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Operator: Welcome to the Fourth Quarter and Full Year 2025 Harmonic Earnings Conference Call. My name is Michelle, and I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to David Hanover, Investor Relations. David, you may begin. David Hanover: Thank you, operator. Hello, everyone, and thank you for joining us today for Harmonic's Fourth Quarter and Full Year 2025 Financial Results Conference Call. With me today are Nimrod Ben-Natan, President and CEO; and Walter Jankovic, Chief Financial Officer. Before we begin, I'd like to point out that in addition to the audio portion of the webcast, we've also provided slides for this webcast, which you may view by going to our webcast on our Investor Relations website. Now turning to Slide 2. During this call, we will provide projections and other forward-looking statements regarding future events or future financial performance of the company. Such statements are only current expectations and actual events or results may differ materially. We refer you to documents Harmonic files with the SEC, including our most recent 10-Q and 10-K reports in the forward-looking statements section of today's preliminary results press release. These documents identify important risk factors, which can cause actual results to differ materially from those contained in our projections or forward-looking statements. And please note that unless otherwise indicated, the financial metrics we provide you on this call are determined on a non-GAAP basis. These metrics, together with corresponding GAAP numbers and a reconciliation to GAAP are contained in today's press release, which we have posted on our website and filed with the SEC on Form 8-K. We will also discuss historical financial and other statistical information regarding our business and operation, and some of this information is included in the press release. The remainder of the information will be available on a recorded version of this call or on our website. And now I'll turn the call over to our CEO, Nimrod Ben-Natan. Nimrod? Nimrod Ben-Natan: Thanks, David, and welcome, everyone, to our fourth quarter and full year 2025 earnings call. We delivered a strong fourth quarter, reflecting accelerating momentum across our broadband business. This is our first earnings call following the announcement of the pending sale of our Video business to MediaKind. This is a decisive step that will push our growth strategy forward and transform us into what I call the new Harmonic, a pure-play broadband leader. This transaction will simplify our operating model and align all of our resources to unlock growth opportunities in the expanding broadband infrastructure market. With the Video sale expected to close in the second quarter of 2026, all financial and operating results I discuss today reflect our continuing operations, meaning our core broadband business. Turning to Slide 4. Broadband revenue for the quarter was $98.2 million, representing 9% sequential growth and coming in above the high end of guidance. In addition, we delivered record quarterly bookings of $346.9 million, driving a 3.5 book-to-bill ratio. These bookings were fueled by several multiyear contracts, reinforcing both revenue resiliency and long-term customer commitment to our platform, alongside record diversified rest-of-world bookings that will support growth in 2026 and beyond. All of this drove backlog and deferred revenue to $573.8 million at year-end, up 73% year-over-year. The current portion of this alone was $307 million, more than double last year's level, giving us strong visibility and confidence as we enter 2026. In addition to our core Broadband business, our Video business, now classified as discontinued operations, exceeded our expectations in the fourth quarter, both in terms of revenue and profitability. The planned sale of this business to MediaKind for approximately $145 million in cash remains on track. In addition to the strategic benefits, this transaction further enhances our balance sheet and supports a disciplined capital allocation framework focused on investing in growth, maintaining financial flexibility and building long-term shareholder value. A defining theme of 2025 and one that accelerated meaningfully in the fourth quarter is the diversification and expansion of our customer base beyond our 2 largest North American accounts. Rest-of-World revenue, which excludes revenue from these 2 large customers grew 33% year-over-year in the fourth quarter. This now represents 41% of total broadband revenue, a meaningful shift in our revenue mix, underscoring the continuing momentum of our diversification initiatives. We delivered record Rest-of-World bookings in the fourth quarter, reflecting growing adoption of our platform globally and increasing confidence from operators investing in multiyear network modernization. For example, together with Norman Engineering, our longest-standing partner in Europe, we recently marked 20 successful DOCSIS and fiber deployments across the region, including with operators in Austria and Germany. We also announced that Telia, the second largest telecom operator in Norway, is modernizing its broadband network using our virtualized cOS platform in a distributed access architecture. What is very important here is that we are not just seeing one-off wins. Rather, these recent deployments are the result of expanding platform relationships. Customers typically start with an initial deployment such as DOCSIS. And as they standardize on our platform and services, they grow their footprint and expand across our portfolio, adding fiber and our intelligence-driven cloud capabilities. Our fiber business continues to scale rapidly and is an increasingly important growth driver with strong revenue growth in the fourth quarter and for the full year. We are seeing growing fiber wins with both telco and cable operators in North America and internationally. A major highlight is our expanding collaboration with izzi, the largest MSO in Mexico. izzi has selected our COS platform and remote OLT solutions to power a strategic fiber broadband expansion across its network. This multiyear deployment leverages our open ONT strategy, lowering izzi's total cost of ownership while accelerating their fiber rollouts. It is a strong example of how our platform simplifies large-scale fiber transitions. Enabling our fiber market momentum are several new fiber product innovations. We recently introduced a new pluggable combo OLT option, which is particularly attractive for operators executing surgical footprint expansions and serving rural markets in a highly cost-effective way. What is particularly compelling and a key differentiator for Harmonic is how fiber and DOCSIS converge within our cloud-native architecture, allowing operators to efficiently manage both technologies through a unified platform, simplifying operations and lowering total cost of ownership across their entire access networks. Our Unified DOCSIS 4.0 strategy continues to gain traction as the ecosystem matures and operators' confidence builds. Major operators are advancing DOCSIS 4.0 road maps and reporting tangible operating benefits from network upgrades, including fewer service calls and faster repair times. We successfully completed a DOCSIS 4.0 field validation with Vodafone Germany, further reinforcing the maturity of the technology and our leadership in this space. Unified DOCSIS 4.0 node shipments are now ramping with initial deliveries this quarter. We are transitioning from field trials and early deployments to scale commercial deployments, marking an important inflection point for this cycle. Looking ahead, operators are increasingly seeking platforms that help them anticipate issues, optimize performance and reduce operational friction, ultimately lowering operating expenses and improving competitiveness. This creates an extraordinary opportunity for Harmonic to leverage the unique data available through our virtualized cloud platform and provide innovative new intelligence-driven operational solutions. Following the successful introduction of Beacon and Pathfinder, which help customers maximize the speed performance of their networks while minimizing truck rolls, we have introduced new subscriber experience detection capabilities that can identify and mitigate network issues before they generate support calls, directly helping operators reduce churn and lower operating costs. Over time, we expect continued development of this intelligence layer to increase recurring revenue, deepen customer integration, improve margins and expand our addressable market into AI-enabled operations beyond access infrastructure. Turning to Slide 5. Network investment is no longer just about speed. It is about measurable business outcomes. A large North American operator recently highlighted significant reductions in service costs and faster mean time to repair in areas where next-generation DOCSIS 4.0 technology has been deployed. These improvements translate directly into lower operating costs and higher subscriber satisfaction. When operators invest in network quality, the returns show up in reduced churn, stronger loyalty and improved competitive position. Our own commitment to customer success is reflected in our world-class Net Promoter Score of 82 as measured at the end of 2025, underscoring the trust operators place in our platform and our team. Customer success is the foundation of our growth model. Moving to Slide 6. Harmonic wins because we enable operators to scale bandwidth faster, more cost effectively and with improved subscriber satisfaction. Our differentiation is built on technology leadership, speed of execution, improving