000,000 and a segment margin in a range of 24.75% to 25.25%. As a reminder, growth in 2026 will be impacted by the execution of projects in 2025 totaling approximately $20,000,000 that were originally slated to execute in 2026. For Q1, as a percentage of our full year 2026 guidance midpoint, we expect revenue and segment income for both segments and adjusted EPS to be similar to the prior year. As always, you will find modeling considerations in the appendix to our presentation. And with that, I will turn the call back over to Gene for a review of our end markets and his closing comments. Eugene Joseph Lowe: Thanks, Mark. Current market conditions support our 2026 outlook, which implies significant growth. Within our HVAC segment, we continue to see solid demand in key end markets. Our strong backlog of highly engineered solutions and increasing production capacity further reinforce our confidence in HVAC’s growth opportunities. In our Detection and Measurement segment, we are seeing improving global market conditions, which is supportive of growth in our run-rate businesses. For our project-oriented businesses, front-log activity remains steady, and backlog is at record year-end levels, yet with a higher percentage of multiyear projects. In summary, I am pleased with the close to 2025 and our strong full year performance. As we look to 2026, we expect to continue to drive additional shareholder value through both our organic and inorganic initiatives, including our continued efforts to expand capacity to meet the growing demand for our HVAC solutions, integration of our recent acquisitions which further scale our HVAC platforms and strengthen our positions in key end markets, and an active pipeline of attractive acquisition opportunities. With these initiatives and a solid demand backdrop, we are well-positioned for another year of 20% growth in adjusted EBITDA in 2026. Looking ahead, I remain excited about our future. With a proven strategy and highly capable, experienced team, I see significant opportunities for SPX Technologies, Inc. to continue growing and driving value for years to come. With that, I will turn the call back to Mark. Mark A. Carano: Thanks, Gene. Operator, we will now go to questions. Operator: Star 11 on your touch-tone telephone, and wait for your name to be announced. To withdraw your question, please press star 11 again. Our first question comes from Bryan Francis Blair with Oppenheimer. Bryan Francis Blair: Thanks, guys. Solid finish to the year. There understandably remains a lot of focus on your team’s data center exposure. So I guess to level set on that front, how much did data center revenue grow in 2025? What percentage of revenue is now driven by data centers? And how is your team thinking about DC sales growth within your initial 2026 guidance? Eugene Joseph Lowe: Thanks, Bryan. I will start there. We are seeing substantial growth. We had talked about some of the numbers we would share previously that 2025 would be about 9% of revenue. It is in the neighborhood of $200,000,000, maybe a little bit more than $200,000,000. That is up quite a bit. We had given the number of 7% prior. And we would anticipate that to be, as we said, low double digits, say, 12%. So we would expect nice growth here, probably in the 50% neighborhood for our data centers going into 2026. Mark A. Carano: That is very encouraging. Bryan Francis Blair: And maybe offer a little more color on the strategic state of Air Enterprises and Ron and Thermalek within EAM and electric heat, respectively. They seem like very down-the-center kind of deals for your team. How do the assets strengthen HVAC positioning overall? How should we think about commercial synergies and the ability to accelerate growth going forward? And what exactly have you baked in for revenue and profitability in the initial 2026 outlook? Eugene Joseph Lowe: I will start on the strategy side. With Crawford United, their air handling units—really two pieces. The bigger piece is Air Enterprise and the custom air handling. They have a great product, a blue-chip customer base. They have a different style of product, lower leakage, and I would say they are viewed as a premium provider in this market. You can go to their website—you will see all of the blue-chip customers that basically have them, oftentimes, as basis of design. So it is a little bit different flavor of a product versus Ingenia, but a very high-quality product and one that we are very excited to have as a part of our portfolio. We think we can help them grow. We think we can help them operationally. We also think we can help them in the building of the channels there. The Ron component of that is somewhat smaller. That is the coil manufacturer—coils for the custom air handling units. We like that because we can use that not only for Air Enterprises, but also for Ingenia, which we predominantly buy outside. We have a lot of coils and coil usage increasing across our product lines in HVAC, and this is just going to give us more confidence. We see some nice growth there, not only within our own businesses, but within our customers, where we have a very strong position, particularly the Tamco business. So operational synergies and channel synergies there. With Thermalek, this is a real no-brainer. We are very strong in duct heating, as we have talked about with Indeeco. We invented duct heating. We have the original patent. Very strong position in the U.S., but very low in Canada. Thermalek is the leader for duct heating in Canada—very complementary. They have a very good brand, a very good channel. We really like the team, a great leader there, really engaged workforce. And we think that they have a variety of products that they do not only sell in Canada. The majority of their business is Canada—let’s say approximately two-thirds. We think we can help them grow more in the U.S. And then we see some products that we have not been able to successfully sell into Canada, and we think we can really leverage the Thermalek channel. So we see some nice channel synergies on both sides there. Additionally, we have a good lean process and operational experience. They are also very capacity constrained. We believe we can help them grow as we look ahead. Mark, do you want to make any comments on the numbers? Mark A. Carano: Yeah. Bryan, let me add to that—your question of the impact on 2026. We have disclosed a few numbers out there. There is also some publicly available information out on some of the businesses with respect to Air Enterprises and Ron. But what I would guide you to is, you know, $35,000,000 in revenue at the Thermalek business and something in the low $80,000,000s for the Air Enterprise and Ron business combined. That is on an annual basis. Obviously, we are going to own both of these businesses for eleven months, so that kind of gets you to something just shy of about $110,000,000. Segment income margins for both these businesses are slightly higher than our segment average. Bryan Francis Blair: Understood. Very helpful. Thank you. Operator: Our next question comes from Andrew Obin with Bank of America. Andrew Obin: Hey, Gene. Hey—how are you? Maybe I know a lot of people will be talking about HVAC. I will ask about Detection and Measurement. A couple of things. A) This $20,000,000 pull-forward of revenue—how should we model it in 2026? And part two of the question, how should I think about the growth for the business? The backlog is up organically 45% if I heard it correctly. Eugene Joseph Lowe: Let me start. We had a project—very nice backlog, as you have seen from our press release—record year-end backlog. We have $350,000,000 in Detection and Measurement, up more than 40% organically. We feel really good about how that business is doing. But we had a project that was in 2026; the customer pulled it forward. So if you do the math, that makes 2025 higher by approximately $20,000,000, and 2026 $20,000,000 lower. It is about a 5% growth headwind. That is the reason we are more flattish. If we look across the business—about two-thirds of this business is run rate—we are seeing nice growth in our run-rate business, GDP-plus growth rates. And then on the projects, we have a lot of projects and a lot of backlog. If you look at 2027–2028, that is the reason that we are more flattish. Mark, do you want to give a little more color? Mark A. Carano: I think Gene touched on the top line. If you do the math—he gave you a little bit of it—look at what the impact of that shifting of that project had on 2026. Had it not shifted into 2025, it would have been mid-single-digit top-line growth in 2026. Andrew Obin: My question was a little simpler. Should we model it in Q1, Q2? Or should I take this $20,000,000 out versus normal seasonality? Mark A. Carano: It was in the back half of the year. That is where you should look to adjust it. Andrew Obin: Right, but then it was pulled forward from—Is all the impact in Q1? Sorry—should I just take $20,000,000 out of Q1 versus what I would normally ask? Is that simple? Mark A. Carano: That is probably the right way to think about it. The D&M business has a project element, and the way these projects gate and how they fall within the quarters can move around on us. But that is a reasonable approach. Andrew Obin: And on Olympus Max—you have described it as your most successful product launch ever. Could you tell us about feedback, any update on bookings, and applications beyond data centers? We have been getting questions about the NVIDIA announcement—does it tie in at all to that, or is that more about PUEs? A little more color would be great. Eugene Joseph Lowe: If anything, I am feeling more bullish than on our last earnings call. The punchline is we have a winner here. We believe we have advantages on tonnage and flexibility—specifically, our dry unit can be upgraded to an adiabatic after the fact to add a lot more thermal heat exchange, which gives you flexibility. We have integrated controls, which is a differentiator versus our competitors, and more robust mechanical equipment. We have already been awarded with three customers—material amounts—and we feel good. We targeted $50,000,000 of bookings last year; we did get that, and we are converting that to revenue this year. We feel really good as we look to 2027, 2028, 2029. We have one customer that has already locked up multiple years of growing demand and a lot of activity that we feel good about. I feel very good about the Olympus Max, and I think it is the right solution for the market. Andrew Obin: Well, congratulations. Thank you. Eugene Joseph Lowe: Thanks. Operator: Our next question comes from Ross Riley Sparenblek with William Blair. Ross Riley Sparenblek: Hey, good evening, gentlemen. Sticking on the Olympus Max, what can we read through from the new Rubin announcement and the way that this market is heading? Do you get a sense that this will be the predominant cooling approach going forward, or will there be a mix for water cooling as well? Eugene Joseph Lowe: Thanks, Ross. When the Rubin announcement came out—it can run at lower water temperatures—and that caused some concern for whether you need a chiller. There are some different variations. There may be circumstances where you need fewer chillers or not need chillers, but we are not aware of circumstances where the Rubin chip would reduce the need for external heat rejection, which is where we play. So the Rubin chip really has no negative impact on us. I would say there is actually some positive impact in some of the architectures we have seen. As chips move toward AI chips like Rubin, they generate a lot more heat—and that heat is linear. The more electricity, the more kilowatts, you are going to need more cooling towers. That cooling tower could be adiabatic, dry, or a normal Marley cooling tower. Historically, the bulk of the data center market has been done with air-cooled chillers; we do not really participate in that market. As the heat loads get bigger, they are moving more toward water-cooled chilling and free cooling—very attractive opportunities for us. Basically, the more compute power, the more heat—you need more cooling towers. We feel well-positioned with the trends we are seeing. Ross Riley Sparenblek: That is very helpful. And then on lead times—it takes a couple of years to build a data center, and cooling is often one of the last things installed. If you are booking orders now, should we expect that to compound into 2027, 2028? Eugene Joseph Lowe: There is a set of hyperscalers we work with, and they have different methodologies. Some will lock you up for four or five years, and you have very clear visibility on future demand. We feel very good about that trajectory. Others lay out the plan; although you do not have a PO in-house, they will release POs on a more quarterly basis but will vigorously validate that you have capacity and quality. You get different levels of visibility across customers, but we are growing a good amount in 2026 and expect nice growth into 2027 and 2028 with what we are seeing. There is a lot of activity, and we have a good set of solutions to meet that demand. Ross Riley Sparenblek: Sounds exciting. I will pass along. Thanks, guys. Eugene Joseph Lowe: Thanks. Operator: Our next question comes from Joseph O'Dea with Wells Fargo. Joseph O'Dea: Hey, Gene. Can we start on the capacity additions? I think you said when you are at full production, that would equate to roughly $700,000,000 of revenue potential—just wanted to confirm that. And then the timeline to reach full production and how much those capacity adds will contribute to revenue growth in 2026? Mark A. Carano: You are correct—that is what we said: $700,000,000. It is going to take some time to get to that full production level, particularly at our Madison facility. Both the Tamco facility and Madison will take time to ramp—some of that driven by equipment lead times and then by getting them into respective production processes. Tamco will come online at the end of Q1 and ramp through the year. Madison will come online in the second half of the year for assembly only; it will not be in a production phase until 2027. Big picture, it will be sometime in 2028 before you see full production capacity on those two expansions. We have also been making incremental investments in a couple other facilities as part of that collective investment to meet data center and custom air handling demand. Joseph O'Dea: That is helpful. And then on the D&M margin expansion in 2026—up about 140 bps at the midpoint—can you bridge that, given you talked last quarter about some initiatives that would require investments? Mark A. Carano: I would bucket it in two areas. One is mix we will see across the business next year, driven by the project mix and the margin profile of those forecasted for 2026—that is close to two-thirds of it. The balance—the other third or so—is continuation of cost optimization initiatives: leveraging engineering, R&D, sourcing, some footprint rationalization—really a broad portfolio of actions across the segment to drive more efficiency. That is how we break it down. Joseph O'Dea: That is helpful. Thank you. Operator: Our next question comes from Jamie Cook with Truist Securities. Jamie Cook: Hi, good evening and nice quarter. First, a flip question on HVAC margins. You imply the top-line growth is fairly healthy and the organic growth is healthy. I think margins at the midpoint are up about 25 basis points, which is less expansion than what you saw this past quarter and this year. Any commentary on that? And second, on the M&A pipeline—you have been very active. How should we think about further M&A potential given the strength you have seen so far? Mark A. Carano: On HVAC margins in the guide, as we suggested previously, there will be start-up costs related to bringing these plants online in 2026. These are temporary in nature and around a 50 basis point impact. As we ramp these facilities to full capacity, we will get operating leverage that outstrips the initial costs, but as you stand up any plant, there are costs required. Eugene Joseph Lowe: On the M&A pipeline, we are very pleased with the two transactions in Q1—great fits and value accretive. Even with pro forma leverage, we are about one time on net debt to EBITDA, so we have a lot of capacity. There is a lot of activity in the areas we have highlighted—engineered air movement and electric heat—as well as a number of Detection and Measurement platforms. The pipeline remains very full, and we see a good probability of more opportunities to invest in growth this year. Operator: Our next question comes from Amit Mehrotra with UBS. Amit Mehrotra: Sorry about that—still learning how to ask questions on calls, clearly. Hi, guys. Thanks for letting me ask a question. On non-data center end markets within HVAC and also in D&M—there is anticipation of some procyclicality. Are you seeing that in real time—have orders perked up? Any color outside of normal procyclicality would be helpful. Eugene Joseph Lowe: We track where we are seeing strength and softness. Across HVAC, areas of really nice strength include data centers, healthcare, power, heavy industrial, aftermarket, and institutional/higher ed. Areas a little softer as we look at 2026 would be battery automotive, semiconductor, chemical, and commercial real estate—which is still active but at a lower level. Put it together, and we see pretty solid growth even outside of data centers. Also, the end of Q4 and the first seven weeks of this year—we have had a nice start to bookings. Amit Mehrotra: Thanks. And Mark, on overall earnings growth—you are forecasting another strong year, and capacity is layering in as we progress. Can you help with cadence—how earnings growth evolves through the year as capacity comes online? Mark A. Carano: We gave some color on Q1 in the prepared remarks. Stepping back to first half versus second half, I would expect a similar cadence to last year on a percentage basis for revenue, segment income, and EPS. The capacity expansions will ramp incrementally each quarter, with benefits more evident in the back half. Amit Mehrotra: And anything around backlog or orders—particularly in data centers—suggesting elongation of typical lead times? Eugene Joseph Lowe: With large data center customers, cooling is mission critical—they give you a lot more visibility than a local hospital or commercial building. You know what is coming earlier, but our lead times have not really changed much across our businesses—pretty similar to where they have been. Amit Mehrotra: Very good. Thank you. Operator: Our next question comes from Joe Giordano with TD Cowen. Joe Giordano: Thanks for taking my questions. Appreciate the color on warmer liquid used for cooling. I am curious what a move to significantly higher voltages in data centers would mean—current goes down, less copper, less heat per unit of compute. As we move into next-gen architectures, any implications for you? Eugene Joseph Lowe: All the shifts we have seen generate more heat. If you look at kW per rack and electricity going into data centers, I have not seen anything decreasing. You are seeing gigawatt-scale data centers—massive electricity—and electricity correlates well to heat, which correlates to the amount of cooling needed. If there were an invention that significantly reduced electricity, that would reduce the amount of cooling towers needed. I am not aware of any such invention. Joe Giordano: Anything we should think about in terms of tariffs—any changes there—and the volatility you are seeing in metal prices? Mark A. Carano: Timely question. For us, tariffs during 2025 were not a material impact. We largely offset through price, sourcing, and CI initiatives. We will keep a close eye on it, but our model is largely U.S., largely in-country-for-country on sourcing, and our North American businesses, particularly Canada, are covered under USMCA. Not overly concerned today. On metals, we watch prices, but a large part of HVAC is configured or engineered to order—we are taking orders and pricing/manufacturing in real time—so we do not have long lead-time exposures for steel and aluminum. Joe Giordano: Thanks, guys. Operator: Our next question comes from Jeff Van Sinderen with B. Riley Securities. Jeff Van Sinderen: Hi, everyone. Back to data centers—what are you hearing from customers? What are they asking for most—what is top of mind—and how is that evolving? Eugene Joseph Lowe: At a high level, demand is increasing, and several hyperscalers are pushing for acceleration. Demand with existing customers and in new bid situations remains very robust. Jeff Van Sinderen: Circling back to supply chain—any areas you think might be increasingly tight this year? Any potential bottlenecks? Mark A. Carano: Looking across our supply chain, nothing jumps out as a material concern today. Eugene Joseph Lowe: As we grow, we go line-item-by-line-item through bills of materials to ensure we can scale up—we have gone through that as we always do, and we do not see red flags today. Jeff Van Sinderen: Good to hear. One more—different topic: trends you are seeing in drone detection and jamming for that business line and the outlook there? Eugene Joseph Lowe: Our Controp business plays in a niche with a very effective product. The drone detection world has many players—many trying residential or stadiums—and we have seen a lot of those belly flop. We are playing more on the military side predominantly and have a very good solution there. We have one primary competitor—a German company we know well—and we compete effectively. There is a good amount of activity, but nothing dramatically higher or lower—pretty steady. Jeff Van Sinderen: Okay. Good to hear. Thanks for taking my questions. Operator: Our next question comes from Walter Scott Liptak with Seaport Research. Walter Scott Liptak: Hi, thanks. Good evening, guys. The CapEx is going up quite a bit. Can you talk about the timing of the cash out for the CapEx and the fairly big range—what could drive pluses and minuses to getting all that capital spending done this year? Mark A. Carano: The plan is to meet the CapEx guidance for the year—it is important and relates to the plant expansions and stand-ups underway. If any shift occurs, it would be timing of equipment deliveries. We are watching that carefully with a great team focused on it. Not concerned today, but that is the primary swing factor. Walter Scott Liptak: And on the capacity going in—you mentioned some hyperscalers trying to lock down capacity. Is the CapEx there to meet that, or within the $700,000,000 run-rate, is there room to grow projecting future demand levels? Is there a phase two of this data center HVAC build-out? Eugene Joseph Lowe: It is nice to have hyperscalers with increasing demand over the next couple of years. With these expansions, we think this is approximately $700,000,000—about $550,000,000 for data center and about $150,000,000 for custom air handling, predominantly Ingenia. This gives us runway over the next couple of years. Where we sit today, we do not see an imminent need for additional expansion in the next couple of years. If there is accelerating demand, we will evaluate opportunities, but we feel very good about this expansion and the flexibility it provides over the next several years. Walter Scott Liptak: Okay. Great. Thank you. Operator: Our next question comes from Bradley Thomas Hewitt with Wolfe Research. Bradley Thomas Hewitt: Hey, guys. Thanks for taking the questions. It looks like you are guiding to about low double-digit organic growth in HVAC in 2026. You mentioned 50% growth expected in data center, and if we adjust for Ingenia revenue growth, it seems like the implied growth rate for the rest of the segment is around 3%. Is that in the right ballpark, and how do you think about puts and takes to growth in core HVAC ex-Ingenia and ex-data center? Mark A. Carano: Your math is directionally right—low single-digit growth in the non-data center, non-custom air handling parts of the business. Bradley Thomas Hewitt: Great. And on D&M, you are guiding margins to 25% at the midpoint versus the Investor Day target of 22% to 24%. Is that still an appropriate medium-term target, or should we think about 25% as a baseline upon which you can layer normal incrementals? Mark A. Carano: Great question. Some of the margin improvement is related to mix; some is related to structural opportunities we are pursuing to drive the overall margin profile up—those should be durable. If you do the math, that pencils out to around the top of the 22%–24% range we guided a couple of years ago. For now, we are not changing the target profile, but we will revisit as we go through the year and into next year. Operator: That concludes today's question and answer session. I would like to turn the call back to Mark A. Carano for closing remarks. Mark A. Carano: Thank you all for joining us for today’s call. We look forward to updating you again next quarter. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Operator: Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press 0, and a member of our team will be happy to help you. Thanks for your continued patience. The meeting will begin shortly. If you need assistance at any time, please press 0, and a member of our team will be happy to help you. Please stand by. Your meeting is about to begin. Hello, and welcome everyone joining today's Clean Energy Fuels Corp. Fourth Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. To register to ask a question at any time, please press 1 on your telephone keypad. Please note this call is being recorded. We are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to Chief Financial Officer, Robert Vreeland. Please go ahead. Thank you, operator. Robert Vreeland: Earlier this afternoon, Clean Energy Fuels Corp. released financial results for the fourth quarter and year ending 12/31/2025. If you did not receive the release, it is available on the Investor Relations section of the company's website where the call is also being webcast. There will be a replay available on the website for 30 days. Before we begin, we would like to remind you that some of the information contained in the news release and on this conference call contains forward-looking statements that involve risks, uncertainties, and assumptions that are difficult to predict. Such forward-looking statements are not a guarantee of performance and the company's actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in the Risk Factors section of Clean Energy Fuels Corp.'s Form 10-Ks, being filed today. These forward-looking statements speak only as of the date of this release. The company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this release. The company's non-GAAP EPS and adjusted EBITDA will be reviewed on this call and exclude certain expenses that the company's management does not believe are indicative of the company's core business operating results. Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for or superior to GAAP results. The directly comparable GAAP information, reasons why management uses non-GAAP information, a definition of non-GAAP EPS and adjusted EBITDA, and a reconciliation to these non-GAAP and GAAP figures is provided in the company's press release, which has been furnished to the SEC on Form 8-Ks today. With that, I will turn the call over to our President and Chief Executive Officer, Andrew Littlefair. Andrew Littlefair: Thank you, Bob. I am pleased to report that we closed the fourth quarter and the year with strong results. Q4 marked another period of solid execution across our business, with continued strength in our fueling operations and exciting progress in our upstream RNG production platform. For the full year 2025, our performance exceeded the high end of our guidance range, reflecting the resilience of our business model and the value of our diversified customer base. During the fourth quarter, we also took an important balance sheet action by repaying $65 million of debt. This reduction in leverage lowers our future interest expense while maintaining ample cash to fund our growth initiatives. Speaking of growth initiatives, our upstream RNG business achieved two very significant miles in the last few months. As many of you know, our South Fork Dairy project in Texas has been a long journey for our team and for our dairy partner, Frank Brandt. As you may recall, three years ago, the facility suffered a fire, set back the farmer's operation and our project schedule. But the resilience of our team and the commitment from the dairy kept this project moving forward. In the fourth quarter, we completed construction and brought South Fork online. When it entered service, it became the largest operating RNG project in our portfolio and one of the largest RNG dairy digesters in the country. I am pleased to report that even since the project's completion, Frank has added to his herd count, and we are considering expanding our production facilities. Another reason this is such a great milestone is that this is a 100% Clean Energy Fuels Corp.-constructed project, and we control all RNG operations. So the financial results are fully consolidated in our financial statements and not part of our JVs. We were able to leverage our many years of experience in engineering and construction and oversee a project that was completed on time and on budget. Hats off to our talented Clean Energy Fuels Corp. team. But South Fork is not our only major recent accomplishment. I am excited to announce we have begun injecting gas in our East Valley Dairy project in Idaho, the largest RNG project in our portfolio. This project is part of our JV with BP and processes manure from over 37,000 milking cows. Final project completion is on track for this spring. In the span of just three months, we brought online two of the largest dairy RNG projects in the country. These additions bring our total number of operating projects to eight, with an additional three projects in construction through our partnership with Moss Energy Works. I will remind you that all of this low-carbon fuel from these projects will find its way into Clean Energy Fuels Corp.'s fueling infrastructure. Our work is far from done. It takes time for new sites to ramp up and optimize production, as is typical in the industry. But this is a major milestone for Clean Energy Fuels Corp. as we continue to execute against our dairy RNG production plan. We now have scale and a clear line of sight to growing volumes in 2026 and beyond. It is never a dull moment in the RNG policy world, but 2026 has begun with encouraging signals across the major regulatory programs that affect our business. RNG is a domestically produced, waste-based biofuel with compelling environmental and economic benefits for our feedstock partners, whether at landfills, dairy farms, or other sources, many of which are located in rural communities. For commercial vehicle fleets, RNG provides a practical, low-cost, low-emissions alternative to diesel that is commercially available today. RNG offers this win-win solution while utilizing the existing network of natural gas pipeline infrastructure here in the U.S. This positive economic and environmental impact that RNG has on such diverse geographic and industry markets makes it easier to advocate for policies that recognize the full value of RNG and support sustainable industry growth. We feel good about the current policy backdrop. A few weeks ago, the California Air Resources Board released Q3 2025 LCFS data, which showed the first net deficit since 2021 driven by CARB’s program changes to accelerate emission reductions. This is a constructive development for LCFS fundamentals going forward. Regarding D3 RINs, we expect EPA to continue acknowledging the strong growth trajectory of RNG production and its critical role in meeting federal renewable fuel targets. The 45Z clean fuel production credit rulemaking is progressing. Like the rest of the industry, we are awaiting the updated 45Z GREET model. We remain optimistic that Treasury and the Department of Energy will recognize the avoided methane emissions and deeply negative life-cycle emissions of dairy RNG as directed by Congress and reinforced throughout recent rulemaking documents. My last comment regarding policy issues is regarding the announcement of EPA a few weeks ago that the administration is rescinding the endangerment finding under the Clean Air Act. We believe this is good because this action removes any lingering potential that there is or will be a mandate for fleets by one and only one technology. We hear repeatedly from operators that they continue to have a desire for a cleaner alternative than diesel for their fleets, and RNG provides that affordably and conveniently today. Collectively, these dynamics support the economic value of RNG and reinforce the importance of our integrated RNG strategy. Turning to our downstream operations, our fuel distribution business delivered another solid quarter. Volumes across our transit, refuse, and trucking customers grew, reflecting long-standing relationships and the essential nature of the services they provide. The strength and success of RNG as the premier clean transportation fuel was demonstrated by agreements that we have signed over the last several months with the likes of waste giant WM, which extended our partnership to provide services for 85 of their stations to keep their fleet of 8,000 refuse trucks fueled with RNG. The cities of Scottsdale, Phoenix, Washington, D.C., Nashville, Arlington, Virginia, and Fort Smith, Arkansas awarded Clean Energy Fuels Corp. the opportunity to flip their CNG to RNG, build stations, maintain stations, or provide their airport shuttle operations with RNG. Heavy-duty truck adoption of the Cummins X15N engine was a little slower in 2025 than we anticipated, but the fundamentals are improving. Challenging freight market dynamics forced many fleets to delay not only alternative fuel decisions but overall truck purchases of any type. Some of those headwinds have begun to ease. In its full year on the road, the X15N showed excellent performance with similar power, torque, and drivability to diesel for those first customers to test drive demo trucks and purchase the beginnings of a fleet of trucks equipped with the new engine. As we talk to fleets, the message continues to resonate. RNG is the best available solution today for fleets looking to lower emissions while using a reliable fuel, while reducing operating cost and achieving a lower total cost of ownership than diesel. The engine technology works, the infrastructure is built, and the fuel is widely available at a lower cost than diesel. We are currently working with a number of third-party carrier customers which are actively using their RNG-operated X15N trucks as a sales tool to attract those hundreds of shipper clients that are looking to address their Scope 3 emissions goals. We see good momentum for heavy-duty adoption and believe that will continue throughout 2026. Before turning the call over to Bob, I want to provide a few high-level comments on our 2026 outlook. We expect continued growth in RNG volumes, both the third-party supplied RNG we deliver through our stations and the RNG we produce at our dairy RNG facilities. Our overall results are expected to improve over 2025 with a range of adjusted EBITDA of $70 million to $75 million. Bob will share more of the details, but our plan reflects moderate volume growth in line with gradual adoption of trucks utilizing the X15N, some extensions of multiyear major fueling contracts, a constructive view of environmental credit prices, significant progress in financial improvements at our dairy RNG production facilities, and a concerted effort at driving down operating costs. We are pursuing growth across our fully integrated RNG model while evaluating opportunities to optimize costs and streamline our operations. We are scaling our own production of negative-emissions dairy RNG while supporting customer adoption of low-emissions, low-cost RNG fuel across the U.S. and Canada. Clean Energy Fuels Corp. is well positioned for 2026 and beyond. With that, I will hand the call over to Bob. Robert Vreeland: Thank you, Andrew, and good afternoon, everyone. We finished 2025 mostly in line with our expectations. Our GAAP loss for the year of $222 million was slightly higher than expected, principally from non-cash interest charges in the fourth quarter associated with our paydown of debt and the expiration of our delayed draw loan. Adjusted EBITDA for 2025 was $67.6 million, which exceeded the top end of our guidance of $65 million. As I have mentioned on our previous calls this year, please remember that the alternative fuel tax credit expired at the end of 2024, so the results of 2025 do not include any meaningful alternative fuel tax credit revenue or income. In 2024, for example, our EBITDA of $76.6 million included $24 million in alternative fuel tax credit income. So, on an apples-to-apples basis, a nice increase in 2025 adjusted EBITDA. For the fourth quarter, the alternative fuel tax credit amount in 2024 was $6 million to consider when comparing results to 2025. RNG delivered in 2025 was 237.4 million gallons, about 97% of our target. The slight shortfall really goes back to the first quarter where extreme weather hampered RNG supply. We were able to make up a lot, but not all, of the Q1 shortfall during the rest of 2025. In Q4 2025, we delivered 64.1 million gallons of RNG, which was approximately 5% increase over Q3 2025 and approximately 3% higher than a year ago in the fourth quarter. Also in the fourth quarter, we saw improved financial performance by our RNG upstream business, and we expect that trend to continue going into 2026. The results of our fuel distribution business, particularly at the gross margin level, were on par with what we have seen during the first three quarters, with the exception being our SG&A expenses in the fourth quarter were approximately $4 million above our normal run rate, due to one-off personnel and station exit costs. For 2026, our SG&A expenses will trend significantly lower. We ended 2025 with $156.1 million in cash and investments after having paid down $65 million in debt in the fourth quarter. At present, we do not have plans for additional paydowns of our debt in 2026. Looking further at 2026, we are expecting to deliver 250 million gallons of RNG with total fuel volumes of around 324 million gallons. Our RNG upstream business is expected to produce 7 million to 9 million gallons from eight operating dairies. Revenues for 2026 are expected to range from $420 million to $440 million with a GAAP net loss of $71 million to $66 million and adjusted EBITDA of $70 million to $75 million. We have a further breakdown of our guidance for GAAP and non-GAAP in our press release between our fuel distribution and RNG upstream businesses. For 2026, we expect to see significant improvements in our RNG upstream business, which is expected to have lower GAAP losses and positive adjusted EBITDA for 2026. Our fuel distribution business will see significant improvement in its GAAP net loss with adjusted EBITDA coming off from a robust 2025 performance due to anticipated lower but still very adequate fuel margins adjusting for normal pricing and market conditions, including impacts of some significant contract renewals and the amount of environmental credit value retained by us. We are maintaining a cautious view on the spread of natural gas to oil for 2026, but certainly short of a negative view. Having said that, we are constructive on RIN and LCFS credit prices for 2026 with an expectation that the RIN and California LCFS credit prices will continue at prices like we have seen to begin 2026. We also include 45Z credit values in our results for 2026 pertaining to the RNG production volumes in our JVs, as well as the South Fork Dairy which we fully consolidate. As I mentioned, we are expecting our SG&A expenses to come down by about 10% or over $10 million in 2026. That may be a run rate of about $25 million a quarter, and that includes the stock comp in there. Our capital expenditures should remain steady at approximately $25 million for our fuel distribution business, which includes maintenance CapEx as well as additional station build-outs, keeping in mind that in 2023 and 2024 combined, we spent $153 million in CapEx for our fuel distribution business, primarily for the build-out of our 19 Amazon purpose-built stations. We have now come down to a more normalized rate of $25 million, which was similar to 2025. Investments into our RNG upstream business for 2026 are expected to be around $40 million, solely related to our continued construction and eventual completion of our three Moss Energy Works dairy projects. We are using cash that we have on our balance sheet and cash generated from operations to fund the fuel distribution CapEx and our RNG upstream investments for 2026. We do not have any borrowings contemplated for 2026. We are expecting to generate around $50 million in operating cash flow in 2026. For comparison purposes, recall that in 2025, we PIK’d interest of $15 million, which benefited our operating cash flows in 2025. In 2026, we do not intend to PIK any interest, although our interest payments will be reduced by approximately $6 million for the year since we paid down $65 million of debt in December. With that, operator, we can open the call to questions. Operator: Thank you. If you would like to ask a question, please press 1 then 2. Once again, that is 1 then 2 to ask a question. We will take our first question from Rob Brown with Lake Street Capital Markets. Your line is now open. Good afternoon. Rob Brown: Good to see the upstream business starting to get to EBITDA positive. That is great news. Just a sense of the ramp trajectory of the eight facilities you have now open and operating and generating fuel. I think you have some metrics on the gallon volume, but how do you see the ramp trajectory to full capacity there playing out? Robert Vreeland: There will be a bit of a ramp. It is not a dramatic ramp, but certainly, mostly the second half of the year is a little better. You are not right out of the gate in Q1, but certainly much better than what it has been in Q1, and then it kind of ramps up each quarter. It is a significant improvement. We have a range of $3 million to $5 million of adjusted EBITDA, so you are going to ramp that over four quarters. Rob Brown: Okay, great. And then on the 15-liter engine and the truck market, I know it is a tough year. You said some signs of maybe spilling there. What are you hearing from customers in terms of the interest in buying trucks and interest in the 15-liter over this year? Andrew Littlefair: I think, Rob, you are seeing some of the macro issues that plagued the trucking industry clearing up. That is a healthier backdrop. We are engaged with a lot of the largest fleets. I continue to be encouraged that customers, even with rolling back of various mandates and different policies, are showing a great deal of interest in fleets wanting to be clean, environmental, and have lower-carbon, sustainable trucks. We are seeing and hearing from their customers, the shippers, that this is still of interest. We are working hard to come up with a total cost of ownership, which we can do in our business because we can price very aggressively to give them a good economic return on that natural gas investment, and then they have dramatic savings going forward. I am optimistic. We have demo trucks; not just Clean Energy Fuels Corp., others in the industry have stepped forward. We have the largest fleets in America demoing trucks. We are beginning to see some orders—still small but very instructive—coming. The final thing is the engine seems to be working really well. As I mentioned in my remarks, the torque and horsepower, drivability, even the mileage, is really improved from what we have seen before in the 12-liter. We have to work it hard, and there is a lot of policy turmoil that people are beginning to understand, but I feel better in 2026 than I did in 2025. Rob Brown: Okay. That is great color. Thank you. I will turn it over. Operator: Thank you. We will go next to Derrick Whitfield with Texas Capital. Your line is now open. Derrick Whitfield: Hey, guys. Good afternoon, and thanks for your time. First, thank you for offering both upstream and downstream guidance for your business. Maybe just on the upstream side, I know you touched on the prepared remarks about 45Z. Could you advise how you are accounting for it in your guidance, both on volumes and average CI? Robert Vreeland: We are accounting for it. We are accruing for it as we produce volume. We anticipate that where that would get recorded will be a reduction of cost of sales. In our plan, we are more optimistic than what is currently in the legislation for us to reflect CIs with dairy manure. I will not get into the specifics of exact scores because that varies at every dairy, and, frankly, the legislation is still forthcoming on that. But we are generally a bit more optimistic than what is currently in legislation, and we will record that as we go along in the year according to what is out there in legislation, but we anticipate that it will improve when the final rules come out. Derrick Whitfield: Maybe to put a button on that, if legislation were in the negative 50 territory, that is kind of where you would be today even though you believe that negative 200 might be the ultimate reading on average. Am I saying that correctly? Andrew Littlefair: I do not know that we told you it would be minus 200, but we agree that when this finally shakes out, when a 45Z GREET model finally gets adopted, and when we look at the legislation and from the engagement that we have had, we think that it should improve from that minus 50. Derrick Whitfield: Fantastic. And then leaning further on the upstream side, while I realize LCFS credits are not back to the levels where most of these projects were underwritten, we are seeing progress as you highlighted in LCFS and also potential through 45Z to further enhance economics. Outside of what you are doing with Moss at present, are the prices and 45Z getting back to a level where it might make sense to revisit some of the growth opportunities in your backlog? Andrew Littlefair: Not yet, Derrick. We are optimistic and constructive on where we see, and our partners as well, the LCFS trending over time. Just to remind the audience, we underwrote some of these projects when it was $150 or $180, so we have some room to grow there. I do not think you will see us underwriting any projects right now. We are very focused on bringing these on, having them contribute. We are pleased with that. We have to watch how some of the markets break before we invest more. We have three more projects we are very excited about. We will end the year with 10, breaking over early 2027 for our 11 projects, and we feel pretty good about that. We now have dry powder in case we see one that we have to have. But right now, consider that we are going to take a breather and make sure that what we have under construction and what we have operating get optimized. Derrick Whitfield: Perfect. Very helpful. Thanks for your time. Andrew Littlefair: Thank you. Operator: Thank you. We will go next to Matthew Blair with TPH. Your line is now open. Matthew Blair: Thank you. Hello, Andrew and Bob, and congrats on beating the top end of your 2025 guidance range. For 2026, in fuel distribution, you mentioned the impacts of some significant contract renewals. I think you also mentioned it sounds like you are retaining fewer of the credits in these renewals. Could you talk about the drivers here? Is this just a function of more competition in the market, or what is really causing this? Robert Vreeland: It is twofold. Absolutely, there is competition in the RNG world, and that is what it is. We are in a good place for that, but you cannot deny that there are a lot of folks wanting to put RNG places, and we have a lot of those places to put RNG, but we have to maintain our market share, and it comes at a price. On the contract renewals, that is a reality, but it is a very positive aspect of our model. It is a recurring revenue model, and we have a lot of renewals. We have had some major ones come up where we are reflecting where we are at with current market conditions, prices, other competitors, as well as what we have spent on CapEx in prior years versus where we are headed going forward. That will be reflected. This is very positive because we are talking about renewals, in my view, and the resulting margins are still very adequate for us. They are very good. We are coming off a robust 2025, I will say. We are not necessarily repeating that, but we are accommodating these renewals, and that is part of it. Matthew Blair: You touched on the weather issues from a year ago, Q1 2025. Are there any weather challenges so far this quarter that we should be thinking about? Robert Vreeland: A little bit. Not to the extent that we saw last year. There have been some freezes, but we are going to go mostly normal course on that. I am not anticipating coming out with Andrew Littlefair: some of our facilities saw minus 40 degrees. You have some operating challenges during that, but nothing like last year. We dodged that in terms of a perfect storm of production that came offline from our third parties. We did not see that this year, so that is good. Robert Vreeland: It is anticipated somewhat in our plan anyway, because it is going to get winter here and get darn cold, and maybe colder than what you would think. Matthew Blair: That is helpful. Thank you. Operator: Thank you. We will take our next question from Betty Zhang with Scotiabank. Your line is now open. Betty Zhang: Hi, Andrew. Hi, Bob. Thanks for taking my question. Could you give us an update on your JVs with BP and TotalEnergies? Is there appetite for growth from your partners? And if I heard correctly, it seems your upstream investments this year are solely related to the Moss Energy Works projects, so just wondering how those JVs are looking. Andrew Littlefair: That is right. The CapEx on the RNG is for those Moss projects, the completion of the three. We have that money, and that will get spent throughout the remainder of this year. Two of those projects will be finished, one in the spring, one a little later than that, and then the third project in 2027. That is all we have anticipated with our partners right now, Betty. Our partners—BP has a lot of landfill gas they bring on with their other investments. I think all of us are very interested in bringing East Valley, which is really a significant investment, a very large dairy, on and have it operate correctly. We have our hands full, and I think all of us feel good about where we are. We are always looking at opportunities, as I said on the last question, but right now, we do not have any hard plans or any other investments that we are ready to pull the trigger on. That would be the case with all of our partners. Betty Zhang: Makes sense. For my follow-up, would you be able to give us some color on 2026 RNG volumes as well as your own upstream production volumes? Robert Vreeland: Our RNG volumes are anticipated to be 250 million gallons, and the RNG production volumes from our RNG upstream JVs and South Fork are 7 million to 9 million gallons. I will add a little side note on that for everyone's information. That 7 million to 9 million gallons that will be produced at those dairies—all of that gas comes to us. That does also flow through our fuel distribution business. The economics on that can change. In everything except South Fork, it is kind of a 50/50 type share in the economics. When you are looking at that production volume, we get about 50% of the economics on seven of those, and the South Fork is fully consolidated, so we get all the economics there. Betty Zhang: Perfect. Thank you. Operator: Thank you. We will go next to Craig Shere with Tuohy Brothers. Your line is now open. Craig Shere: Good afternoon. I understand you are more optimistic heading into 2026 on the new advanced CNG truck sales flow. But given the narrowing spreads between diesel and CNG, is it reasonable to think that the payback period for the fuel savings for the fleet customer is getting a little elongated here? I understand they are trying to cut costs for the additional upfront cost of the CNG trucks over time, but are we at risk of any elongated payback period and that creating a headwind to this growth outlook? Andrew Littlefair: Of course, if the spreads narrowed significantly, you would see that payback period getting elongated. We do not see that yet. As Bob mentioned in his remarks, we are not necessarily optimistic about that spread widening, but we are constructive. We believe we may not quite see the spreads we saw in 2025, but we will have good spreads on natural gas versus oil price. Obviously, there is geopolitics at work here, but that is not an issue that has come up where we are seeing alarm. We can discount our fuel significantly and allow for about a two-year payback. We have to always work with our channel partners and with Cummins and with the dealers and with the OEMs to make sure that we are putting the best price of that package forward, because there is probably always work to be done on that, and the more of those we sell, the better that will get. We are working on that hard with all of those people. We have seen a little bit of tightening of the spread in the Central, South, and Eastern United States, but since January 1, that has widened a little bit. We are okay right now, Craig, but it is something that we keep our eye on constantly. Craig Shere: Is 2025 an all-time record RNG volume through the downstream, and how do you anticipate opportunities to source third-party RNG to continue to grow that over the next two to three years? Robert Vreeland: We would mark it down as a record quarter. It is probably gold medal worthy. Andrew Littlefair: On the last part of your question, everybody wants into the transportation sector, and there is a lot of RNG available. We have very good relations with the industry. We source from 90 suppliers today. There is plenty of RNG. What all of us need in the business is more transportation volume, and we are on the tip of the spear there working hard every day to create it. There is a lot of RNG available. All of us could use a little bit more adoption and more volume in transportation because the alternative markets are tough right now. Everybody wants in, and we are in an enviable place because we have all those nozzle clips. There is no shortage of RNG at present, and, frankly, not for the next couple of years, I would imagine. Craig Shere: I hope there will be soon. Great. Thank you. Operator: Thank you. We will go next to Eric Stine with Craig-Hallum. Your line is now open. Eric Stine: Hi, Andrew. How are you? Just sneaking a few in here at the end. Hopefully, no repeat. Following up on that last question, I know some time ago you had set the goal that it would be all RNG through your Clean Energy Fuels Corp.-owned stations, and I know that 100% of the volume in California is RNG. Where do we stand towards that goal? I know you talked about that in 2026, you expect about 250 million gallons of RNG. Andrew Littlefair: Maybe this, Eric: through our infrastructure, we are at 89%. Eric Stine: To get to 100, as you said, you have really no limitations in terms of RNG supply. Correct? Andrew Littlefair: Some of that 89% is because we have seen some conventional fossil natural gas go up. We sort of work against ourselves once in a while on that. We have done a good job moving almost all of the fuel to dairy in California. A few years ago, we talked about someday we would like to see that go from 10% to 30%. It is almost at 100. Maybe in 2026, it will be. We are doing well on that goal, and it will continue to be high like this, I would think, from here on in. Eric Stine: In terms of stations where you do O&M, there are cases where you are involved in the supply of the RNG as well. Is that correct? Andrew Littlefair: That is something that we see as an advantage. We have long-term relationships where we have built that station. There could have been a time in the past where a transit property got their natural gas from the local utility. Because we know them, and because we are experts in RNG, we have been able to flip transit properties from buying CNG from a utility to where we are now supplying the RNG. That is what I was talking about in my remarks. We have a big list right now of candidates in 2026 where we hope to work that relationship and move them from a competitor supplier—CNG from a utility—and move them over to RNG. We have a workforce, a team of people; that is what they do. We hope to add that. Wish us well on that. Eric Stine: It sounds like that would probably be the bigger objective than getting through your stations where it is at 89% up to 95% to 100%. Is that fair? Andrew Littlefair: That will help. If we land 4 million gallons or 5 million gallons as an adder where we were doing the maintenance but we were not supplying the gas, and we can flip that to RNG that we are supplying, that is one of the ways that number comes up. Eric Stine: Last one for me. You talked a little bit about the 45Z and waiting on the guidance to be dialed in some, but what conversations are you having in terms of, at some point, monetizing those credits with a third party? Robert Vreeland: Our expectation is to get into routine monetization. We have already been in the market with the ITC monetizing that, and our team is well connected with third parties there as well. That is the plan. We also work with our partners on that. We are in a good spot, and there is definitely an appetite out there for the 45Z credits. Eric Stine: Thank you very much. Andrew Littlefair: Thank you, Eric. Operator: Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to Andrew Littlefair. Andrew Littlefair: Thank you, operator, and thank you, everyone, for joining us. We look forward to speaking with you next time on our first quarter results. Have a good day. Betty Zhang: Thank you. Operator: This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.
Operator: We will be going live in five, four, three. Good afternoon. I will be your conference operator today. All lines have been placed on mute to prevent any background noise. After the company's remarks, there will be a question-and-answer session. If you would like to ask a question, press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. Before we begin, I would like to remind everyone that today's call may contain forward-looking statements within the meaning of the federal securities laws, including, but not limited to, statements about BridgeBio Pharma, Inc.'s future operating and financial performance, business plans, prospects, and strategy. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause actual results to differ materially from those expressed or implied in these forward-looking statements. For a discussion of these risks and uncertainties, please refer to the disclosure in today's earnings release and BridgeBio Pharma, Inc.'s periodic reports and SEC filings. All statements made here are based on information available to BridgeBio Pharma, Inc. as of today, and the company undertakes no obligation to update any forward-looking statements made during this call except as required by law. With that completed, BridgeBio Pharma, Inc. may begin your conference. Chinmay Shukla: Good afternoon, everyone, and thank you for joining BridgeBio Pharma, Inc.'s fourth quarter 2025 earnings call. My name is Chinmay Shukla. I am the Senior Vice President of Strategic Finance at BridgeBio Pharma, Inc. With me today are Neil Kumar, our CEO, who will provide opening remarks and discuss overall corporate performance; Matthew Outten, our Chief Commercial Officer, who will provide more details about our commercial performance, particularly the continued success of Atruby; and Thomas Trimarchi, our President and CFO, who will review our financial results. During today's call, we will review our continued strong commercial execution in Atruby's fourth quarter and first full year on the market. More importantly, we will discuss what we believe is a transformative inflection point for BridgeBio Pharma, Inc., marked by positive top-line Phase 3 results for Encalarec NADH1 BBP-418 in LGMD2I, as well as positive top-line data for infigratinib in achondroplasia. With three successful late-stage readouts across our pipeline, we are entering a new phase of value creation and portfolio maturation. We will also review our robust financial position and how it supports our regulatory launch and life cycle expansion priorities across these programs. Following our prepared remarks, we will open the call for questions. For the Q&A session, we will also be joined by Ananth Sridhar, Anna Wade, and Justin To, who lead Encalarec, BBP-418, and infigratinib, respectively. With that, I will turn it over to Neil. Thanks, everyone, for taking the time today. Neil Kumar: This is our first earnings call since we reported the results of our Phase 3 study with Infograt, which delivered a successful outcome for the community we serve in achondroplasia. Altogether with ATTR cardiomyopathy, this brings us to four large post–Phase 3 programs, and I want to begin my comments today by discussing what that portends in terms of the shape of the firm. In short order, this company will turn from a cash-consumptive business to one that generates significant cash flows. The shape of those cash flows connects to the clinical profiles that we will spend some time discussing today. But before I get into that, I want to take a moment to paint the picture of what the overall economic productivity of our post–Phase 3 pipeline might look like over the coming 24 months. I do so because the immediacy of the transition from a cash-losing business to a cash-flowing business is one that happens quickly and can open up new opportunities for a firm as successful at R&D as ours. Last year, we used $446,000,000 for the year net of revenue. Cash burn declined in the fourth quarter relative to the third quarter and throughout 2025, driven by rising revenues and improving operating leverage. Similarly, while we are going to make significant investments for launch readiness against our next three products, we expect cash burn to roughly hold steady through this year and start declining by the end of next year, given expected increases in Etrubee revenue. That is less interesting to me, though, than the following fact: absent any strategic moves, our current pipeline will begin to generate cash in late 2027 and will be a cash generation engine by 2028. The profile we anticipate having in 2028 will distinguish us in the field of genetic disease, and more broadly would place us in the top 20 to 30 firms in the biopharmaceutical sector from the perspective of cash flow or EBITDA. This projected future is driven by growing and diversified revenue streams connected to our four post–Phase 3 assets, which we believe in 2028 will generate more than $600,000,000 in profit. The value of any firm relates back to ROIC, revenue growth, and cost of capital, and against all three metrics, we believe this firm has a rapidly improving profile over the next three years. Our anticipated profit is even more impressive when one considers that we have been able to advance programs from the preclinical stage through Phase 3 at under $300,000,000, in some cases considerably under that, and at higher probability of technical success than industry average, suggesting an engine that could drive repeatable organic growth. Of course, all of this now highly probable growth is underpinned by clinical data that we have already generated across our four Phase 3s as well as data that we continue to generate, and a commercial engine that continues to grow and grow share in the ATTR cardiomyopathy marketplace. We intend to establish that commercial engine as best in class for both first-to-market and competitive market launches in genetic disease. Despite continued strong execution across our business, our recent share price performance does not reflect the progress we have made. We believe this disconnect is primarily driven by uncertainty surrounding the tafamidis IP situation, which I will address directly in a moment. Importantly, nothing about our fundamentals has deteriorated. If anything, our position is strengthened commercially, clinically, and strategically. As we execute against our milestones, we believe the intrinsic value of BridgeBio Pharma, Inc. continues to increase. We are keenly aware of the gap between intrinsic value and our current market valuation, and we are actively evaluating all appropriate options to ensure that shareholder value is properly recognized over time. More specifically, over the past three months, given the derisking of LGMD2I, our patient finding progress in ADH1, and the clearly differentiated infogratinib readout in achondroplasia, we believe our intrinsic value has increased and its error bars have narrowed. With over a billion dollars of capital on our balance sheet, and additional significant amounts of capital available away from the equity markets, and with the base business fully financed, we believe we have retained optionality to capture the value you all have helped us to create. With that said, I want to spend some time today reiterating some of the important clinical data, especially as it pertains to the infigratinib readout. I want to highlight ongoing commercial readiness activities for LGMD2I and ADH1, and I want to talk about—and Matt will elaborate on this—our continued commercial progress in ATTR cardiomyopathy. On the data side, I will begin with our recent Phase 3 readout in achondroplasia. As many of you know, we were privileged to generate data alongside the achondroplasia community that suggests a differentiated profile infogratinib. This study successfully met the primary endpoint of change from baseline in average height velocity at week 52 with a p-value of less than 0.0001, with a mean treatment difference against placebo of 2.1 centimeters per year. In key secondary endpoints, infogratinib also demonstrated the first statistically significant improvement in body proportionality in achondroplasia, with a least squares mean difference of minus 0.05 with a p-value of less than 0.05 against placebo in children younger than eight years old, which were more than 50% of our participants and in a prespecified analysis. It succeeded on change from baseline in height z-score at week 52 with a least squares mean increase on the treatment arm of 0.41 standard deviations at week 52 associated with a p-value of less than 0.0001. All of these numbers, as a reminder, are best in class and unique to infogradinib. Infogradinib was also well tolerated with no discontinuations or serious adverse events related to study drug. Three cases, or 4% on active, of hyperphosphatemia were mild and transient, with no cases requiring either dose reduction or discontinuation, and no adverse events associated with the inhibition of FGFR1 or FGFR2—for example, retinal or corneal adverse events. As a reminder, infogratinib’s differentiated oral route of administration and its mechanism, which uniquely targets this well-described condition at its source, produced Phase 2 efficacy and safety results that were highly differentiated. Our Phase 3 data have confirmed those efficacy and safety profiles. And interestingly, as we have begun to test this product profile since the readout, we have heartily found that our base case achievable market share has risen from the 52% I mentioned in my JPMorgan talk to in excess of 65% peak year share. In addition, that preliminary market research suggests not only differentiated peak year share, but also significant market expansion, similar to what we have seen when orals enter markets as diverse as Fabry, migraine, hereditary angioedema, and in many other categories. In fact, recent analysis done at our Revenue Institute in partnership with MIT suggests that across indications, the launch of an oral product expands the market by approximately 170% over five years from launch of the first oral product. With regards to our efforts in LGMD2I, we are excited to be presenting the full dataset from our study at the upcoming Muscular Dystrophy Association Conference where Doctor Katherine Matthews from the University of Iowa will give the keynote. We have built and onboarded a dedicated commercial leadership team to ensure we are fully prepared to serve the LGMD2I community from day one. This is a population with profound unmet need. We are ready to execute. At the same time, we are not limiting our focus to the patients already identified. We are actively working to expand awareness, accelerate diagnosis, and help uncover individuals who may be unidentified within the broader LGMD or Becker muscular dystrophy populations. Our goal is simple: to find every patient who can benefit and to ensure we are ready to reach them the moment we are able to. Moving to ADH1, our other first-in-class product, Encalorate, we continue our patient finding efforts, which have already identified in excess of 1,700 unique patients in claims data. We also recently had pre-NDA communications with the agency, which were supportive of our expectations, and we continue to anticipate the launch of both Encalorate and BBP-418 in late 2026 or early 2027. Finally, and most importantly, I want to talk about our ATTR cardiomyopathy franchise, where, as I suggested recently, we continue to elaborate not only on the fullness of the best-in-class stabilizer hypothesis, but also on our differentiation in the real-world setting and our ability to impact patient health as early as one month—by far the earliest impact we see from any medicine in this space. We already preannounced the fourth quarter Atruvi net product revenue of $146,000,000, which corresponded to greater than 25% NBRx share as of 12/31/2025. Over the last few weeks, Atruby’s commercial momentum has continued. As of February 20, we have seen 7,804 unique patient prescriptions written by 1,856 unique prescribers. You will hear more from Matt about what this means in terms of competitive differentiation. And as I alluded to as well in my JPM talk, we are continuing to interrogate the importance of the cardiorenal axis, which seems to be uniquely involved in our early onset of action. We have also noted with great interest the recent PNAS paper that I only had a bit of time to talk about at JPMorgan, which suggests that binding enthalpy best predicts the conformational stabilization imparted by kinetic stabilizers as opposed to binding affinity (Kd) or Gibbs free energy. As we have shown through ITC experiments and as we published in Miller et al., we have a vastly superior enthalpic binding mode than does tafamidis, which in concert with superior binding kinetics continues to reinforce Atruby’s better stabilization profile. A recent bevy of literature further supports that increases in serum TTR are associated reliably with decreases in the relative risk of mortality. These papers suggest that for every mg/dL increase in serum TTR, you decrease the risk of mortality at 30 months by approximately 5%. As a reminder, we observed in our Phase 3 study that patients increased their serum TTR by 3 mg/dL when moving from tafamidis to acaramidis. This suggests a whopping 15% relative risk reduction in mortality when moving from tafamidis to acaramidis. Let me also address the recent stock volatility, which is largely centered on questions regarding Vyndamax IP and the potential for generic entry. First, it is important to separate two things: the legal process around tafamidis and the fundamental strength of Atruby. Our confidence in Atruby is rooted in its clinical profile and market positioning, not a particular IP outcome. On the IP front, the Pfizer decision to withdraw one of its EU patents defending the Vyndamax-equivalent product was unexpected. That said, it did not materially change how we view the EU market given Vyndamax’s orphan drug exclusivity in wild-type ATTR cardiomyopathy through 2030, which is now and how we have always consistently modeled that geography. In the U.S., which is the market of greatest importance to us, we believe the IP position is stronger. The patent claims at issue are narrower than those in Europe, including specific XRPD peak limitations for Form 1 that were not part of the EU case. In addition, U.S. law applies a higher legal threshold for invalidity, requiring that challengers prove by clear and convincing evidence that a prior art process necessarily and inevitably produces the claimed form, not merely that it could or likely would. That said, IP trials are inherently uncertain, and we will reassess as more information comes available following the U.S. proceedings in April. Stepping back, however, our strategy does not depend on tafamidis IP. Atruby has demonstrated near-complete stabilization, rapid clinical benefit, and meaningful differentiation in ATTR cardiomyopathy. It is already priced at a discount to Vyndamax and is less than half the price of the knockdown technologies. We believe physicians are making decisions based on clinical performance, not simply price, and prescribing trends we are seeing are reflecting that. Even in a hypothetical scenario involving generic tafamidis, we do not believe a less efficacious product would undermine the role of a clinically differentiated therapy in a serious, progressive disease like ATTR cardiomyopathy. In short, we remain confident in Atruby’s positioning today and in the years ahead. I will now turn it over to Matt to speak more specifically about the commercial momentum we are seeing. Matthew Outten: Thank you, Neil. Consistent with what we highlighted at JPMorgan in January, we believe 2025 reflected strong commercial momentum for Atruby, and it represented an important step forward in advancing three additional product candidates towards potential commercialization. In the fourth quarter, we delivered 35% quarter-over-quarter growth in net product revenue, ending the year with $502,100,000 in total revenue and $154,200,000 in quarter four. Of this, the net product revenue for Atruby was $362,400,000 and $146,000,000, respectively, while new patient growth accelerated in the latest quarter to reach 7,804 new patient starts. When viewed in conjunction with the IQVIA data, it becomes clear that Atruby is accelerating growth at a significantly faster rate versus previous quarters, while the competition lags behind. This is particularly obvious in first-line patients, where the exceptional data for Etruebe, along with our experienced field teams, have driven sales to the highest levels since launch, surpassing all expectations. We have historically given out the new patient start number each quarter, and have done so again despite the competition not offering similar numbers. Moving forward, we will not be offering new patient start data because of this lack of transparency by others. Continuing to do so would put us at a competitive disadvantage, but our expectations are that Atruby will continue to grow as it has done since launch and as exemplified with today's update. As adoption grows, particularly in the first-line setting, we remain focused on ensuring patients and healthcare professionals have clear, balanced information when evaluating therapy options. That focus is especially relevant given recent updates we have seen in competitor direct-to-consumer communications. After receiving a letter from the FDA several months ago and pulling their television ad from the airwaves, Alnylam has returned to TV advertising, but of note, the safety section has been updated. Besides adding the warning about the risk of vutrisiran lowering vitamin A and potentially affecting vision, the ad now points out the risk for several additional concerns, namely joint pain, pain in the arms and legs, and shortness of breath. In a population already often suffering from these issues, the possibilities of amplifying, compounding, or causing shortness of breath and/or pain in the joints and/or pain in the arms and/or pain in the legs should be highlighted to any patient considering treatment with vutrisiran. The fact that these risks had been omitted but are now stated at the end of each commercial—hopefully all promotional materials and messaging will correct and highlight for patients and healthcare professionals some things to consider with vutrisiran treatment, especially if they are a newly diagnosed patient versus someone who has tried all other options. If we shift back to the reasons for the growth of Atruby, there are several driving factors. First, the number of prescribing HCPs continues to grow, but of equal importance, HCPs who start using Atruby continue using Atruby. We are seeing repeat use and stable patient persistence, which tells us physicians are comfortable with what they are seeing in their practice. We believe the success we have seen in 2025 is driven by Atruvio's differentiated profile as the only near-complete stabilizer on the market. In contrast to therapies that rely on partial stabilization or partial knockdown mechanisms of action, Atruby has also demonstrated the fastest time to separation to date—a attribute that matters as physicians seek therapies that can deliver meaningful benefit quickly. Importantly, persistency and adherence for Etrube continue to exceed our original expectations, which were based on historical ATTR treatment patterns, reinforcing our confidence in the durability of the franchise. We believe we have the strongest commercial teams in the industry spanning sales, marketing, strategy, analytics, and market access. Many team members have worked together for years; we have continued to build on that foundation with targeted hiring of top talent, including the recent expansion of the Atruvio sales team. Overall, Q4 reflects continued progress across key metrics including growth in patients on therapy and ongoing use by prescribers, and we are excited to see continued growth in quarter one as we head into 2026. Turning to the pipeline, we are focused on the next wave of potential launches. We are excited by the recent clinical results for BVP-418, Encalorit, and in fagratinib, all of which exceeded expectations across their primary and secondary endpoints. Based on the strength of these data, we believe each program will be the leader in its respective market, bringing much-needed therapies to families and patients in need of care. Building on the successful launch of Etrube, we have established a proven commercial foundation and are well positioned to extend this model as we prepare for future launches across our pipeline. We look forward to going into more detail as we get closer to approval for each. I will now turn the call over to Tom. Thomas Trimarchi: Thank you, Matt, and good afternoon, everyone. I will now discuss our financial results for the fourth quarter and full year 2025. Please note that our commentary on today's call will focus on GAAP financials unless otherwise indicated. Total revenues were $154,200,000 in Q4 2025, consisting of $146,000,000 of Atrivio net product revenue, $5,300,000 of royalty revenue, and $2,900,000 of license and service revenue, compared to total revenues of $5,900,000 for the same period last year. The $148,300,000 increase in total revenues was primarily driven by a $143,100,000 increase in net product revenue from Atruby, reflecting broad-based growth across market segments, including accelerating first-line adoption, increasing new patient starts, expanding prescriber depth, and strong persistency and adherence, supporting durable revenue growth. We also recorded an increase of $5,100,000 in royalty revenue from ex-U.S. net sales of BEYONDRA in Europe and Japan. For the full year 2025, total revenues were $502,100,000 compared to $221,900,000 for the full year 2024. The $280,200,000 increase in total revenues for the full year was primarily due to a $359,500,000 increase in net product revenue for Atruby and an $11,200,000 increase in royalty revenue from sales of Beyond, partially offset by a $90,500,000 decrease in license and service revenues versus the prior year. Total operating costs and expenses for Q4 2025 were $293,700,000 compared to $231,900,000 in the same period in the prior year. The $61,800,000 increase in operating costs and expenses was primarily driven by a $63,300,000 increase in SG&A expenses, partially offset by a $13,900,000 decrease in R&D, primarily due to decreased R&D activities related to Atruvian Biotrio following regulatory approval. For the full year 2025, total operating costs and expenses were $1,000,000,000 compared to $814,900,000 in the prior year. The $210,600,000 increase was primarily driven by a $242,300,000 increase in SG&A, largely reflecting the company's investments to support the commercial launch and ongoing activities for Atruvio. This increase was partially offset by a $54,900,000 decrease in R&D expenses, primarily due to decreased R&D activities related to Atruvio and Biotra following regulatory approval. Turning to our balance sheet, we ended the year with a cash position of $587,500,000 in cash, cash equivalents, and marketable securities. We completed the issuance of $632,500,000 aggregate principal amount of 2033 convertible notes in January 2026, which provides significant cash runway to continue supporting our transition into a diversified late-stage multiproduct business. With that, I will turn the call back over to Chinmay. Chinmay Shukla: Thank you, Neil, Matt, and Tom. We will now turn the call over to the operator, who will open the line for questions. Thank you. Operator: At this time, I would like to remind everyone, in order to ask a question, press star and the number one on your telephone keypad. Your first question comes from the line of Salim Syed from Mizuho. Your line is live. Hi, guys. This is Bennett for Salim. Bennett (for Salim Syed, Mizuho): Thanks for taking our question, and congrats on another quarter of continued patient growth. If I may, could you comment on why Atruvio continues to show consistent growth even as competitors' growth seems to be slowing down? Can you comment what are the key drivers behind it? And what is the feedback that you feel is resonating more with docs and patients now that we are several quarters in. Operator: Thank you. Neil Kumar: Thanks, Bennett. Maybe I will turn it to Matt to answer that question. Matthew Outten: Sure. Thanks. I think it is multifaceted, but a big part is the field team that we have at BridgeBio Pharma, Inc. The right team makes or breaks a launch, and that is across both commercial and medical. And then, of course, there is the data. No one has been able to show better data or near-complete stabilization. Only Atruby. I think the time to separation is a big factor, and you heard some of that in the earlier comments. And I think finally, we have stayed disciplined and focused on what is important for patients and HCPs. We have category-leading efficacy and safety with consistent results across all patient types. So a great team and a great medicine, I think, is hard to slow down. Neil Kumar: Maybe I will just build on that. You can see in the new patient script number something kind of interesting where we had that rapid acceleration at first, sort of plateaued, and now we have a second wave of acceleration. That is sort of rare if you look and model most launches where you see kind of a burst of activity and then typically you see a slowing. So that really portends one of two things. One is obviously rapid patient identification, which I think we are seeing in the field. And secondly, it is really a second wave of prescribers that are starting to wake up to some of the messages that we are putting forth. So that, I think, is an exciting profile generally for a launch this early in. And, you know, couple that with nearly 1,200 new scripts since I gave my JPM talk, that is a very, very exciting trajectory right now. Bennett (for Salim Syed, Mizuho): Alright. Thank you. Operator: Your next question comes from the line of Mani Foroohar from Leerink Partners. Your line is live. Congrats on continuing to show volume growth. Mani Foroohar: You have talked a lot about the commercial differentiation and differences in your growth trajectory versus competitors; lots of different pieces of data go into that. But I want to look past out into just what the timeline is into whenever tafamidis and discussed generics and beyond about clinical differentiation, which you have identified as core to your strategy to driving continued growth and durability in the face of a generic. Whenever that happens, can you tell us when we will have significant incremental real-world data, longer-term data, from acaramidis to establish that difference in clinical benefit that you guys are hanging that growth tail on. Neil Kumar: Great question, Mani. Thanks for it. I think first, the key is for us to really start to get some of the data that we presented in the last year out into the field and understood. Maybe just a couple pieces that I think have been overlooked or are just starting to really make their way into the field. First and foremost is the early impact—that impact as early as one month that I talked about at JPM. We continue to interrogate the precise mechanism behind it. But as you know from these clinical trials and a lot of the real-world evidence, early CVH is extremely common. So you want to get patients on the drug that can take action as early as possible. Not only for that reason, but obviously, this is an ongoing mass action in deleterious disease, so you want to be on the drug that has the earliest impact. The second is the AF data that we put forth. Nearly 60% of patients in this space suffer from AF or cardiac arrhythmic events. I think the most important piece of data that we put forth when we showed forth the 70% reduction as published last year is that we are having an equivalent effect on or off AF in the AF subpopulation. And so, when you think about AF patients being slightly harder to manage in the context of ATTR cardiomyopathy, here you have a drug that has consistent and high impact—in fact, the highest point estimate we have seen in terms of both reduction in downstream outcomes of 43% and reduction in AF itself of 17%. So that, I think, is the second piece that we need to do a better job of educating on, and I think physicians will find it exciting. And then finally, it is the variant population, the sickest by far of the subpopulations. They do deserve a better drug, and that 0.41 hazard ratio that we presented with statistical significance is even more impressive given the fact that less than 10% of our patients on ATTRIVUE were variant patients. I think that is the best point estimate again with the best statistical significance in the space and extremely consistent with the binding mode that we have articulated, which is differentiated against tafamidis. So those would be the things that we need to do a better job of driving into the marketplace. Right now on a go-forward basis, the two big areas that we are interrogating, number one, are real-world evidence, which you should see by the end of this calendar year, and the second is the cardiorenal axis work that we are doing. We think we have a unique signal that connects interestingly to the early onset of activity and could really, I think, change the shape of this marketplace going forward. So that is what I would say on that front. Mani Foroohar: I have a quick follow-up more on firm-wide strategy. You guys have talked about the transition to cash flow generation over the course of a couple of years. Obviously, that happens when you have multiple high-margin small molecule assets. Can you talk about how you guys think strategically longer term about use of cash—where and how to put that incremental free cash flow to work? I am not saying call for a dividend, buyback, etc., BD, but how you guys think about your strategy and where that capital should go in a 2028, 2029, 2030, etc., free-cash-flow-generating BridgeBio? Neil Kumar: Totally. I would say at the very highest level, and as we have been talking about, I think a little bit more over the last couple of months, we are very pleased with the efficiency of our R&D engine—efficiency both in terms of time and cost and obviously the validity of it as it pertains to probability of technical success. And as we talked a little bit about a few months ago, Mani, I know you and I have connected on this, the pipeline that is attended at Gondola is a wonderful example of the ample substrate available to help patients with genetic disease. And our objective function is to serve as broadly as possible. So given all of those things, with cash flow, we would intend—as long as we could beat our cost of capital—to continue to reinvest into R&D and in some cases in partially owned assets that we have access to through Gondola, and bring those forward into the highly efficient operating model that we have established in mid- to late-stage development and ultimately in the commercial setting. Obviously, the stock is not trading where we would like it to trade, and it is trading quite a ways off intrinsic value. There are opportunities to do other things with cash flows, namely share buybacks and dividends, if indeed we do not feel we can capture the NPV of fully financed assets as they move into the marketplace. So a bit of this will be just to see whether or not we can do a better job of helping investors avail of the value that we create and getting the stock price and cost of capital back up into a normal realm. And then that, we hope, would get us going in terms of growth in the R&D sector. That answer your question? Mani Foroohar: That is good. Absolutely. And congrats again on a good quarter. Operator: Thanks, Mani. Your next question comes from the line of Tyler Van Buren from TD Cowen. Your line is live. Tyler Van Buren: Hey, guys. Thanks for taking the question. So following the three successful Phase 3s in recent months, can you elaborate on your launch readiness and expected field footprint in the context of your burn commentary and the expected cadence of regulatory and commercial catalysts over the next 12 to 18 months? Neil Kumar: Yes. Thanks, Tyler. Maybe I will ask Matt and Tom to comment on that. Matthew Outten: Sure. Hey, Tyler. I think we are going to follow the same rigor as what we did for the Atruvio launch. I think one of the big differences is this time we will be launching on a global basis. And as a part of that, we are building in the U.S., but also ex-U.S. as well. We will have more on that towards the end of the year, in terms of both additional revenue for Atruvi that will be coming rest of world, but also our prep and buildout for the three additional launches in the U.S. and the rest of the geographies as well. But I think what is important—you have seen the recent data readouts. We are setting or resetting the standard of care for each and every one. For LGMD2I and ADH1, it is going to be a first- and best-in-class story. And for ACON, it is going to be resetting the standard with best-in-class data. Thomas Trimarchi: I will take the question on burn. As we have discussed, we have seen over the last several quarters our cash burn has been on a downward trajectory, driven first and foremost by the strong ramp of Atruvi and the gross profit that it provides. But I will also say that it has been due to our disciplined OpEx profile here. As we look to ramp the next three launches, we do expect a gradual increase in OpEx throughout the year. However, we expect burn to hold steady throughout most of the year and drop off again towards the end of the year. We continue to see an expanding operating margin provided by the Atruvio brand. Thanks for the question, Tyler. Operator: Your next question comes from the line of Biren N. Amin from Piper Sandler. Your line is live. Biren N. Amin: Congrats on the quarter. I have a high-level question. As you have demonstrated impressive productivity and outlined BridgeBio way as a sustainable development model, which is highlighted in the Drug Discovery Today manuscript recently in January, with that in mind and as we look beyond 2025, what are the key drivers of momentum for the company and when should investors expect new assets under the pipeline? Neil Kumar: Yes. Thanks, Biren. Thanks for the question. A little bit overlapping with some of my comments against Mani’s question as well. But maybe I will just say, near term, our focus continues to be obviously making sure that these drug products that we just registered successful Phase 3s on are approved and ultimately launched correctly. That is the highest and best use of our time right now. The second best use of our time are the additional indications associated with medicines that we know are safe and effective, such as obviously chronic hypopara in the context of Encalorate, and hypocon and some of the other height disorders that Justin has talked about in the past associated with infigratinib. So that would be the sort of second category of growth. But I think you are asking the right question. At the end of the day, as I mentioned earlier, the scientific substrate available to us to target well-described genetic conditions at their source continues to grow, and we are finding starting points all the way from the clinic back to early-stage discovery where we are probably most adept. And that is highlighted in the ever-growing pipeline at Gondola, which obviously BridgeBio Pharma, Inc. shareholders partially own. So I would think over the course of time, if indeed we are able to correct our cost of capital and trade closer to intrinsic value, number one, and number two, we are able to really stick the landing and effectively get these drugs approved and launched, there will be a moment where we can bring some of those other assets in and prosecute them through the great infrastructure that we have already set up here—namely, mid- and late-stage development, regulatory, and the ability to put them in the hands of a great commercial team—to do all of that efficiently in terms of time and cost. That is kind of the high-level answer. I do not have anything specific on a specific asset that we would bring in like that. I do think you should look for us generally to rely on organic, not inorganic, growth—organic meaning from the ecosystem of BridgeBio activities and BridgeBio companies—and not looking for big M&A or anything like that. We tend to look at that as a rather expensive mode of growth, and one that we probably do not need to take on given the fact that we are getting to INDs in less than $10 or $15 million and through Phase 1/2s in less than $100,000,000. So unless we run out of ideas internally, I do not think we would be aggressively moving toward M&A for growth in the next three to five years. Neil Kumar: Great. Did I answer your question, Biren? Biren N. Amin: Yep. Definitely. Operator: Your next question comes from the line of Cory Kasimov from Evercore ISI. Your line is live. Adi (for Cory Kasimov, Evercore ISI): Hi. This is Adi on for Cory. I wanted to ask on entegraslib. Now with the Phase 3 data in hand, how are you thinking about the competitive landscape across not just the NP pathway therapies, but also other FGFR-targeted programs which are more specific to FGFR3? Thank you. Neil Kumar: Thanks for the question. Justin, do you want to take it? Justin To: Yes, again, thanks for the question. We really believe the balance of efficacy and safety shown in BELL3 proved that infigratinib is not just best in class, but potentially last in class in achondroplasia. On the efficacy side, we had a plus 2.1 centimeter per year change from baseline AHV and the first and only statistically significant improvement in proportionality. Most importantly, we normalize absolute AHV, bringing back kids with achondroplasia to wild-type growth levels of 6 centimeters per year. Across every single measure of efficacy, whether it be in animal models or in the clinic, we have set a new bar here. On the safety side, we had a home-run outcome, with basically no change in mean phosphate levels between the placebo and treatment arms, and no signs of FGFR1 or FGFR2-associated toxicity. Really, I think the other molecules being developed in the space, whether it be CMPs or FGFR3 inhibitors, have two issues. One, on the efficacy side, you actually do not want to overshoot 6 centimeters per year too much. We have heard from clinicians that the skeletons and bones in achondroplasia are not built for too much growth given preexisting low bone mineral density, and we really hit the sweet spot there. On the safety side, we obviously avoid all the well-known issues associated with the CMP class, such as vasodilation. Now the other FGFR3 inhibitors in development trade off selectivity for FGFR1 and FGFR2 for significant VEGFR3 liabilities. There are two issues related to that, and they are not just theoretical risks. The first is on spermatogenesis, and because of this, enrollment in trials is restricted to prepubertal males for these other programs. The second, and potentially even more overlooked issue, is the effect on angiogenesis. Many molecules that have in vitro potency findings for VEGFR3, even without clinical findings, end up with a box warning on their labels for impaired wound healing. A great example of this is fruquintinib. So net-net, we are really happy with where we have landed on data, and our safety profile obviates the need for other FGFR3 inhibitors. We absolutely could go further in dose given our safety data, but we think there is no need to in achondroplasia given that we have gone back to wild-type levels of growth. I hope that answers your question. Operator: Your next question comes from the line of Eliana Merle from Barclays. Your line is live. Eliana Merle: Hey, guys. Thanks for taking the question. Thanks for all the color so far. If you could go over your views in a little bit more depth on the TAF IP and some color there, and specifically your base case for when tafamidis goes generic in the U.S., how you are thinking about it, and can you elaborate on why this does not matter for Atruby? And then I have a follow-up question. Thanks. Neil Kumar: Eliana, thanks for the question. We tend not to comment on the IP situation for our competitors, but obviously it has been a big story for the stock here. Let me turn it over to Chinmay to take a crack, and I am happy to elaborate on it. Chinmay Shukla: Happy to take that. Eliana, thanks for the question. Maybe I will talk about it in two ways. As Neil mentioned, we try not to talk about our competitors’ IP, especially when the competitor is, as we believe, not as potent as our molecule. But I think let us talk a little bit about what we think will happen on the trial and maybe a little bit on strategy for why this does not really matter. I will start quickly on the autops and I know you had some questions there. It is important to note that Pfizer withdrew its patent there, and so that is going to limit the precedential value of this ruling for related parties in other jurisdictions. As Neil highlighted in his prepared remarks, our base case for Europe has always been generic entry in 2030, and that is based on ODE for wild-type ATTR cardiomyopathy. That is still our assumption. There are two more patents in Europe which protect Pfizer, so there may be some upside there. It is also important to note on that front the really strong treatment-naïve share that Bayer has been achieving, which talks a little bit about how physicians, not just in the U.S. but globally, are recognizing the differentiation of acaramidis. Turning to the U.S., which I think is the market which probably matters a little more, Neil had a bunch of comments in his prepared remarks on how we think about it. Based on publicly available information, a couple of things are interesting to note there in addition to what he said. One is that Apotex, which I think is the lead filer, has considered infringement of the '441 polymorph patent. The other interesting thing to note is also that the bar for invalidity is much more in the patentee’s favor under U.S. law. So as Neil mentioned in his remarks, IP is always uncertain, so we will keep monitoring it and seeing what happens in the U.S. trial in April. But we feel good about where we are right now, and we do feel like Vyndamax should have protection into the 2030s, potentially up to 2035. It is important to note, though, that we feel like the tafamidis IP debate is a little bit of a sideshow. It does not really matter for Atruby’s uptake. You heard today from Neil and Matt and everyone else about the tremendous momentum we are seeing for Atruby. The patient weeks and number of patients per week continue to increase as we go forward in our launch and continue to accelerate. I think that is driven by the differentiated clinical data which we have for Atruby. And so even in a scenario where a generic tafamidis enters the market, we just do not believe that a less efficacious product will displace a clinically superior therapy in a serious, progressive disease. We have seen this pattern, by the way, play out in multiple therapeutic areas such as PAH, statins, prostate cancer—very differentiated second-to-market molecules continue to grow even after the first-to-market goes generic. So we feel good about the long-term value of Atruby, and we look forward to executing against that. Eliana Merle: Great. Thanks so much. And just a quick follow-up. How do you see the use of TTR in clinical practice in the real world evolving and your perspective there and how that could potentially show differentiation for physicians? Thanks. Neil Kumar: Great question, Eliana. I would say first and foremost, you probably saw the recent two JACC papers that came out looking at serum TTR elevation and correlating it with downstream relative risk of mortality reduction. Both of those were associated with tafamidis, but they reiterated the point that our publication last year made, which is that ever-higher levels of serum TTR are associated with ever-lower levels of downstream mortality, and that roughly, you could imagine every 1 mg/dL increase leading to about a 5% relative risk reduction in downstream mortality. So that is exciting. Obviously, the studies that Pfizer did had significantly higher levels of variant patients in them, so you are going to see similar serum TTR rise as you saw in our studies, but that is just basically rigged up so that you can see a higher increase because you have many more variant patients. If you normalize for variant to wild-type patients, even in cross-trial studies or cross-study comparisons, you can see that we have a significantly higher serum TTR elevation. But I think the most interesting data from that standpoint were literally the same patients going from tafamidis onto acaramidis in the context of our OLE and ATTRIBUTE, where you saw, as I mentioned earlier, that 3 mg/dL increase when going from a partial stabilizer to a full stabilizer. And I think now we can say—we were having this debate a long time ago—even just what is the shape of that response curve in terms of ever-higher levels of stabilization leading to ever-better outcomes. And I think here, at least we can say it is roughly 5% per mg/dL. So it is about a 15% relative risk reduction in terms of mortality going from tafamidis to acaramidis, putting aside the earlier onset of action and some of the other advantages. So I think serum TTR will become ever more important based on this bevy of publications. It is not broadly used right now, but our hope is on a go-forward basis it will become an ever more important marker of drug action and also therapeutic choice. Eliana Merle: Great. Thanks for the color. Operator: Thanks, Eliana, for the question. Your next question comes from the line of Andrew Tsai from Jefferies. Your line is live. Andrew Tsai: Hey. Good afternoon. Thanks for taking my questions. Wanted to stick on the theme of cash burn and near-term profitability. What are your expectations on priority review vouchers for non-dilutive capital? I think they are going for $200 to $300 million apiece right now. So of your pipeline drugs or even which indication per drug could be eligible for PRVs, and when do you expect to receive them? Thank you. Neil Kumar: Good question. I did not factor that into my earlier comments. Tom, do you want to take that? Thomas Trimarchi: Sure. I will take that. First, absolutely thrilled to see that program has been reauthorized. That has been a hugely successful incentive for BridgeBio Pharma, Inc.—companies like us—in being able to responsibly invest in diseases that affect very few patients and otherwise would be at risk of being left behind. So really happy that that has been extended. We actually have three programs that have already received Rare Pediatric Disease designation, and we expect to be eligible to receive a PRV upon approval. Those are 4-1A for limb-girdle, infigratinib for achondroplasia, and then our Canavan gene therapy program. And as you rightly pointed out, the pricing of these has not only held in but risen in the last few months. So there is significant asset value there, already within our portfolio. Looking out more broadly to the Bridge ecosystem, many of the programs we work on over at Gondola Bio affect children, and so there will, I would expect, be many more PRV-eligible programs in the ecosystem around Bridge. So great day for patients and biotech companies like us that are focused on rare disease communities. Operator: Excellent. That concludes our question-and-answer session for today. I will now hand it back over to the company. Chinmay Shukla: Thank you, investors, for joining us on our call today and for the analysts who asked the questions. We look forward to updating you on our next quarterly call in a few months. Thank you. Operator: That concludes today's meeting. You may now disconnect.