customer network reliability and solutions that drive lower total cost of ownership. We now have 146 COS deployments in production, serving more than 41 million cable modems and ONUs worldwide. At this scale, the gap between Harmonic and the rest of the market is no longer incremental. It is structural. Our platform brings a decade of production maturity, proven operational consistency and unmatched scale in virtualized broadband and a wealth of real-time network data that is now beginning to be exploited. This is why leading cable and now telco operators are standardizing on Harmonic as they modernize their networks and why we believe there are so many compelling growth opportunities still in front of us. Moving to Slide 7. The broadband market opportunity ahead of us is substantial. According to Dell'Oro, the cable serviceable addressable market is expected to grow from approximately $510 million in 2025 to over $1.1 billion by 2030. What's driving this is that across the industry, broadband operators are accelerating network modernization as data consumption continues to rise at a rapid pace. AI-powered applications, immersive content experiences and multi-gigabit services are driving sustained bandwidth growth and placing increasing performance demands on broadband networks. This investment cycle is not driven by speed alone. Operators are increasingly focused on quality of experience, churn reduction and operating efficiency. Network capability has become a direct driver of customer satisfaction, application adoption and long-term competitiveness. Our share positions remain strong in virtual CMTS, RPDs and remote OLTs with meaningful room to expand. In fiber, the addressable market exceeds $2.6 billion and represents a significant opportunity where our share is growing. Importantly, these market figures exclude the AI operation and tools market, which represents an additional growth vector we have begun to actively target. Turning to Slide 8. Our long-term strategy centers on 4 priorities: first, expanding our market leadership in DOCSIS through continued innovation in COS, remote devices, outdoor nodes and recurring services while accelerating our fiber position with both cable and telco operators globally. Our objective is not simply participation, but category leadership across access architectures, driven by continued investment in innovation and differentiated capabilities. Second, increasing customer diversification. We are targeting sustained Rest-of-World growth of 30% or more annually, expanding beyond our largest North American customers and building a broader, more balanced global revenue base. Third, driving software and cloud differentiation. Our cloud-native architecture and intelligent automation capabilities create opportunities to expand recurring revenue, deepen platform integration and build long-term customer relationships. And fourth, maintaining operational and cost discipline. As a pure-play broadband company, we are simplifying our cost structure and positioning the business to generate meaningful operating leverage as revenue scales. Together, these priorities are designed to expand our addressable market, increase revenue durability and improve our long-term margin profile. Moving to Slide 9. As we enter 2026, Harmonic is well positioned as a focused pure-play broadband innovator, providing market-leading DOCSIS and fiber-to-the-home solutions augmented by an intelligence-driven software layer for automation and subscriber experience to operators worldwide. With the sale of our Video business, we are transitioning to a company fully dedicated to the growing broadband market. This sharpens our strategic focus, simplifies our operating model to a single go-to-market motion and product road map and improves our ability to generate long-term operating leverage as we scale. The transaction also provides us with a significant capital infusion with a stronger balance sheet and incremental cash. We are positioned to invest in organic innovation, expand into adjacent broadband opportunities and pursue disciplined inorganic expansion where it accelerates diversification and market leadership. We believe this combination, leadership in DOCSIS, expanding presence in fiber and a growing intelligence-driven software capability positions Harmonic for accelerated growth and improved long-term operating margins. With that, I will turn the call over to Walter to walk through our financials in more detail. Walter Jankovic: Thanks, Nimrod, and thank you all for joining us today. Before I discuss our quarterly results and outlook, I'd like to remind everyone that financial results I'll be referring to on this call are provided on a non-GAAP basis. As David mentioned earlier, our Q4 press release and earnings presentation include reconciliations of our non-GAAP to GAAP financial measures. Both of these are available on our website. As previously announced, we are in the process of selling our Video business to MediaKind. As a result, this segment is classified as held for sale and reported as discontinued operations. Unless otherwise noted, all results discussed today relate to continuing operations. We've also provided historical information for continuing operations to support your financial modeling and prior period comparisons. The transaction remains on track to close in the second quarter of this year, subject to customary conditions, including the completion of the required consultation with the French Employee Works Council. We closed the year with exceptionally strong quarterly broadband bookings, driving a 3.5 book-to-bill ratio for the quarter and a significant year-over-year increase in backlog. This robust backlog enhances our visibility for 2026 and combined with Unified DOCSIS 4.0 ramps, large customer deployment plans and accelerating rest of world adoption will help drive strong broadband revenue growth throughout the course of this year. On Slide 11, you'll find some of the financial highlights for the quarter. For total company results, including Video discontinued operations, revenue was $157.3 million, EPS was $0.14 and adjusted EBITDA was $23.8 million, all well above our Q4 guidance. For continuing operations, fourth quarter broadband revenue was $98.2 million, above our $85 million to $95 million guidance range with adjusted EBITDA of $12.1 million and EPS of $0.06. These results include $3 million in stranded costs related to the pending Video business sale. The revenue upside reflected strong bookings and service deployments in the quarter. For the fourth quarter, we had one customer representing greater than 10% of total revenue, which accounted for 53% of total revenue. To remind everyone, this metric is now based on continuing operations, which is only our Broadband business. Our Q4 Rest-of-World revenue showed strong year-over-year growth of 33%, representing 41% of total revenue, underscoring our customer diversification progress. As a reminder, Rest-of-World revenue describes all revenue that is not from our largest 2 customers as measured by subscriber count. Starting with next quarter's results, we will refer to Rest-of-World as Rest-of-Market as this name more accurately reflects the grouping of these customers, which can be in any region, including the U.S. Recurring revenue reflected in the services and SaaS revenue line item made up 16% of our total continuing operations or broadband revenue. Moving on to Slide 12. You'll find our fiscal year 2025 actual results. For the total company, net revenue was $570.8 million with a gross margin of 55.8%, adjusted EBITDA of $83.8 million and EPS of $0.47. Continuing operations generated $360.5 million in revenue, a 48.7% gross margin, adjusted EBITDA of $47.3 million and EPS of $0.23. These results include a $2.3 million tariff impact and approximately $9 million of stranded costs related to the pending Video sale. Turning to Slide 13. You can see our balance sheet and cash flow highlights for continuing operations. Our balance sheet remains strong with $124.1 million of cash and cash equivalents at year-end. The sequential change in cash was mainly attributed to positive free cash flow in the quarter, offset by share repurchases. Free cash flow during the fourth quarter was $9.6 million. For the full year, we increased cash by $22.6 million while also repurchasing $79 million in stock during the year. We generated $97 million in free cash flow, which was an increase of $44 million from the prior year, demonstrating strong profitability and cash generation even amid a broadband industry transition to DOCSIS 4.0. Furthermore, given our expectations for progressive and significant full year broadband revenue growth in 2026, we are confident in our ability to expand profit margins and generate free cash flow considering the high operating leverage we have already shown in broadband. DSO at the end of Q4 was 79 compared to 61 in Q3 '25 and 76 in Q4 '24. The sequential increase was due to a large number of shipments that took place earlier in the third quarter. We expect DSO to trend in the high 70s going forward based on our customer mix. Inventory decreased $1 million in the quarter, and our days inventory on hand fell to 83 days from 91 days last quarter. Q4 bookings reached a record $346.9 million, nearly matching all of total broadband revenue for full year 2025, resulting in a 3.5 book-to-bill ratio. At the end of Q4, total backlog and deferred revenue was $573.8 million, up 73% year-over-year. Of that, $307 million or 53.5% is expected to convert to revenue within the next 12 months, an increase of 110% year-over-year. This provides us excellent visibility for 2026 growth. As shown on Slide 14, we believe we have ample liquidity to support