Operator: Hello, and welcome to the CeriBell, Inc. Q4 2025 Earnings 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. And if you would like to withdraw your question, press 1 again. Thank you. I will now turn the call over to Brian Johnston, Investor Relations. Brian, you may begin. Good afternoon, and thank you all for participating in today's call. Joining me from CeriBell, Inc. are Xingjuan Chao, Co-Founder and Chief Executive Officer, and Scott Blumberg, Chief Financial Officer. Brian Johnston: Earlier today, CeriBell, Inc. issued a press release announcing financial results for the quarter and year ended December 31, 2025. A copy of the press release is available on the Investor Relations section of the company's website. Before we begin, I would like to remind you that management will make remarks during this call that include forward-looking statements within the meaning of federal securities laws and that these are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our public filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q filed with the SEC on November 4, 2025. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, February 24, 2026. CeriBell, Inc. disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. And with that, I will turn the call over to Xingjuan. Xingjuan Chao: Thanks, Brian. Good afternoon, and thank you all for joining us on our fourth quarter and full year 2025 earnings call. 2025 was an outstanding year for CeriBell, Inc. as we further penetrated our core seizure market while significantly expanding our total addressable market, which we believe has grown from $2 billion to over $3.5 billion. We accomplished this while delivering robust financial results, driving rapid revenue growth, and maintaining a strong gross margin profile. I am pleased to report that the revenue for the fourth quarter of 2025 was $24.8 million, reflecting 34% growth over the same period last year. For the full year, revenue totaled $89.1 million, representing 36% growth over 2024. Gross margins were 87% and 88% for the fourth quarter and full year, respectively. We finished the year with 647 active accounts as of December 31, which translates to 32 net new accounts added during the fourth quarter and 118 throughout 2025. The strong performance reflects the disciplined execution of our dedicated team and the predictable, recurring nature of our business model. Beyond driving rapid revenue growth and expanding our account base, we made several critical cornerstones of the foundations for application. Our mission is clear: to make point-of-care EEG the standard of care for management of seizures in the acute care setting, and to leverage our technology and footprint to establish EEG as a new vital sign. The milestones we achieved in 2025 bring this vision much closer to reality. Becoming the standard of care requires demonstrating clear superiority over the status quo. With over 140 peer-reviewed publications and abstracts, we believe we have firmly established that the CeriBell, Inc. system is equipped to address the unmet needs in the acute care setting. But evidence alone is not enough. To achieve our ambitions, we must make our technology widely available. In 2025, we undertook several initiatives aimed at bringing the benefits of our system to all patients in need. First, we expanded our commercial infrastructure from 35 territories in 2024 to approximately 55 territories today. We are starting to see the signs that this investment is paying off, with a very strong backlog of accounts interested in adopting our technology. Based on our experience, the timing of our investments will begin accelerating the rate of account acquisition in 2026, with further acceleration expected in 2027. Second, we demonstrated our ability to accelerate utilization rate through systematic departmental expansions, protocol development, and other growth initiatives. Our playbook is well defined, and with roughly 30% penetration within our installed base, we have plenty of room to drive deeper within our accounts. Third, we broadened access to additional sites of care by achieving FedRAMP High authorization, which unlocked access to all 170 hospitals within the VA system. After a comprehensive and highly successful pilot, the VA has committed to expanding within the system. The first accounts launched in 2025, and we are excited to launch even more throughout 2026. Finally, we expanded our core seizure market opportunity by approximately $400 million following the FDA clearance of our seizure detection products for neonate and pediatric patients. We expect this age range expansion to accelerate account acquisition and to drive deeper penetration into our existing installed base of over 600 hospitals. I would like to spend a few minutes discussing the neonate market. Seizures are the most common neurological emergency in the U.S., and guidelines are clear in supporting the use of EEG. Still, legacy practice falls short in managing these newborns, given limited EEG capacity and the shortage of epileptologists. In this patient population, 90% of seizures are nonconvulsive, and physicians who are supposed to suspect a seizure based on observation alone are incorrect more than 70% of the time. What is at stake is profound. Evidence shows that a total seizure burden of approximately one hour is associated with a 15% decline in cognition and language development score, a difference that can shift a child from normal neurological function to lifelong impairment. Studies also demonstrate that for every hour delay in treatment, seizure duration can double. By identifying seizure earlier and initiating treatment sooner, clinicians can significantly reduce the total time the patient spends in seizure and fundamentally shift their development in a positive direction. In a recent case, a two-week-old infant presented brief abnormal movements after hours. The care team suspected seizure but required EEG for accurate diagnosis. Our neonatal head cap was set up within 10 minutes, and a few minutes later, seizure was confirmed. The infant was promptly sent for imaging, which identified cerebral venous sinus thrombosis, a stroke caused by a blood clot that can be devastating if not treated early. Empowered with this information, the care team was able to promptly and confidently treat the patient. I am happy to share that the infant is doing well today. Following treatment, there has been near complete resolution of the clot and no recurrence of features. This story illustrates how the CeriBell, Inc. system can change the trajectory of care in a matter of minutes, particularly in these vulnerable patients. This story is only one of many. This early clinical experience, in addition to management recognition that neonatal patients are eligible for some of the highest value DRG payments, has driven momentum during our ongoing commercial pilot. We believe that every NICU should have access to point-of-care EEG, and our goal is to enable this as soon as possible. We look forward to bringing this product to the market in Q2, when we anticipate moving from the pilot stage to a full commercial launch. With our expanded sales team, FedRAMP approval, and FDA clearance for neonatal and pediatric patients, we have solidified the foundation of our core seizure market to set the stage for an exciting 2026. We believe we are less than 4% penetrated within a $2.5 billion core seizure market and see significant growth opportunities ahead. Entering 2026, the path to achieving our vision of becoming the standard of care for seizure detection within the acute care setting has never been more clear. Moving now to the second horizon of our vision: to make EEG a new vital sign. We believe that a single platform that can differentiate between the most common and significant neurological abnormalities impacting patients in the acute care setting could fundamentally change the treatment paradigm. Just as patients who have chest pain receive an EKG, we see a future where patients with any sign of altered mental status receive CeriBell, Inc. as a matter of protocol. During the past three months, we achieved breakthrough milestones that position us to deliver a comprehensive neuromonitoring platform for the acute care setting. In December 2025, we received FDA 510(k) clearance for our delirium algorithm, making the CeriBell, Inc. system the first and only FDA-cleared delirium detection and continuous monitoring device. Shortly after, in January 2026, we announced the receipt of FDA Breakthrough Device designation for LVO stroke monitoring in the inpatient setting. We achieved both of these regulatory milestones ahead of schedule. Let me first focus on delirium, where the need for objective monitoring is clear. Sometimes called acute brain failure, delirium affects over 30% of patients in the ICU. Every day in ICU with delirium carries a 10% higher mortality risk, and the risk of developing dementia is at least 60% higher if patients experience delirium in ICU. The current standard of care for diagnosing delirium is a behavior-based nursing protocol. It is subjective, burdensome, and binary. The limitations of this diagnostic tool make accurate longitudinal tracking of delirium impossible. As a result, it can be difficult to assess the effectiveness of management tasks and adjust them in real time. We believe our continuous monitoring solution solves this major unmet need while also reducing nursing burden. Beyond the clear stand-alone need for a delirium monitoring solution, we are excited by the synergistic value of this new technology with our existing platform. Seizures and delirium are highly interrelated. They can present similarly, but the treatment paths are diametrically opposed. The first line medication for status epilepticus is one of the most delirium-inducing agents. Complicating the picture further, 48% of seizure patients later experience delirium and 42% of delirious patients have seizure or seizure-like abnormalities. We believe that an integrated platform that can monitor for delirium coherently with seizure not only provides access to new patients, but also drives broader adoption within our existing patient population. Looking ahead to 2026, we plan to initiate a pilot aimed at identifying patient populations, optimizing workflow, refining our commercial message, and building clinical evidence. In parallel, we are pursuing a New Technology Add-on Payment, or NTAP, to help support adoption. We are extremely excited to be the first entrant to what we believe is a $1 billion greenfield market where no other FDA-cleared monitoring device is commercially available. By leveraging our established installed base and existing sales infrastructure, we expect to be able to bring this technology to market quickly and efficiently. This combined effort will set the stage for anticipated full commercial launch in 2026 or 2027. Finally, turning to stroke, we view our receipt of FDA Breakthrough Device designation as a clear indicator of the life-saving potential and the technical feasibility of our LVO stroke monitoring algorithm. For LVO patients, every minute saved can mean a week of disability-free life. Yet, when strokes occur in patients who are already in the hospital, the signs can often go unnoticed for several hours because these patients have highly varied cognitive baselines and are often sedated, intubated, or recovering from surgery. The symptoms are incredibly difficult to spot. As a result, hospitalized patients who have a stroke face two to three times higher in-hospital mortality compared to those who have a stroke outside the hospital. Throughout 2026, our efforts will be focused on clinical data generation and advancing regulatory milestones for the LVO stroke detection. Seizure, delirium, and stroke together form the core of a technology platform that we believe will be indispensable for the vast majority of neurological patients in the acute care setting. We look forward to sharing more details on the program in the quarters to come. In conclusion, I am extremely proud of the team's accomplishments in 2025 and enthusiastic about what is ahead. 2025 sets the product and regulatory foundations for our near- and long-term future growth. We expanded patient access through FedRAMP High approval and 510(k) clearances for pediatric and neonatal seizure detection. We also expanded our capabilities to include a new and highly related disease state with regulatory clearance of our delirium algorithm. We believe these accomplishments have nearly doubled the size of our total addressable market, which we now estimate at $3.5 billion. In 2026, we will continue driving growth by adding new accounts and driving further adoption of our adult seizure product, which still delivers the majority of our revenue. We expect the upcoming full commercial launch of our pediatric and neonate products to drive upside later in 2026 and throughout 2027. We aim to further drive upside in 2027 and beyond as we work to establish a comprehensive commercial plan for delirium in the coming quarters. We believe that our LVO stroke detection algorithm provides another exciting avenue for growth in the future. Collectively, these efforts position us for a fundamental transformation of our business as we penetrate our large market opportunity with a single, highly integrated brain monitoring platform capable of revolutionizing care for neurological conditions. We are further along in accomplishing our mission to make EEG a new vital sign than ever before, and are increasingly confident in the transformative nature of our platform: transformational for patients, transformational for providers, and ultimately, transformational for CeriBell, Inc. With that, I would now turn the call to Scott Blumberg, our CFO, to provide a review of our fourth quarter results and 2026 guidance. Scott Blumberg: Thank you, Xingjuan, and good afternoon, everyone. As Xingjuan highlighted, total revenue for the fourth quarter of 2025 was $24.8 million, which is a 34% increase from $18.5 million in the fourth quarter of 2024. The increase is primarily driven by increased adoption of the CeriBell, Inc. system across new and existing accounts. Products revenue for the fourth quarter of 2025 was $18.8 million, representing an increase of 33% from $14.1 million in the fourth quarter of 2024. Subscription revenue for the fourth quarter of 2025 was $6.0 million, representing an increase of 37% from $4.4 million in the fourth quarter of 2024. Overall, we are pleased with the continued growth in active accounts and headband purchasing trends in Q4. We ended 2025 with an active account base of 647, an increase of 32 accounts in Q4. This was achieved despite our strategy to avoid launches in the final weeks of the year. Included in our Q4 launches were a small number of accounts associated with our previously announced expansion within the VA system. We anticipate the launch of additional VA accounts in the coming quarters. We also saw an increase in account utilization in Q4, which we believe reflects both the efforts of our clinical account management team and the typical seasonal patterns in which we see increased usage in the winter months when ICU census is elevated. For the full year 2025, total revenue was $89.1 million, representing 36% growth over 2024. Products revenue for the full year 2025 was $67.3 million, an increase of 34% over 2024, and subscription revenue was $21.7 million, an increase of 41% over 2024. Gross margin for the fourth quarter of 2025 was 87%, compared to 88% in the prior year period. For the full year, gross margin was 88% compared to 87% in 2024. The decrease in Q4 reflects partial-quarter impact of our transition to utilizing inventory acquired after the implementation of increased tariffs on products originating in China. As a result of our efforts to mitigate the current tariff environment, including our fully operational manufacturing line in Vietnam and initiatives aimed at reducing manufacturing cost, we expect to deliver margins in the mid-80% range throughout 2026. This assumption does not include any impact from Friday's Supreme Court decision or future changes in policy. Total operating expenses for the fourth quarter of 2025 were $36.2 million, an increase of 24% compared to $29.1 million in the fourth quarter of 2024. Non-cash stock-based compensation was $3.3 million in the fourth quarter of 2025. Total operating expenses in the full year 2025 were $136.7 million compared to $96.5 million in the full year 2024, representing an increase of 42%. Full year 2025 operating expenses included $12.2 million in non-cash stock-based compensation. The increase in fourth quarter and full year 2025 operating expenses was primarily attributable to investments in our commercial organization, increased headcount to support the growth of the business, legal expenses, and expenses related to operating as a public company. Net loss was $13.5 million in the fourth quarter of 2025, or a loss of $0.36 per share, compared to a loss of $12.6 million, or a loss of $0.40 per share, in the fourth quarter of 2024. An average weighted share count of 37.2 million shares was used to determine loss per share for the fourth quarter of 2025. Net loss for the full year 2025 was $53.4 million, or a loss of $1.46 per share, compared to a loss of $40.5 million, or a loss of $3.39 per share, in 2024. Our cash, cash equivalents, and marketable securities as of December 31, 2025, were $159.3 million. Turning now to our outlook for 2026. We expect full year 2026 total revenue to be in the range of $111 million to $115 million, representing annual growth of 25% to 29% over 2025. As Xingjuan mentioned, we currently expect to proceed with the full launch of our neonate and pediatric products in Q2 of this year. While we do anticipate the sales cycle may be shorter within hospitals that are already using the CeriBell, Inc. system for adult patients, we believe in most cases, we will still be subject to a multi-month sales process, including contracting, workflow design, and training. We expect to establish commercial traction across a number of hospitals by the end of the year, but given launch timing and expected sales cycles, the impact on 2026 revenue will likely be modest. Our goal is to establish the pediatric and neonate products as meaningful revenue contributors in 2027 and beyond. Finally, our cash position remains strong, with cash, cash equivalents, and marketable securities of $159 million as of December 31. We plan to selectively deploy capital in incremental R&D and commercial infrastructure investments to capture our untapped market opportunity and maintain rapid long-term revenue growth. That said, we remain committed to our objective to achieve cash flow breakeven with cash on hand. With our gross margin profile, recurring revenue model, and high customer retention rates, we remain confident in our ability to do so. With that, I will turn the call back to Xingjuan. Xingjuan Chao: Thank you, Scott. And thank you all for your time today. In conclusion, we are very pleased with our 2025 performance and believe it positions us well for continued growth in 2026 and beyond. I would like to take a moment to thank the entire CeriBell, Inc. team for the continued dedication to our mission of making EEG a new vital sign. I will now turn the call over to the operator for Q&A. Operator? Operator: We will now begin the question-and-answer session. If you would like to ask a question at this time, simply press. And our first question comes from the line of Travis Steed with Bank of America. Travis, please go ahead. Travis Steed: Hey, congrats on the quarter and all the progress in the pipeline. Maybe to start with the 2026 guidance. If you look at just dollar growth, about $24 million growth, roughly about the same we did in 2025. But your TAM has doubled. You are adding accelerating center adds in the back half of the year. Utilization is increasing. So I wanted to understand some of the moving parts and assumptions on 2026. Scott Blumberg: Hey, Travis. First, I want to state that our guidance philosophy has not changed. As we have said all along, we really appreciate the need to deliver on the numbers that we put forth, and so we have baked in an appropriate level of conservatism into the model. As it relates to the sequential growth, I think it is important to appreciate that the guide last year was consistent with the guide this year. And since philosophy has not changed, we think there is potential for upside if we operate within the principles that we expect to with the investments we have made. As far as the pipeline goes, as we mentioned, we really expect that to start kicking in towards the end of this year and more into 2027. So some neonate is baked in, but it is fairly modest. But we think as we set out for 2027, that could be a contributor next year. Travis Steed: Okay. And maybe can you elaborate a little more on the commercial plan for delirium? I am just trying to understand how you build that up. Will you start to see some potential benefits in account adds and account penetration from that? Or is there a different sales approach on the commercial plan for delirium? Xingjuan Chao: Yes. We are in the middle of the discussion with some accounts already for the commercial pilot, and the majority of these accounts are our existing accounts, with some new accounts as well. So for the commercial pilot, we really are focused on the real-world validation of our clinical impact. So these discussions will be focused with accounts on what are the best target patient populations, the workflow, how to measure the impact, and also generate case studies and clinical evidence. Therefore, this portion, as I mentioned earlier, is largely driven by existing accounts. We also see that will be reflected, at least in the near term, where delirium can drive financial and commercial impact as well. It will be more expanding deeper utilization in our existing accounts. And in that, we see two drivers. One is delirium itself, where we introduce a new patient population that is not seizure. And the other driver we see is there is a big synergistic interaction between delirium and seizure, as I mentioned in the earnings call. So we could see this drive deeper into the seizure population as we introduce delirium as well. Scott Blumberg: Thank you. Operator: Sure. And your next question comes from the line of Robert Marcus with J.P. Morgan. Robert, please go ahead. Lily (for Robert Marcus): Hi, this is Lily on for Robert. Thanks so much for taking the question. As we think about 2026, can you talk through what you see as the main levers of growth that you are pulling this year? I know you talked about accelerating account adds, so how are you thinking about balancing that with driving continued utilization, and what do you see that has the most potential for upside this year? Scott Blumberg: In terms of levers in the model, I can touch on the levers mechanically. Maybe Xingjuan can comment on the drivers. The two core drivers of our adult seizure market remain unchanged: the rate of account adds and the same-store growth. On the account adds, we expect to add more accounts in 2026 than we added in 2025, and that is a result of the strategy we laid out last year, including expansion of the sales team, FedRAMP approval, and the acceleration from the buzz around CeriBell, Inc. Within our base, we are roughly 30% penetrated, and we have got a number of strategies aimed at driving that, including training more physicians, expanding to new departments, and implementing protocols. We have built out a robust campaign to drive those efforts. We have got a lot of opportunity to continue to push that forward. Xingjuan Chao: Yes, and to add to what Scott has said, we have a well-defined playbook in both adding accounts as well as driving utilization. Maybe I will emphasize and cap off new levers in 2026. On the account acquisition front, we are adding a new focus on driving hospital system-level acquisition. So this is more focused on both large systems as well as small and medium-sized systems. Instead of, historically, the territory manager focusing on closing one or two accounts, how can we accelerate the process of closing the entire system, say, a 10-hospital-sized system. So we could see that in the near and long term add more gross leverage. On the utilization front, we started more systematic departmental expansion in 2025, and we have seen consistent impact from that departmental expansion. It could be expanding to the emergency department, to additional ICUs, or even sometimes to the floor. So we expect to further expand what we have established in 2025 and expect to see the impact of departmental expansion on driving utilization as well. Great. That is really helpful. And then as a follow-up, how should we be thinking about spend ahead of launches in all these new indications? It is a pretty big expansion in terms of TAM when you layer on pediatric, delirium, and LVO stroke. And so is there a lot of investment that needs to be made ahead of this in terms of the sales force and commercial infrastructure, or do you think you can largely leverage what you have already built out? Lily (for Robert Marcus): Thanks so much. Scott Blumberg: We intend to largely leverage our commercial infrastructure. The beauty of our platform is that it is the same call point. It is the same platform. It is really just training the reps on the new indications, and it is delivering the message to customers. There will, of course, be some upfront investment related to a product launch in terms of marketing and market development. But in terms of the core infrastructure, we expect to have fairly modest investments there. Lily (for Robert Marcus): Perfect. Thank you. Operator: And your next question comes from the line of Brandon Vazquez with William Blair. Brandon, please go ahead. Brandon Vazquez: Hey, everyone. Thanks for taking the question. I wanted to focus first on the commentary around the neonate launch. Maybe spend a little bit more time on the launch here and dig into it. I think as we have talked in the past, there are some accounts that you are already in that now you can kind of open the neonate or the NICU. And I think, to say a little bluntly, starting to see benefits not until late in Q4 seems a little late. So maybe walk us through why it takes a couple of quarters to start to see those in accounts that you are already in, to make sure we are all level set on when you will start to see those benefits more meaningfully ramp. Xingjuan Chao: Yes. Thank you, Brandon. So let us maybe focus on the neonate NICU expansion for existing accounts. I think that is where you are focusing. We have about 200 level three, level four NICUs in our existing accounts. If you think about the timeline, we plan to launch in Q2. Even though we are already in these hospitals, to expand to a new department, the hospital needs to acquire additional recorders as well as the clarity that is dedicated to neonatal seizure detection. So that often requires going through the vetting committee and additional committees. We expect that sales cycle to be shorter than your brand-new account acquisition, but that still takes several months. And even after that, in the context of the departmental expansion, there will be workflow and patient population discussions. Based on our experience, that often would take a couple of months as well. If you start to think through the timeline, that is why a Q2 launch would lead to financial or commercial impact in Q4. Brandon Vazquez: Okay. And then maybe I will tie this back to a couple of model questions for Scott. As we think about additional recorders and some of that stuff, just reset us and level set us on how we should be modeling some of that. How should we be thinking about where this will be reflected in the model, like ASPs, things like that? And then maybe if I can also tag one modeling one here from the prior question. How should we think about, I will ask more poignantly, on the OpEx line? How should we think about 2026? Is it a point of leverage, or does OpEx have to grow at a higher clip than your total sales growth? Thanks, guys. Scott Blumberg: Sure. On the commercial front for neonate, our model is that we are charging additional subscription costs for adoption of the neonate product. The cost of adopting neonate, if you are already an adult customer, is not double, but it is higher than just being an adult customer. And we would expect the headbands, which are a similar pricing model but slightly higher price, to also be included. The way it will reflect itself in the top line would not necessarily change the number of accounts, with the exception of children’s hospitals that adopt specifically for neonate, but increase both product and subscription revenue through our installed base. As it relates to OpEx, while we do not provide specific guidance, I would be happy to give a little color, kind of going through the different functions, in order to help you with your modeling. On sales and marketing, we believe we largely have the commercial infrastructure in place to deliver on 2026 guidance. We will be selectively investing in opportunities to drive growth in 2027 and beyond throughout the year. That includes the previously discussed regional system function, as well as expansions within the CAM work to support the growing account base. And then, as I mentioned earlier, there may be some additional investments associated with market development activities related to the launch of our new products. But with our platform and our existing infrastructure, we do not expect to materially increase the size of the sales or support functions. On R&D, we see a lot of opportunity ahead of us, so we are going to continue to invest in R&D. We expect a decrease in the growth rate in R&D spend this year, but we do expect R&D growth to be outsized compared to the rest of the departments given what we have ahead of us. And then on G&A, our infrastructure on G&A is largely in place, so we expect to see material leverage there. However, I think it is worth noting that with the cadence of our patent infringement case against Natus, the ITC litigation expenses are heavily concentrated in the first half of this year, so I would expect to see a little bit of elevation in G&A over the coming two quarters or so. Final note on OpEx is in line with what you see out of our peers. We expect an increase in non-cash stock-based compensation expense throughout the year as we continue to transition to public company compensation practices. So hopefully that is helpful. I do expect overall that our OpEx growth to moderate in 2026. You started to see some of that in Q4 with the lowest year-over-year growth rate in OpEx that we have seen. We do want to strategically deploy our capital to drive long-term growth of the business. But as we make investment decisions, we have always got our ROI towards our North Star, which is to achieve breakeven with cash on hand, and we have very high confidence that we can do that. Operator: Okay. Our next question comes from the line of Josh Jennings with D.D. Cohen. Josh, please go ahead. Brian (for Josh Jennings): Hi. This is Brian here for Josh. Thank you for taking my questions. On the revenue guidance, how is the VA expansion accounted for in your sales projections for the year, if at all? And can you review the specific tariff assumptions that go into the mid-80s gross margin guidance for the year? Scott Blumberg: Yes. So the VA is incorporated in our guide in terms of the expansion that has been committed to last year, but further expansion is not incorporated into the guide. And we will be pursuing that with the government budgeting cycle. That is likely to come up for discussion potentially in Q3 for late 2026 and 2027 impact above our guide. As far as the tariff assumptions go, obviously there has been a lot of change over the last couple of days in terms of what our policies are. Our guide does not contemplate any of those changes. What our guide includes is the move from the prior tariff rates since 2018 in China of roughly 25% to the pre-Friday tariff rates, which were in aggregate around 55% in China, mitigated by our move in part to Vietnam with lower tariff rates, as well as some reductions that we have done over the past couple of years on our product manufacturing cost. Without any benefit from potential impact of Friday's Supreme Court decision, we have confidence that we will maintain margins in the mid-80% range throughout the year. Brian (for Josh Jennings): Okay. And then one follow-up, if I could. On the NTAP for delirium, are you saying you are positioned to file for the NTAP, or an NTAP that becomes potentially effective this October, or is this likely to be a 2027 decision for you? Xingjuan Chao: Yes. We submitted NTAP late last year. If we receive it, it will be effective this October in 2026. And the preliminary decision would be released by CMS in April, so in a couple of months. Brian (for Josh Jennings): Okay. Terrific. Thank you. Xingjuan Chao: Thank you. Operator: And your next question comes from the line of William John Plovanic with Canaccord Genuity. William, please go ahead. William John Plovanic: Great. Thanks. Good evening, and thanks for taking my questions. Just for clarity's sake, your operating losses have decreased quarter over quarter the past two quarters. It seems like from the detailed guidance you provided, excluding any IP litigation expenses, that that trend would continue throughout 2026. And then we, you know, I think we are modeling for you to get to adjusted EBITDA positive in 2026. Just any thoughts on any of those statements? Scott Blumberg: I do not want to go beyond the guide and give specific comments. I will say that the investment and the infrastructure we have in place right now is sufficient to carry us forward through 2026, but we are always thinking two, three, four years ahead. And so as we see the impact of the investments in terms of translating into accelerated growth, we do have a desire to invest more to drive outsized growth in the outer years of the model. We always pay very close attention to what that means for our overall cash position. We do not pay as much attention to time to breakeven, but we want to ensure that we are maximizing growth while not putting our ability to break even at risk. William John Plovanic: Okay. And then on delirium, I am just—is that more you just see more utilization? Or I know you are trying to get the add-on, but do you think you can actually charge more? And then what does implementation of that look like with the new algorithm? Is that just a download over the cloud, or do you have to get out in the field and upload the new algorithm? How do you implement that? Thanks for taking my questions. Xingjuan Chao: Yes. Thank you, William. On the pricing of delirium, it is a little bit too early for us to comment, and that is part of the commercial pilot for us to learn better about the market dynamics. We could certainly charge for both the algorithm as well as the headband, but those are the decisions we would like to make later down the road. In terms of how we implement the algorithm, it is rather straightforward in that we can remotely update both the firmware on the recorder as well as the portal, so we can turn on delirium for our existing users and existing recorders remotely rather quickly. William John Plovanic: And then are there any incremental expenses from internal staffing and reviewing the data and the reports or anything of that nature? Xingjuan Chao: As Scott mentioned, on the commercialization front, we leverage the existing sales team. On the R&D and ops front, there will be some marginal investment we need to add, because the portal and device get more features, but it is not significant. We will also invest in marketing and market development and clinical evidence generation. But there is no major significant OpEx increase related to implementing the algorithm. William John Plovanic: Okay. Thanks for taking my questions. Operator: And your next question comes from the line of Marie Yoko Thibault with BTIG. Marie, please go ahead. Marie Yoko Thibault: Hi, good evening. Thanks for taking the questions. Nice to see the new account adds tick higher again sequentially this quarter. And I heard your commentary on acceleration of account adds in 2026–2027. I suppose some of this goes hand in hand with the newer rep productivity that is coming online now, but I wanted to understand the acceleration comment. Is that an acceleration from the low 30s where we are today or from the mid-20s where we were earlier in 2025? And is that something we should expect to continue building throughout the year, given the timing of some of these newer reps that you hired, maybe 12–18 months ago? Scott Blumberg: At face value, the comment was specific to the full year. So I believe we added 118 in 2025, and we expect to add more than 118 in 2026. There will be some lumpiness quarter to quarter, not entirely linear, especially with the new health system strategy where we expect first orders to come in in boluses. So I would not expect it to be totally linear. That said, the reps do get progressively more productive. What we have seen historically is the reps do get progressively more and more productive between year one, when they start to contribute, and year two, when they reach kind of their peak productivity. And so with more reps aging into greater productivity throughout the year, we expect a general trend of acceleration. Marie Yoko Thibault: Alright. That is really helpful, Scott. And you touched on something I want to ask too, which is the process of trying to sell into the entire healthcare system, maybe sort of an enterprise-wide approach. Tell us a little bit more about what is behind the scenes there. Are we starting to see that in accounts already, or is that all to come? I am a little ignorant of how recently this was brought online. Xingjuan Chao: Yes. So we saw a couple of senior territory managers last year and had very significant success in selling to small and mid-sized hospital systems. The success drivers there are: often these senior TMs work closely with the regional director and even the regional sales VP because systems are across different territories or different regions. So we can form a coherent system-level strategy, not just focus on one or two hospitals. Also, they engage with key stakeholders, especially administrators at the system level, and fine-tune the value proposition at the system level instead of a single ICU or a single ED. Because of the success last year, we are expanding that model this year. So we are relatively confident that we can further expand the success we saw. Marie Yoko Thibault: Alright. Very helpful. Thank you. Xingjuan Chao: Thank you. Operator: And your next question comes from the line of Jeffrey Scott Cohen with Ladenburg Thalmann. Jeffrey, please go ahead. Operator: Jeffrey, your line is open. Jeffrey Scott Cohen: Hi, sorry about that. Hi, Xingjuan and Scott. Thanks for taking our questions. Two from our end. Could you talk about any update with regard to the patent case with Natus as far as where you are at and ramifications on any expenses for 2026? Xingjuan Chao: I can talk about the process. We are in the discovery phase, and the preliminary decision point would be November 19. Before that, there will be a whole series of events, and all the milestones and timeline are published and available on the ITC website. You know? Scott Blumberg: On expenses, since we kicked this off in Q3 or so of last year, we have seen relatively linear costs. We expect, given the nature of litigation, that it will not be linear. And what we are seeing is that in the depths of the core of the case, which is happening right now into Q2, we would expect expenses to increase and then potentially moderate in Q3 and Q4 as we reach the late stages, at least of the first path here with the ITC. Jeffrey Scott Cohen: Okay. Got it. And then secondly, first, can you talk about the LVO indication potentially and the call point there beyond ICU? Are you also thinking about or looking into neuro and/or cardiac as well? Xingjuan Chao: Yes. The LVO monitoring would focus on the inpatient setting, and many of these patients actually stay in the ICU. Therefore, again, it is the same call point. That being said, our initial finding is that there is a significant portion of patients who have stroke outside the ICU, on the floor or even in the telemetry monitoring units, and they have even less or poorer training for bedside nursing on identifying stroke. So we expect that this would be a very synergistic add-on to both seizure as well as delirium. I do not fully understand your comments on neuro versus cardiac. Can you reframe that? Jeffrey Scott Cohen: If the majority of patients are in the ICU, is the neurologist involved in the patient care and the equipment being used? Xingjuan Chao: Yes. For LVO, neurologists would definitely be involved, except this would be more stroke neurologists than epileptologists. But usually, the current standard of care is if nursing identifies any potential symptom that would suggest stroke, then the stroke team would rush to the bedside. So there is definitely at least a general neurologist, often a stroke neurologist. Jeffrey Scott Cohen: Perfect. Okay. Got it. Thanks for taking my questions. Operator: And your next question comes from the line of Jason Bedford with Raymond James. Jason, please go ahead. Elaine (for Jason Bedford): Hi. This is Elaine on for Jason. Thanks for taking the question. For delirium, I was wondering, have you started the pilot launch or started any early discussions with hospitals? And if so, could you please share a little color on the early progress and learnings? Xingjuan Chao: Yes. So we started discussions with some accounts already in the context of the commercial pilot, and we do not expect any commercial pilot to go live until Q2, as we are also in the process to make sure all the different algorithm software are fully integrated. In terms of adding color, the initial feedback was very positive. The majority of intensivists have high awareness of delirium and the potential harm delirium would cause and often are quite frustrated with the lack of objective and continuous biomarkers for delirium. Another strong signal is that they recognize certain populations have a very strong prevalence for both delirium and seizure. So the earlier hypothesis validated by the physicians is our device could potentially help them to detect delirium earlier, because not all the nurses are well trained, and the algorithm could potentially help them to give some feedback to know whether or not they are on the right path, and also to really help them to differentiate seizure and delirium under the same population. One example is sepsis patients who have altered mental status—20%–30% of them could have seizure, and then 40% of them could have delirium—while the symptom is very similar: the patient looks very confused. So we are very encouraged by the early feedback from the physicians and the nursing team as well as the administrators. Elaine (for Jason Bedford): Thanks. I appreciate the color. And for my follow-up, would you be able to share your expectations on headband pricing this year? I know you have talked a little bit about the neonate headband pricing, but for overall headbands, do you expect to pass on a price increase this year? This is in general or related to the delirium product? Sorry. This is just in general. Scott Blumberg: We have maintained really strong pricing discipline and consistent ASPs over the years. I think there is a lot unknown about the macro environment, both some headwinds and tailwinds, as it relates to tariffs and people's understanding of tariffs and how companies react to that, as well as some of the pressures on hospitals. We are evaluating it case by case, but in any regard, we expect to maintain very tight pricing discipline. Operator: That concludes our question-and-answer session. We will now turn the call back over to our Co-Founder and Chief Executive Officer, Xingjuan Chao, for closing remarks. Xingjuan? Xingjuan Chao: Well, thank you all for joining the call. Again, we are very proud of what we have accomplished in 2025 and cannot be more excited about 2026. Thank you all. Operator: That concludes today's call. You may now disconnect.