our capital allocation priorities with $124 million in cash and $82 million undrawn credit facility and expected net proceeds from the planned Video sale. Additionally, we continue to anticipate a meaningful reduction in our cash income taxes in 2026 due to the passage of the One Big Beautiful Bill Act as well as the impact of Section 174 R&D adjustments. All of this should substantially enhance our capital allocation flexibility. Even as we transform to a pure-play broadband company, our capital priorities remain unchanged: investing in organic growth and diversification, returning capital to our shareholders and pursuing strategic M&A to further enhance growth and diversification in our broadband business. Aligned with our first key priority, we expect to increase our inventory over the next several quarters to support our anticipated growth, including advancing memory purchases to secure supply. We also expect to invest in additional organic broadband opportunities in both our services business and fiber portfolio. Under our expanded $200 million share repurchase program, to date, we have already repurchased $101 million of our common shares, including $13.3 million in Q4 2025 and an additional $21.8 million post year-end. As we stated previously, we expect to fund ongoing repurchases through the strong free cash flow generation over the next several years. In addition, we expect to realize a substantial cash infusion from the sale of Video. This will also position us well to explore additional opportunities, including inorganic options to further diversify and grow our broadband business. Now I would like to briefly discuss stranded costs on Slide 15. These are shared corporate and infrastructure expenses previously allocated across both Broadband and Video that will now reside in continuing operations. We anticipate approximately $10 million in stranded costs for 2026, including $3 million in public company costs. We believe roughly 30% of these are temporary costs and will be removed within 1 year following the closing of the Video sale. Turning to guidance on Slide 16. We lay out our continuing operations non-GAAP financial guidance for Q1 2026 and full year 2026, and we have included an FY 2026 EPS bridge to assist in comparing our continuing operations results to the previous combined Broadband and Video results. Please note, beginning this period, the company will provide guidance on adjusted operating profit before tax basis rather than on an adjusted EBITDA basis. This change reflects our view that operating profit is the more commonly used profitability measure in this industry and provides a more complete and transparent view of our underlying operating performance. Given the company's limited capital expenditures and low depreciation and amortization, the difference between the 2 metrics is minimal. With our 2026 guidance, we're taking a prudent and measured approach on both revenue and margins, considering factors such as the current memory chip pricing and supply dynamics. Built into our full year margin guidance is the current market pricing expected for memory. Now let me walk you through the guidance. For Q1 2026, we expect broadband to deliver revenue between $100 million to $105 million, gross margins between 54% to 55% due to favorable product mix, operating profit between $18 million to $20 million and EPS of $0.11 to $0.12. As our guidance shows, we expect modest sequential broadband revenue growth in Q1 2026 versus Q4 2025, with momentum building considerably as we move throughout 2026. Our Broadband gross margin guidance includes an estimated tariff impact of less than $1 million based on the currently announced tariff rates and exemptions. Operating profit includes stranded costs of approximately $2 million. For the full year 2026, we expect broadband to generate revenue between $440 million to $480 million, gross margins between 51% to 53%, declining from the Q1 levels due to product mix and surging memory costs as they flow into shipments after the Q1 time frame, operating profit between $74 million to $99 million and EPS of $0.46 to $0.63. This full year Broadband gross margin guidance includes an estimated tariff impact of approximately $4 million, while operating profit includes stranded costs of approximately $10 million. Our non-GAAP tax rate in Q1 and full year 2026 is now 24.5% and reflects the higher expected U.S. mix of business in our continuing operations. Regarding the previously mentioned EPS bridge, Video, which, as a reminder, is now classified as discontinued operations, contributed $0.24 in EPS in 2025. Also, in 2026, continuing operations includes $10 million of stranded costs and EPS impact of $0.07. These items provide a bridge to prior total company EPS results and expectations. On Slide 17, we provide some historical context to our continuing operations and our full year 2026 guidance. Revenues are forecasted to grow quite strongly in 2026 between 22% and 33% due to the extremely strong bookings we saw in Q4, combined with Unified DOCSIS 4.0 ramps, large customer deployment plans and Rest-of-Market adoption. 2026 gross margin is projected to increase several hundred basis points due to cOS mix, offset partially by expected higher memory costs. Operating expenses increased primarily due to expanded portfolio investments and the impact of foreign exchange. Again, you can see here our record backlog and deferred revenue level as compared to prior years, which positions us well for growth in 2026 and beyond. We ended the year with strong performance in Broadband and Video, exceeding our expectations. Record Broadband bookings provide excellent visibility for the coming year and revenue resiliency over the long term. As we finish 2025, we are now seeing DOCSIS 4.0 transitions evolve from headwinds to tailwinds, positioning us for accelerated growth as deployments ramp. The Video sale will streamline our operations, strengthen our balance sheet and allow us to focus entirely on our fast-growing broadband business. This will position us well for accelerating our growth and diversification across broadband, both in DOCSIS and fiber-to-the-home to take full advantage of the growing available market. With broadband, with robust demand, strong cash generation and expanding operating leverage, we are confident in our ability to deliver sustained revenue growth, margin expansion and continued strong free cash flow in 2026 and beyond. Thank you for your attention. And now I'll turn it back to Nimrod for closing remarks before we open up the call for questions. Nimrod Ben-Natan: Thanks, Walter. To summarize, our broadband business delivered a strong finish to 2025. Record bookings and substantial backlog growth provide clear visibility into 2026 and beyond. With the pending sale of our Video business, we are well placed to capitalize on this industry's growth as a pure-play leader in the broadband deployment space. Our converged DOCSIS and fiber architecture is proven at scale, enabling operators to deliver multi-gigabit services with higher quality of experience and lower cost of ownership. Fiber continues to accelerate as a major growth engine and Unified DOCSIS 4.0 is transitioning from trials to commercial scale. At the same time, our intelligence-driven software capabilities are expanding our differentiation and extending our addressable market. Supported by strong rest of world momentum and a more diversified customer base, Harmonic will lead the next phase of broadband networks modernization. These dynamics give us confidence in our long-term growth trajectory as DOCSIS 4.0 and fiber deployment scale through 2026 and beyond. That concludes our prepared remarks. Walter and I are now happy to take your questions. Operator: [Operator Instructions] And our first question comes from Simon Leopold with Raymond James. Simon Leopold: I want to start out with how you're thinking about the customer mix for the full year 2026 in that I assume there are a number of moving parts, and it's intriguing to see the rest of world customers getting as big as they did this quarter. So it's a positive, but I imagine we should not make the assumption that they remain at 40% of revenue for the full year. So I'd love to get your thoughts on how 2026 assumptions might be broken down by major customers versus rest-of-world. Walter Jankovic: Simon, it's Walter. Maybe I'll address that here first. So with regards to 2026, the comments we made today around Rest-of-World and the expected continued growth at 30% plus is one of the factors in looking at the absolute growth of that contingent of customers. Obviously, from quarter-to-quarter, depending on what the largest customers spend, the percent will vary. However, over the long term, with the expectation around this year's growth and continued growth in rest of market customers, we expect that metric to continue moving north. However, as you look at quarter-to-quarter, you will see it move up and down based on what the other customers are doing in terms of the larger customers. Simon Leopold: Okay. And you've given us quarterly guidance, full year guidance on gross margin. I just want to sort of do a sanity check on my arithmetic in that it sounds like you're expecting some COGS hit from memory to basically start contributing in the second quarter. My rough estimate is something like 300 basis points, which sounds similar to what we've heard from others. But is that kind of the right magnitude of how to think about it? Walter Jankovic: Here's what we've assumed based on the very dynamic situation around memory pricing today. We've built in around a net $6 million impact as a result of the pricing that we see today. We have committed orders out there for the supply that we need in 2026. And the pricing on that is generally fixed to some degree, it could move. So we've built in a certain factor there in terms of the margin impact solely from the price element of memory. And as I mentioned, we have already have committed all of the supply we need for 2026. Now one of the factors beyond margin that I would like to highlight and mention, and it kind of reflects back to the comments I made with regards to the full year guidance and being prudent about it is that there's always risk that some of those deliveries that are committed get delayed, which could impact your timing of your revenue or there could be impacts to our customers' ecosystem from other products out there that could have a knock-on or indirect effect on delivery schedules later in the year. So that's why we've taken a more prudent view of our guidance for the full year. But specifically with regards to the pricing of memory, we've got a pretty good handle of where it is right now, and we've built that in based on looking at the net impact. And when I say net on the $6 million, it's net of what we expect from customer recoveries in terms of additional price adders. Simon Leopold: Maybe one last value that maybe you've given us and I haven't found it yet. But I'm just trying to figure out in 2025, what would be the sort of other customers, Rest-of-World customers' Broadband purchases. So we know total company. I'm trying to figure out what they did in the Broadband segment. Walter Jankovic: For -- yes... Nimrod Ben-Natan: I think you can -- $130 million and a change. Walter Jankovic: $130 million. Yes, that's right. Nimrod Ben-Natan: $138 million. Walter Jankovic: $138 million as compared to 2024 at just under $95 million. Operator: Our next question comes from Ryan Koontz with Needham & Company. Ryan Koontz: Nice quarter and outlook, guys. With regards to the big bookings step-up you saw here in Q4, maybe can you discuss customer behaviors there that drove kind of change in behavior and a little bit about the composition there as it relates to maybe the difference between your larger customers and some of your rest of market customers within that backlog? Walter Jankovic: Ryan, it's Walter. Yes. Maybe I'll kick it off and Nimrod can add some more color to it. But just in terms of the bookings there in Q4, the way I would categorize it, it was very strong in rest of world. So the dynamics of both larger customers as well as the rest of world were strong. We had some bookings that are multiyear bookings included in there, but you have the current metric there as well in terms of how much of that backlog is going to be -- expected to be turned into revenue over the next 12 months. And certainly, customers are putting their orders in sooner. We're getting more visibility, and we're pushing our teams to get that level of visibility so that way we can ensure that we're ordering appropriately in terms of getting our supply chain ready for the growth. Ryan Koontz: Great. And maybe a follow-up, if I could, on the margin outlook within Broadband. What do you -- what's your perspective there on kind of increasing mix of software? Is that one of the tailwinds you're seeing as it relates to the step-up in gross margins for '26? Walter Jankovic: Yes, Ryan, absolutely, it is the step-up of the cOS mix for 2026, which is helping to drive that. Obviously, we're scaling up and also scaling broader customer set. So those are all things that are tailwinds. One of the headwinds, as explained on the prior question with regards to memory, that's a headwind for us in terms -- and has been factored into the overall margin guide. Nimrod Ben-Natan: And maybe one more comment on the licenses. Historically, we had quarters in which we delivered more hardware versus software. And one of the indicators you see now is increase in our connected modems and ONU. When customers are connecting subscribers, this is typically when there is more cOS licenses being recognized. Ryan Koontz: And is that a factor of -- what's driving that higher connectivity rate? Is it just customer rollout? Or is there some changing behavior? Nimrod Ben-Natan: Yes. It's a ramp-up of production. Sometimes it takes longer to go through integration phase. We announced quite a few new customers over the course of '25. So as we get into end of '25 and '26, you see more of them starting to connect subscribers. Operator: Our next question comes from George Notter with Wolfe Research. Taran Katta: This is Taran on for George. I just want to confirm, you said $6 million in cost net of pricing actions, correct? And if so, what sort of pricing actions do you guys plan on taking with your customers? Walter Jankovic: Well, it's -- Taran, it's Walter here. Specifically, the net is, as you -- just to confirm the number, it's $6 million net that we've built in there. And the pricing actions have to do with certain products that obviously have higher memory content in it and rolling out those actions. I won't get specific about the nature of those, but obviously, this is a significant impact across the industries, and it's impacting a lot of different vendors out there. So I'm sure you've heard very similar from them as well. Operator: And our next question comes from Steven Frankel with Rosenblatt Securities. Steven Frankel: I wonder if you might characterize the bookings in the quarter. How significant was that ROW contribution to the total? Or did you also have significant bookings from your 2 key customers in Q4? Walter Jankovic: Steve, it's Walter. It was a mix of both, to be honest, well spread out between larger customers as well as Rest-of-World. And you saw today in our commentary in terms of the expectations of Rest-of-World growth at 30% plus. So that's helping us have the level of visibility and confidence around that continued growth trajectory. Steven Frankel: Okay. And then on memory, maybe in these products that are more memory intense, typically, what percent of the BOM does memory represent? Walter Jankovic: As compared to other products in the industry outside of what we specifically do, I think we'd fall in the category of the lower end of the spectrum as compared to high memory count. Like, for example, if you look at CPE type of equipment, customer prem equipment, modems, that would have a much higher memory content BOM in the product versus the products we do. But nonetheless, it does have an impact, and that's why we made the comments we did. Steven Frankel: Okay. And one more quick one. In the revenue breakdown of SaaS and service, if you look at that $58 million in '25, could you give us a rough idea of what maintenance was of the $58 million? Walter Jankovic: It was the large majority in terms of SLA contracts, but included in there under the SaaS umbrella are the features and functionality that we're also selling out to customers and very much a focused area of growth. And Nimrod mentioned it earlier in his opening remarks in regards to investments we're making around tools and the intelligence on the network. So maybe, Nimrod, you'd like to comment further on that. Nimrod Ben-Natan: So that's a component of that. It's a growing component, and we expect that to grow into '26 and beyond. And that's also an area of an investment, whether organic or inorganic. We see that as, number one, very critical for our customers. Number two, very beneficial for our business given the recurring nature of that. Steven Frankel: And were any of the multiyear agreements you talked about in the quarter kind of more software focused on these new value-added offerings? Or are these new customers that are securing a multiyear view into nodes and associated software? Nimrod Ben-Natan: There was a mix in the booking. There was a mix of hardware and software as well as our tools. When we publicly talk about tools and more recently, intelligence, these are kind of the categories that we talked about. There was a mix of all of the above. Operator: I'm showing no further questions at this time. I'd like to turn the call back over to Nimrod for any further remarks. Nimrod Ben-Natan: Thank you. We appreciate your continued interest in Harmonic and look forward to updating you on our progress in the future. Thank you all for joining the call. Have a good day. Operator: Thank you for your participation. You may now disconnect. Good day.