Operator: Thank you for standing by, and welcome to this Cytokinetics, Incorporated Fourth Quarter 2025 Earnings Call. This call is being recorded and all participants are in a listen-only mode. After the speakers' remarks, we will open the call to questions. We will allow for one question per participant. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, press star 1 again. I would now like to turn the call over to Diane Weiser, Cytokinetics, Incorporated Senior Vice President of Corporate Affairs. Please go ahead. Diane Weiser: Good afternoon, and thanks for joining us on the call today. Robert I. Blum, President and Chief Executive Officer, will begin with an overview of the quarter and recent developments. Andrew M. Callos, EVP and Chief Commercial Officer, will discuss the commercial launch of MYCorzo in the U.S. and readiness in Europe. Fady Malik, EVP of R&D, and Stuart Kupfer, SVP and Chief Medical Officer, will provide updates related to our clinical development programs. Sung H. Lee, EVP and Chief Financial Officer, will provide a financial overview of 2025 and discuss our 2026 financial guidance. Robert will then make closing remarks and review key milestones for the year ahead. Please note that portions of the following discussion, including our responses to questions, contain statements that relate to future events and performance rather than historical facts and constitute forward-looking statements. These include statements regarding expected timing and potential outcomes of clinical trials, including ACACIA-HCM, expectations regarding regulatory interaction and the potential for regulatory approval, expectations regarding commercial performance, and statements about our financial guidance and capital allocation. Our actual results might differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause our actual results to differ materially from those in these forward-looking statements is contained in our SEC filings, including our current report regarding our fourth quarter 2025 financial results filed on Form 8-K that was furnished to the SEC today and our annual report to be filed on Form 10-K in the coming days. We undertake no obligation to update any forward-looking statements after this call. I will now turn the call over to Robert I. Blum. Robert I. Blum: Thank you, Diane, and thanks to all for joining us on the call today. The 2025 marked a defining moment for Cytokinetics, Incorporated with the FDA approval of MYCorzo for the treatment of adults with symptomatic obstructive HCM, the first medicine we have advanced from discovery to commercialization. In fact, in the span of a single week, Cytokinetics, Incorporated received approvals for MYCorzo in both the U.S. and China, plus a positive opinion from CHMP for MYCorzo in the European Union, that latter milestone preceding last week's announcement of the European Commission's approval of MYCorzo in the EU. Together, these milestones represent the culmination of years of focused scientific, clinical, and regulatory execution and we now turn the page onto a new chapter for Cytokinetics, Incorporated as a global commercial-stage biopharmaceutical company. More importantly, the approval of MYCorzo offers a new treatment option to patients living with obstructive HCM, a serious condition that can profoundly impact quality of life. As Andrew will discuss, since the FDA approval in December, our teams have been focused on executing a disciplined and deliberate commercial launch. Our ongoing priority is to implement the systems, the education, the promotion, and market access pathways to support physicians, patients, and payers while also building initial and sustainable launch velocity and momentum. While it is still early, we are encouraged by our progress thus far and the initial engagements we are seeing from the cardiology community. In fact, the level of interest in MYCorzo as a new treatment option is high. With an eye toward the longer-term U.S. commercial launch trajectory, during the first quarter we submitted the supplemental NDA for MAPLE-HCM to the FDA. We expect FDA to conclude its review of the sNDA in Q4 2026. We believe that the potential inclusion of results from MAPLE-HCM into an expanded label for MYCorzo could boost category penetration depth and breadth, so more patients may ultimately benefit. Of course, we also anticipate the readout of results from ACACIA-HCM in non-obstructive HCM and we are on track for top line announcement in the second quarter of this year. nHCM is a different patient population with significant unmet medical need. Should this trial prove positive, it could also represent a potential growth driver for MYCorzo. Outside the U.S., following the recent approval of MYCorzo in the EU, we have now shifted into full execution of our commercial readiness planning, with our first planned launch in Germany expected in the second quarter. Additionally, during the fourth quarter of last year, Health Canada accepted for review the New Drug Submission for aficamten, and a potential approval for aficamten in Canada could come later this year. As we look ahead, we enter this next phase of our corporate development with strong momentum and also solid financials. The progress we delivered last year positions us well for continued growth and value creation while we also keep a close eye on capital structure and capital allocation. Sung will speak to our financial guidance and position as we ended 2025, as well as operating expense guidance for 2026. That guidance reflects the priorities of launching MYCorzo and advancing our muscle biology pipeline, both with disciplined execution and attention to capital efficiencies. We are confident in the foundation we are building for our specialty cardiology franchise and to deliver for both patients as well as shareholders. I am going to now turn the call over to Andrew. Andrew M. Callos: Thanks, Robert. Our U.S. commercial launch process began immediately following FDA approval of MYCorzo in December. We have built our customer support systems around a team of HCM navigators who serve patients in a one-on-one relationship. These navigators started taking calls within days of approval, ensuring patients and HCPs had support. Immediately following FDA approval in December, we launched our patient and HCP marketing campaigns, leveraging surround-sound assets and activations such as quick start guides, patient brochures, websites, and social media advertising to help drive awareness and educate patients. Our sales representatives, whom we call Cardiovascular Health Specialists, began engaging with HCPs immediately following the New Year’s holiday and certifications within the MYCorzo label. Within weeks of approval, the online portal for the MYCorzo REMS program went live and MYCorzo became available for prescription. On that same day, we also launched “Corzo & You,” our patient support program offering personalized support, access, reimbursement assistance, and affordability programs for eligible patients, including a free trial program, bridge program, co-pay assistance, and patient assistance program. On the first day of product availability in channel, HCPs began to be certified in REMS and patients enrolled in Corzo & You. Within days of availability, the first prescriptions for MYCorzo were dispensed. In January, we also hosted our first national speakers’ broadcast with strong attendance from across the U.S. This was only the start of what will become an extensive peer-to-peer physician education program, which is a key element of our strategy to ensure HCPs are aware of this new treatment option. All of these integrated commercial launch programs were synchronized to roll out and support our ambitious plans for MYCorzo in the United States. While we are still early in our launch, so far customer feedback has been positive. HCPs have expressed enthusiasm for another cardiac myosin inhibitor as a treatment option for obstructive HCM, with particular interest in the clinical evidence demonstrating sustained reduction in obstruction and improvement in symptoms with no treatment discontinuation due to ejection fraction drops as observed in SEQUOIA-HCM. Our understanding is that a substantial portion of HCPs also appreciate the flexible dosing and ability to rapidly titrate as early as every two weeks, the adaptable monitoring schedule that allows for echos to be completed within a two- to eight-week window, and that drug-to-drug interaction counseling is not required as part of the REMS for MYCorzo. While it is still early in our launch, we are encouraged by the initial level of engagement, REMS certification, and overall demand. Within three weeks, we had over 700 HCPs REMS-certified across HCM specialty and non-specialty centers, a leading indicator of HCPs planning to prescribe MYCorzo. And as mentioned, patients were on therapy within the first week that MYCorzo was available. The level of demand in REMS patient enrollments and therapy is so far reinforcing our conviction in the commercial prospects for MYCorzo. In addition, we have already achieved over 12,000 customer engagements, including our Cardiovascular Account Specialists having engaged over 95% of the 700 HCPs who account for the majority of CMI prescribing today. Our current focus remains on educating HCPs on the prescribing information, preparing them for the REMS requirements, and encouraging them to identify patients for MYCorzo. From market research conducted post launch, we have learned that on an unaided basis, 90% of HCPs surveyed are aware of MYCorzo, the majority of which have stated they plan to prescribe MYCorzo for their obstructive HCM patients. They further state they recognize the potential benefits of the MYCorzo clinical profile for efficacy, safety, and tolerability as well as the differentiated REMS and dosing flexibility. As we have stated, starting with our Q1 earnings call, we will report on three key metrics to measure the pace and velocity through our launch: number of HCPs who are actively writing prescriptions, the volumes of prescriptions an HCP writes, and the number of patients on MYCorzo. We see these as leading indicators of launch depth and breadth that will read on our overall progress. As we continue this launch, our goal for MYCorzo is to achieve greater than 50% of CMI new patient preference share by 2026. We also intend to grow the overall CMI category. Our confidence is based on three launch drivers: clinical evidence, our bespoke patient support services, and the differentiation of our REMS program. First, the clinical evidence from SEQUOIA-HCM supports that MYCorzo is associated with rapid and sustained reduction in obstruction and improvement in symptoms, that it provides flexibility to titrate as early as two weeks with a flexible monitoring schedule for both patients and HCPs, and was not associated with treatment interruptions or clinical heart failure events. Second, our patient support program called Corzo & You provides a single point of contact for patients to deliver an experience that balances empathy and individual connection with consistency and seamlessness. And third, the MYCorzo REMS program allows for the flexibility to titrate as early as two weeks with echo monitoring required within a two- to eight-week window following dose initiation and any subsequent dose change, with no DDI monitoring. Importantly, a patient’s dose may be titrated after each echo with no delay. These three launch drivers are what we believe will fuel the uptake for MYCorzo and preference share. Driving access for patients is also a high priority. We have been engaging with payers for some time ahead of FDA approval to educate them on the evidence from our clinical trial as well as the clinical and economic burden of obstructive HCM. We have already met with all key payers earlier this year following approval. Our goal is to have Medicare access comparable to Camzyos in the first quarter and commercial access comparable to Camzyos by Q4 2026. In Europe, with EC approval for MYCorzo now secured in the European Union, we are moving quickly toward our first European commercial launch in Germany, planned in the second quarter. Our German medical and commercial teams are hired, and launch plans are accelerating. We also now have hired country leads in all EU4 countries and the UK to prepare for subsequent European launches in later 2026 and in 2027. We also continue to advance European commercial readiness activities, including preparing HTA dossiers for all key European markets. It is a privilege to be in the position of launching MYCorzo globally, and it is our priority to establish awareness and confidence. As proven by other launches, the early work of establishing awareness and confidence in access is critical to unlocking long-term momentum and velocity. We are encouraged by initial engagement and are focused on converting these engagements into consistent, scalable execution with positive commercial success as the year progresses. And with that, I will turn the call over to Fady to address our medical and clinical development activities. Fady Malik: Thanks, Andrew. In support of the launch of MYCorzo, our medical affairs organization continued to expand its engagement with the HCM community ahead of and now during our commercial launch. The field medical affairs team has been in place for several years now, working with our clinical trial sites during the conduct of SEQUOIA-HCM and MAPLE-HCM, building deep relationships across the HCM community. Immediately upon approval of MYCorzo, our U.S. field medical teams, including Therapeutic Medical Scientists and Managed Health Medical Scientists, were fully trained and operational, allowing them to hit the ground running and engage in 2026. Since approval, our U.S. TMS team has rapidly scaled scientific engagement, conducting over 500 interactions with HCPs in support of MYCorzo. Our U.S. MHMS team, in collaboration with our U.S. payer account managers, has expanded engagement by conducting more than 50 access-related interactions, reinforcing the economic profile, clinical profile, and safety considerations most relevant to access decision makers. At the ACC next month, our presence will underscore our leadership in HCM, with accepted oral and poster presentations covering the real-world treatment implications, additional data from MAPLE-HCM, and important safety and efficacy analyses drawn from our late-stage clinical programs. Supportive of our global development strategy, our partner Bayer completed enrollment in CAMELLIA-HCM, a Phase 3 clinical trial of aficamten in Japanese patients with obstructive HCM. Additionally, we completed enrollment of the Japanese cohort of non-obstructive HCM patients in ACACIA-HCM, both intended to support potential marketing authorization for aficamten in Japan. During the fourth quarter, we presented additional data from MAPLE-HCM in three late-breaking sessions at the HCM Society Scientific Sessions and the Scientific Sessions. Responder analyses showed that significantly more patients on aficamten achieved a positive response compared to patients on metoprolol. Additionally, treatment with aficamten resulted in significantly greater improvements than metoprolol on symptoms and cardiac biomarkers. The results from MAPLE-HCM have resonated strongly across the cardiology community, highlighting the evolving thinking around the standard-of-care treatment in HCM and the need for new therapies. Now I will hand it over to Stuart to speak more about ACACIA-HCM as well as our ongoing development programs in heart failure. Stuart Kupfer: Thanks, Fady. Our next important data readout will come from ACACIA-HCM, the pivotal Phase 3 clinical trial of aficamten in patients with nHCM. We remain on track to share top line results of the primary cohort, which excludes Japan, in the second quarter. We anticipate the top line press release will remain relatively high level so as not to jeopardize presentation of the full results at a potential medical congress later in the year. nHCM is a highly underserved patient population with no approved therapies. We look forward to reporting the results of ACACIA-HCM and to evaluating whether aficamten can demonstrate a clinically meaningful benefit for these patients. As with any pivotal trial, a range of outcomes is possible, and we will provide a thorough review of the results at an upcoming medical congress following the top line release. As we previously guided, the conduct of ACACIA-HCM remains within its design parameters and closeout is going according to plan. Given our expertise and experience in designing and managing trials in HCM, we believe that we have successfully executed a well-designed clinical trial. We continue to be confident in ACACIA-HCM and look forward to seeing the results in the second quarter. Now moving on to our clinical development programs in heart failure. During the quarter, we continued conduct of COMMUN-HF, the confirmatory Phase 3 clinical trial of omecamtiv mecarbil in patients with symptomatic heart failure with severely reduced ejection fraction less than 30%. We now have 100% of U.S. sites activated and over 90% of European sites activated. We soon plan to expand the trial into China to increase the global footprint of this important clinical trial. We also continued AMBER-HFpEF, the Phase 2 clinical trial of olicamtiv, in patients with symptomatic heart failure with preserved ejection fraction of at least 60%. We continued enrollment in cohort one of AMBER-HFpEF and expect to complete enrollment in this first quarter. After an interim safety review is conducted, we may assess whether to begin to enroll in cohort two for evaluation of a higher dose. We are encouraged by the continued progress and execution across these ongoing clinical trials, reinforcing our focus on disciplined development and advancing innovative medicines within our emerging specialty cardiology franchise. And with that, I will pass it to Sung. Thanks, Stuart. Sung H. Lee: We are pleased to report our fourth quarter and full year 2025 financial results. Starting with the balance sheet, we finished 2025 with approximately $1,220,000,000 in cash, cash equivalents, and investments, compared to $1,250,000,000 at the end of 2024. The 2025 year-end balance includes $100,000,000 in proceeds from the drawing on tranche five of the Royalty Pharma multi-tranche loan. Excluding the proceeds from this loan, cash, cash equivalents, and investments would have declined by approximately $134,000,000 during 2025. Turning to the income statement, total revenues in Q4 2025 were $17,800,000 compared to $16,900,000 for the same period in 2024. Total revenues for the full year 2025 were $88,000,000 compared to $18,500,000 in 2024. Total revenues for the full year 2025 benefited primarily from the successful completion of the technology transfer totaling $52,400,000 to Bayer in 2025 and the recognition of $15,000,000 in milestones in 2025 related to the approvals of MYCorzo in the United States and China under the Sanofi license agreement. As we announced previously, MYCorzo became available to patients near January, and as such, we expect to report product sales of MYCorzo with our Q1 2026 results. R&D expenses for the fourth quarter were $104,400,000 compared to $93,600,000 for the same period in 2024. R&D expenses for the full year 2025 were $416,000,000 compared to $339,400,000 in 2024. The increase from 2024 to 2025 was primarily due to advancing our clinical trials, higher personnel-related costs including stock-based compensation, and medical affairs activities. G&A expenses for Q4 2025 were $91,700,000 compared to $62,300,000 for the same period in 2024. G&A expenses for the full year 2025 were $284,300,000 compared to $215,300,000 in 2024. The increase from 2024 to 2025 was primarily driven by investments toward commercial readiness, including the hiring of our U.S. sales force primarily in 2025, and higher non-sales personnel-related costs. Net loss for Q4 2025 was $183,000,000 or $1.50 per share compared to a net loss of $150,000,000 or $1.26 per share for the same period in 2024. Net loss for the full year 2025 was $785,000,000 or $6.54 per share compared to a net loss of $589,500,000 or $5.26 per share in 2024. Turning now to our financial guidance for 2026. As this is our first year of launching MYCorzo, we are not providing product sales guidance at this time. In terms of expense, we expect our GAAP combined R&D and SG&A expense to be between $830,000,000 and $870,000,000. Stock-based compensation included in the GAAP combined R&D and SG&A expense is expected to be between $120,000,000 and $130,000,000. Excluding stock-based compensation from the GAAP combined R&D and SG&A expense results in a range of $700,000,000 to $750,000,000. The GAAP combined R&D and SG&A expense does not include the following: collaboration expenses, including reimbursed expenses and cost of inventory sales of aficamten to partners; subject to the results of ACACIA-HCM and regulatory review, potential costs related to commercialization of aficamten in nHCM; and the effect of GAAP adjustments as may be caused by events that occur subsequent to publication of this guidance, including, but not limited to, business development activities. Our capital allocation priorities are as follows: first, launching MYCorzo in the U.S. and funding commercial readiness activities in Europe; second, advancing our pipeline with important label expansion opportunities for aficamten and ongoing clinical trials of omecamtiv mecarbil and olicamtiv; and third, investments in our muscle biology platform and pipeline. We will continue to be disciplined in our approach to capital allocation and remain good stewards of capital as we embark as a global commercial-stage company. With that, I will hand it back to Robert. Robert I. Blum: Thank you, Sung. Before we open the call to questions, it is worth pausing to reflect on what this moment represents for Cytokinetics, Incorporated. After years of focus, discipline, and unwavering commitment to our science, we have crossed an important threshold from pursuing possibilities to delivering impact. The approval of MYCorzo marks the beginning of a new chapter, one for which our work impacts the daily lives of patients and the decisions made in clinics around the world. This is a moment we have been working toward for nearly 28 years at Cytokinetics, Incorporated, and it reflects unstoppable resilience, dedication, and a rigorous focus on translating our science into medicine for the benefit of patients. With that transition comes a deeper sense of purpose and dedication to our core values, which define how we do what we do. Chief amongst them is our value of “Patients are our North Star,” and during the fourth quarter, we announced our support for a three-year initiative led by the American Heart Association to address disparities in access to care, diagnosis, and treatment for people living with HCM. Through this longstanding commitment, we hope to help close the gaps between evidence, guidelines, implementation, and equities in health care delivery for HCM. Progress at this stage is not only about innovation, but also about our responsibility to show up for patients and the communities we serve. What we have discussed today reflects years of focused work across the organization from discovery and development through regulatory, manufacturing, and now commercial execution. What made all of this possible was the enduring dedication and the passions from our employees, for which I have endless gratitude. As we enter this next chapter as a commercial-stage company, our focus remains clear: execute ambitiously, advance our pipeline, and deliver meaningful, longer-term impact for patients and shareholders. Now I would like to share our 2026 milestones. For aficamten, we expect to report top line results from ACACIA-HCM in the second quarter 2026. We expect to launch MYCorzo in Germany in the second quarter 2026. We expect to receive potential FDA approval of the supplemental NDA for MAPLE-HCM by Q4 2026. We expect to complete enrollment in the adolescent cohort of CEDAR-HCM in Q4 2026, and we expect to receive potential approval from Health Canada in the second half of this year. For omecamtiv mecarbil, we expect to continue patient enrollment and the conduct of COMMUN-HF through 2026. For olicamtiv, we expect to complete enrollment in cohort one of AMBER-HFpEF in Q1 2026 and complete enrollment in cohort two of AMBER-HFpEF by 2026. And finally, for our preclinical development and ongoing research, we expect to continue ongoing preclinical development and the research activities directed to additional muscle biology-focused programs. Operator, with that, we can now open up the call to questions, please. Operator: Thank you. And just as a reminder, please one question. Your first question comes from Tessa Romero with JPMorgan. Please go ahead. Tessa Romero: Hello, good afternoon, Robert and team. Thanks so much for taking ours this afternoon. So one from us on ACACIA. Is it true that the study will be successful if at least one of the endpoints reaches statistical significance? And then along these lines, in your study protocol, did you specify which endpoint you would need to hit to properly claim success? In other words, either KCCQ or peak VO2, or is either fine? Thank you. Robert I. Blum: I will start, and I will turn it over to Fady and Stuart. To define success, you have to also consider with whom you are engaging. And, obviously, the clinical community is going to have one set of expectations and interests, as might FDA, but also they could diverge. But it is true as we have designed this clinical trial, it will be deemed positive if it hits on either or both of the prespecified clinical trial endpoints. With that, I will also turn it over to Fady and Stuart if they want to add anything. Fady Malik: I think the only thing to add is that either endpoint is considered equally positive. Robert I. Blum: Either one is positive, the trial would be considered positive. One is not weighted more heavily than the other. Operator: Your next question comes from the line of Roanna Ruiz with Leerink Partners. Please go ahead. Roanna Ruiz: Good afternoon. Afternoon, everyone. Hello. So a question for me. I was thinking about MYCorzo and its initial launch in cardiologist engagement. Could you share any color on how long it is taking sites and clinical centers to get through the REMS certification and start to prescribe? Are the field reps noticing anything so far in their detailing? Robert I. Blum: I will start again and turn it over to Andrew. And we very purposely are focusing on engagements, inputs, if you will, on this call because it is early in the launch. But we are indeed impressed by how many HCPs have already been REMS-certified and the speed at which that happened shortly after product was in channel. And I will ask Andrew to elaborate. Andrew M. Callos: Sure. So the REMS certification, as you are maybe aware, is a quick self-study training and a 10-question Q&A that is scored. It takes 10 to 20 minutes generally for cardiologists, sometimes even faster. So it has really not been a barrier to be REMS-certified. I think there are many HCPs and cardiologists we were talking to that were waiting for MYCorzo to be approved and had patients that were also waiting, and, you know, we have gotten strong engagement across a broad base of cardiologists, both in centers of excellence and outside of centers of excellence in not only REMS certification, but also getting patients REMS-certified and prescribing. And, also, to add, knowing that this is not the first but now the second cardiac myosin inhibitor, these cardiologists were accustomed to a REMS, were awaiting one, and when we did launch and have product in channel, I think they were poised, well-positioned to move swiftly with REMS certification, and we are seeing evidence of that. Roanna Ruiz: Got it. Thanks. Operator: Your next question comes from the line of Mayank Mamtani with B. Riley Securities. Please go ahead. Robert I. Blum: Hello, Mayank. Mayank Mamtani: Yes. Good afternoon, team. Thanks for taking our questions, congrats on a very productive recent few months. So on ACACIA, if I may, could you comment on your placebo arm response expectations for both KCCQ and peak VO2? And if you would expect consistency to what we have seen in preceding nHCM trials? And if you could also comment on whether you would expect a similar NT-proBNP reduction that you saw in the earlier OLE experience at the time point that you have here, and if you expect that to be correlated to the exposure that you may have from a dose intensity standpoint? Robert I. Blum: I am going to ask my colleagues to answer your question, but I will remind you and also them that as we are approaching the conclusion of the study, and as we would be expecting to proceed to database lock and unblinding, we should answer your question with regard to what was the original design expectations. And I want to make certain that we are not in any way front running anything that might be understood regarding the progress of the trial, rather its design and conduct. Fady Malik: It is important to realize that we are still blinded to the data, so we have really no clue as to what the placebo arms are doing. But based on past experience, the peak VO2 arm generally—the placebo response—is close to zero. Robert I. Blum: It may be a little higher, may be a little lower, but in our prior studies the placebo response—there is not much of a placebo response to peak VO2, and, again, we based ACACIA’s design on— Fady Malik: A placebo response in line with our prior studies. You know, expect four to five points, perhaps six points. But just to— Robert I. Blum: Emphasize, the statistical design of the study does not rely on the magnitude of the placebo response. It relies on the difference between the active— Fady Malik: Response and the placebo response. And so that difference in the case of KCCQ, which we powered the study on, was five points— Robert I. Blum: Difference between placebo and active. And then your last, I think, point was with regards to NT-proBNP. Fady Malik: We certainly would not have any— Robert I. Blum: Expectations that are different from what we observed in the Phase 2 or the open-label extension with regards to how NT-proBNP has declined during treatment with aficamten, but we are blinded to those data as well. Mayank Mamtani: Thank you, team. Operator: Your next question comes from the line of Joe Pantginis with H.C. Wainwright. Please go ahead. Robert I. Blum: Hey, Joe. Joe Pantginis: Hey, everybody. Thanks for taking the questions. So a question on early market uptake, and I am glad Andrew made an earlier comment as well that I wanted to ask. So with regard to the U.S. first, Andrew, you made some comments about—and previously about patients that docs have been having in—wanted to know if there is any uptake there that you thought might have been in line or even quicker than expected. And secondly, with regard to ex-U.S., you know, China, for example, what would you describe as any commercial differences? I know you have started to put a team there or potential headwinds that you could expect versus what you would see in the United States? Thanks. Robert I. Blum: Andrew, do you want to take that? Andrew M. Callos: Sure. So maybe start backwards. China is partnered—Sanofi is commercializing in China. We are not doing that. So that is an important element. I think back to the U.S. patients in reserve, I think that the demand we are seeing and where we are seeing it from is what we were expecting. So we were not surprised by the patient demand. I think it will be reflected in research we were seeing when we were doing primary market research pre-approval—things like demand studies, things like awareness studies—that there was broad awareness. The physicians certainly were aware of not only SEQUOIA, but also MAPLE that were presented at congresses. So I think we are where we were expecting to be knowing that we have been in the market with product for about three weeks. Robert I. Blum: Maybe I can just add to the point of Andrew’s market research, but also as equity research analysts from Wall Street have done their own surveys, there was clear evidence that the current cardiac myosin inhibitor category was only penetrated 15% to 20% at most and that there would be a large number of patients still eligible for treatment. What we heard, what analysts heard, is that there would be a number of patients that could be started promptly and the early evidence would suggest that there were patients that were held awaiting a potential approval. And we will be in a position to comment more about that in time. Joe Pantginis: Thank you. Operator: Your next question comes from the line of Cory Kasimov with Evercore. Please go ahead. Cory Kasimov: Hey, Robert. Hey, guys. Thanks for taking the question. So I had a follow-up on ACACIA and wanted to also ask between these two primary endpoints of KCCQ and peak VO2, and we think specifically about U.S. investigators. Is there a view from, like, domestically on whether one of these endpoints is more important than the other? I know the original primary was KCCQ—does that—is that a reflection of how U.S. physicians are thinking about it? And then from that standpoint, I know how it is, again, powered, but what is considered to be a clinically meaningful change from a physician point of view? Thank you. Robert I. Blum: So here again, I am going to remind our colleagues of the fact that we chose to have co-primary endpoints not because we originally thought one was more important than the other, but rather because regulatory authorities wanted to see a harmonization across the study as could be best achieved by putting equal weight and emphasis to the two co-primaries. Maybe Fady and Stuart, I will ask you if you want to say anything else. Fady Malik: I will just add I do not think physicians will lean one way versus the other. I think they will look at the totality of the evidence and not just the primary endpoints, but also the secondary endpoints that include NYHA class, and other metrics of exercise, biomarkers, and things like that. So, you know, in this field, there are no treatments for non-obstructive HCM. Physicians are looking for improvements in their patients’ status, and there are many dimensions— Robert I. Blum: Upon which they can improve, and, you know, I think they and also regulators will look at the totality of the data. To answer your question about minimally important differences, for this being in HCM, and to reiterate what Fady said, there is no approved drug for these patients in this population. What is going to be considered important and clinically meaningful is going to be hopefully a function of this trial, as we learn what is concordant—how the endpoints move together, and what ultimately defines larger magnitude improvements versus what may be otherwise. So I think we are going to learn a lot from this study that is going to be informing the clinical literature and hopefully what ultimately may be medical guidelines. But we do not have reference standards or benchmarks that we can point to. Instead, this study is intended to test those hypotheses and determine what should be important and meaningful. Cory Kasimov: That is helpful. Thank you both. Operator: Your next question comes from the line of Salim Syed with Mizuho. Please go ahead. Salim Qader Syed: Great. Thanks for the question, guys. One for us just on the disclosure. When you said high level, should we be thinking more along the lines of how Bristol had their press release for Odyssey, which was just completely qualitative? I think it was just one sentence like, did not hit on the dual primaries. Or should we be thinking somewhere more along the lines of SEQUOIA, how you guys did it, which had a lot of numbers in it, or somewhere in between. And if it is all qualitative, would you be willing to comment on each of the co-primaries in the press release? Thank you. Robert I. Blum: Ultimately, this will be a function of the data and what is deemed material, and also what would be, upon receipt of those data, what can be negotiated with the medical congress. Disclosing more would be an objective if that can be permitting of the full presentation at an important medical meeting. And in the case of SEQUOIA, we disclosed more, but at the expense of being able to present it at the medical congress where it would have been more appropriate. So we would like to be able to do both: disclose as much as we can, but still preserve the opportunity to present at the appropriate next-level congress. If it is going to be more qualitative, I imagine we will have to speak to both endpoints. I do not think we could speak to one and not the other. But in terms of what would be contained beyond that, I think it all depends on the data, magnitude of effect, p-values, and what we can be enabling of at a congress. Fady, anything you want to add? Fady Malik: The presentation of the data is important to the academic community, and in the past, I would say that if you look at the presentation of MAPLE at the ESC Congress last year, it was tremendously impactful that way. So there are many considerations and important trade-offs here— Salim Qader Syed: In terms of all the stakeholders involved. Robert I. Blum: We are fully aware of the significance and the importance of these data both to the medical community as well as to the Wall Street community. And we are going to try to do our best. Salim Qader Syed: Okay. Got it. Thanks so much, guys. Operator: Your next question comes from the line of Yasmeen Rahimi with Piper Sandler. Please go ahead. Yasmeen Rahimi: Thank you so much for all the color. My question is just related on ACACIA also. I think, you know, one of the questions we have been getting is have you done payer work or uptake work to understand whether the usage would still be strong if you showed a three-point placebo-adjusted difference in KCCQ, or just commentary—as long as you have a statistical separation, the magnitude of delta difference in KCCQ is irrelevant. Appreciate color, and I will jump back in the queue. Robert I. Blum: Maybe that is a question for both Fady and Andrew. In terms of your specific example of a three-point difference in KCCQ, I assume you picked that number arbitrarily. But maybe, Fady and Andrew, if you want to tackle that. Fady Malik: Let me just start by saying that in MAPLE and SEQUOIA, you see a range of strength of response. And while the average response, say, in your example of three, may represent an all-comers average response, you see responses that are far larger than that, and, obviously, you see some patients that do not respond very much at all. Robert I. Blum: And so I think in a lot of ways, the— Fady Malik: The average number that is coming out of the trial will certainly color how physicians maybe look at the importance of the results, but— Robert I. Blum: We also enrolled 500 patients in the study, and many of them will go into open-label extension, and— Fady Malik: Many of these investigators will have a chance to evaluate on their own—are patients improved? And I think ultimately, this will be probably a case of: if you try it and you have a sizable response, and it is important to you, then continue therapy; and if you do not, then you do not have to continue therapy. And it is a little different than drugs where we treat to lower risk, where you do not really know if you are the one that is going to benefit from the drug, and thereby absolute differences are far more important to understand your potential benefit. Robert I. Blum: So I hope that helps from a medical perspective. Fady. Andrew M. Callos: And from a demand point of view, provided that the study is statistical and that MYCorzo would be approved for non-obstructive, the care demand is driven, you know, significantly higher. You know, we hear things like HCPs being able to use one product across all of HCM, not worrying whether it is oHCM or nHCM, especially given the profile that you know and we know from SEQUOIA. That would drive up use both in oHCM, obviously, as well as nHCM. So it has a significant impact on nHCM, and maybe not significant, but definitely an impact on oHCM as well. Robert I. Blum: And I think, just to maybe culminate here, simply achieving clinical significance is not alone enough. The magnitude of change needs to be meaningful, especially relative to an instrument like KCCQ where there is history of a placebo effect. So our goal is to demonstrate with this trial, above and beyond a placebo effect, a meaningful impact on KCCQ. Operator: Your next question comes from the line of James Condulis with Stifel. Please go ahead. James Condulis: Good afternoon. Congrats on all the progress, and thanks for taking my question. Actually wanted to ask one about HFpEF, and I was curious, in the context of ACACIA, how important or meaningful you think an ACACIA win would be helping to kind of de-risk that broader HFpEF opportunity given some of the overlap in kind of pathology here. And just curious if you could also help frame out kind of when we may see initial data there and what a win looks like. Thanks so much. Robert I. Blum: Good question, and I am going to ask Stuart to comment, but I will also highlight that we learned a lot from what we can glean from those data from ODYSSEY. And that obviously has impact and implication to what we hope to see with our study, ACACIA. But to your point, ACACIA can also inform what we might expect from HFpEF and the translation of this mechanism of a cardiac myosin inhibitor to an adjacent population. That is certainly our objective. And with that, I will ask Stuart maybe to comment. Stuart Kupfer: Thank you, James. You hit upon an important evidence base that really informed this hypothesis about the potential benefit of a CMI in patients with HFpEF and, more specifically, those patients with hypercontractility. So, you know, many of the features structurally are similar between patients with non-obstructive HCM and with HFpEF and hypercontractility. So I think the outcome of ACACIA could further inform the potential benefit of a CMI in HFpEF. With respect to when we expect results from AMBER-HFpEF, I think it is a little bit too soon to say that, but we will continue updating you in terms of the progress of the trial. Robert I. Blum: But underscoring what Stuart said around hypercontractility, ensuring that everybody appreciates that the way we are thinking about HFpEF is not the entirety of that population, but those whose disease and anatomy is defined by hypercontractility, and that is where we believe there is an adjacency to nHCM. Thank you for the question. Your next question comes from the line of Jason Butler with Citizens. Please go ahead. Jason Butler: Hi. Thanks for taking the question. Just wondering if you could give us any color on the centers that are signing up in the REMS program right now. Are you getting any health care prescribers that are either not current CMI prescribers or have never prescribed CMI? Or is it fair to say the majority of the sign-up are current CMI prescribers? Andrew M. Callos: Thanks for the question. The majority are current CMI prescribers, but we do have prescribers who are REMS-certified who are not CMI prescribers today, and we do have prescribers that are first-time CMI prescribers as well. But as you would think, the majority are current CMI prescribers. Robert I. Blum: And that tracks with the ways in which our Cardiovascular Account Specialists are focusing their energies. As Andrew commented in his prepared remarks, our activities are more focused to those targeted cardiologists who are already high-volume prescribers, and that is where he commented on percent engagements. But it is