Operator: Good afternoon, and welcome to Savers Value Village conference call to discuss financial results for the fourth quarter ending January 3, 2026. [Operator Instructions]. Please note that this call is being recorded, and a replay of this call and related materials will be available on the company's Investor Relations website. The comments made during this call and the Q&A that follows are copyrighted by the company and cannot be reproduced without written authorization from the company. Certain comments made during this call may constitute forward-looking statements, which are subject to significant risks and uncertainties that could cause the company's actual results to differ materially from expectations or historical performance. Please review the disclosure on forward-looking statements, including in the company's earnings release and filings with the SEC for a discussion of these risks and uncertainties. Please be advised that statements are current only as of the date of this call. And while the company may choose to update these statements in the future, it is under no obligation to do so unless required by applicable law or regulation. The company may also discuss certain non-GAAP financial measures. A reconciliation of each of the historical non-GAAP measures to the most directly comparable GAAP financial measure can be found in today's earnings release and SEC filings. Joining from management on today's call are Mark Walsh, Chief Executive Officer; Jubran Tanious, President and Chief Operating Officer; Michael Maher, Chief Financial Officer; and Ed Yruma, Vice President of Investor Relations and Treasury. Mr. Walsh, you may go ahead, sir. Mark Walsh: Thank you, and good afternoon, everyone. We appreciate you joining us today. We are very pleased with our fourth quarter results. We delivered our anticipated inflection in earnings, posting our first quarter of year-over-year adjusted EBITDA growth in nearly 2 years, supported by profit contribution gains in both countries. We are also thrilled with the momentum in the U.S., where thrift adoption continues to accelerate and strength remains broad-based across categories and regions. Before we look towards the compelling growth opportunities ahead, let me start with a few highlights from the quarter. Sales in our U.S. business grew 20.6%, or 12.6% when excluding the benefit of the 53rd week, with comps up 8.8%, driven by both transactions and average basket. We attribute this performance to accelerating consumer adoption of thrift and stellar execution by our team, delivering compelling value to consumers. In Canada, our sales trends have stabilized with a 0.7% comp during the quarter. As we take a conservative approach to planning our business in Canada, we have tightly managed production levels, helping us drive year-over-year segment profit growth. We opened 10 new stores in the quarter, finishing the year with 26 openings. As a class, our new stores continue to perform in line with our expectations. We remain confident in our long-term store growth opportunity and a targeted 20% store level contribution margin. Financially, we generated over $74 million of adjusted EBITDA in the quarter or 15.9% of sales. Looking at our loyalty program, we have 6.1 million total active members. As it relates to pricing, we are monitoring trends closely. We feel very good about our competitive positioning and value gaps as new clothing and footwear prices continue to increase in the U.S. Finally, we are pleased to announce our outlook for 2026, and Michael will provide further additional details on our outlook in his remarks. Turning to our results by geography. The U.S. business continues to shine. Our 8.8% comp was driven largely by mature stores with minimal contribution from new stores that are only now beginning to enter the comp base. We are also seeing our customer base continue to skew younger and more affluent. As we shared at ICR, based on our loyalty program data, roughly 40% of our U.S. shoppers are under the age of 45 and about 45% of the household income above $100,000. These trends reinforce the powerful secular shift towards thrift in the U.S. At the same time, attractive real estate opportunities supported by our off-site processing capabilities continue to strengthen our confidence in the long runway for disciplined square footage expansion. In Canada, macro conditions remain largely unchanged. And with a mature market, we continue to plan the business conservatively, which is reflected in the modest growth we saw again this quarter. That said, trends have stabilized and our disciplined approach to managing production allowed us to grow our Canadian segment profit during the quarter. As we significantly slow new store openings and focus on operating more efficiently, we expect margin expansion in Canada and for our Canadian business to continue to be a meaningful contributor to free cash flow. Moving on to new stores. We continue to be pleased with the results, and they are performing in line with our expectations. As I previously noted, our inflection in profitability was in large part driven by the on-plan maturation of new stores, and we believe we can expand our store fleet in the U.S. at current rates over the years to come. We opened 10 new stores during the quarter, bringing our total to 26 new store openings for 2025. For 2026, we are planning to open around 25 new stores. And as a reminder, we're expecting over 20 of those openings will be in the U.S., including expansion in new markets in North Carolina and Tennessee. To this end, we are pleased to be planning store openings across 11 states and a nice mix of infill and new markets. Store growth remains the highest return and most important use of our capital, and we are excited to bring our value offering to more consumers. Shifting now to innovation, which remains a core part of Savers' DNA. At ICR, we introduced ABP Lite, an asset-light extension of our automated book processing or ABP system. We expect returns comparable to our existing ABP system, and we expect that ABP Lite can bring capabilities to roughly 85% of the fleet by the end of the second quarter. We are also investing in proven in-store efficiency initiatives to help offset cost inflation, including autonomous floor scrubbers and AI-enabled HVAC integration. Our innovation agenda continues to focus on 3 key areas: strengthening our price value equation, driving efficiency and cost reduction, and lastly, expanding our data science and business insights. I look forward to sharing more in future quarters. I would like to close by reflecting on another year of meaningful progress since our IPO. At ICR, we outlined 3 strategic pillars for long-term value creation: growth, innovation and capital allocation. In 2025, we made meaningful progress on all 3 of these pillars. Our new stores are maturing as expected and help drive our inflection point with a return to growth in both segment contribution and enterprise adjusted EBITDA. We also continue to advance our innovation agenda, sharpening our price value equation and driving labor efficiency with the initiatives I mentioned earlier a strong example. And we put in place a new capital structure that reduces annual interest expense by $17 million and provides flexibility for continued debt reduction. I'm incredibly proud of the execution from our nearly 24,000 team members and grateful for all of their hard work throughout 2025. Their efforts strengthen our business and helped us deliver on our commitments to shareholders. We are as energized as ever to continue expanding our footprint and bringing our value proposition to more consumers as thrift adoption grows. Our mission is to make secondhand second nature, and we believe that we are well positioned for continued success. I'll now hand the call over to Michael to discuss our fourth quarter financial performance and the outlook for 2026. Michael Maher: Thank you, Mark, and good afternoon, everyone. As Mark indicated, we had a strong fourth quarter. Total net sales increased 15.6% to $465 million. Excluding the benefit of the 53rd week, total net sales increased 8.4%. On a constant currency basis, net sales also increased 8.4% and comparable store sales increased 5.4%. We are especially pleased with our sales results in the U.S., where net sales increased 20.6% to $266 million. Excluding the benefit of the 53rd week, net sales increased 12.6%. Comparable store sales increased 8.8%, fueled by both transactions and average basket with broad-based gains across categories and regions. We believe we're still in the early innings of thrift adoption in the U.S. and are eager to accelerate expansion in markets where we are significantly underpenetrated. We also saw stability in Canada, where net sales increased 9.1% or 3.1% when excluding the benefit of the 53rd week. On a constant currency basis, Canadian net sales increased 3% to $156 million and comparable store sales increased 0.7%, driven by an increase in average basket. In the near term, we do not assume any material improvement in the Canadian economy, and as such, we'll be planning our Canadian business conservatively. However, as Mark mentioned, we do believe that we can still expand segment margins and grow profit contribution even with roughly flat comps through strong execution, efficiency gains and the continued maturation of our new stores. We will also significantly decelerate store openings in Canada, which will provide a benefit to segment margins. Cost of merchandise sold as a percentage of net sales increased 30 basis points to 44.6% due to the impact of new stores, partially offset by comp leverage and associated growth in on-site donations. Salaries, wages and benefits expense was $93 million. Excluding IPO-related stock-based compensation, salaries, wages and benefits as a percentage of net sales increased 90 basis points to 19.2%. The increase was driven primarily by new store growth, an increase in annual incentive plan expense and higher wage rates. Selling, general and administrative expenses increased 8% to $99 million, primarily due to growth in our store base. However, as a percentage of net sales, SG&A decreased 150 basis points to 21.4%. Excluding impairment and contingent consideration charges in the prior year, SG&A as a percentage of net sales was roughly flat. Depreciation and amortization increased 32% to $22 million, reflecting investments in new stores, the impact of the extra week and accelerated depreciation on 7 stores that we closed during the quarter. Net interest expense decreased 8% to $14 million, primarily due to the impact of our recent debt refinancing, partially offset by the impact of the extra week. GAAP net income for the quarter was $22 million or $0.14 per diluted share. Adjusted net income was $24 million or $0.15 per diluted share. Fourth quarter adjusted EBITDA was $74 million, and adjusted EBITDA margin was 15.9%. U.S. segment profit was $60 million, an increase of $11 million, primarily due to increased profit from our comparable stores and new store productivity progression. Canada