nice to see that already we are seeing outside of that circle use of a cardiac myosin inhibitor where it had not been previous. Jason Butler: Great. Thank you. Operator: Your next question comes from the line of Maxwell Skor with Morgan Stanley. Please go ahead. Maxwell Skor: Great. Thank you for taking my question. So assuming positive ACACIA readout, how should we think about any incremental uplift to the obstructive HCM launch trajectory in 2026? If you can maybe quantify or speculate that would read through. And also, can we expect ACACIA to read out in the early part of the second quarter or maybe later on in the second quarter? Thank you. Robert I. Blum: I will tackle that latter question and ask Andrew to do the former. We are not going to guide to when in second quarter. I imagine analysts will do their own math and make their own handicapping and projections, but we are not going to comment on that. And then I will ask Andrew to speak to your first question. Andrew M. Callos: Yeah. I mean, I think, obviously, we are not going to be promoting or talking about 15% to 20% uplift. To be able to comment on the data, we will have to do additional market research to assess how that might inform use in HCM and what kind of spillover there may be, but underscoring we intend to be very much by-the-book compliant with regard to what our field colleagues would be able to speak to. Operator: Your next question comes from the line of Serge Belanger with Needham. Please go ahead. Serge Belanger: Hi, good afternoon. Thanks for taking my questions. I will pile on ACACIA too—seems to be the topic du jour. So I know you are still blinded to almost all the data, but I think in the past, you have talked about monitoring the variability in the endpoints. So just curious if there has been any change in that variability in what you can glean from that? Thanks. Robert I. Blum: I will turn to Fady, but I will emphasize yet again that in light of the fact that we are now nearer to what would be database lock and unblinding, we cannot comment on something like what you asked with regard to standard deviation. Rather, instead, we can comment on what the study was designed to demonstrate. Fady Malik: The study was designed to demonstrate a five-point delta on KCCQ, assuming a standard deviation of 15, and a peak VO2 of 1 with a standard deviation of 3. Robert I. Blum: Ninety percent power, with being able to detect statistically significant differences— Fady Malik: At differences that are less than that, with less power, obviously. And as I stated in the script, the study remains within its design parameters, and, you know, we will not commit to updating those statements going forward. Serge Belanger: Got it. Thank you. Thank you. Operator: Your next question comes from the line of Jason with Bank of America. Please go ahead. Unknown Analyst: Hi. This is Jackie on for Jason. Congrats on the progress, and thanks for taking our question. So real quick, can you report what you have seen thus far this year in terms of patient start forms and also about how much of your early efforts have involved more community practices and what has the uptake been like specifically within these offices? Thank you. Robert I. Blum: Thank you. Andrew? Andrew M. Callos: Sure. So we are not going to give numbers—we will do that in the first quarter relative to start forms. All I can say is what we said in the script, which is our demand in the three weeks and the engagement we have seen with physicians is at, if not above, what we expected internally. In terms of community versus centers of excellence, the 700 physicians that were 80% of the market—that is where the majority is coming from. But there is also strong engagement from the community. There is strong engagement from new prescribers—probably new prescribers who have never prescribed a CMI—those numbers are higher than we were expecting. So I think we are seeing a good balance across all types of prescribers. And the majority, obviously, are the ones that we are calling on and educating. In our first quarter call, we will give more color around patients and engagement—centers of excellence versus non-centers of excellence, prescribing depth, etc. So, you know, more to come, but too early to say with just three weeks of data. Robert I. Blum: I see. It is early innings, but we are pleased. Operator: Understood. Thank you. Your next question comes from the line of Srikripa Devarakonda with Truist Securities. Please go ahead. Alex (for Srikripa Devarakonda): Hi. This is Alex on for Kripa. Congrats on the progress. I am very excited to see how MYCorzo’s REMS can also improve the patient and physician experience. A question on the REMS: Could there still be an option to modify the REMS requirement in the future? And could Cytokinetics, Incorporated go back to the FDA at some point with updated post-marketing data and get it re-reviewed to potentially make it even more favorable? Robert I. Blum: We have already seen that the FDA was accepting of an opportunity to see real-world evidence data in support of a modification of the Camzyos REMS. But for our REMS, we are not guiding to any changes in the near term, but certainly, over a medium to longer term, it is reasonable to expect that real-world evidence could inform changes. But what those changes might look like would be premature to speak to today. Fady or Stuart, anything you want to add? Fady Malik: The REMS itself is, you know, quite straightforward in terms of what is required to execute it. But the real-world data will inform potential future modifications to it. But as Robert says, still too early to decide what it is that we may pursue. I think we just need some real-world data to understand what may be our pinch points and how those real-world data would support altering the REMS as might relieve those pinch points. Operator: Your next question comes from the line of Ashwani Verma with UBS. Please go ahead. Unknown Analyst: Hi there. This is Natalie on for Ash, and thanks again for taking our question. So just on ACACIA, could you talk about how the discontinuation rate in ACACIA compares to prior studies? And then also for the baseline patient population, could you give us a sense of the percentage of patients that might have the concentric LVH phenotypes? Fady Malik: I can talk to, you know, discontinuations. And, again, the study was designed to withstand a 10% discontinuation rate, and I think as I have said in the past, we have been within that metric, and in my earlier comments, reaffirmed that, but we will not commit to updating that going forward. And then, you know, we have not released any of the baseline characteristics, and so I cannot really comment on your last question. But what I can say is that our group of HCM specialist physicians review every echo of every patient that is enrolled in the trial, and unless they feel it is an echo consistent with hypertrophic cardiomyopathy, the patient would have a query raised to the site to gather more information that might support the diagnosis. Operator: Got it. Thanks so much. Thank you. Operator: Your next question comes from the line of Leonid Timashev with RBC Capital Markets. Please go ahead. Leonid Timashev: Hey, guys. Thanks for taking my question. I just wanted to go back to the MYCorzo launch and the patient starts. I guess, can you provide any color on the types of patients that are being started versus what you might expect from the initial mavacamten launch? Anything specific about the patients that are being put on? Is it just new patients? Are there any switches? Is it patients who maybe needed higher efficacy or had lower baseline ejection fraction? I guess I am just curious how docs are thinking about the initial use of aficamten as they now have the ability to use the drug. Thanks. Robert I. Blum: Good evening. Thanks. Just keeping in mind we do not always have insights into patient-level data, but we only hear things maybe a bit more anecdotally. I think “all of the above” may be a way of addressing your question. But maybe, Andrew, you have something else you want to add. Andrew M. Callos: No. I think you said exactly what I was going to say, which is that patient information is protected. We do not see exactly who is put on and for what reason. You know, the data is too early to see if there are switching, etc. But I do think we are seeing all of the above, as Robert said. Operator: And that concludes our question and answer session. I will now turn the conference back over to Robert I. Blum for closing comments. Robert I. Blum: Thank you, operator, and thanks to all of you for joining us on this call today. Obviously, we reflected on the importance of this moment. I will not repeat those statements other than to say we understand the significance of this as we turn the page on to commercialization, and we want to do the right thing by these patients for the benefit of their care and do right by health care professionals who attend to their care. We also recognize and acknowledge that this is an important milestone for Wall Street, as Cytokinetics, Incorporated is now a global commercial company, and we take that very seriously as well. We look forward to providing you insights as we have more substantial information relating to the launch of MYCorzo in the United States, its expected launch in Germany and other European countries, and we will know more and be able to share more through the remainder of this year. Moreover, as we have access to results from ACACIA, expected in Q2, we look forward to sharing those with you, and we recognize the significance of those too. So thank you for your interest and attention to all that we are doing at Cytokinetics, Incorporated. We look forward to keeping you abreast of progress. With that, operator, we can now conclude the call. Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation and you may now disconnect.
Operator: Hello everyone. Thank you for joining us and welcome to the CareDx, Inc Q4 2025 Financial Results Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. I will now hand the call over to Caroline Corner, Investor Relations. Please go ahead. Caroline Corner: Thank you, operator. Good afternoon. Thank you for joining us today. Earlier today, CareDx, Inc released financial results for the fourth quarter and full year 2025 ending 12/31/2025. These results are currently available on the company's website at www.caredx.com. Joining me on today's call are John Hanna, President and Chief Executive Officer, Keith Kennedy, Chief Operating Officer, and Nathan Smith, Chief Financial Officer. Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements are based upon current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results to differ materially from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. Information concerning the risks, uncertainties, and other factors that could cause results to differ from these forward-looking statements is included in our filings with the Securities and Exchange Commission. The information provided in this conference call speaks only to the live broadcast today, 02/24/2026. We disclaim any intention or obligation except as required by law to update or revise any information, financial projections, or other forward-looking statements, whether because of new information, future events, or otherwise. This call will also include a discussion of certain non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute or in isolation from, GAAP measures. Reconciliations of our non-GAAP financial measures to the most direct comparable GAAP financial measures may be found in today's earnings release, which is posted on our website. With that, I will now turn the call over to John. John Hanna: Thank you, Caroline, and welcome to everyone joining today's call. 2025 was a transformative year for CareDx, Inc. We advanced our market leadership across heart, lung, and kidney transplantation with an expanded commercial footprint including a broader sales and medical presence to execute our solution selling strategy that drove growth across all business segments. We launched new products to further differentiate our offerings such as AlloSure Heart for Pediatrics to service the entire heart transplant market, Alisure Plus, our AI-derived model for kidney transplant risk assessment, and HistoMAP Kidney, our first tissue-based gene expression classifier for identifying rejection subtype. We generated meaningful evidence to further build clinical belief in our molecular testing solutions including multiple published manuscripts from the large prospective SHORE and KOAR registries in heart and kidney transplantation, respectively. At the same time, we invested in critical infrastructure including significantly advancing our revenue cycle management function through automation and AI deployment, and launching Epic Aura, designed to improve our customers' experience with test ordering and reporting by reducing sample holds and supporting faster, more reliable test processing. Our innovation strategy and disciplined execution have set us on a path to achieve the long-range plan we laid out in October 2024. I believe CareDx, Inc is well positioned for our next phase of innovation, scale, and sustained growth as a leading precision diagnostics company. In my prepared remarks today, I am going to highlight some of our accomplishments from the fourth quarter and then detail our key growth drivers for 2026. Then I will turn it over to Nathan to review the quarter and full year 2025 financial highlights and our full year 2026 financial guidance. Briefly, our fourth quarter financial performance was strong. We delivered revenue of $108,000,000, representing 25% year-over-year growth. Testing volume accelerated to 17% growth year-over-year. We maintained a 69% non-GAAP gross margin and generated positive adjusted EBITDA of $7,000,000 in the quarter. We continue to be disciplined in our capital allocation and maintain a strong balance sheet. In the first quarter, we returned capital to shareholders through an additional $12,000,000 of share repurchases. In total, in 2025, we have repurchased approximately 9% of our outstanding shares. We ended the quarter with approximately $200,000,000 in cash, cash equivalents, and marketable securities and no debt, providing significant financial flexibility. Overall, I believe our results reflect disciplined execution, improving cash generation, and a solid foundation as we continue to execute our growth strategy. Now on to the business highlights. Testing services growth was strong across all three organs, heart, lung, and kidney. Revenue was $78,000,000 for the fourth quarter, an increase of 23% year-over-year. We delivered approximately 53,000 tests in the fourth quarter, up 17% from the prior year. Kidney testing continued to lead our growth, supported by both increased surveillance protocol adoption and expanded for-cause use of AlloSure Kidney at transplant centers. Generally, when a center initiates a surveillance testing protocol, they will start newly transplanted patients on that testing schedule. As centers restarted their surveillance protocols throughout the year, it had a gradual layering effect of increasing test volumes, leading to a strong fourth quarter. Although the number of kidney transplants was relatively flat year-over-year in 2025, we are encouraged by the year two IOTA proposed rule which reinforces the need to increase kidney transplants, including through the use of expanded organs that are considered medically complex. Based on CMS' forecasted growth rates, IOTA may be an additional tailwind for our testing services business, where our growth rate is already outpacing the market. We believe the proposed framework aligns well with our portfolio and positions testing services to benefit as IOTA progresses into its second year. In heart transplantation, during the fourth quarter, we announced the publication of the third manuscript of the Surveillance Heart Care Outcomes Registry, or SHORE, in the Journal of Heart and Lung Transplantation. This large multicenter study analysis included 1,934 heart transplant recipients across 59 centers and demonstrated that HeartCare's combined molecular testing provides independent prognostic information beyond biopsy alone. Patients with an abnormal HeartCare result at any time from two months to five years post-transplant were associated with approximately threefold increase in the 30-day risk of graft dysfunction and cardiovascular death, even when there was no biopsy evidence of rejection. These findings reinforce the clinical value of HeartCare in identifying higher-risk patients who may benefit from closer monitoring and more personalized post-transplant management, further strengthening the scientific foundation of our heart transplant franchise. Over the course of 2025, we progressed from stabilizing our revenue cycle management function to demonstrating clear RCM strength. After installing our new team in 2025, collections improved consistently in the third quarter and accelerated in the fourth quarter. For the year, reimbursement improved materially, with claim rejection rates declining by more than 60% over the course of 2025 through September, and overall zero-pay claims improved by approximately 10% through the same period. These improvements were supported by increased automation, streamlined workflows, and more effective appeals execution, driving what we expect to be more predictable and durable revenue capture. Just as important, we improved the patient experience. We are more proactively managing prior authorizations, timely claims submission, and appeals to help patients receive their insurance benefits and diminish uncertainty. We believe this disciplined execution strengthens provider and patient confidence in CareDx, Inc as their laboratory of choice. Across 2025, we delivered meaningful improvements in cash conversion and reimbursement reflecting stronger execution across billing, collections, and appeals. I will turn now to Patient and Digital Solutions, which includes our transplant pharmacy, software tools, and remote patient monitoring services. Our solution selling strategy is working. We delivered a strong fourth quarter with revenue of $17,000,000, up 47% year-over-year. Our integrated patient and digital offerings continue to meaningfully deepen customer relationships. As we continue to engage our customers with these solutions, we are seeing the benefits of tighter integration across the transplant journey, improving the experience for patients and care teams while reinforcing the value of our overall precision medicine platform. Turning to the Lab Products business, we delivered solid performance in the fourth quarter, with revenue of $13,000,000, up 17% year-over-year, reflecting continued demand across both domestic and international markets. Growth was supported by ongoing adoption of our HLA typing and analysis solutions as well as stronger customer engagement at key scientific forums. During the quarter, we continued to advance our product portfolio, including launching Alisig TX11 and SCOR 7, which are designed to improve workflow efficiency, scalability, and regulatory alignment for transplant laboratories. AlloSeq TX11 is our next-generation HLA typing solution, featuring enhanced class II loci coverage to improve donor-to-recipient matching in both solid organ and stem cell transplantation. We also achieved important regulatory milestones, including IVDR certification for AlloSeq TX and QType in Europe, positioning the Lab Products business for sustained growth and broader global adoption going forward. Looking ahead to 2026, I want to lay out our key growth drivers for the year that will allow us to sustain a high level of product innovation and extend our leadership position in existing markets through our solution selling strategy. These initiatives span our pipeline advancement, go-to-market strategy, and evidence generation, and together, they reinforce our ability to rapidly launch, iterate, and scale products across the platform. Importantly, this is a connected operating model designed to fuel growth and extend our leadership over time. These drivers are not just about scaling what we do today, they are about applying our platform to new high-impact markets. This year, I am placing a significant emphasis on advancing our cell therapy pipeline, which we have referred to as Transplant Plus. On our February 12 investor call, we announced pivotal clinical validation results for Allaheme, our first AI-powered NGS surveillance solution designed to predict relapse in patients with AML and MDS following allogeneic cell transplantation. Alegeme represents an important milestone in our Transplant Plus strategy, positioning CareDx, Inc to expand beyond solid organ transplant and into cell therapy, hematology, and oncology, areas where there remains a significant unmet need for sensitive, noninvasive relapse detection. The data were generated from the ACROBAT study, a prospective multicenter trial conducted across 11 U.S. transplant centers and demonstrating strong clinical performance recently presented at the Tandem 2026 Annual Meeting. In this analysis, Allaheme identified relapse a median of 41 days earlier than clinical detection, with 85% sensitivity and 92% specificity. In patients with a positive Allaheme result at six months post-transplant, there was a 12-fold higher risk of relapse compared to patients with negative results. These findings underscore the potential of a universal blood-based surveillance approach to provide earlier risk insight than traditional bone marrow-based or marker-specific methods. Strategically, we expect Allaheme to broaden the long-term growth opportunity for CareDx, Inc by extending our molecular surveillance expertise into a large and growing cell therapy market. In the call, I laid out our anticipated pathway to commercialization, starting with publishing the results of the ACROBAT trial, CLIA readiness in 2026, followed by commercial introduction in early 2027, and anticipated payer coverage in 2028. While still early, we believe Allaheme has the potential to become a foundational component of a broader molecular monitoring platform for cell and hematologic malignancies, consistent with our disciplined, data-driven approach to innovation and portfolio expansion. Advancing our cell therapy pipeline is a top priority for 2026, and I plan to share more updates on this work throughout the year. John Hanna: Turning to go-to-market, I view our operational excellence initiatives and placing the customer experience at the center of everything we do as a key part of our go-to-market strategy. That message has resonated across the country with the more than 50 transplant centers I visited with personally over the last year. In 2026, we are placing a significant focus on Epic to make the customer experience simple and streamlined. Our pipeline of customers willing to integrate is significant, and we believe these integrations will drive further volume growth. As of today, seven transplant centers are fully live on our Epic Aura instance, making us one of the fastest implementers to date according to Epic's team. An additional 14 transplant centers are in active implementation, with several more expected to formally kick off in the near term, including large multi-site systems. Our pipeline for 2026 implementations is strong. Importantly, we are beginning to see early operational and commercial benefits from these integrations. As anticipated, Epic Aura implementations are improving the quality of electronic order data, and early indications show roughly 40% in login-related issues, which meaningfully improves the experience for clinicians. We are also encouraged by early signs of growth at initial live sites, where active levels have increased following go-live. While it is still early, these signals reinforce our confidence that Epic integrations can support improved adoption, operational efficiency, and long-term growth as implementation continues to scale. In addition, in 2026, we are migrating our LIMS infrastructure to Epic Enterprise Solutions. This is a strategic infrastructure decision that allows us to establish a platform for lab test workflow and reporting that has two key advantages. First, the flexible infrastructure allows us to more rapidly launch new products in our lab, such as our cell therapy products, which I view as key to future growth. Second, we are able to exchange data with Epic centers more seamlessly for patient treatment purposes even if we are not Epic Aura integrated with the center. For example, if we need medical records to verify a patient's date of birth, today, we have to call the center and ask for that information. With Epic Enterprise, we can reach into the EMR and pull the data seamlessly to help eliminate interruptions in the timeline of patient test results or claim billing. Turning to clinical evidence, evidence is the foundation for building clinical belief in our testing solutions as the standard of care in solid organ transplantation. We think about evidence generation in 2026 across three dimensions. First is translational research, under the umbrella of our Immunescape program. This January, we announced our strategic collaboration with 10x Genomics to launch Immunescape, a multi-omics research platform that we believe represents a significant advancement in our precision transplant medicine innovation pipeline. This initiative leverages 10x's cutting-edge single-cell and spatial biology technologies to decode the complex immune mechanisms underlying transplant rejection, particularly antibody-mediated rejection and microvascular inflammation. Immunescape builds on our existing diagnostic portfolio, including our recently launched HistoMap Kidney platform, and is designed to generate high-resolution biological insights that may inform our future clinical diagnostic development pipeline. By mapping immune cell populations and pathways at higher resolution, this collaboration positions us to drive the discovery of next-generation diagnostic solutions that can better predict therapeutic response and improve treatment selection in transplant care, while reinforcing our commitment to advancing personalized medicine. Second, observational studies are a core pillar of our 2026 strategy, because they demonstrate the real-world utility of our testing services and their impact on physician behavior. We expect continued publications across kidney, heart, and lung that are critical to building belief, reinforcing adoption, and supporting market access. Large registries such as KOAR, SHORE, and ALAMO allow us to show longitudinal clinical utility across diverse populations and care settings. Importantly, this real-world evidence also fuels innovation by informing new algorithms, refined thresholds, and expanded clinical context of use, creating a durable engine designed to promote product differentiation and long-term growth. And lastly, as the use of our products matures, and new insights are generated around the impact they may have on guiding interventions in clinical practice, we are launching interventional trials in heart and kidney designed to demonstrate how molecular insights actively can inform treatment decisions and improve patient management. Trials like HARBOR and MERIT are designed to show that our testing is not just informative, but actionable within clinical workflows. We believe this level of evidence strengthens differentiation, supports guideline inclusion and reimbursement, and creates a foundation for new contexts of use. Together, these interventional efforts have the potential to help establish as the standard of care and support durable, scalable growth across our platform. And now, I would like to hand it off to Nathan to cover our Q4 and 2025 financial highlights and our 2026 guidance. Nathan? Nathan Smith: Thank you, John, and good afternoon, everyone. In my remarks today, I will discuss our fourth quarter and full year 2025 results before turning to 2026 guidance. Unless otherwise noted, all financial measures discussed are non-GAAP. For further information, please refer to GAAP and non-GAAP reconciliations per our press release, earnings presentations, and recent SEC filings. Starting with financial highlights for the fourth quarter, total revenue for the quarter was $108,400,000, an increase of 25% from the same quarter of the previous year. Testing services revenue for the quarter was $78,400,000, an increase of 23% from the same quarter of the previous year. Testing services volume was approximately 53,000, an increase of 17% from the same quarter of the previous year. Average revenue per test for the quarter was $14.80. That included $5,100,000 in cash collections in excess of receivables on historical claims consistent with our guidance for the quarter. Patient and Digital Solutions revenue for the fourth quarter was $16,800,000, an increase of 47% from the same quarter of the previous year. Lab product revenue for the fourth quarter was $13,300,000, an increase of 17% from the same quarter of the previous year. Non-GAAP gross profit for the fourth quarter was $74,300,000, representing a gross margin of 68.5%. Fourth quarter non-GAAP operating expenses were $70,000,000, including a $6,700,000 one-time cash bonus instead of equity awards for nonexecutives. We reported adjusted EBITDA for the fourth quarter of $6,500,000, a decrease of 34% compared to the last year. Our adjusted EBITDA includes approximately $7,000,000 of operating expenses for compensation in lieu of equity grants for nonexecutives in 2025, reflecting our continued focus on managing shareholder dilution and achieving a three-year average employee equity burn rate consistent with industry benchmarks as outlined in our 2025 proxy statement. Turning to cash, we collected $115,800,000 in the fourth quarter, representing an increase of 37% over the same quarter in 2024. During the fourth quarter, we repurchased $12,000,000 of common stock, acquiring 773,000 shares at an average price of $15.79 per share. And now I will turn to financial highlights for the full year. We reported full year 2025 revenue of $379,800,000, an increase of 14% year-over-year. Testing services revenue was $274,500,000, an increase of 10% from last year. Testing volumes of approximately 200,000 increased 14% year-over-year. Patient and Digital Solutions revenue for the full year was $56,900,000, up 31% year-over-year. Lab product revenue was $48,400,000 for the full year, an increase of 19%. Non-GAAP gross profit for the year was $263,100,000, representing a 14% increase over 2024. Gross margins for 2025 were 69.3%, consistent year-over-year. Non-GAAP operating expenses totaled $240,100,000, or 63% of revenue, in line with the prior year as a percent of revenue. Adjusted EBITDA for the year was $31,700,000, representing a 14% increase over 2024, and as noted earlier, lower by $6,700,000 due to the one-time cash bonus in lieu of equity. Continued execution of initiatives to transform our RCM processes helped drive cash collections of $405,600,000 for the full year 2025, a 32% increase compared to the previous year. These collections drove a $22,500,000 year-over-year reduction in accounts receivable and a 42% annual improvement in DSO, which decreased from 71 days to 41 days. During the year, we bought back $88,000,000 of common stock, purchasing 5,800,000 shares at an average price of $15.16 a share. We ended the year with $201,400,000 in cash, cash equivalents, and marketable securities, 50,900,000 shares outstanding, and no debt. Turning now to guidance for the full year 2026, in line with what we shared previously, if the draft local coverage determination for solid organ transplant is finalized, we expect a full year negative revenue impact of approximately $15,000,000. We expect the LCD policy to be finalized midyear, and we included a $7,500,000, or half-year, impact to revenue and adjusted EBITDA in our guidance. With that, we expect full year 2026 revenue of $420,000,000 to $444,000,000. The midpoint of 2026 guidance represents approximately 14% year-over-year growth. For Testing Services, we expect full year Testing Services revenue of $306,000,000 to $326,000,000. We expect full year testing volume of 220,000 to 228,000 tests. The midpoint of the 2026 guidance represents approximately 12% year-over-year growth. Turning to average revenue per test, on 01/01/2026, our new PLA code went into effect that reduced AlloSure Kidney reimbursement by 4% from $2,841 to $2,753. As a result of that change and the anticipated impact of the LCD, we are modeling revenue per test to start at $1,400 in the first quarter, and the full year blended revenue per test in the low $1,400s. In 2026, we expect to recognize approximately $5,000,000 in revenue from prior-period collections, with the majority occurring in the first quarter. In 2026, we expect our accrual window to age into the new normal of cash collection. From that point forward, we expect any impact from prior-period cash collections will be immaterial. Turning to Patient and Digital Solutions and Lab Products, we expect full year 2026 revenue to be $114,000,000 to $118,000,000. Working down the P&L, we expect full year non-GAAP gross margin to be approximately 69% to 71% for the full year 2026. We expect our 2026 adjusted operating expenses to be in the range of $68,000,000 a quarter, plus or minus $1,000,000. That would be approximately 63% of revenue, plus or minus 1%. Included in our adjusted operating expenses is approximately $10,000,000 related to strategic investments in enterprise systems, including Epic Enterprise LIMS, which we believe will be an important contributor to future growth. Turning to adjusted EBITDA, we are assuming 2026 annual depreciation expense of $9,000,000 that will be added back to operating profit, resulting in full year 2026 adjusted EBITDA to range between $30,000,000 and $45,000,000, representing an approximate 20% increase over the full year 2025 at the midpoint. The first quarter is typically our softest EBITDA quarter due to the annual reset of employee benefit costs, including 401(k) matching and payroll taxes. In addition, 2026 will reflect the first full quarter impact of recent hires. As a result, we expect adjusted EBITDA on an absolute dollar basis to be in the high single digits in the first quarter. Lastly, I want to share that I decided to transition from my role following the completion of our filing of our Form 10-Ks. After several demanding years in executive finance leadership roles, I feel it is important to step back and dedicate meaningful time to my family. This decision is personal and not a reflection of my confidence in the business. I am proud of what we have accomplished and believe the company is well positioned for the future. I am deeply grateful to John and the entire CareDx team for the opportunity to serve alongside such talented and dedicated people in advancing our mission. And now I would like to turn the time back to John. John Hanna: Thank you, Nathan, and thank you for your contributions to the company. We wish you the best in your future endeavors. Alongside this news, I would like to announce the appointment of Keith Kennedy as the company's Chief Operating Officer and Chief Financial Officer. Keith will oversee the company's finance organization, effective February 26. Keith brings seven years of public company CFO experience, and under his leadership, we expect to continue modernizing the company's financial systems to deliver sustained, profitable growth. Lastly, as I reflect on 2025, I am proud of the progress we have made, not just in our financial performance, but in building the foundation for what comes next. We have strengthened our platform through solution selling, expanded evidence generation, and the infrastructure required to scale innovation. Recently, I spoke with a transplant clinician who told me that what has changed most is not just having better data, but having insights they can actually act on earlier, more confidently, with less friction in their workflow. That conversation captures what we are building at CareDx, Inc. As we move into 2026 with continued investment in observational evidence, interventional trials, and new markets like cell therapy, we believe we are entering a new phase of precision medicine, one defined by faster product iteration, deeper clinical impact, and durable long-term growth. And with that, I would like to open the call for questions. Operator? Operator: We will now begin the question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Brandon Couillard of Wells Fargo. Your line is open. Please go ahead. Brandon Couillard: Hi. Thanks. Good afternoon. Just starting with the volume guidance for the year. I mean, 12% seems like somewhat of a low bar relative to the 17% exit rate. Can you just talk about the contribution from Epic Aura and, John, are you assuming that transplant procedures get any better over the course of the year? Thanks. John Hanna: Thanks for the question, Brandon. We are not assuming transplant procedural volume increases in our guide. And we think it is too early to say right now what the lift from Epic Aura will be. We have seen, you know, nice growth in the handful of accounts that we have integrated with over the past, you know, month or two. But that signal is a little too early to give a guide around what we think the lift will be for the full year. I anticipate that when we get to our Q2 call, and we have at least six months of integration under our belt with, you know, 10 plus sites, that we will be able to give more guidance on what we think the longer-term impact of those Epic integrations will be. Brandon Couillard: K. That is fair. And then I would like to just focus on the Patient and Digital Solutions business, which has really accelerated in the last two quarters. The guide consolidated it with products. So could you break out the Patient and Digital Solutions piece, sort of the sustainability of kind of 40% growth that we saw in the back half of 2025? And what does the margin profile of this business look like today given mostly software? Thanks. Keith Kennedy: On the Patient and Digital Solutions, we are assuming we are going to grow the Product, Patient, and Digital Solutions collectively in the range of 8% to 12% next year. We are early in the year. These businesses have outperformed, as you saw last year, every quarter. So we, you know, we have high hopes that these guys are going to deliver a better return. And so, hopefully, on the first call, we will know more and have more to discuss around that. Brandon Couillard: The margin, in terms of the margin profile of that business? Keith Kennedy: That range is anywhere on the software side into the mid-sixties. So 60% to 70% margins in the software business. And then on the products business, that goes anywhere from, say, 50% to 60%, and that depends on the absorption. Which is one of the things, you know, I have been working on is taking some of the manufacturing in-house and controlling, you know, our manufacturing and overhead. So as you are making these kits, it is a pretty manual process. I have been working on technology around that so that I can normalize that around the margin. Brandon Couillard: Great, thanks. Keith Kennedy: Yes, sir. Operator: Your next question comes from the line of Mark Massaro of BTIG. Your line is open. Please go ahead. Vivian: Hey, guys. This is Vivian on for Mark. Thanks for taking the questions. So I just have one on the guidance. Could you just walk us through some of the assumptions of the high end versus the low end? I just wanted to confirm if that was primarily being driven by the Medicare LCD, or are there any other swing factors to call out? I think I heard you on the prior-period collections and pricing reset as well. Just wanted to check if there was anything else going on there. Thanks. Keith Kennedy: Vivian, that is a great question. Let me walk you through an illustrative example of how we model this at the midpoint of the guide, and I will try to, you know, show you the low and high end of the range and how we think about it. The midpoint of our revenue guide is $432,000,000, and we have a $12,000,000 band on the low and the high end. As I turn to Testing Services, the midpoint of the testing volume, which drives that business, is 224,000 tests, which represents 12% year-over-year growth. Our band around that on the high and the low end is 4,000 tests, or 1,000 tests per quarter. That goes between 220,000 and 228,000 tests. So to Brandon's question, that will go between 10% to 14% annual growth in line on the high end of that range earlier in the year, obviously, as we try to predict what is going to happen over the next four quarters. 14% growth on the high end. In terms of seasonality in testing volumes, we modeled a 1,000 test step up from Q4 2025 to Q1 2026, a 2,000 test step up in Q2. We have seasonality out; we are flat from Q2 to Q3, and a 2,000 test step up in Q4. Remember, we had a 3,000 test step up in Q4 of last year. So we are a little bit light to that, as we are earlier in the year and we are watching how the momentum picks up in the business. Based on the continued success in RCM, we anticipate recognizing $5,000,000 in out-of-period revenue in 2026. And I assume that we would generate $3,000,000 in the first quarter and $2,000,000 in 2026. This out-of-period revenue, and to the earlier points, as we discussed, and you spread the $5,000,000 over the 224,000 tests at the midpoint of our guide, our 2026 revenue per test is higher by $22 per test. The revenue guide includes, to your point, Vivian, $7,500,000 in revenue reduction, as Nathan outlined, from the implementation of the LCD. Spreading the $7,500,000 over the 224,000 tests at the midpoint, our 2026 anticipated revenue per test is negatively impacted by $33 per test. Again, this is built into the guidance, impacting revenue and adjusted EBITDA. Our guidance assumes testing revenue per test of approximately $1,410 per test at the midpoint, with a range bound of plus or minus $20 per test, and I, conservatively, I hope to beat that, but that is the range bound on that number. In terms of the guide build, again, our revenue per test is lower by $33 per test associated with the LCD and higher by $22 from the out-of-period revenue. On the Product, Patient, and Digital Solutions, back to Brandon's point, we modeled the revenue at $116,000,000 at the midpoint, plus or minus $2,000,000. This represents a 10% increase for these service lines, range bound at 8% to 12%, and I would apply that equally to those businesses. So I would take last year's revenue, and I would take that range around 8% to 12% and apply that to each of those businesses. Turning to gross margin, as Nathan mentioned, we anticipate a midpoint of 70% gross margins with a range of 69% to 71% based on the calculated revenue and gross profit that I just covered. And on the OpEx line, the midpoint of the guide range assumes that we average quarterly OpEx spend of $68,000,000, plus or minus $1,000,000. I will note we obviously can control expenses. 60% of our expenses are labor, but we are investing for the future. And so we think that is a pretty range bound where we plan to end up in terms of OpEx spend on the year. Adjusted EBITDA ranges from $30,000,000 to $45,000,000, and as Nathan mentioned, it includes a $9,000,000 add-back for depreciation which is included in operating expenses. So, hopefully, Vivian, that will give you a good, you know, foundation for the build to the midpoint and the range bound. Answer your question? Vivian: Yes. Yes. That was perfect, and thank you much for the transparency, Keith. I just have one follow-up. As far as the SHORE manuscript publication, I was just curious as far as any dialogue you have had with MolDX since then. I think it is our understanding that this was the prospective study that they were looking for. So if any nuggets to find there or any sense of where you might be in the review queue? Thanks. John Hanna: Thanks, Vivian. We provided an extensive comment letter to the draft local coverage determination back in August. And that comment letter included the data that was published in the SHORE-3 manuscript. That data had previously been presented at a conference, and we were, you know, relatively confident that that publication was going to be in press in the near term, and so we included that data. And then, of course, once that publication came out in press, we shared it with the MolDX team. But I think on the last point of your question, we continue to anticipate that the LCD will be finalized sometime midyear. So we are not really in the queue necessarily for, like, a new LCD. Really, the rules around draft coverage determinations contemplate that they should be finalized within one year of the draft being issued, which was 07/15/2025. So we are somewhere in the June to July timeframe that the LCD will be finalized. Vivian: That is super helpful. Thank you, guys, for taking the questions. John Hanna: Yep. Thank you. Thank you, Vivian. Operator: Your next question comes from the line of Tycho Peterson of Jefferies. Line is open. Please go ahead. Tycho Peterson: Hey, thanks. Maybe just on the Epic, I know you are kind of doing Epic, you know, Beaker in the lab, and you have talked about this can really help with appeals, you know, because a lot of those get timed out. Can you maybe just help us think about that opportunity, quantify it, and, you know, what is the path to, you know, ultimately get to, you know, $2,000 in reimbursement? Over what time frame do you think you will get there? Keith Kennedy: Internally, in terms of the reimbursement—to last question first, Tycho—first, thank you for your question. This is Keith. Internally, we are targeting—the team is driven towards a three-year goal on the $2,000 test. Obviously higher than our guide, and that is what we are working on internally. Part of doing this is making sure that all of these workflows are executed in such a way that when claims are denied, you have met all and checked all the boxes. So getting eligibility checks so you file for the right insurance company, making sure you get the prior auth filed in time, and those things. That is a moving target, and the only way to really do this effectively at this high volume is to have real-time information that informs your initial claim. And so this is where we think getting to that $2,000 or even higher—it is highly important that we integrate and streamline these operations so that that can happen on a clean claim. Tycho Peterson: Got it. Keith Kennedy: Let me just expand on this. You did not ask this, Tycho, but we are spending $10,000,000 to essentially upgrade and integrate between Epic—this includes Epic Aura, Epic Enterprise, okay, so this is their full feature and function, so similar to what Exact has in their operation—and this includes integrating six lab information systems. So that is a lot to do. And that is going to take us about 18 months to get all this done. We are phasing this in a multiple phase approach. And of that money, I am probably talking $6,000,000 would be a recurring fee. So my bogey is about $6,000,000. There is $4,000,000 that is cost to implement that software, to be less recurring. And then Epic would tell you, A, you are going to get a lift on your volume, right, because it is easier to order and access the test, and therefore, you get that. B, you are going to get better information, have cleaner claims, and you are going to offset that expense. Right? So it does not take a heavy lift to make $5,000,000 up, or even $10,000,000, in terms of, say, a $500,000,000 revenue company at the time. So that is how we are thinking about it in terms of the P&L and the contribution down the road. Tycho Peterson: Okay. That is certainly helpful. And then I guess just thinking on kind of the back of the ACROBAT data and the commercial readiness, you know, activities, you know, ahead of launch, can you maybe just talk about other kind of gating factors and steps you are taking ahead of the commercial launch for Elohim next year? John Hanna: Yes. Thanks for the question, Tycho. I mean, I think there is a broad clinician education effort that we need to engage in around the product. Right? So we presented data at the Tandem meeting and at the hematology meeting in the, you know, fourth quarter, now for two years in a row. But certainly, we have not educated every clinician that could potentially order the product. And so what we want to do is, you know, have an intense focus on making sure that the manuscript gets submitted so that we can get that data and evidence in print. We will start educating centers on that data through personal promotion. And then we will complete our CLIA readiness, which allows us to prepare our technology assessment packet and submit for reimbursement, which I anticipate will get done this fiscal year. We will get it submitted. And that gives us enough time to, you know, generate revenue and coverage in the 2028 timeframe. So that is how I am thinking about the cascade of activities. Of course, in the back, we are also working on our broader cell therapy pipeline. So I talked in the call on the twelfth about persistence monitoring in CAR-T therapy. Right? So we have another product in that indication that we are working on, and several other product ideas that the team is kicking around to really fill out that portfolio along with the broader set of solutions that we offer, like digital products to bone marrow transplant centers. So there is a fair amount of work for us to do around education and really priming the market for the launch of this product so that the volume can accelerate. Rather, we can see this be a market-leading product in the cell therapy space. Tycho Peterson: Sounds good. Alright. Thanks. John Hanna: Yeah. Thanks for the questions. Operator: Your next question comes from the line of Andrew Brackman of William Blair. Your line is open. Please go ahead. Andrew Brackman: Hey, guys. Good afternoon. Thanks for taking the question. Maybe back to Brandon's question around sort of the Digital Solutions business, can you maybe just sort of unpack for us sort of what specifically is driving the strength that you are seeing there? And as we sort of think about the halo effect for the rest of the business, how are you sort of thinking about this as being sort of a leading indicator for share wins in the Testing Services side of the business as well? Thanks. John Hanna: Yeah. Thanks, Andrew. That is a great question. I mean, I think that we have been gaining share of the addressable in Testing Services, and that is a testament to the 17% year-over-year growth we experienced in the fourth quarter. And I really think Jessica, our Chief Commercial Officer, has done an outstanding job rebuilding this commercial team and field team around solution selling, so that when we walk into a transplant center, we are focused on what are their challenges for the year, what are their goals, and how can we help support them have success? And that is driving the sale of the Patient and Digital Solutions. Previously, the company, you know, had had teams split between testing and digital. They were not selling together, and so you lost some of that synergy. And when Jessica came in, she really turned that around, and you can see now the acceleration of that digital and patient solutions. Collectively, in those businesses, we see a lot of demand for our MedActionPlan product, which is a patient discharge planning tool and medication therapy management tool. We see a lot of demand in our ZynQAPI platform, which is our quality reporting tool that has been updated to include the IOTA calculation so that centers can see in real time where they are in terms of their IOTA scores. So on the digital side, those are driving. And then on the pharmacy side, we have a very elegant solution where our pharmacy is a transplant-focused pharmacy, so we understand the issues that these patients go through with their transplant immunosuppression meds, and that is attractive to these centers especially as they use more medically complex organs. And so we are seeing that growth. On the product side, we continue to benefit from this transition toward NGS for HLA typing away from PCR, and that is a global transition that we are leading. We are the market leader in that space. We have expanded the number of countries that we sell in around the globe. And then in the U.S. market, we continue to innovate by launching products like AlloSeq TX11 with greater resolution in that matching process, and then I talked a little bit on the call about our goal of launching what we call AlloSeq Nano, which is a nanopore sequencing platform. So we are continuing to innovate in that business, and that is what is driving the Lab Products business forward. Andrew Brackman: Okay. Appreciate all that color. And then if I could, just one on the balance sheet. I think you ended the year just over $200,000,000 in cash. You bought back close to $90,000,000 in stock last year. You just talk to us about capital allocation priorities, how you sort of weigh potential tuck-in M&A versus continued share buybacks for 2026? Thanks. John Hanna: Yes. It is a great question, Andrew. I think first and foremost for us is growing our core business. Right? So we see—we continue to see opportunities to grow, and where we do, we are going to in the core. And you see our sales and marketing spend increasing throughout the year. And, you know, we feel like we have invested significantly in that space, which gave us the freedom to go ahead and buy back some shares at a lower share price. Obviously, we are going to be opportunistic around M&A when we see something that fits within the CareDx, Inc portfolio and our strategy. Right now, we are very focused, though, on Allaheme and our cell therapy pipeline as our core area of investment and capital allocation. Andrew Brackman: Got it. Okay. Thanks, guys. John Hanna: Yep. Thank you. Operator: Your next question comes from the line of Bill Bonello of Craig-Hallum. Your line is open. Please go ahead. Bill Bonello: Hey, guys. Thanks a lot for taking my question. And congratulations, I think, Keith, on assuming more responsibility. So question on the $7,500,000 LCD impact. You walked it through in detail in Q2, but can you just remind us again, does that $7,500,000 assume that AlloMap Heart is essentially no longer reimbursed as part of HeartCare, so that that piece of the draft policy? John Hanna: Yeah. Thanks for the question, Bill. The $7,500,000 is a half-year impact of what I laid out as the first scenario in the Q2 call, which is the LCD is implemented as it is written today, the draft LCD. And that LCD contemplated there being a 12 timepoint bundle for heart transplant, and then that bundle would pay for only one test per date of service. And so whether that is AlloSure or AlloMap, I think, is TBD. But in general, when we model that, we assume we were going to get paid for 12 timepoints for one product, and which is what the current draft LCD states. And in that scenario, where today, we do five to six HeartCares on average in the first year, that impact was, you know, awash more or less. Bill Bonello: Yep. That—okay. That is what I thought, but I wanted to confirm. So can—just as a follow-up, if that proposal is—you know, you have got the SHORE data out there that you have presented to them. If that piece of the policy is changed, should we be thinking about the LCD as potentially being actually a net positive for you guys? John Hanna: Well, I think all that we know today, Bill, is what is in the draft. Right? And so we provided that scenario around what would happen if the LCD is finalized as it is written today. We are not going to provide guidance around any modifications to that draft. I think we have a strong sense of how 2026 is going to play out, and we included that $7,500,000 headwind in our 2026 guidance. Keith Kennedy: Yes. I mean, the news from the last call to this call is that we thought it would be done in Q1. Now, we think it is going to be done in the middle of the year. But we do not have any new information as to what would happen in the LCD. But we will have calls with you. This will happen as John goes on vacation on the July 4, so you can just expect it to happen right before the July 4. Bill Bonello: Perfect. And then just the last thing, the EBITDA guide, does that also assume a similar level of one-time cash bonus, or was that a sort of once and done thing? John Hanna: No. That was a one and done. So it does not include any one-time cash bonus in lieu of equity in 2026. Bill Bonello: Okay. And—but continue to expect sort of a lower level of, you know, stock compensation expense? Or how should we think about that? John Hanna: Yeah. I think that we are targeting to have somewhere around a 4% or sub-4% burn rate for 2026. And so, yeah, it is a slightly lower stock compensation expense than what we experienced in 2025. Bill Bonello: Great. So much. John Hanna: Thanks, Bill. Operator: Your next question comes from the line of Andrew Cooper of Raymond James. Your line is open. Please go ahead. Andrew Cooper: Hey, everybody. Thanks for the question. A lot already asked. So maybe first, starting with some of the growth, I mean, I know you mentioned surveillance and for-cause growth contributing to the number here in 4Q. But can you give a little bit of the magnitude of how much sort of surveillance uptick or reuptake you are seeing relative to penetration in that for-cause space or additional adoption in that for-cause space? John Hanna: Yeah. Thanks for the question, Andrew, and for joining the call. The growth has been relatively distributed between the two categories. I think that there has been a significant amount of literature, including the Nature Medicine paper from 2024, talking about different for-cause uses of AlloSure in kidney transplantation. And the result of that has been a reemergence of its use in surveillance testing, but also in the for-cause setting where you see the use of AlloSure in cases where, for example, a patient has undergone rejection already and you are trying to dial in the immune dosage and see those cell-free levels come down. So we are seeing, you know, consistent growth and utilization in both settings. Of course, surveillance was important for 2025 and contributed to the growth for the year, but we do see for-cause testing increasing. Andrew Cooper: Okay. Helpful. And then one last one on the EBITDA trajectory. Even if we add back sort of the $4,000,000 in one-time spend out of that $10,000,000 investment you talked about, looks like the midpoint of the guide is a little bit shy of 10% EBITDA margin. John, I think I heard you say the targets from the Investor Day back in 2024 are still on the table. So how do we think about that ramp to sort of 20% EBITDA margin targets for 2027 that you talked about given the 2026 starting point. Keith Kennedy: Let me take this—yeah. Sure. So the way we are thinking about this internally—and this, obviously, there is a lot of moving pieces in running a company and whether or not you have to get ahead with investment or not having investment—we feel like we are making a few strategic investments that make the top line much stickier. So we think that is worth doing. But we think about the gross profit dollars, and 50% of the incremental dollars should go down to the investors. So if you are at $440,000,000, you are going to grow 15% the next year, half of that growth drops down to EBITDA, is how we think about, like, a disciplined growth profile. Does that make sense? Andrew Cooper: Yeah. I will stop there. John Hanna: Yeah. So, I mean, we still believe we will get to 20%. I, you know, Veracyte said, like, 28%. Business we ran prior to coming over here. And we feel like long term we will get, you know, significantly—we will get to 20% in this business. I mean, we have a recurring testing model. We have 250 transplant centers. You know? But getting to Salesforce, we have accelerated the investment in the Salesforce higher than the volume growth, but that is not a long-term trend. We are not going to be doing that, you know, year after year in that business. I see it as more as a stepwise function as we get the commercial organization aligned and the messaging around marketing, etcetera. Andrew Cooper: Okay. That is helpful. I appreciate it. Thank you. Operator: Your next question comes from the line of Mason Carrico of Stephens Inc. Your line is open. Please go ahead. Mason Carrico: Hey, guys. Appreciate you taking the questions. Could you give some color on what the testing volume guide bakes in around incremental kidney protocol adoption this year? I realize there is a lag between when they are established and kind of when the benefit shows up in volumes. But do you think you could hit your testing volume target based on what is in place today? Are additional protocols upside? Just any color there would be great. John Hanna: Yeah. Thanks, Mason. You know, I think we build the guide around, you know, how much growth potential we see in the marketplace. Even within centers that did implement protocols during 2025, many of them do not always, you know, utilize the testing to the extent that they had intended to in the protocol. Like, patients miss blood draws or something does not get ordered, etcetera. And so there is still substantial growth that can occur in those existing centers that have already adopted a protocol. That is number one. Number two, as I shared previously, we continue to see for-cause testing growing, and so we anticipate that that trend will continue through 2026. And then third, yes, we believe there are more protocols to go get. We have many centers that we still are talking to about implementing their protocols and how they want to go about doing that in particular populations in their center. And so we will continue that effort. And all of that in aggregate gives us confidence in our guide on volume for the year that there is that opportunity to go get. Mason Carrico: Got it. And maybe it is somewhat of a follow-up to that. Could you give us an idea of what percentage of total kidney transplants could be attributed to centers that have protocols in place today? John Hanna: That is—I do not have that number off the top of my head, Mason. We would have to go back and look into that. Mason Carrico: All good. Alright. Thank you, guys. John Hanna: Thank you. Thanks, Mason. Operator: Your final question comes from the line of Yi Chen of H.C. Wainwright and Co. Your line is open. Please go ahead. Eduardo Martinez: Hi. Thanks for taking the question. This is Eduardo on for Yi. I guess a general question based on the evolution of the use of GLP-1s and the growing clinical evidence that they could have a meaningful impact on reducing kidney disease. I am curious what your thoughts are and its impact on the evolution of kidney transplants because you get some tailwind, right, because you could also lower BMI, then the other eligibility of donors, but maybe some headwinds in the reduction of kidney disease in general and then, therefore, the need for transplant. I am curious how you see that market moving forward. John Hanna: Yeah. Thanks, Eduardo. It is an interesting question, and we agree with your assessment generally. Although I would say that there are upwards of 400,000 patients in the U.S. on dialysis today that could get a kidney transplant, and then 100,000 on the transplant waitlist. So we do not see any, you know, diminishing demand for kidney transplantation as a function of GLP-1s anytime in the near future. But certainly, as you point out, GLP-1s are advantageous to driving more transplantation. As you know or may know, one of the key kind of metrics around determining whether a recipient is eligible for undergoing a transplant is their BMI. And so if a patient cannot get their BMI down to an acceptable level where, you know, in historic studies, it is shown that they do better post-transplant, then they are ineligible to get that organ. And so there are many patients today on the transplant waitlist that are actively being put on GLP-1s to prep them for the transplant procedure. And my understanding from the clinicians I have talked to is that this has been a favorable development for those populations, and that they are going to continue to use those therapies, especially as newer, more effective therapies come out for those individuals. Thanks for the question. Eduardo Martinez: Perfect. So much. Congrats on the year and quarter. Keith Kennedy: Thanks, Eduardo. Operator: There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.
Operator: Good afternoon. And welcome to First Solar, Inc.'s Q4 and full year 2025 Earnings and 2026 Guidance Call. This call is being webcast live on the Investors section of First Solar, Inc.'s website at investors.firstsolar.com. All participants are in listen-only mode. Please note that today's call is being recorded. I would now like to turn the conference over to your host, Byron Jeffers, Head of Investor Relations. Good afternoon. Byron Jeffers: And thank you for joining us on today's earnings call. Joining me are our Chief Executive Officer, Mark R. Widmar, and our Chief Financial Officer, Alexander R. Bradley. During this call, we will review our 2025 results and discuss our outlook for 2026. After our prepared remarks, we will open the line for questions. Before we begin, please note that today's discussion contains forward-looking statements and actual results may differ materially due to risks and uncertainties. We undertake no obligation to update these statements due to new information or future events. For a discussion of factors that could cause these results to differ materially, please refer to today's press release, our SEC filings, and the earnings materials available at investors.firstsolar.com. On this call, we will also reference certain non-GAAP financial information. This non-GAAP financial information is not intended to be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. A reconciliation of our non-GAAP items to their respective nearest U.S. GAAP measure can be found in our earnings press release and our earnings presentation. With that, I will turn it over to Mark. Mark R. Widmar: Beginning on slide four, good afternoon, and thank you for joining us today. I will share key highlights and accomplishments from 2025. We entered the year on the new U.S. administration with a back-weighted shipment profile that required staging production to fulfill contracted commitments concentrated in the second half. Amid a persistently uncertain policy and trade environment. Over the course of the year, we navigated a budgetary reconciliation process which created the One Big Beautiful Bill Act, evolving tariff scenarios, customer negotiations, and regulatory developments, including Section 232 actions, FEOC restrictions, and AD/CVD investigations that are still unresolved and could ultimately prove to be either headwinds or tailwinds. Throughout, we remained anchored to a core guiding principle and a key differentiator valued by our customers: contract certainty, both in pricing and in timely delivery. To honor our obligations, we maintained sufficient capacity to fulfill international module commitments and actively pursued various contractual protections to address shifting tariff dynamics and, in some cases, contract terminations. Given that backdrop, we took a disciplined, selective approach to customer contracting throughout the year. That approach is proving effective. Since our last earnings call, we secured gross bookings of 2.3 gigawatts excluding domestic India volume, and 0.1 gigawatt of low-bin inventory clearance. We booked 1 gigawatt in our key U.S. utility-scale market at an ASP of $0.364 per watt, inclusive of applicable adjusters. By remaining patient, selective, and opportunistic, we capitalized on demand that recognizes the differentiated value of our products and contracting structure, strengthening the forward earnings profile of our backlog and positioning us to navigate and potentially benefit from ongoing policy and trade uncertainty. We are pleased to have delivered record sales of 17.5 gigawatts of modules in 2025. Net sales of $5.2 billion were at the top end of our most recent guidance range and represented a 24% year-over-year increase. Full year diluted EPS was within our most recent guidance range at $14.21 per share. We ended the year with $2.9 billion of gross cash and $2.4 billion of net cash, coming in above our guidance range. Our growth continued in 2025 as we advanced our U.S. capacity expansion, highlighted by initiating commercial production in Louisiana, our fifth U.S. factory. In addition, we announced plans to onshore the finishing of Series 6 modules initiated at our international factories by adding U.S. finishing capacity with a new facility in South Carolina. We expect production from this facility to begin in 2026 and ramp through 2027. We also advanced our CdTe-based CURE semiconductor platform. Following a limited commercial production run from Q4 2024 to Q1 2025, we delivered initial CURE modules to customers in 2025. Based on laboratory and field testing results, CURE has demonstrated the expected advantaged energy profile driven by industry-leading temperature coefficient and long-term degradation rate with improved bifaciality. These results continue to support a disciplined factory-by-factory CURE conversion rollout expected to begin next month starting at our Ohio Series 6 factory. In parallel with our CdTe-based CURE platform, we advanced our next-generation perovskite thin film program. Our focus remains on efficiency, energy attributes, reliability, and a scalable path to high-volume, low-cost manufacturing of this potentially transformational thin film. We launched the perovskite development line at our Perrysburg campus and reached full in-line processing capabilities in Q3, marking an important step in the lab-to-fab transferability and enabling production of smaller form factor modules using anticipated manufacturing tools and integrated processes. In late 2025, we initiated sourcing for a perovskite Series 6 module form factor pilot line, which we expect to reach operational readiness in early 2027. While we made promising progress in 2025, additional work remains before more broadly scaling our perovskite program. Lastly, we continue to actively enforce our intellectual property rights, including our TOPCon patents. Notably, in Q4, the U.S. Patent and Trademark Office denied three separate petitions filed by foreign-headquartered manufacturers that sought to invalidate aspects of our TOPCon portfolio. This outcome reinforces our confidence in the strength of our patent portfolio. I will now turn the call over to Alexander R. Bradley to discuss our most recent shipments and booking activities as well as our Q4 and full year 2025 results. Thanks, and beginning on slide five. As of 12/31/2024, a contracted backlog totaled 68.5 gigawatts, valued at $20.5 billion, or approximately $0.299 per watt. For the full year 2025, we sold 17.5 gigawatts of modules, secured 7.4 gigawatts of gross bookings, and recorded 8.3 gigawatts of debookings, primarily due to our termination of contracts as a result of contract breaches by customers, resulting in net full-year debookings of 0.9 gigawatts. We ended the year with a contracted backlog of 50.1 gigawatts valued at $15 billion. As a reminder, the contracted backlog reflects the base ASP. A significant portion of our existing contracted backlog includes pricing adjusters that may increase the base ASP, contingent on achieving specific milestones within our technology roadmap and manufacturing replication plan. At year-end, approximately 23.2 gigawatts of contract volume included these adjusters, which we estimate could generate up to an additional $600 million, or approximately $0.03 per watt, the majority of which we recognize in 2027–2028. Turning to the P&L on slide six. Q4 net sales were $1.7 billion, a $100 million increase sequentially. Full year net sales were $5.2 billion, a $1 billion increase year over year, driven primarily by a 24% increase in module volume. Gross margin in Q4 was [percent omitted in source], an increase from 38% in the prior quarter. The increase was driven by a higher mix of U.S.-manufactured modules benefiting from Section 45X tax credits, lower nonstandard freight charges due to reduced international shipments, and the resolution of the glass supply chain disruption experienced in Q3 at our Alabama facility. These benefits were partially offset by ramp and underutilization costs for Louisiana, a higher proportion of sales into the India market, and the termination amounts recognized in the third quarter related to breach contracts by affiliates of BP. Full year 2025 gross margin was 41%, a decrease from 44% in the prior year. The decline was primarily driven by tariff costs as well as the impact of tariffs exacerbating warehousing expense associated with a back-weighted revenue profile, detention and demurrage, partially driven by supply-demand imbalance following certain contract terminations due to customer default and underutilization from the curtailment of our Series 6 international facilities. These headwinds were partially offset by $1.6 billion of Section 45X tax credits recognized in 2025, plus $1 billion in 2024, driven by a higher mix of U.S.-manufactured module volumes sold. As an update on warranty-related matters, we resolved certain claims and have continued to advance negotiations with additional customers regarding warranty claims for select Series 7 modules produced prior to 2025. Based on our settlement experience, the estimated number of affected modules, and projected remediation costs, we believe a reasonable estimate of potential future loss will range from approximately $35 million to $75 million. Within this range, we have recorded a specific warranty liability of $50 million, representing our best estimate of the expected impact associated with this issue. We are aware of certain statements, including in recent counterclaim filings by affiliates of BP, relating to overall PV plant underperformance. While we will not comment on existing litigation, we do encourage a review of our initial complaint filed last year as well as our answer to those claims and our motion to dismiss filed earlier this month. To relate to overall PV project, we would note that solar plant performance relative to expectations is influenced by a broad set of environmental, design, operational, and grid-related factors. These include, but are not limited to, third-party prediction modeling, weather variability, terrain variability, local microclimates, shading and soiling, procurement and design decisions relating to trackers, inverters, trunk transformers and other plant components, design and construction parameters including EPC quality, DC and AC system design, construction and handling, and operational factors including tracker algorithm design and fidelity, open circuit conditions, and overall O&M scope and quality. In short, a solar plant's performance reflects its total environment and system design. As we have consistently stated, First Solar, Inc. fully stands behind its module warranty obligations. To the extent a customer has a valid module warranty claim, we remain ready, willing, and able to perform our responsibilities pursuant to the procedures agreed to in our warranty. SG&A, R&D, and production start-up expense totaled $117 million in Q4, a decrease of approximately $27 million relative to the prior quarter. The decrease was primarily driven by the reduction of start-up costs associated with the Louisiana facility commencing commercial operations. For the full year 2025, operating expenses were $523 million, an increase of $59 million year over year. This includes a $42 million increase in R&D expense, driven by higher depreciation, maintenance and utility costs associated with our research facilities as well as increased headcount and compensation. SG&A increased by $15 million driven primarily by higher allowance for credit losses on aged receivable balances and supplier loans. Our fourth quarter operating income was $548 million, which included depreciation, amortization and accretion of $141 million, ramp and underutilization costs of $29 million excluding depreciation, production start-up expense of $1 million, and share-based compensation expense of $3 million. For full year 2025, our operating income was $1 billion which included depreciation, amortization and accretion of $529 million, ramp and underutilization costs of $140 million, production start-up expense of $86 million, and share-based compensation expense of $19 million. Interest income, interest expense, other income, and foreign currency losses totaled $3 million in income in Q4, and $16 million expense for the full year. Income tax expense for the fourth quarter was $30 million compared to a tax expense of $4 million in the third quarter. This quarter-over-quarter increase in tax expense was primarily a function of Q3 benefits including a $20 million discrete tax benefit associated with the acceptance of a filing position on amended tax returns in a foreign jurisdiction, and incremental share-based compensation benefits recorded in the prior quarter. We recorded full year income tax expense of $53 million. Q4 earnings per diluted share were $4.84 compared to $4.24 in the previous quarter. For the full year 2025, earnings per diluted share were $14.21 compared to $12.20 in 2024 and within our guidance range. Turning to slide seven, I will cover select balance sheet items and summary cash flow information. The aggregate balance of our cash, cash equivalents, restricted cash, restricted cash equivalents and marketable securities was $2.9 billion at year-end, an increase of $800 million sequentially and $1.1 billion year over year. Both the sequential and full-year increase in gross cash were driven primarily by proceeds from the sale of Section 45X tax credits generated during the year and positive operating cash flows, partially offset by capital expenditures for our Louisiana facility. We monetized €800 million of 2025 Section 45X tax credits in the fourth quarter, and $1.4 billion during the full year. Notably, in January 2026, we also received $118 million for 2024 Section 45X tax credits where we elected a direct pay option in our 2024 tax return filed in October 2025. The sale transactions highlight the liquidity of the Section 45X tax credit sale market. The IRS refund provides insight into direct pay election turnaround times, providing additional visibility and flexibility to optimize credit monetization and manage overall liquidity. Accounts receivable and inventory decreased both sequentially and relative to the prior year, reflecting improved customer collections and higher volumes sold. Capital expenditures were $172 million in the fourth quarter compared to $24 million in the third quarter. Full year 2025 CapEx was $870 million compared to $1.5 billion in 2024. Our year-end net cash position was $2.4 billion, an increase of $900 million from the prior quarter and an increase of $1.2 billion from the prior year. Now I will turn the call back to Mark, who will provide an update on market conditions, policy, and technology. Mark R. Widmar: All right. Thank you. Turning to slide eight. In 2025, the policy and trade environment remained complex. While we are experiencing significant direct and indirect tariff impacts, in our view, on balance, the environment is net favorable for First Solar, Inc., an example of genuine, long-standing U.S.-based solar manufacturing. In contrast, in our view, headwinds beyond reciprocal tariffs and commodity cost increases continue to build for the crystalline silicon industry. A combination of tighter trade enforcement, potential retroactive tariffs, pending Section 232 actions, expanding Foreign Entities of Concern (FEOC) restrictions, and greater intellectual property enforcement is increasing cost, timing, and compliance risk for developers relying on crystalline silicon products with ties to China. With respect to trade, it is notable that the Trump administration has withdrawn its appeal against a U.S. Court of International Trade ruling in the Auxin litigation requiring the retroactive collection of previously suspended AD/CVD tariffs. If this ruling is maintained, which appears increasingly likely, mounting contingent liabilities for AD/CVD duties associated with this unlawful two-year moratorium could represent an as-of-yet unrealized material financial impact on those foreign producers that relied on it. In fact, one recent industry publication noted that “U.S. Customs is suggesting that no panels that came in during the moratorium qualified for the moratorium.” In support of true domestic manufacturing, we are encouraged by interim Treasury guidance issued earlier this month that, in our view, clearly signals the administration's intent to address gamesmanship by China-tied solar manufacturers seeking to evade U.S. regulations and benefit from tax incentives by artificially shuffling ownership stakes, voting rights, or IP licensing with the intent of evading FEOC status. We anticipate that the forthcoming FEOC restrictions will be aligned with the legislative intent of prohibiting access to tax credits for entities with sudden corporate restructuring lacking business purpose. We also commend Commerce's preliminary CVD determinations issued earlier today as part of the broader Solar 4 AD/CVD investigation into Laos, India, and Indonesia, which reflect subsidy rates of approximately 81%, 126%, and 104%, respectively. Note these preliminary CVD rates do not include preliminary antidumping rates, which will be additive and are expected to be determined in April. It is expected that final aggregate AD/CVD duties will be decided in September. We expect that the final AD/CVD duties applied in Solar 4 will again support a level playing field against the illegal and unfair trade practices of Chinese-headquartered and other silicon producers who strategically evade U.S. trade laws. Finally, IP enforcement must be considered within the overall legal framework that includes these recent legislative and regulatory headwinds confronting the crystalline silicon industry. Earlier today, we filed a petition with the U.S. International Trade Commission (ITC) against 10 groups of foreign-headquartered manufacturers that we believe are producing products infringing on one of our U.S. TOPCon patents. Now this is a separate action from our three actions seeking monetary damages against affiliates of Adani, Canadian Solar, and Jinko in the U.S. District Court. If the ITC institutes an investigation based on our complaint, we expect that the matter would be decided in approximately 18 months. If our case is successful, the ITC may issue a general exclusion order preventing importation of infringing TOPCon products made by foreign entities, or in the alternative may issue a limited exclusion order preventing the importation of infringing TOPCon products by the entities named in our complaint. In addition, the ITC may issue a cease and desist order preventing the sale of infringing TOPCon products currently in the United States. Note the IP-related headwinds confronting the crystalline silicon industry are reflected not just by First Solar, Inc.'s recent and continued enforcement efforts, but also by the recently reported $236 million settlement entered into between Maxeon and Aiko just days before a U.S. patent court was due to decide their patent dispute. In summary, the policy and trade environment, together with sustained intellectual property enforcement across the industry, have continued to generate mounting uncertainties for U.S. developers that are dependent on suppliers tethered to China-tied supply and/or IP. On the topic of technology, turning to slide nine, our strategy remains anchored in a simple premise. Customers ultimately buy lifetime energy, not just nameplate efficiency. And our roadmap is designed to optimize the balance of efficiency, energy yield, and cost, while leveraging our industry-leading thin film expertise. We continue to believe the next step change in solar will be enabled by thin film platforms such as perovskites. We are well aware that many in the industry are seeking to crack the code of this potential next generation of advanced thin film technology. However, we believe the winner of the perovskite race will also need to have the ability to manufacture the product cost-competitively in a high-volume manufacturing environment. As the world's leader in thin film PV technology, and the world's only manufacturer of thin films at scale, we believe we are uniquely positioned to advance this prospective device, given our nearly three decades of not only thin film R&D learnings, but high-volume thin film manufacturing experience. Our technology strategy continues to be primarily concentrated on two core thin film–focused pillars. Firstly, we are executing a disciplined, phase-gate introduction of CURE, responsibly bringing this new technology to market with proven laboratory results and expanding field validation. Consistent with our prior outlook, we expect to permanently convert the Ohio lead line to CURE in Q1, providing a pathway to enhance the energy attributes and competitiveness of our Series 6 platform, and then rolling out these enhancements to our Series 7 platform at successive factories. Executing CURE remains strategically important because it is designed to enhance the attributes that translate into lifetime energy, including improved temperature response and degradation behavior, which are highly valued by utility-scale customers. With adding the improved energy attributes of CURE to the current energy advantages of thin film CdTe, such as superior spectral and shading response, CURE can deliver up to 8% more lifetime specific energy yield than crystalline silicon TOPCon technology in the markets we serve. Our second pillar, perovskites, is a key part of our effort to develop next-generation thin film semiconductors that can be deployed at commercial scale in both our traditional utility-scale markets while potentially expanding our addressable market segments. Today, we have achieved reliability results we believe are comparable with best-in-class R&D efforts, by continuing to advance efficiency and stability—two of the industry's key hurdles to scaling perovskite technology. A major enabler of these efforts is our dedicated perovskite development line in Ohio. As announced prior to the beginning of the call, we have entered into an agreement with Oxford PV, the holder of what we believe is the most fundamental portfolio of perovskite-related patents. In terms of this agreement, Oxford PV will license to us on a nonexclusive basis its existing issued and currently pending patent applications. We believe that this agreement will advance our freedom to develop, manufacture, and sell crystalline-silicon–free perovskite-based semiconductor modules in the U.S. utility, commercial, and residential markets. I will now turn the call back over to Alexander R. Bradley, who will discuss our 2026 outlook and guidance. Alexander R. Bradley: Thanks, Mark. Before turning to our financial guidance, I want to briefly reiterate our approach to managing the business amid a dynamic market, policy, and trade environment. We entered 2026 with a backlog of 50.1 gigawatts, despite taking a highly selective approach to bookings over the past two years. We expect to continue