segment profit was $43 million or up $4 million due to favorable comparable store and new store performance. This acceleration of profit growth in both countries reflects the fact that new stores continue to perform in line with our expectations and mature on schedule as their contribution ramps. Our balance sheet remains strong with $86 million in cash and cash equivalents and a net leverage ratio of 2.5x at the end of the quarter. As previously announced, we repaid $20 million of debt during the quarter and also repurchased 1.1 million shares at a weighted average price of $8.75. This speaks to the power of our model, which enables us to organically fund new store growth, repay debt and repurchase shares, consistent with our capital allocation strategy. Our strong cash flow generation will enable us to further deleverage our business as we target a net leverage ratio of under 2x within the next couple of years. I'd like to now turn to our guidance and discuss our outlook for fiscal 2026, which we believe reflects the momentum in our business as well as an inflection in our earnings. I'll start by providing some important context for our outlook. First, we're at an inflection in our long-term growth strategy, and we're expecting adjusted EBITDA growth in 2026 with roughly flat adjusted EBITDA margins. This reflects the continued maturation of our new stores, some of which are now entering their third year of operations. As we build our pipeline over the next few years, we expect continued improvements in profitability with a long-term target of high teens adjusted EBITDA margins. Second, adjusted EBITDA and EBITDA margins continue to reflect significant preopening expenses, which we estimate will be approximately $14 million to $16 million in 2026, consistent with 2025. We've made good progress on the consistency and flow of our real estate pipeline. We expect new store openings to be reasonably balanced between the first and second half of the year, with most occurring in the second and third quarters, whereas 2025 openings were concentrated in the third and fourth quarters. As a result, preopening expenses will be more front-loaded than last year. Next, consistent with our long-term financial algorithm, we're taking a conservative approach to planning comparable store sales growth, assuming mid-single-digit comp performance in the U.S. and flat to low single-digit comps in Canada. We are assuming no material change in the U.S. or Canadian economies in 2026. We expect modest improvement in gross profit margins as new store headwinds abate and we continue to drive efficiencies in store and off-site processing. We also expect modest operating expense leverage as our IPO-related stock-based compensation will fully run off by the end of the first half of 2026. We expect to recognize approximately $8 million of IPO-related stock-based compensation expense evenly split between Q1 and Q2 of 2026. Excluding noncash items, we expect slight operating expense deleverage due to new stores, roughly offsetting gross margin expansion. As it relates to Canada, our outlook for 2026 is based on an estimated exchange rate of USD 0.72 per Canadian dollar. Also, in 2026, we will be lapping a 53-week fiscal year that will be approximately a 2% headwind to total sales growth. There's no impact on net income, adjusted net income or adjusted EBITDA. Additionally, there's no impact on comparable store sales growth, which is reported on a like-for-like 52-week basis. With that context in mind, our full year outlook for 2026 includes the following: net sales of $1.76 billion to $1.79 billion; comparable store sales growth of 2.5% to 4%; net income of $66 million to $78 million or $0.41 to $0.48 per diluted share; adjusted net income of $73 million to $85 million or $0.45 to $0.53 per diluted share; adjusted EBITDA of $260 million to $275 million; capital expenditures of $125 million to $145 million; and roughly 25 new store openings. Our outlook for net income assumes net interest expense of approximately $50 million and an effective tax rate of approximately 28%. For adjusted net income, we're assuming an effective tax rate of approximately 27%. We are projecting weighted average diluted shares outstanding to be approximately 163 million for the full year. This does not contemplate any potential future share repurchases. Finally, I'd like to briefly touch on our expectations for the first quarter, which is our smallest in terms of both revenue and adjusted EBITDA due to normal seasonal patterns. Q1 has limited new store openings and reflects the impact of an earlier Easter, including store closures in Canada on Good Friday. And as previously noted, preopening expenses will be higher in Q1 this year than last year. Based on these factors, we expect mid- to high single-digit total revenue growth in the first quarter with adjusted EBITDA roughly flat to slightly up compared with last year. We also expect the cadence of earnings through the balance of the year to resemble 2025. This concludes our prepared remarks. We would now like to open the call for questions. Operator? Operator: [Operator Instructions] Your first question comes from Matthew Boss of JPMorgan. Matthew Boss: Congrats on a nice quarter. So Mark, could you speak to the progression of same-store sales that you've seen post holidays in the U.S., just maybe relative to the momentum that you saw in the fourth quarter? How best to think about comp trends in the first quarter relative to the mid-single-digit guide in the U.S. for the year? Michael Maher: Matt, it's Michael. I'll go ahead and take that. So yes, we have continued to see, for the quarter, good momentum in the U.S. Certainly choppy, you're aware of the significant storm there towards the end of January. That definitely disrupted our business in the U.S. We saw similarly severe weather in Canada in January. But thus far, we've seen a nice rebound in February. So for the quarter-to-date, we're continuing to see strength in the U.S., and Canada remains up slightly. So essentially feel good about that relative to the directional guide we've given for Q1. Matthew Boss: Great. And then maybe just a follow-up on stores. So with the acceleration in the pace of new store growth in the U.S. for this year, could you elaborate on new store productivity, maybe what you're seeing, and just expected returns on new stores in the U.S. Michael Maher: Yes. So we continue to be very pleased. New stores progressing in line with our expectations. Really no change there, Matt. I think we've outlined now the overall new store economics averaging around $3 million in sales in the first year, ramping up to around $5 million by the fifth year, again, unprofitable in that first year, but typically breakeven or better by year 2 and something close to 20% contribution margin by year 5. So nothing in the recent openings has changed our view on that. Continue to feel good about that. Operator: Your next question comes from Brooke Roach of Goldman Sachs. Brooke Roach: What are your latest thoughts on pricing, particularly as the industry has raised prices in recent months? Are you seeing any opportunities to lean into specific areas of market share gains by letting price gaps widen in specific categories? And is this driving additional trade-down customer traffic to your stores, particularly in the U.S.? Mark Walsh: Thanks, Brooke. Look, I think as we've talked about in the past, we continually monitor our pricing relative to competition. And obviously, our core objective is to deliver a compelling price value relationship. If others do raise price, we do think it's an opportunity for us to gain share, absolutely. But we also target price increases to aggregate a little under inflation, which 2025 is a good example. We do think we're gaining some share with what is a small but growing price differential relative to what we see in discount retail. Brooke Roach: And then just as a follow-up, Michael, can you help us walk through the puts and takes of the inflection back to gross profit margin expansion that you expect in 2026? Are there any other particular geographical or comp considerations on that, that we should be considering? Michael Maher: Brooke, yes, so first of all, I just would emphasize, it's going to be relatively modest. I mean, as we talked about our EBITDA margins, we're expecting something roughly flat, and that's a modest gross margin leverage, modest OpEx deleverage. I think the biggest thing, obviously, is the maturation of new stores. And so as you think about the fact that our new store growth now is shifting to the U.S., and we really are not going to have a whole lot of new openings, a low single-digit number in Canada, combining that with our efficiency initiatives there, you saw in the fourth quarter that even on a very low comp, we were able to drive contribution growth in Canada, essentially hold contribution margin flat there. We think we have an opportunity to really drive continued margin improvement in Canada even on relatively low growth. Operator: Your next question comes from Mark Altschwager from Baird. Mark Altschwager: I guess, first, with the comp trends you're seeing, can you give us a sense of the trends with the need-to-shop-thrift customer versus the want-to-shop-thrift customer? And then separately, just any color on regional trends within the U.S. And as we think about the growth outlook this year for comps and new stores, what you're most excited about? Mark Walsh: Well, from a consumer perspective, as we talked about at ICR, Mark, we're really excited about what are 2 really important underlying trends for us, the continued growth of our younger customers and the continued growth of more affluent customers or trade