this strategy in 2026 as we await the outcome of and impact on forward module demand and pricing from the numerous political, regulatory, and legal matters discussed earlier in the call. We believe our market position with non-FEOC and high U.S. content supply on a proprietary thin film platform remains long-term advantaged, and our existing contracted backlog relative to our production capacity provides us with the ability and flexibility to be patient. Regarding 2026 U.S. deliveries, many of our customers continue to face both regulatory and commercial challenges, including federal permitting approval delays. As we previously stated, we will continue to work with customers to accommodate schedule shifts where possible, consistent with our philosophy of supporting our long-term partnerships, even while we are not contractually required to do so. We entered 2026 with a fully allocated position for our U.S. production. Given tariff uncertainty, our India production is assumed to be sold into the India domestic market. We will continue to monitor opportunities to export products into the U.S. where it is margin accretive to do so. Our guidance assumes our India facility operating at full capacity, with the ability to flex production as needed through the year in response to changes in demand signals. Demand for our Series 6 international products produced in Malaysia and Vietnam remains constrained. Our decision in 2025 to establish a new finishing line in the U.S. allows us to make use of a portion of the front-end of these Southeast Asian facilities, optimizing freight, tariffs, and domestic content for the sale of incremental products into the U.S. domestic market. We intend to run our remaining end-to-end in Malaysia and Vietnam at low utilization rates this year, despite the financial impact of doing so, maintaining a near-term option to increase throughput should catalysts such as the political and regulatory matters discussed earlier drive incremental profitable demand. Slide 10 shows our capacity and forecast production for 2026 and into 2027. Nameplate capacity reflects current output entitlement at full scale, throughput, and yield, with downtime solely for planned maintenance. Production reflects nameplate capacity adjusted for factory ramp, other downtime including for technology and tool upgrades, and any planned reduction in throughput including due to market demand. As it relates to technology, as previously noted, we expect to recommence running Series 6 CURE products in Perrysburg this quarter. Assumed in our 2026 production forecast for India is downtime associated with tool upgrades, with the intent of beginning CURE production on our first Series 7 line in India in early 2027, followed by the remainder of the Series 7 fleet thereafter. Additionally, our Southeast Asian capacity is reduced significantly in both 2026 and 2027 due to the removal of tools destined for our U.S. finishing line, as well as their reuse in our perovskite development work. By 2027, U.S. finishing is forecast to be 3.5 gigawatts, with the remaining Southeast Asia capacity of 1.8 gigawatts for fully finished international Series 6 modules. The projected U.S. nameplate capacity of 14.9 gigawatts in 2026, growing to 17.1 gigawatts in 2027 with the scaling of Louisiana and South Carolina. We expect global nameplate capacity of 19 gigawatts in 2026 and 22.1 gigawatts in 2027. And note, we expect U.S. nameplate to continue to increase as we drive technology, throughput, and yield improvements. In terms of production, as previously noted, we expect significant underutilization of our international Series 6 facilities. India is assumed to run high throughput, with the ability to flex production as needed based on local demand and international sale options. We forecast U.S. production of 13.0 to 13.3 gigawatts this year, and 14.9 to 16.1 gigawatts next year. This results in total forecasted production of 16.5 to 17.5 gigawatts in 2026, and 18.9 to 20.5 gigawatts in 2027. Turning to slide 11 and other assumptions embedded within our guidance today. Spectrum volumes sold of 17.0 to 18.2 gigawatts is above forecast production, as we reduce inventory levels by year-end. We forecast a U.S. ASP of approximately $0.308 per watt, slightly above our contracted backlog. This includes certain freight, tariff and commodity recovery, and technology upside. We expect limited ASP upside from CURE sales in 2026, largely as a function of contractual notification deadlines relative to the timing of the decision to recommence CURE production. Combined with India domestic sales, the majority of which we expect will book and deliver within the next year, we forecast the global ASP recognized at approximately $0.287 per watt. Cost per watt sold is forecast to remain relatively flat year over year at approximately $0.267 per watt, which includes the impact of tariffs and the impact of reshoring U.S. manufacturing, largely recognized through ramp and underutilization expense, and excludes the benefit of Section 45X credits generated by domestic manufacturing. Including the benefit of Section 45X credits, cost per watt sold is projected to be down approximately $0.03 per watt year over year. Cost per watt released from inventory is expected to increase approximately $0.02 per watt year over year. Approximately half of this increase is forecast to come from a mix shift as both Southeast Asia production reduces and Louisiana/Alabama increases. The other half to come as a result of multiple factors, including increases in tariff costs, increases in core bill of material costs, increases in utility rates, and downtime for technology upgrades. Period costs are expected to decrease by approximately $0.02 per watt from a combination of lower standard sales rates due to greater domestic mix shift, effective elimination of nonstandard freight charges as a function of reduced international product imports, reduced warehousing costs, and other period cost reductions. To provide some more color, we forecast total net tariff cost impact across bill of material and finished goods imports, recognized in both cost of goods produced and period costs towards cost of goods sold, at $155 million to $175 million. Net of expected contractual recoveries on finished goods sold, we expect a total tariff impact of $125 million to $135 million. This assumes a Section 122 tariff in place for 150 days at 15%, impacting all bill of materials, works in progress, and finished goods imports in that time period. In addition, certain commodities, including aluminum, are subject to long-lasting higher rate Section 232 tariffs. Note that we recognize the P&L impact of tariffs at the time of product sale. Our total tariff impact in 2026 reflects higher tariff rates paid on bill of materials, works in progress, and finished goods imports incurred prior to the recent Supreme Court decision. Tariffs also indirectly lead to underlying commodity cost pressure for our variable U.S. bill of material, including relating to aluminum, steel, glass, interlayer, targets, and spares. In addition, electricity rate hikes increase fixed costs. These cost increases are not contractually recoverable from our customers. Sales rates are forecast to be approximately $0.014 per watt in 2026. Warehousing-related costs of approximately $200 million are down from 2025, but remain high and are part of the function of underutilization of space driven by a forecast Southeast Asian curtailment. Beginning in 2027, we expect to reduce warehouse costs to a longer-term run rate of approximately $100 million per year. Forecast ramp and underutilization expense of $115 million to $155 million are a function of curtailing Malaysia/Vietnam capacity as well as the ramp of our U.S. finishing line. Start-up cost is expected to be $110 million to $120 million, driven primarily by the ongoing depreciation and logistics associated with idle finishing equipment in transit, as well as certain tariff-related costs incurred to import that equipment and warehousing such equipment for use at our new South Carolina facility. And finally, a note on capital structure. Our strong balance sheet remains a strategic differentiator and allows us to navigate periods of volatility, including near-term supply and demand imbalances in certain international markets, while continuing to support R&D investment, technology capital spend, and capacity growth, including localizing the U.S. solar supply chain in support of energy security and national policy objectives. We ended 2025 in a strong liquidity position and have since enhanced financial flexibility by entering into a new $1.5 billion senior unsecured revolving credit facility with improved commercial terms, greater flexibility, and more relaxed covenants. In 2026, we intend to fund CapEx through cash on hand and operating cash flow. We plan to prepay the remaining balances outstanding under our India credit facilities, including our loan with the DFC, ahead of its scheduled maturity. Doing so enables us to optimize our jurisdictional capital structure, increase the capacity of our local working capital facilities, while reducing exposure to India rupee volatility-related hedging costs. Separately, while not assumed in our guidance, potential monetization of 2026 Section 45X tax credits provides additional liquidity optionality. Our capital allocation priorities remain unchanged. Firstly, we prioritize maintaining a resilient working capital reserve of approximately $1.5 billion to $2 billion to account for industry cyclicality and uncertainty, and short-term supply and demand imbalances. Secondly, we deploy cash to fund growth and replicate technology improvements across the fleet. Thirdly, we invest in innovation through R&D and targeted capital investments, as well as strategic enablers such as licensing arrangements, to advance our technology roadmap, including perovskite optionality. Fourthly, we will consider M&A, which we are actively evaluating to pursue complementary technology-adjacent opportunities to reinforce our strategic differentiation. As we near the conclusion of recent years of sustained high CapEx associated with manufacturing capacity growth, we will evaluate applying cash generation in excess of the above capital priorities to share repurchases. We will provide an update on this later in the year, pending clarity around certain factors including policy catalysts, realization of new bookings volume, and any decisions around 2026 Section 45X tax credit monetization. I will now cover the full year 2026 guidance ranges on slide 12. Our net sales guidance is between $4.9 billion and $5.2 billion. Gross margin is expected to be between $2.5 billion and $2.6 billion or approximately 49.5%, which includes $2.1 billion to $2.19 billion of Section 45X tax credits, and $115 million to $155 million of ramp and underutilization costs. SG&A expense is expected to be between $215 million and $225 million and R&D expense between $285 million and $290 million. The primary driver for our increase is due to higher investment in advanced research, including expanded perovskite and innovation center activity, and planned headcount additions. SG&A and R&D expense combined is expected to total $500 million to $515 million. Total operating expenses, which includes $110 million to $120 million of start-up expense, are expected to be between $610 million and $635 million. Clearly, within our R&D expense guide for 2026 are approximately $100 million of costs associated with perovskite development. Going forward, we intend to guide on an adjusted EBITDA basis, which we believe provides the accuracy of our underlying operating performance and enhances comparability across periods. We forecast full-year adjusted EBITDA of $2.6 billion to $2.8 billion. From a first-quarter earnings cadence perspective, we expect module sales of 3.4 to 4.0 gigawatts, Section 45X tax credits of $330 million to $400 million, resulting in adjusted EBITDA of between $400 million and $500 million. Capital expenditures in 2026 are forecast to range $800 million to $1 billion. Approximately half of the spend is for capacity expansion, primarily the South Carolina finishing line and the Louisiana plant. Remaining spend is expected to be split evenly between CURE in India and R&D technology replication and maintenance. We expect to end 2026 with gross and net cash balances between $1.7 billion and $2.3 billion and assume a full repayment of our India credit facility with the U.S. International Development Finance Corporation by 06/30/2026. With that, we conclude our prepared remarks and open the call for questions. Operator? Operator: We will now begin the question and answer session. Please limit yourself to one question. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question comes from the line of Brian K. Lee with Goldman Sachs & Co. Your line is open. Please go ahead. Brian K. Lee: Hey, guys. Good afternoon. Thanks for taking the question. I guess just on the ASP front, Mark, you mentioned the $0.364 per watt, including adders for the U.S. bookings this quarter. How much did the adders add there? And then is that sort of the level of entitlement, 36 and above, that you would expect for U.S. bookings through the rest of the year? Maybe can you comment on visibility you have on the pricing environment from this point forward? And then just secondarily on the gross margins, I would be curious, I mean, if you factor out underutilization and the 45X credit, it is implying kind of a 10% component gross margin in the guidance even if I know there are a lot of moving pieces, Alex, but when do you get back to high teens, 20% type of gross margin for components the way you were at in 2024? And what are some of the big bridges to get back there? Mark R. Widmar: Alright. I will do the ASP conversation and probably suggest Alex cover gross margin. So there is about, call it, 2.5 to 3 cents of the value of the adder in terms of the ASP, that $0.364. So that is about the numbers. The CURE attributes will give you close to 3 cents. Now not everything that was booked in that $0.364 actually had the adder. So if you broke it out a little bit, you are potentially going to see slightly higher prices for the CURE attributes for the product that we booked with the CURE attributes. But, you know, look, I think the entitlement-wise, I feel good about the pricing that we are at now, but I think there are some more catalysts that could still happen. I think some are leaning in with all the uncertainty that we referenced on the call in terms of what happens with FEOC and what window are they trying to book into given the constraints with FEOC. And I think if we continue to see more momentum there, we just obviously saw the Solar 4 announcements, which obviously are going to address imports coming in from those three countries that we referenced. So there are potentially more tailwinds, depending on how they play out, that could support even better pricing as we move forward. But I think, visibility-wise, I think that is kind of a good indication of where we expect the market pricing to be relative to the CURE technology. Alexander R. Bradley: Yeah. Brian, on the gross margin, so if you back out the 45X, it is about a 7% gross margin. And if you think about that against the $5 billion revenue profile, about $350 million of gross margin. So, if you try and walk that back up to, call it, the 20% number we have talked about before, this year we have got about $165 million of tariffs sitting in there, about $135 million on underutilization. So you are about $300 million or so there, about six points of margin. You have got about $200 million of warehousing. I think we said in the prepared remarks that will come down to about $100 million on a run-rate basis next year. So pick up another $100 million there—another two points to margin. And if you look at the adjusters we talked about, $600 million in the backlog mostly recognized in 2027, 2028—so take $300 million across each of those years—that is another six points of margin that kind of walks you back up to around about $1 billion of gross margin and a 20% number. So tariff is obviously still in there. That is an impact that we are still wrestling with. But I would also say you have got incremental volume coming in next year which is not backed against that, and the contribution margin benefit of that, even ex-IRA, is going to be meaningful. I would also say we are trying to look at this on an ex-IRA basis, but it is challenging to do that to some degree because we are adding incremental costs both by U.S. manufacturing and also by the mix shift to bringing more production into the U.S. And we are doing that, and that allows us to enable us to capture that 45X credit. So I know we are looking on an ex-IRA basis, but if you think about it with the IRA included with that 45X, yes, the core shows 7% this year and the walk-up that we talked about just now, you have got 43 points of IRA. So the gross margin on a GAAP basis will be 50% this year relative to 41% last year, which is the highest we have seen. So obviously, we want to keep growing the core underlying non-IRA, and there is a path there, as I said, that takes you back up to that 20% and or about $1 billion at that $5 billion revenue profile. But you cannot ignore the two and the interconnectedness of the fact that we are reshoring capacity, and that does come at a cost, both direct cost and mix shift cost, to enable us to capture those 45X benefits. Mark R. Widmar: And, Brian, maybe I want to add a couple things too. One, back on the pricing environment, because I also want to make sure this is clear, is that product—or that ASP—is also reflective of, largely influenced by, a domestic content product, right? Now what we do a lot of times is it is agreed to around some number of points, which allow us to bring in some amount of international volume, assuming the tariff rates are amenable, such that we can blend international. But if we ended up doing a straight-up international deal, for example, with some of the capacity we have available with our Malaysia/Vietnam facilities, I would expect that price point to be closer to $0.30. So I just want to make sure that is clear. So if we actually end up booking some of that international volume as we go forward, you may see a lower ASP there because of that dynamic. I want to make sure that is clear. Then the other one just to Alex’s point around tariff. The other thing that is creating some headwind for us this year is—and we have mentioned this before—there is insufficient glass supply in the U.S. And we have been working to bring in basically brownfield and mothballed facilities and getting them up and operational. But to support the scaling that we have right now, we are bringing in some sun glass internationally and using it in our U.S. production. And that is creating a cost headwind. My inbound freight costs are higher. I am bearing the cost of the tariffs. And what we would expect to do as we scale up our supply chain here in the U.S., which we are in the midst of doing, is we will see less of a dependency on that import of glass, which will also help us a little bit on our gross margin profile. Operator: Your next question comes from the line of Julien Patrick Dumoulin-Smith with Jefferies LLC. Your line is now open. Please go ahead. Julien Patrick Dumoulin-Smith: Thank you. Thank you all very much. Appreciate the opportunity to connect here. If I can ask you first off, just to reconcile on the volumes produced versus sold. Can you comment a little bit about just what you are seeing here of late? Separately, can you comment a little bit about what you are actually seeing in terms of sell-through on volumes out of Asia? I know your prepared comments had some nuance on this, but elaborate a little bit about both Southeast Asia and India—what you are assuming here in 2026 and what you are seeing preliminarily for 2027 as well? Alexander R. Bradley: Yeah. So, if you go to the slides, we give you a walk on what we are expecting to produce versus sell. The delta between the two is about 700 megawatts coming out of inventory. So that is the gap you are seeing between produced volume and sold volume. And we gave you the U.S. number for sold. You can see it in there—it is 12.129. So the 9.33 in the script—I will come back to you. But, yeah, the delta is coming out of inventory. What was your second question, Julien? Mark R. Widmar: I think part of it is your question was on the sell-down in Southeast Asia, I think, is what you are asking. Julien Patrick Dumoulin-Smith: Yeah. On Southeast Asia. What are the dynamics? So let us talk through that. Alexander R. Bradley: So India is going to produce, call it, 3 gigawatts or so this year and will be sold into the Indian market. We are actually going to have a really strong quarter. We had a really strong Q4 and we will have a strong Q1 in India. So demand in India is strong. So we have 3 gigawatts or so, a little bit north of that because we have some inventory sell-through, that we will sell in 2026 in India—domestically manufactured, sold into the India market. Now on Southeast Asia, those factories are kind of running 20% or so. I mean, they are extremely underutilized. And what Alex said in his prepared remarks is that we are looking at this almost as option value. Now some of that capacity will be fully utilized once we get our South Carolina facility up because the front-end capacity for, call it, half of the Southeast Asia manufacturing will come to the U.S. So that will solve a piece of that underutilization. The other half is going to continue to be underutilized at a very low utilization rate. But we are looking at this as really an option to allow some of these potential tailwinds around FEOC and other things to play themselves out to see what the impact of that could be to create more demand for those international operations. We also, as we indicated in our last call, are trying to work with a couple of counterparties on potentially meaningful volume offtake for that international production. But that is all still in the works. It is still going to be largely tethered back to what happens in the policy environment. But we are incurring significant underutilization and cost headwinds because what we are trying to do right now is figure out, let us create an option, let us evaluate what we continue to see in the market. And we have been wearing this for over a year now. It was about a year ago when these tariffs came in place, and we started to throttle down, kind of towards the ’22, ’23. And we have run at a very low utilization rate to try to buy some time to see how these tariffs ultimately get played out. Operator: Your next question comes from the line of Mark Wesley Strouse with JPMorgan. Your line is now open. Please go ahead. Mark Wesley Strouse: Yes. Good afternoon. Thanks for taking our questions. Within the last couple of months, there was an individual with a vast amount of resources that is talking about ramping up a supply of U.S.-based solar panel production over the coming years. Just curious if that is having any real impact on the conversations you are having with your customers, especially as you look out to later this decade? And I have a quick follow-up. Thanks. Mark R. Widmar: Yeah. Look, I was very much aware of the announcement and the ambitions. From my understanding, a lot of that is not necessarily focused for our utility-scale market that we are primarily focused on. I think it is primarily looked to be captive for their own consumption for their own programs that they are envisioning. It is also out in the horizon, and I think there is also a pretty strong realization of some pretty significant challenges to try to get to that type of scale. And if you are really thinking about as fully vertically integrated all the way from polysilicon forward, if you are only trying to solve the constraint at, let us say, the cell level, you have to think through how do you solve the wafer, how do you think through the polysilicon, and the capital investment to try to move all that forward is going to be pretty overwhelming. And the technical aspects around it as well of understanding freedom-to-operate issues. We have already talked about there are IP infringements all over the place within the crystalline silicon world. And everybody is going to stand up and try to protect their IP where it makes sense. So, it has not really impacted our conversations yet. I think if they got to a realization where you started to see sites being announced, actual equipment being purchased, operations being commenced, then I think it could maybe start to inform our customers’ use of other thoughts and ideas. But as of right now, it is having very little impact. Alexander R. Bradley: Mark, just wanted to comment around that. And as you are well aware, the constraint that we are seeing in the market for hyperscalers right now is access to power. We have just gone through the process of looking to site our new finishing line. The biggest constraint we faced around that was land with available power to connect. So again, Mark mentioned you have got capital constraints—which even that could be overcome—constraints around knowledge and know-how. You have also got the constraint of how you would power these facilities if you are trying to build to that scale. You would be in the same constraints that the hyperscalers have today. Mark Wesley Strouse: Okay. Thank you for that. That makes sense. And then I just want to ask a clarifying follow-up to Brian Lee’s question earlier. When you said the $0.364 is for the domestic content, are you saying that that is the blended rate—so it would be a higher amount than that for the U.S. domestic content averaged with whatever, $0.30 for international—or is that $0.364 how we should be thinking about the domestic content portion? Mark R. Widmar: Yeah. So the way—we tried to mention this a little bit last time. The way we actually price is we negotiate with the customer some number of points that they need, given their already procured strategy around procurement strategy around the IRA in particular, and then what are the incremental points that they need relative to the window that they plan on putting the project into service. And so we will negotiate a points construct, which then gives us the optionality to blend whatever percentage we can internationally. And we are in a pretty good balance between the domestic S7 and the international S7. We can optimize there pretty well, assuming we choose not to sell into the India market. Where we are a little bit more misaligned is really with only having, call it, 3 gigawatts of capacity for S6 in the U.S. and then trying to match that up with 7 gigawatts of international production, which makes it harder because you cannot really blend that much international to achieve, let us say, a 30% or 40% or 50% requirement that a customer has. Now moving some of that finishing capacity into the U.S. also brings in some domestic content, so that helps move that equation a little bit. But what I was trying to say is that if you have no domestic content at all embedded into a blended price construct, you are going to see a much lower ASP. So if I go out and say, okay, I want a customer to buy 500 megawatts of international only with no domestic content value, and you may see some of that in some customers that are doing a PTC project as an example, because the uplift on the PTC is not as meaningful as it is on the ITC, those prices are going to be lower. And I just want to make sure that is clear and that is understood—that you could see a delta. I know I said $0.30 or somewhere in that range. If you are selling just a pure international S6 product into the U.S. market, you would see a lower ASP clearing price. Operator: Your next question comes from the line of Philip Shen with Roth Capital Partners. Your line is now open. Please go ahead. Philip Shen: Hey, guys. Thanks for taking my questions. First one, just was wondering if you could give us a little more color on why no EPS guide for 2026. And then secondly, in terms of the ASP implied for the 2026 guide, it seems like the U.S. ASP might be a little bit low. I think in 2025, it was closer to $0.324, but the implied U.S. ASP in the 2026 guide seems to be closer to $0.308. So I was wondering if you might be able to give some color on that. And then finally, on Oxford PV, can you share what kinds of efficiencies you are able to generate? What are you seeing in your test modules, if any? And then what is your sense of timing as to when commercial volumes could actually ramp? Thanks, guys. Alexander R. Bradley: Yes. So on the EPS, we are moving to guiding to EBITDA. We think it gives a better view of operational performance and better comparability year over year. And especially in a year like this year, where you have got significant costs associated with both underutilization of our Southeast Asia facilities as we are deliberately curtailing those—as Mark mentioned, waiting for an option around whether there is profitable capacity or profitable production to be had there to serve the market—and we have got significant start-up and ramp production. Historically we have not done that, but this is a lot different where start-up costs are as we are moving that equipment from Southeast Asia to the U.S., and so effectively taking tools we already have in the ground and idling them for a significant period of time. That makes it more comparable. On the tax side also, we have got potential challenges around Pillar Two this year, which will make the tax number very noisy going down to EPS. So on a kind of core non–Pillar Two basis, expect very low tax expense for the year, but because the agreement is not yet been finalized, there is a potential chance we will have to accrue significant Pillar Two expense, which ultimately we do not believe will ever get realized on a cash basis. But until those agreements are finalized, we would have to accrue that. I think it helps us with comparability as well. On the ASP side, so your number is right, $0.308. If you look at what is in the backlog, it is around $0.30. So about what is in the backlog coming out of that ASP with a little bit of uplift relative to some adjusters we get around freight and around commodities. And then there is a little bit of upside on the tech side as well there. If you think about—we mentioned on the adjusters going forward about $600 million or about $0.03 a watt on average of adjuster value sitting aligned with the CURE platform, and most of that we said will be realized in 2027–2028, which is when we will start having much more CURE product available to us. So this year, we have limited CURE production, and given the timing of our decision to run that CURE relative to the notification timings in the contracts, we are going to see very limited upside from that this year. So that is why you are seeing that U.S. ASP around $0.308. Mark R. Widmar: And I think the other thing, Phil, when you are looking at your year on year, you have to remember that last year, as we realized throughout the year a handful of terminations—obviously the largest one being the Lightsource bp termination—which obviously impacts revenue, but you would have to normalize, pull that out of your top-line revenue, then do your math from that standpoint. But that clearly provided some incremental uplift to the reported ASP last year because of some of those terminations. As it relates to Oxford PV, or just our perovskite program, basically what we are doing right now, Phil, is we have a development line where we are doing small form factor modules. Think they are like 60 centimeters by 20 centimeters or so. These are actual fully functional small form factor modules that we are producing in an actual integrated production process and doing all of our conversion of some of the efforts that we do in our advanced research, whether it is in California or whether it is in Sweden, and then we are doing all that testing within our development line. And if you look at our—as we said in the prepared remarks—if you look at our efficiencies and what we are seeing in stability, we are best in class from many, many, many ways—many different dimensions. So I feel good about where we are from a program standpoint, but there are still fundamental challenges that have to be addressed, and we are very good at understanding the nuances of thin films. We understand the issue of metastability. We understand the impact of encapsulating the thin film to protect the thin film. We have a number of what have been identified as best-in-class particular Chinese perovskite products. And if you put those out into a test field as we have, first off, they will even tell you in their literature that they give you: do not expose the module open circuit, which means effectively once you install it, it has to be immediately energized. And if you choose to expose it to open circuit, it degrades almost instantaneously in some cases. There are others that because their encapsulation is insufficient, the film just starts to over time effectively pull apart. So there is a huge significant delamination that happens with the film, and it cannot sustain itself over extended periods of time. And so there are many, many factors that factor into how you commercialize a product. So our view is we need to think about—we are working on all of those—the development not just to drive the efficiency, also to drive the attributes to a point where they are competitive and then to manufacture that in a way that creates an enduring product that can be in the field for 30-plus years and perform at attributes that are relatively close to the current thin film technologies that we have, and then we can do that all in HVM and do that in a way that we can do it cost-competitively. So there are many different things that we are working on in that regard, Phil. So I would just say we are pleased with where we are. Our next phase is we will be investing—we have already started our procurement process—to put together a pilot line that will make full-size modules, largely still for development purposes. We will deploy those modules in the field as well, some commercially with customers. And then as we evolve the development program, as we evolve the HVM issues in larger form factors—because anytime you scale from something that is, call it, 20 by 60 centimeters to something that is 2.5 meters, there are issues you will have to deal with through that scaling process, and especially the uniformity of the film. Once we are better informed around how well that is progressing, that will determine overall commercial readiness. But the entitlement here is an efficiency number that is 20% plus, an LTR that is competitive, a bifaciality that is, call it, 70%, and a tempco that is, you know, somewhere in the mid-teens, which is better than we have now with CdTe. That is the aspiration of what we are trying to accomplish, but a lot of work between now and then. Operator: Your next question comes from the line of Vikram Bagri with Citi. Your line is now open. Please go ahead. Vikram Bagri: Good evening, everyone. I wanted to ask sort of a two-part question about CURE and potential for cancellations. First on India, can you talk about the pricing environment? I was wondering if you can give confidence that the sales in the market are viable, the pricing is stable, is expected to stay stable throughout the year. Understand there is no sizable spot market in the U.S., but is there a possibility some of that volume can be redirected to the U.S. given 15% tariffs now in place? And then finally on India, it seems there is a lot of domestic capacity for panels being ramped up. How do you think about that capacity in the long term and the viability of that market for solar panels? And then as a follow-up on cancellations, you have historically mentioned pricing and EU players pulling back investments from renewables in the U.S. market has created this risk of cancellations. With lower tariffs, how are the conversations going with customers? Is that risk much lower now? And if you can quantify how much of the contracts are potentially at risk of cancellations. Thank you. Mark R. Widmar: Alright. I will deal with the India question first, and I do not know if you got the tariff question. Okay. So, look, what I would say is right now, pricing is a point to look at in India—it is lower. What I would say, though, is we are effectively realizing high-teens to low-20% gross margin. So if you want to look at it from a gross margin standpoint, because I think you have to understand the cost of manufacturing in India is significantly lower than what the cost of manufacturing is in the U.S. So, yes, lower pricing, but you basically balance that out with a lower cost of production. You are realizing high-teens to low-20% type gross margin in India. So that is obviously where we stand right now. And if you look across the horizon of how would we optimize that production—and one of the things I think you said is the risk of overcapacity—look, I agree that there is that risk, but there is also what is counterbalancing that and why there is also robust demand for our product and technology in India is that the Approved List of Models and Manufacturers in India is now moving further upstream. So it started off with the module itself. Now, effectively, for any project that is commissioned in April or Q2, there will now be a cell requirement to be made domestically, and then they have also foreshadowed already a wafer requirement that effectively starts to come into effect in 2028. And there is not existing vertically integrated manufacturing capability in India at this point in time. And I think what manufacturers have seen is that it has become more challenging as they try to get into cells, and then even more so as they try to get into the wafer. And then, obviously, they are trying to figure out the poly side of the house as well. So a lot still needs to happen from that standpoint. We also believe that from a cost standpoint, even if that vertically integrated supply chain were to happen, we will be cost-advantaged with our vertically integrated manufacturing facility with everything being done within the four walls of a factory. So there is a cost advantage, we think. We also believe we have an energy advantage, which will be further enhanced when we implement our CURE technology in India, which will start in 2027. So I look across the horizon, feel like I have a better product, better technology. I have a better policy environment that should continue to advantage us in terms of India. As a backdrop, to your point, we will continue to evaluate the construct of potentially bringing some of that product into the U.S. market, and we will do some of that with a view of creating some competitive tension into the domestic market, because I do not want customers to believe that they do not have an alternative path other than selling into the domestic market. I would like to be able to say, sure, if it is the right tariff construct, we can also redirect the product and blend it in with some S7 domestic product and then still command pretty good pricing. It is a little bit choppy to continue to move back and forth because today we primarily make a fixed-tilt product for the India market and then to have to convert the back to make a tracker product for the U.S. market or export market—that is a little clunky and you can incur some downtime and some cost, and transportation of bringing that product into the U.S. is more expensive than what we would like. So, ideally, if we can just harmonize and keep running that factory all out, serving the domestic market, getting good ASPs, that is our preferred path, but we clearly would look at bringing some of that into the U.S. market if the situation and the dynamics are right. Alexander R. Bradley: Yeah. Vikram, you asked around cancellation risk and whether tariffs are playing a part there. Look, tariffs coming down are fairly helpful, but I do not think what you have been seeing on the cancellation side over the last year has really been tariff related. So the two are not necessarily linked. What we have said before and what we have been seeing is more of a strategic shift by certain players, especially oil and gas, and the European utility players, to reallocate capital away from renewable development in the U.S. into some of their more core business on oil and gas development or European utility development. So where we have seen some of those players move away, we have seen others enter into the space in the U.S. to pick up some of that slack and see an opportunity in taking over those projects to develop them. So it is hard to handicap a cancellation risk in the backlog. Sure, it could exist. Historically, what we have seen has been essentially more risk around the international product, just given the value of domestic content. If you look at today, the amount of international product sitting in our backlog is pretty small. You can see that by how much we are producing in Southeast Asia this year relative to U.S. product. And so that product has potentially been more challenged. I think U.S. demand has been strong. And even if there were cancellations, we have much more opportunity to move any terminated U.S. products back into the U.S. market. I would also say that clearly, we have been enforcing termination penalties and fees and making sure that we capture the value in the contract. So if there is a contractual obligation for someone to pay an amount for terminating those contracts, we have been enforcing that. We will continue to do so. Operator: This will be our final question. Our final question will come from the line of Ben Kallo with Baird. Your line is now open. Please go ahead. Ben Kallo: Hey, guys. Thanks for putting me in here. I just wanted to square your time to power—it is a big question or big emphasis out there. And I know you have so many moving pieces. And just bookings, I am trying to square time and power and the need for electrons with how you guys are doing bookings, but, you know, your different moving pieces right now. Thank you. Mark R. Widmar: Look, I think, Ben, you have to remember we have a luxury—we are kind of in a nice position. We have got 50 gigawatts of contracted volume that is going to carry us forward. There is a clear sense of urgency from customers around execution and time to power. There are customers that obviously have safe harbored under Section 48, and they need to get their projects commissioned by the end of 2028. There are others that are safe harbored under 45, and those who are continuing to safe harbor because they can do that up to the middle of this year, then get an opportunity to get projects done through the end of 2030. So there is quite a bit of demand. Our customers are also dealing with a lot of angst of trying to figure out permitting issues and other things they are trying to do, financing issues, getting things in place for the current projects that they are executing against in construction and what have you, and then thinking through a longer position around their portfolio—both earlier stage and late stage development. So that sense of urgency is there. People are being really creative, looking to do more on-site generation, try to get out from underneath the constraint of the interconnections. But if a customer does have an interconnection agreement, they are running hard and they are making sure they are lining up their modules as well as their EPC agreement and balance of system equipment to make sure they can execute on time. So it is a clear catalyst. I also think it is helping us as we engage and we talk with customers around pricing as well. Operator: There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.
Operator: Greetings, and welcome to the Astronics Corporation fourth quarter and fiscal year 2025 financial results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press 0 on your telephone keypad. It is now my pleasure to introduce your host, Deborah Kay Pawlowski, Investor Relations for Astronics Corporation. Thank you. You may begin. Deborah Kay Pawlowski: Thanks, Shamali, and good afternoon, everyone. We certainly appreciate your time today and your interest in Astronics Corporation. On the call with me are Peter J. Gundermann, our Chairman, President, and CEO, and Nancy L. Hedges, our Chief Financial Officer. You should have a copy of our fourth quarter and full year 2025 results which crossed the wires after the market closed today. If you do not have the release, you can find it on our website at astronics.com. As you are aware, we may make some forward-looking statements during the formal discussion and the Q&A session of this conference call. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what is stated here today. These risks and uncertainties and other factors are provided in the earnings release as well as with other documents filed with Securities and Exchange Commission. You can find those documents on our website as well or at sec.gov. During today's call, we will discuss some non-GAAP measures which we believe will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release. So with that, I will turn it over to Pete to begin. Pete? Peter J. Gundermann: Hello, everybody, and welcome to our fourth quarter 2025 year-end call. We closed the year on a very strong note, and are happy to share the results. I will start off with a summary of the headlines for the quarter, then Nancy will go through the financials in some detail, then we will discuss our early look at 2026, finally, we will open the lines for questions. Simply put, our fourth quarter was very strong. Revenue of $240,000,000 easily set a new record, besting our previous high watermark set in 2018 by almost 13%. Sales were up on the comparator 2024 by 15% and the preceding quarter also by 13.5%. Sales growth was due to the strong market conditions we see across our business and solid execution across our operations. The strong sales volume combined with a number of efficiency, pricing, and productivity initiatives that we have implemented across the business resulted in a much improved Q4 margin profile for the quarter. We also benefited from a favorable mix in the quarter. Operating income was 14.8% and adjusted EBITDA was 19% for the quarter, both post-pandemic records. The improved margins drove improved cash flow, with $27,600,000 cash from operations for the quarter. We also completed a planned transition from an ABL line of credit to a cash flow revolver. At the end of the quarter, we had available liquidity of $231,000,000. To top it all off, we had total bookings in the quarter of $257,000,000, for a book-to-bill of 1.07, leaving us with a year-end backlog of $674,500,000, another new record. All in all, our fourth quarter was an excellent close to the year. I will turn it over to Nancy now to cover a range of specifics on the quarter. Nancy L. Hedges: Thanks, Pete, and good afternoon, everyone. I will walk through our fourth quarter and full year results in more detail, provide some color by segment, review cash flow and the balance sheet, and then close with key financial priorities. As Pete noted, we delivered on our expectations of a step change improvement in revenue growth in the fourth quarter. The 15.1% revenue growth also drove strong operational results. Gross profit increased nearly 29% to $80,000,000 and gross margin expanded 350 basis points year over year to 33.3%. The majority of margin expansion was the result of higher volume and favorable mix. This included a surge in aircraft spares orders that we expect will benefit the first quarter as well. The 2025 period also benefited year over year from repricing actions taken throughout 2025. Margin was also supported by some normal course catch-up pricing on a couple programs, overall productivity gains, and the benefit of earlier Test Systems restructuring actions, which more than offset the $2,900,000 of increased tariff expenses. R&D expense was $10,600,000 or 4.4% of sales, which is within an expected 4% to 5% run rate. Levels can vary from quarter to quarter based on the timing of projects. The $7,300,000 decline in SG&A expense was primarily the result of a $9,000,000 reduction in legal reserves and litigation-related expenses. SG&A included the incremental SG&A expense gained from the Buehler acquisition as well as the one-time legal and accounting costs related to it. At 14.1% of sales, we were at the lower end of our historic operating rate of 14% to 15% of sales. We expect to continue to benefit from lower litigation expenses and the cost saving measures we have implemented. Stronger gross profit and lower operating expenses flow through to operating income, which was $35,500,000, up sharply from $8,900,000 a year ago, and operating margin expansion of 10.5 points to 14.8%. On an adjusted basis, which excludes the acquisition expenses and continued litigation costs, operating income was $38,300,000 and adjusted operating margin expanded 450 basis points to 16%. We had solid conversion to net income, which was $29,000,000 or $0.78 per diluted share in the quarter, compared with a loss in the prior year period. I do want to point out that our diluted shares for the 2025 fourth quarter included 1,400,000 shares associated with the assumed shares underlying the remaining 5.5% convertible bonds, as the average share price for the quarter was above the conversion price on those bonds. However, there was no diluted EPS effect in the quarter related to the 0% new convertible bonds, as the average share price was below the $54.87 conversion price. As a reminder, we do have a capped call in place, which means that there is no actual potential dilution unless and until our share price exceeds $83.41, after which potential dilution comes on gradually beyond that price. Nonetheless, the calculation for the diluted average weighted share count will reflect the implicated shares associated only with the premium on the bonds, as long as the quarter's average share price exceeds the $54.87 conversion price. Adjusted net income was $28,500,000 or $0.75 per diluted share, which is lower than the GAAP reported net income as a result of normalizing the quarter's tax rate. The volume, mix, reduced litigation expenses, and pricing recovery benefited Aerospace operating profit in the quarter, which was $41,700,000 or about 2.5 times greater than the prior year period, and resulted in operating margin of 19% of sales. On an adjusted basis, Aerospace operating profit margin expanded 380 basis points to 19%. Even on a relatively low level of sales, Test Systems produced operating profit of $1,100,000 compared with slightly below breakeven results a year ago. The improvement reflects the benefit of simplification and restructuring actions taken in 2024 and 2025, partially offset by continued unfavorable mix and under-absorption of fixed costs at our current volume. We expect profitability to improve meaningfully once production on the U.S. Army radio test program ramps. Before we turn to the balance sheet, I wanted to touch on tariffs for a moment. As you all know, the U.S. Supreme Court held a imposed under the International Emergency Economic Powers Act or IEEPA exceeded the authority granted by that statute. We are reviewing this decision with our advisers to understand any implications for previously paid tariffs, and our go-forward cost structure, but at this time, we are not assuming any benefit in the outlook. To date, we have treated these tariffs as a normal cost of doing business, and have not recognized any asset for potential refunds. Time will tell if there will be an opportunity to recoup any or all of the approximately $8,000,000 in incremental tariffs previously paid. We will, of course, be monitoring the situation closely. Now moving on to cash and the balance sheet. We had a strong cash quarter and generated $27,600,000 in cash from operations in the quarter, and $74,800,000 for the year. Strong cash earnings in the quarter were partially offset by higher working capital to support increased order volume. Operating cash flow also included a tenant improvement allowance reimbursement of $5,000,000 for the quarter, which is offset by the CapEx in the buildout and consolidation for our new Redmond, Washington facility. For the year, we had $8,000,000 in reimbursements. Capital expenditures were $11,800,000 in the quarter, and $31,700,000 for the year. We still have some work to do on the Seattle facility consolidation, so there will be carryover into 2026. We are expecting CapEx of $40,000,000 to $50,000,000 for 2026. Not included in that number is approximately $14,000,000 to $18,000,000 of investment into a global enterprise resource planning system. Because of the accounting treatment for those types of projects, that spend will not be reflected in CapEx, but instead will come through as cash outflow from operations. We are planning a staged implementation of the ERP. Excuse me. And the project is projected to take approximately five years to complete, with the cost expected to be heaviest in 2026. We will be relying on both outside resources and a dedicated team to execute on the implementation. We closed the year with $18,200,000 in cash and cash equivalents, net debt was $324,800,000 at the end of the year, up from $156,600,000 at the end of 2024. The increase reflects the refinancing actions that we executed in September 2025 that included the repurchase of 80% of the $165,000,000 principal 5.5% convertible bonds, which required $285,800,000 given how far in the money those bonds were at the time. We also purchased a capped call for $26,900,000 which elevated the strike price on the new bonds issued to $83.41. To pay for the repurchase in the capped call, we issued $225,000,000 of 0% convertible bonds, we borrowed on our revolver, and we used cash on hand. As Pete mentioned, in October, we also entered into a new $300,000,000 senior secured cash-flow-based revolving credit facility, of which we had $85,000,000 drawn at year end. We closed the year with $231,000,000 in available liquidity, including the remaining available on the revolver and $18,000,000 in cash. Our capital allocation priorities remain oriented on funding organic growth and critical capacity and infrastructure investments, while maintaining a prudent and flexible balance sheet. We believe our current capital structure, improved profitability, and healthy liquidity position us well to execute on these priorities. Our financial priorities for 2026 include to deliver on our revenue outlook, supported by a record backlog and strong demand in Aerospace, drive further operating margin expansion with an emphasis on achieving sustainable high-teens operating margins or better over time, improved Test Systems profitability as volume ramps on the Army Radio Test Set Program, and to maintain a strong liquidity position while investing in our future. With that, we are pleased with the progress we made in 2025 and the foundation that we have built for 2026 and beyond. Pete, I will turn it back to you to discuss our outlook. Thank you, Nancy. Peter J. Gundermann: One more comment on 2025. It was, in retrospect, very much a year that played out as we originally expected. When it began, we thought it would be a year of more modest growth compared to the three years prior, but it would also be one where we would dial in and fine tune our efficiency initiatives and cost structure while realizing the benefit of pricing actions to bring about significantly improved margins. And that is pretty much what happened. Growth in 2025 was 8.4%, down from an average of over 20% for the three years prior, as we clawed ourselves out of the pandemic. But the more manageable growth we saw in 2025 allowed us to work on our margins, which today are much improved over the prior year. 2025 saw adjusted operating margin of 12.2%, up from 7.7% in 2024. Adjusted EBITDA was 15.6%, up from 12.1% in 2024. It is now time to talk about 2026, and we think 2026 is shaping up to be a very good year for our company. Long story short, we anticipate growth picking up significantly over 2025, and we believe our margin journey has plenty more room to run. A few weeks ago, we issued preliminary 2026 revenue guidance of $950,000,000 to $990,000,000. The midpoint of that range, $970,000,000, would represent growth of 12.5%. The high end of the range, $990,000,000, would represent growth of nearly 15%. This level of growth is a solid step up from 2025, but not as crazy and challenging as the years before that. As for margins, we do not issue bottom line guidance, but we believe that the broad range of initiatives that helped us make progress in 2025 remain in place, and we expect to see continued progress given the higher sales volume we expect to see in 2026. As for cadence, our current expectation is that first quarter sales will be in the range of $220,000,000 to $230,000,000. We expect a modest step up from there in subsequent quarters such that the second half of the year will see quarterly sales above $250,000,000. We expect that the sales volume will play well with our evolving cost structure and efficiency initiatives. There are of course some risks. The most prominent of those includes geopolitical risks, which are wide ranging and macroeconomic in nature, tariffs are another question mark, which is as unpredictable as ever. Closer to home, we continue to wait for the U.S. Army to turn us on for volume production of our 4549T radio test program. The government shutdown late last year did not do us any favors in this regard. We now believe that we will get the long-sought-after turn-on early in 2026 or shortly thereafter. In summary, we expect 2026 to be a remarkable year for our company. We expect to post strong growth and continued progress with our bottom line. We look forward to updating you regularly on our progress as we work through the year. And that ends our formal. Shamali, we can open up the line for questions now. Operator: Sure. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 to remove yourself from the queue. If participants use speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment, please, while we poll for questions. And our first comes from the line of Jonathan E. Tanwanteng with CJS Securities. Please proceed with your question. Will (for Jonathan E. Tanwanteng): Hi. This is Will on for Jonathan E. Tanwanteng. Assuming you achieved the midpoint of your Q1 full year revenue guidance, you will be doing $245,000,000 to $250,000,000 in quarterly revenue on average in Q2 to Q4. Can you do a similar 19% to 20% EBITDA margin in those quarters? Peter J. Gundermann: That would be a goal. That is what we are thinking. We are shooting for. I would point out that the fourth quarter, the quarter we are reporting on today, was a little bit unprecedented. We had not been at that volume before, and it did benefit from a strong lineup of tailwinds. So, you know, we are hoping to repeat that kind of performance as we move through the year and as we go further. One of the other questions that we will answer as the year progresses is what our marginal on incremental revenue dollars might be. We have consistently in the past been in the 40% to 45%, 50% range. And that thesis will be tested as we move through the year into those higher volume levels. But at this point, that is our goal. Thank you. Super helpful. And then just one more. Can you add some color to what you are hearing from the Army radio test program? And is that the biggest swing factor in terms of achieving the high or low end of your revenue guidance? Peter J. Gundermann: It is less and less of a swing factor as we move through the year. We have discounted a little bit. We originally thought it would get started, you know, right around year end 2025. The government shutdown pushed it out, and the wheels are in motion, I guess, I would say. We believe it is a matter of when and not if. We believe that most of the task items that have to be accomplished in order to get a green light on the project have been or are being completed. So we think the user community is definitely in line to get it going, and we expect that to happen shortly here. But again, it is a little bit hard for us to predict when and how the Army will act on this kind of matter. But we are planning a second quarter turn-on. Will (for Jonathan E. Tanwanteng): Thank you. Operator: Our next question comes from the line of Gautam Khanna with TD Cowen. Proceed with your question. Gautam Khanna: Yeah. Just wondering if you could characterize the order influx in Q4. Was it concentrated in any specific product areas? Was it broad based? Maybe you could talk about some of the customers. Was it aftermarket orientation or OE? Etcetera. Peter J. Gundermann: Yeah. I would tell you that there was nothing singly outstanding or specific. It was pretty broad based and across the board, both for linefit and aftermarket, pretty consistent with our revenue base. That being said, there are a few pretty significant programs out there that we were waiting for, hoping to bring in in the fourth quarter. Had we done that, it would have been a blowout fourth quarter bookings number, but as it is, we feel like, you know, there is pretty good targets for the first quarter and second quarter as we work to pursue those things that have maybe slipped a little bit. But nothing really special, I would say, that drove fourth quarter bookings. It was just rising tide, you know, lifts all ships, and we were beneficiaries of that. Gautam Khanna: And that leads me to my follow-up, which is just can you characterize what you are seeing in Q1 and the pipeline beyond Q1 with respect to orders? Peter J. Gundermann: Yes. We are pretty optimistic. I mean, you know, we obviously have to keep bookings above shipments to some extent in order to achieve kind of a 10% to 15% growth rate in 2026. But at this point, obviously it is early in the year, but we feel pretty optimistic we have got kind of a target-rich environment that we are working in that we should be able to convert into revenue dollars in plenty of time to achieve that growth. So at this point, of all the things we kind of sweat about, the bookings and the demand in the market is not really one of them. Gautam Khanna: Terrific. And then just lastly, on pricing broadly, I do not know if you could characterize how that is trending and I do not know if you are willing to comment beyond 2026, but with respect to pricing opportunities for the overall portfolio. Peter J. Gundermann: That is a good question. I think I am pretty pleased with the achievements we have had kind of repricing our business mix on the heels of the inflation that we saw over the last few years. That definitely has been beneficial to our results. And I would tell you that if I look across the book of business, this is a kind of a hard thing to estimate, but we are probably somewhere in the 70% to 80% complete range there. We have a few major programs that will be coming due over the next year, year and a half, and we will, you know, execute on those as we have on the others. But for the most part, you know, we have kind of fixed the deficit that we found ourselves in when inflation kicked up costs faster than we could raise prices. I think we are catching up. We are well on our way. We have got a little bit further to go, but for the most part, I would say we are 70% to 80% done. Gautam Khanna: Terrific. Thank you. Peter J. Gundermann: Thank you. Operator: Our next question comes from the line of Michael Frank Ciarmoli with Truist Securities. Proceed with your question. Michael Frank Ciarmoli: Hey. Evening, guys. Nice results. Thanks for taking my question here. Apologies for the background noise. I am on the news. Just Peter, Nancy, on the Aero margins, you know, really great performance. I mean, you maybe just unpack that a bit? I mean, obviously, it sounds like you got a pretty big tailwind from reduced litigation and reserves. But then I think I heard you call out a pretty significant order for spares. You got the pricing. You know, I am assuming we are not going to take this and run-rate it forward, but maybe if you kind of remove some of those items, you know, I am thinking litigation and spares, you know, are you still trending, you know, above that maybe, you know, high 16%, 17%, or do you think you kind of do better than that going forward here with these volumes? Nancy L. Hedges: No. I think there is definitely, you saw, Mike, our adjusted table in the back, which removes the litigation and the, you know, the nonstandard types of items. So we are at 19.8% on an adjusted basis for Aerospace. There is obviously mix was beneficial in there, and we had some of those repricing actions that we mentioned. But we still think that high teens is achievable. You know, we have, you know, we have been in that mid to high teens all year. You know, this quarter was quite favorable. We think some of that mix is going to continue on into Q1, as we mentioned. So, yeah, there could be some puts and takes quarter to quarter, but, yeah, I mean, that mid to high teens is where we expect to run. I would also add, Michael, that one of the things that excites me about our situation right now is it is not one thing. It is not one program. It is not one driver that is really producing the results. It is more a groundswell of things all across the board, and we do not dive into them all in too much specificity. But the strength of the results is based on a real broad-based set of drivers, which gives us a lot of confidence that it is going to continue. So just wanted to throw that in there. Michael Frank Ciarmoli: Okay. Okay. And, Nancy, yeah, I was looking at that table. I guess the press release talked about a $9,300,000 decrease in litigation. And, I mean, we could probably take it offline because I see the $1,400,000 in there. But was there any way to quantify the benefit to the margins from the spares? Nancy L. Hedges: Yeah. It is terms of quantify, we could probably quant. It was just a favorable aftermarket environment, Mike. So there is not necessarily one program. It is just, it was, like Pete said, we got some broad-based tailwinds that were behind us, and it happened to be a particularly, you know, a particularly strong quarter in terms of aftermarket. Right. And if I add a little color to that, we are not a business that generally has a whole lot of spares and repairs kind of aftermarket business. We do a lot of retrofit business, but as you know, Michael, for us, that is pretty consistent with how we sell to OEM applications also. So it is not a retrofit. It is this quarter benefited from kind of a spares and repairs element, which is a little bit over and above what we typically see. So that is why we called it out. Michael Frank Ciarmoli: Okay. That helps. And then, Pete, if I may, just on the outlook for 2026, any, maybe can you give us a sense of what kind of production rates you are thinking about? I mean, obviously, we heard, you know, from Boeing, there might be two rating reasons on the MAX. It sounds like, you know, maybe the bigger content wide bodies are certainly moving in the right direction. But any sort of assumptions underpinning kind of the revenue guidance? Peter J. Gundermann: I guess what I would tell you is that we get the same message from the OEMs that everybody else does, and we are planning and spooling accordingly. But when we publish our numbers, we are discounting that a little bit. We are sliding some of those rate increases three or four months, not as though we will be unable to keep up if, you know, if they do that, but, you know, just to be conservative, we feel like it is appropriate to discount it just a little bit. So there is some conservatism built into the numbers there. Michael Frank Ciarmoli: Okay. And then last one on 2026 and maybe just cadence of one program. Any general update on the MV-75? And then kind of where things stand with that opportunity and that ramp? Peter J. Gundermann: We are chugging away with it. You know, again, it is a little bit of a situation where the Army is pretty public in saying that they want to accelerate that program. We understand that that is not always an easy thing to do. I can tell you that we will not be the holdup if they want to accelerate the program. We think we are on schedule to do it as they want. In terms of revenue for the year, do not have this exactly in front of me, but I believe that we generated something like $30,000,000 of revenue in 2025 on that program, approximately $20,000,000 the year before that, and we expect to step up this year to somewhere in the neighborhood of $40,000,000. So it becomes a bigger portion of our overall task list. We expect that we are going to be done with the development phase of the program in 2027. So largely done by the end of this year. Michael Frank Ciarmoli: That is helpful. Thanks a lot, guys. I will jump back in the queue. Peter J. Gundermann: Alright. Thanks. Operator: Thank you. Next question comes from the line of Greg Palm with Craig-Hallum Capital Group. Please proceed with your question. Greg Palm: Yes. Thanks. Congrats on a good way to finish the year. Maybe just looking back, you talked a little bit about Q4 specifically, but as it relates to kind of the Commercial Aero segment, can you give us a sense on how both OE and retrofit performed for the year, like, an absolute and maybe relative to one another, and just based on your expectations for this year, any change in how both of those perform relative to one another? Peter J. Gundermann: Our sense is that they are both going to continue to be pretty strong, Greg. The production rates are well publicized. You know, they are well discussed in the industry. We do not have any insight beyond those, beyond what I have already talked about. If they can build the airplanes, we will ship the product. There is no question about that. And, otherwise, we continue to benefit from what I describe as a secular trend where people, they travel, have almost an insatiable desire to be connected and entertained. So there is pressure on the airlines in the aftermarket to keep up with people's desires, you know, passenger desires when they step on board a commercial airplane. And that is half our business is basically in-flight entertainment and connectivity. And we continue to see strong tailwinds both on the OE rate side and the aftermarket side. And we benefit also, as you know, that, you know, the technology life cycles in that part of the Aerospace industry are pretty short. So even though product may be functional, perfectly fine, just as intended, it becomes technically obsolete and needs to be updated. So we are in a constant position where we get the opportunity to try to, you know, replace ourselves really with newer product that keeps up with consumer electronics. So it continues to be a pretty good picture. I cannot tell you there is a meaningful shift one way or the other in terms of aftermarket versus OE production rates. We are fairly optimistic on both at this point. Greg Palm: And, yeah, that is good color. And on the retrofit, you know, specifically, as I think about, you know, some of that that you sort of alluded to, there is a lot of new things, you know, going on inside the plane. I mean, I can think about, you know, how we access to the Internet and, you know, Wi-Fi and how that might change, you know, from GEO to LEO, maybe even, you know, the exact way we charge our phones. So how does, how might that impact you this year? What type of opportunities might, you know, sort of emerge over the coming years? Peter J. Gundermann: Well, it is an interesting question. I do not know how much time we have on this call, but that is a big part of what we live for at Astronics Corporation. And I can think off the top of my head there are all kinds of things happening with satellite geometries or geologies, architectures, and the carrier systems, and the security protocols on wireless access points, even electrical power. I mean, people think of that as relatively staid, but it has not been too long since we moved from 110 volts AC to USB Type-A to USB Type-C. And now there is pressure for new wireless kind of protocols for charging in airplanes. So it is, again, a target-rich environment, and we have a pretty comprehensive product line that addresses all those product areas. And one of our challenges is to see where consumer electronics is going and stay in front of it and find a way to get it offerable and commercialized so it can get on airplanes. And we have a pretty good road map in a range of areas to address those opportunities. So, you know, it takes some time for some of those to play out, but I expect 2026 will be a meaningful year, you know, get a little firmer and we will talk about those developments as they down the road in our regular calls. But we think it is an optimistic setup for the year for sure. Greg Palm: Yeah. Okay. And I guess just last one. I wanted to just spend a minute on flight critical power. And you mentioned FLIRA, but, you know, just given the attention, some of the interest, and I know, like, unmanned aircraft, CCAs, it just seems like maybe there is an opportunity that is emerging there that could provide some additional opportunities as well. I just wanted to get your thought. Peter J. Gundermann: It is a very good question, and it is an exciting topic. It is one of our main strategic thrusts, flight-critical electrical power, and we have become specialists basically in designing electrical power generation and distribution systems primarily for smaller aircraft. And we do work across the board, but in that particular product line, we are specialists in small aircraft. We started off primarily focused in business jets. We have found our way into military programs, the FLRAA program or the MV-75 being the, you know, the kind of the big highlight, you know, so far that we are really excited about. That is a transformational program for our business. But while we are busy doing these things, these other class of aircraft have come up, like eVTOL, which are, again, small, electrically intensive aircraft, and drones. Not the, you know, the smaller dispensable drones that, you know, may or may not come back to fly a second mission, but the higher-end ones, the CCAs, like you mentioned, those are right up our alley. We have technologies that make our very well suited for these smaller remotely piloted or autonomous aircraft. And we are heavily involved in a range of development programs right now. But most of them are, you know, unofficial and not programs of record at this point. We cannot go into a whole lot of detail, and there are more questions than answers. But we are very excited about where that business is going to go. It is about 10% of our total right now, but it is one of the most potentially explosive growth areas in our business. So we are excited to see how it plays out. MV-75 gets the big headlines. It will continue to get the big headlines this year. But kind of in the background, there are going to be a number of other development programs that, and things we can maybe talk about more freely when the time comes, that could be pretty exciting for our company. Greg Palm: I am sure we all look forward to hearing more. I will leave it there. Thanks. Peter J. Gundermann: Alright. Thanks, Greg. Operator: Thank you. And ladies and gentlemen, this does conclude today's question-and-answer session, and this also concludes today's conference. You may disconnect your lines at this time. We thank you for your participation. Have a great day.
Operator: Thank you for standing by, and welcome to the Horizon Oil Limited Half Year Results. [Operator Instructions] I would now like to hand the conference over to Mr. Richard Beament, Chief Executive Officer. Please go ahead. Richard Beament: Well, look, a very good morning, and welcome to Horizon Oil's FY '26 Half Year Results Presentation for the period ended 31 December, 2025. I'm Richard Beament, Horizon's CEO, and I'm joined today by Kyle Keen, our CFO. This half year represents a very important period for the company. Despite a materially lower realized oil price environment, we delivered strong operating and financial performance, underpinned by disciplined cost control and the successful integration of our recently acquired Thailand assets. The completion of the Thailand acquisition on the 1st of August, together with the 10-year extension of the Maari permit to December 2037, has delivered a genuine step change for Horizon, increasing production, strengthening cash flow resilience, extending portfolio life and further diversifying the business. This morning, I'll provide a brief overview of the half-year performance, then hand over to Kyle to take you through the financials before I return to cover asset performance, outlook and upcoming activity. And we'll then open up to questions. Before we begin, I'll draw your attention to the customary compliance statement on Slide 2, which I encourage everyone to read in full. During today's presentation, we may make forward-looking statements, and actual results may differ materially due to known and unknown risks and uncertainties. It's also important to note that in our results, our recent Thailand investment is equity accounted in the half year financial statements since we hold the interest through our 75% shareholding in MH Energy Thailand LLC, the company which we acquired together with Matahio from Exxon. To aid our investors, where possible, we've reported metrics for the half year inclusive of the contribution from Thailand, such as underlying revenue to aid with comparability. As always, I should also note that all dollar amounts referred to in this presentation are in U.S. dollars unless otherwise stated. Now, this slide highlights Horizon's diversified non-operated portfolio across Southeast Asia and Australasia. We now have 5 producing assets across 4 countries with China, New Zealand, Australia and Thailand with a strong weighting toward long-life, low-cost oil and gas assets operated by experienced partners. The addition of the Sinphuhorm and Nam Phong gas fields in Thailand further strengthens the portfolio, increasing gas exposure and providing additional scale and resilience. Turning now to the investment highlights for the half year. Production and sales volumes increased by 26% and 25%, respectively, compared to the prior corresponding half year, reflecting 5 full months of contribution from the Thailand assets, together with continued solid performance from our existing portfolio. Underlying revenue for the half year was $54.2 million, including $9.6 million from Thailand, while EBITDAX of $28.6 million was broadly in line with the prior half year despite a 15% lower realized oil price. Cash flow from operating activities increased by 37% to $25.1 million, demonstrating the resilience of our assets and cost base. We finished the period with $35.6 million of cash and a modest net debt position of $9.8 million following payment of the FY '25 final dividend in October. Importantly, the Board has declared an FY '26 interim dividend of AUD 0.015 per share payable in April this year, maintaining our long-standing commitment to prioritizing shareholder returns. Now the next slide brings together how the business is performing against strategy. First, on shareholder returns. With the declaration of the FY '26 interim dividend, Horizon enters its sixth consecutive year of distributions, with more than AUD 0.17 per share paid or declared since 2021, totaling over AUD 274 million. Operationally, we continue to execute across the portfolio. Thailand is already contributing meaningfully following completion of the acquisition in August. Block 22/12 is in the midst of a liquid-handling upgrade. Maari delivered its strongest production rates in more than 5 years following workovers, and Mereenie continued to perform strongly with gas sales now supported by long-term arrangements with the Northern Territory government. Strategically, the Thailand acquisition and the Maari permit extension materially strengthened portfolio longevity at low-risk growth options and with Thailand's increasing gas exposure, including the sanctioned Nam Phong Booster Compressor, which is expected to deliver a significant percentage uplift in production from that field around mid-2026. Finally, from an ESG perspective, safety performance remains strong across the portfolio. Our gas assets continue to support regional energy security and the completion of a double materiality assessment during the half year helped sharpen our ESG focus as the business evolves. Overall, this half year reinforces that Horizon is delivering disciplined growth, resilient cash flows and long-term value creation. And now I'll pass over to Kyle to run through the financial results for the half year in a little more detail. Kyle Keen: Thank you, Richard. As always, all references to dollars are to United States dollars unless otherwise stated. Throughout the financial slides, you'll see a constant theme, the strong and positive contribution from the Thailand acquisition. Whilst the acquisition had an effective date of the 1st of January 2025, completion occurred on the 1st of August 2025. Therefore, only 5 months of contribution is reflected in the half year results. Importantly, cash flows generated between the effective date and the completion dates were deducted from the initial purchase consideration. Turning to the group's financial performance for the half year. This slide summarizes our results compared with the prior half year period. We've also included 2026 calendar year results, which we reference later. Most key metrics were strong despite a 15% lower realized oil price, which notably impacted profits. That impact was largely offset by the 5 months contribution from Thailand, allowing us to maintain underlying revenue and EBITDAX while increasing operating cash flow. Production and sales for the half year increased by over 20%, exceeding 1 million barrels of oil equivalent and generating underlying revenue of $54.2 million. On the cost side, the group continued to maintain a low cash operating cost base of around $20 a barrel of oil equivalent, supporting continued strong free cash flow generation with an EBITDAX result of $28.6 million and cash flow from operating activities of $25.1 million for the half year. At the 31st of December, the group held cash reserves of $35.6 million, resulting in a modest net debt position of $9.8 million. This reflects the payment of the FY '25 final dividend and completion of the predominantly debt-funded Thailand acquisition. This chart clearly illustrates how the business has performed over the past 6 months, breaking down operating cash flow and how those funds were deployed. The $25.1 million of operating cash flow, including Thailand's contribution, has completely funded the 2025 final dividend of $15.9 million, $3 million of debt repayments and $4.6 million of investments in our low-cost producing assets. The chart also highlights the minimal equity contribution to the Thailand acquisition, with the majority of the purchase price debt funded. The primary reason for the decline in cash over the period was the loan to our joint venture partner to aid with completion of the transaction. That loan generates interest income of at SOFR plus 9% per annum and fully amortizes by the 31st of December 2027, with over $1 million already repaid. The group closed the half year with $35.6 million of cash, and this provides sufficient liquidity to pay the interim distribution of AUD 0.015 per share. That's to be paid in April 2026, fund ongoing development activity across the asset base, progress organic and inorganic growth opportunities and to allow us to maintain appropriate working capital balance, which includes the provision for Maari's long-term decommissioning obligations. Moving to the calendar year context. 2025 sales volumes were the highest in 5 years, reflecting the contribution from Thailand following completion in August 2025. Mereenie continues to play an important role in offsetting natural reservoir decline at Block 22/12, reinforcing the strategic value of that acquisition. While revenue remains closely linked to production volumes, it is also influenced by realized oil and gas prices. And despite the lower realized oil prices, calendar year underlying revenue of $103.6 million was achieved, noting it was supported by Thailand's contribution. Building on production performance and continued cost discipline, the group remained profitable. Half year EBITDAX remained strong at $28.6 million, while calendar year EBITDAX of $54 million demonstrates the consistency of earnings following the Thailand acquisition. Calendar year profit of $8 million primarily reflects a higher non-cash amortization expense, together with the impact of lower realized oil prices, with underlying cash operating margins remaining resilient. The strong profitability delivered over recent years has been underpinned by disciplined capital allocation and the contribution from high-quality acquisitions and development projects, including the Weizhou 12-8 East development and more recently, the Mereenie and Thailand acquisitions. Now turning to our final financial slide. The charts highlight the group's ongoing ability to generate free cash flow and return capital to our shareholders. At the 31st of December 2025, net debt was $9.8 million, following the Thailand acquisition and shareholder distributions during the half year. Cumulative distributions now exceed USD 165 million or approximately AUD 250 million over the past 5 calendar years and excludes the FY '26 interim distribution of AUD 0.015 per share, which will be paid in April later this year. These outcomes reflect a clear strategy focused on value, disciplined investment and consistent shareholder returns while maintaining balance sheet strength and flexibility. With that, I'd now like to hand you back to Richard to provide an update on the asset portfolio and an outlook for the company. Richard Beament: Well, thanks, Kyle. I'll now provide an update on the assets. As Kyle mentioned, starting with Block 22/12 in the Beibu Gulf. Block 22/12 delivered a solid operational performance during the half year, with production broadly in line with expectations. As anticipated, natural reservoir decline was partly offset through a combination of workovers, slickline activities and ongoing optimization initiatives. A key focus for the joint venture remains the liquid-handling capacity upgrade, which is scheduled to come online progressively over the coming months. This upgrade is expected to aid with sustaining and potentially increasing oil production rates later this year. In parallel, feasibility studies have progressed on a potential multi-well development at 12-8 East, which continues to be evaluated by the joint venture. Turning to Maari in New Zealand. Maari delivered an outstanding half year performance, achieving the highest daily production rates in more than 5 years during August following successful workover activities. Average production for the half year was approximately 12% higher than the prior corresponding period, underpinned by stable reservoir performance and effective water injection. A major milestone during the period was the award of a 10-year permit extension through to December 2037, providing long-term certainty for continued production, further optimization and decommissioning planning. This extension reflects the increasing focus on energy security in New Zealand and reinforces Maari's value as a long-life cash-generating asset. Moving now to Mereenie in the Northern Territory. Mereenie continued to perform strongly during the half year, with production supported by the 2 infill wells drilled in early 2025, which still contribute almost 25% of total field gas production. Realized gas pricing improved materially following the expiry of legacy contracts and the execution of a binding letter of intent with Power and Water Corporation provides a pathway to firm supply of uncontracted gas through to 2034. This agreement underpins the planned drilling of additional infill wells later in calendar year 2026 and reinforces Mereenie's role as a critical supplier of domestic gas to the Northern Territory. Turning now to Thailand, our most recent addition to the portfolio. The acquisition of interest in the Sinphuhorm and Nam Phong gas fields completed on the 1st of August 2025 and delivered an immediate positive impact during the half year. Over the 5-month period, Thailand contributed approximately 28% of group production with revenue of $9.6 million and very low average operating costs of around $7 per barrel of oil equivalent. Operational performance has been strong, with both fields exceeding nominations and early optimization at Nam Phong delivering an estimated 7% uplift in production with no additional capital. A final investment decision was reached in early January on the Nam Phong Booster Compressor, which is expected to increase field production by at least 40% from mid-2026. At Sinphuhorm, regulatory approvals are now in place and works commenced for the tie-in of the PH-14 well, which along with the perforation of the shallow section of the original discovery well, the PH1 sidetrack on the same pad. This is targeted for completion later in 2026. Overall, integration of the Thailand assets has been seamless, and they are already making a meaningful contribution to group cash flow and portfolio resilience. Finally, turning to our activity plan for the next 12 months. At Block 22/12, the liquids-handling upgrade is expected to ramp up over the coming months, with further drilling and workover activity under review. At Maari, focus remains on ongoing optimization and infrastructure integrity following the permit extension. At Mereenie, the joint venture is progressing planning for additional gas infill wells, supported by long-term gas sales arrangements. And in Thailand, we are advancing the Nam Phong Booster Compressor Project and the Sinphuhorm infill well tie-ins, both of which are expected to support higher production and cash flow from the second half of calendar year 2026. So once again, we have a busy calendar of activity, firmly focused on extracting more value out of our assets. In summary, this has been another strong half year for the company. We've delivered resilient financial results in a lower oil price environment, successfully integrated the Thailand acquisition, extended the life of Maari and maintained our commitment to shareholder returns, all while preserving balance sheet strength. And with that, Kyle and I would now be very happy to take any questions you might have. Operator: [Operator Instructions] Unknown Executive: Okay. So the first question we have right now is, how have you found Thailand as a jurisdiction and working with PTTEP? Richard Beament: I might take that one. Look, it's been a really rewarding and good experience going into Thailand. Our relationship with PTTEP has been very, very strong. I think the testament to that is that within 5 or 6 months of taking over and completing the transaction, we've reached FID on that Booster Compressor Project at Nam Phong and that [Technical Difficulty] milestone so quickly after taking the rains there in Nam Phong to how strong that relationship has been. And moreover, the energy security requirements in Thailand. These fields provide fundamental gas supply to a power station. And all we've seen is positivity around how we can continue to help them to extract more gas and deliver into the power station. Unknown Executive: Thanks, Richard. The second question we had again on Thailand is Sinphuhorm was lower in August and September and February and March. Can you explain why? Richard Beament: Yes. Look, I mean, that was purely -- as sort of depicted on the slide, that was purely due to a planned maintenance outage in the EGAT power station. They essentially did a 5-year turnaround on one of their gas turbines earlier in the year and the second one in that August, September period. Production is back up over 100 million standard cubic feet per day, and we expect it to be maintained at that level for the foreseeable future. Unknown Executive: Thank you. Another question we have here is, what consideration is being given to testing Mereenie Stairway untapped gas? Richard Beament: So, I think you're referring there to the Mereenie Stairway formation. Look, the immediate priority of the joint venture is to drill infill wells in order to fulfill and essentially support the Northern Territory gas demand. So, those infill wells planned to be drilled into the existing Pacoota reservoir. The Stairway formation continues to be a priority for us. It is something we are keen to drill. The joint venture continues to consider its options in respect of that, whether it can be drilled as part of the campaign later this year or in a subsequent campaign, that's still to be determined. Unknown Executive: Thanks for that. We might just give another 30-odd seconds or so if any final questions come through, please put your questions in the Ask Question box and send them through. I don't think we've received any more questions. So, please feel free to e-mail us any questions you might have at info@horizonoil.com.au. And this concludes our webcast for today. I'll hand you back to the operator. Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.
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