down. That is a big win for us. It's a big win from a value perspective. And I think what you're seeing is they're drawn to what is a well-merchandised environment with a terrific price value proposition. Jubran Tanious: Yes. And Mark, this is Jubran. On your question on geography, really no distinction. I mean, we see it across the country, a variety of different markets, different geographies. We see it across very mature stores, and we certainly see growth, transaction growth and sales growth in younger stores as well. So it's pretty encouraging, seeing broad-based growth. Mark Altschwager: And maybe just a follow-up for Michael. Now that we've hit this inflection point in the business in terms of profitability, how should we think about the goal for annual margin leverage on a low to mid-single-digit comp, high single-digit revenue growth? Michael Maher: Yes, Mark, I think as we said, so this year, expecting margins to be roughly flat, and that is an inflection in terms of the profit dollars. We do expect profit margin to follow. And as our new store pipeline continues to mature, we just have stores entering their third year now as we go forward and have stores filling out the fourth and fifth year of that pipeline and continuing to work toward that 20% business contribution, we expect not only a continued tailwind to profit dollars, but to profit margins toward our long-term algorithm goal of high teens. So we do expect further build in that as we go forward. Operator: Your next question comes from Dylan Carden of William Blair. Dylan Carden: Michael, just a point of clarification. So you gave the first quarter flat to slightly up EBITDA margin. Is that kind of the outlook for the balance of the year? It sounded like you said it would be linear? Or do you simply mean it would follow sort of similar seasonality? Can you just unpack some of those comments about what to expect as far as the cadence of them? Michael Maher: Sure, Dylan. Let me just clarify, first of all, Q1 is flat to slightly up EBITDA dollars. I want to be clear about that, not margin. And just to give a little more color on that, we do expect our business contribution to grow. However, we've got some timing issues in Q1 this year relative to last year. We've got -- preopening expenses are more front-loaded because our new store openings are more even across the year. That's a good thing. We've been working toward that, but it does have that implication in terms of the timing of those preopening expenses. And we've got the earlier Easter, meaning we've got some store closures in Canada on Good Friday, which will negatively impact our comp there by a little less than 1 point for the quarter. And so those 2 things are going to weigh on our Q1 EBITDA dollars. After that, we expect the flow, not necessarily that it's flat every quarter, but that the overall cadence and shape of the earnings will resemble 2025. Does that make sense? Dylan Carden: Yes. I appreciate it. And then if not price, can you just unpack kind of the drivers behind basket being up? I don't know if that sort of speaks to customer behavior or what type of customers are in the store, but that would be helpful. Mark Walsh: Yes. Look, I think it's really about transactions in both countries. The U.S., the business and the comp was driven principally by transactions. Obviously, there's a mix of price and UPT in the basket composition. And in Canada, a lot of the stability was led by the increase in transactions as well. So really, really balanced and like the trend in both countries. Dylan Carden: And then just to confirm, the stimulus that everyone is kind of anticipating here on the tax refund, that's not embedded in the expectations here? Are you seeing any kind of early signs that, that might be happening? Any comment there would be helpful. Mark Walsh: It's not embedded in our expectations. We do historically see activity in our business related to the timing of government payments to consumers such as tax refunds, stimulus checks. And look, any time our customers have more money in their pocket, that's good for business. Momentum is strong. We think we'll get our fair share as that occurs. Operator: Your next question comes from Bob Drbul of BTIG. Robert Drbul: Just a couple of quick questions. On the new markets, can you talk a little bit about supply in the new markets or any surprises that you're seeing? And then I guess the other question that I have is largely around the plan for new stores. Have there been any sort of changes to, I guess, the backlog of the new store plan or the new store opening schedule? Jubran Tanious: Bob, this is Jubran. I can take that and the guys can jump in with additional color. So in terms of the new markets, you're absolutely right. Mark referenced that in his opening comments. Really, the majority of our new stores, starting this year, in 2026, 20-plus openings are going to be in the U.S. Pretty excited about the mix. It's a nice mix of both infill and greenfield markets. So in total, we're talking about opening stores in 11 different states. Very excited about our foray into North Carolina and Tennessee. When we think about supply, the first thing to know, and we've said this on previous calls, is that we will not open a new store unless we feel good about that supply equation. And the cornerstone of that is the on-site donation. So these specific locations that we're looking forward to opening, we think they set up very well in terms of a robust on-site donation growth, which we expect to continue to grow for many, many years, just like we see in our mature stores. So that's the first thing to start with. In terms of the delivered supply, we have a number of different tools in our tool belt. We talk about GreenDrop, we talk about all the different ways in which you can collect supply, and we participate in all of them. So it's always market specific. We're always looking ahead. But in terms of any concerns around supply feeding these new stores with their OSD performance and then attractive cost-effective delivered supply to make up the balance, no concerns there. In terms of the second part of your question, backlog, not really. We continue to get really great traction in the tone and tenor of the conversations that we're having with landlords as they see thrift as part of their mix. I think Michael talked about this earlier where we've been working for a couple of years now to get those new store openings feathered across the quarters in a more balanced way, and we've made progress on that each and every year. We'll make more progress on that in 2026. So that's really the goal from an execution perspective is to get that kind of balanced out. Operator: Your next question comes from Peter Keith of Piper Sandler. Alexia Morgan: This is Alexia Morgan on for Peter Keith. Given the typical margin drag associated with new store openings, what gives you confidence in your ability to drive EBITDA margin expansion looking longer term over the coming years while keeping unit growth steady. Are there any specific efficiencies we should be considering that might offset that new store pressure? Michael Maher: Yes. Thanks, Alexia. The biggest thing is the continued maturation of new stores. It's almost a math equation, right? As they continue to develop and grow profitability toward a mature store level, and as we fill out that pipeline and with stores entering their third, fourth and fifth years, we just start to get more offsetting tailwind, more momentum to counteract the impact of the 25 or so new stores that we'll open in any given year. And if you want sort of a near-term proof point of that, if you just look at Q4 and what we did in both countries, frankly, we grew EBITDA, and we actually held EBITDA margin on a business contribution level at least. And that was including in Canada on what was just a little bit above a flat comp. And so that just speaks to the fact that as the new stores continue to mature, that's starting to provide a meaningful tailwind to us as we go forward. By the way, that's not reflecting all kinds of other things we're working on in terms of the innovation agenda around, again, price value equation, cost efficiency and so on that we think can provide additional longer-term benefits. Alexia Morgan: Okay. And then just one more on sales. So U.S. performance was really good. Could you elaborate on the specific drivers of that acceleration and then perhaps give more detail on what informs your Canada forecast going forward? Mark Walsh: In the U.S., look, it's a lot about the secular trend continuing and terrific selection and value and an exceptional brick-and-mortar experience for thrifters. And I think the 8.8% comp is that evidence. The things that we're really excited about in the U.S. in terms of the momentum is, as I stated before, the continued increase in the younger customer and the higher household income customer and transactions and basket drove comps. And I think the other thing that's really exciting about the U.S. momentum is that our new stores are resonating, and we see a lot of momentum from that as well. Michael, do you want to handle the second half of that question? Michael Maher: Yes. So Alexia, you asked about the assumptions behind our Canadian comp plan. So we're planning very conservatively for Canada, something in the flat to low single-digit comp level for the year. And that's pretty consistent with what we've seen both in the fourth quarter and thus far in the first quarter. I think it's a reflection of an economy that appears to have broadly stabilized, albeit at certainly a weaker level than what we see in the U.S. And we're planning our business accordingly. We're not assuming any material change in that in the near term. Mark Walsh: But to add to Michael's comments about Canada, fourth quarter was another step forward. And I think it's indicative of our expectations around Canada moving forward with that increased segment profit growth in a modest comp environment and generating nice strong free cash flow. Operator: Your next question comes from Owen Rickert of Northland Capital Markets. Owen Rickert: We've seen a lot of commentary lately about consumers leaning pretty heavily into thrift for holiday gifting. I guess, based off what you saw in 4Q, strong quarter, obviously. But do you think that behavior is pretty sticky and could potentially carry over to other major holidays and seasonal moments maybe throughout the year? And then maybe secondly, anything you can just share on how holiday shopping patterns this year compared to prior years? Mark Walsh: I'll answer the sticky question. I think overall, what we're seeing with thrift adoption and with our own loyalty database is a very low attrition rate. Once we sign people up and get them into our family, they love the experience, they love the value we're providing. So our attrition rates are exceptionally low. And I think that speaks volumes about the stickiness. On the Q-over-Q... Michael Maher: Yes, Owen, I guess, I just think this is the second consecutive year that we've seen the strongest comp of the year in the fourth quarter for the U.S. So it's hard for us, obviously, to parse all the motivation behind that. But I do think it's consistent with that sort of broader consumer adoption and the acceptance of thrift, including for gifting. And I think we also see it in terms of sort of some of the more giftable categories in the hard goods that you might think about toys, for example, or jewelry continuing to outperform. So I certainly think it's consistent with that thesis. Operator: Your next question comes from Jeremy Hamblin of Craig-Hallum Capital Group. Jeremy Hamblin: I'll add my congratulations on the strong results and hitting that inflection point on profitability. I wanted to start actually on that point about EBITDA drag, which you called out roughly $10 million of hit to EBITDA from new store openings and kind of the impact of those first couple of years. As you're getting through the maturation of the '23 and '24 class of stores, can you give us a sense of what the EBITDA drag will look like in '26? And then as you start hitting, let's call, that tailwind effect that's going to happen as those stores get into years 4, 5 and beyond. Can you give us a sense for what that might be as a help to 2027? Michael Maher: Jeremy, thanks. It's Michael. Yes, it's really not a drag anymore. As we've said now for a while, we expected by '26 that drag to become a tailwind, and it is. It's a modest tailwind this year, because we really only started opening stores in earnest just over 2 years ago, it was sort of second half of 2024, not even really 2 years ago. And so we have these stores now just beginning to enter their third years and that is allowing that net year-over-year impact to be slightly positive this year relative to 2025. And the size of that tailwind, we expect to continue to grow as those stores enter years 4 and 5 and so on. So not ready to guide with any specificity for 2027, other than just to say, as we have for a while, over the longer term, we do expect both EBITDA dollars and margin to grow as the new stores, as that pipeline continues to fill up. And our long-term target remains an EBITDA margin in the high teens. Jeremy Hamblin: Great. And then just my other question. You got some noise related to having a 53rd week in '25. As we think about Q4 in '26, can you just help us understand a little bit of what you think the implications might be on SG&A in particular in Q4 year-over-year and then kind of salary, wages and benefits. Michael Maher: Yes. Well, I guess maybe the way to think about that, Jeremy, is that the fourth quarter impact of giving back that 53rd week, obviously, it's especially pronounced there, 6 or 7 points, give or take, in the fourth quarter. But we also lose that extra week of salary and benefits and cost of merchandise sold in SG&A, and that's why there really isn't much, if any, impact on the bottom line. So it just roughly neutralizes. Operator: Your next question comes from Anthony Chukumba of Loop Capital Markets. Anthony Chukumba: So you guys have talked a lot about the fact you have very high brand recognition in Canada. I was just wondering, I guess, what's that comparable number? I want to say it's like over 90%. What's that comparable number in the U.S.? And then how has that changed over like the last year? Mark Walsh: Look, I think every U.S. market is different. As we've talked about, Anthony, the supply and demand comes from within a 10- to 12-mile radius. I think in our more mature stores, we've got very strong but unquantified brand recognition. And in new markets, we're gaining rapidly as we see in the performance of those new stores. Anthony Chukumba: Got it. And then just one last quick one. Have you seen any shifts in terms of source of supply like between in-store versus GreenDrop versus delivered by the nonprofit, anything notable there that you've seen? Jubran Tanious: Anthony, it's Jubran. Short answer is, no, we haven't. I mean the one thing that we have seen is, of all the different sources of supply, we like the on-site donation for its quality and its cost, and we like our execution on that. We're seeing, across all 3 countries and across the regions within those countries, good robust on-site donation growth. In terms of the composition of the donation or the nature of the supply, no, not really seeing any changes there. Just that we kind of make our own weather when it comes to growing on-site donations. It's totally within our control. We expect it to grow again this year in 2026 and for years to come. Operator: There are no further questions at this time. I would hand over the call to Mark Walsh for closing remarks. Please go ahead. Mark Walsh: Just want to say thank you to everyone for their time and their interest today in Savers Value Village, and we look forward to speaking to you after our next quarter. Thank you. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.
Operator: Welcome to the Ardelyx Fourth Quarter 2025 Earnings Conference. [Operator Instructions] I would now like to turn the conference over to Caitlin Lowie, Vice President of Corporate Communications and Investor Relations. Caitlin, you may begin. Caitlin Lowie: Thank you. Good afternoon, and welcome to our fourth quarter and full year 2025 financial results call. During this call, we will refer to the press release issued earlier today, which is available on the Investors section of the company's website at ardelyx.com. Please note that we are also including a slide presentation to accompany today's remarks. You can view the material by accessing the webcast version of today's call on the Investors section of ardelyx.com. During this call, we will be making forward-looking statements that are subject to risks and uncertainties. Our actual results may differ significantly from those described. We encourage you to review the risk factors in our most recent annual report on Form 10-K that will be filed today and can be found on our website at ardelyx.com. While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so even if our views change. Our President and CEO, Mike Raab, will begin today's call with opening remarks followed by Eric Foster, Chief Commercial Officer, who will provide an update on the performance of IBSRELA and XPHOZAH. Dr. Laura Williams, our Chief Patient Officer and Interim Chief Medical Officer, will share an update on our recently announced development program before our Chief Financial Officer, Sue Hohenleitner, reviews the company's financial performance. We will then open the call to questions. With that, let me pass the call over to Mike. Michael Raab: Thank you, Caitlin, and good afternoon, everyone. It's great to be with all of you here today. 2025 was an extraordinary year for the company as the team delivered on every single one of our strategic priorities. That performance establishes a strong foundation for what we will accomplish in 2026. We will continue growing XPHOZAH/IBSRELA and execute on our growth initiatives. What we've accomplished over these past 12 months is remarkable. We delivered on all 4 of our key strategic priorities, accelerating IBSRELA growth momentum, executing on our XPHOZAH strategy, building a pipeline focused on addressing areas of unmet patient need and delivering strong financial performance. First, IBSRELA has proven to be a critical growth engine for the company and is a powerful example of our disciplined execution and our conviction in the benefit that a first-in-class medicine can offer IBS-C patients. IBSRELA is now helping tens of thousands of patients, evidenced by the incredible revenue growth of 73% compared to 2024 and 61% year-over-year growth in the fourth quarter. Second, 18 months ago, we made the decision to preserve access to XPHOZAH for all appropriate patients as we recognize at a core foundational level that staying true to our principles and doing what is best for patients will result in doing what's best for the company. Today, I can tell you that our patient-first strategy is working. More patients now have access to XPHOZAH than ever before, and we're confident in our growth expectations. An additional development from just a few weeks ago was the issuance of a new patent for the commercial formulations of IBSRELA and XPHOZAH that expires in 2042 and is now listed in the Orange Book at the FDA. This patent is an important component of our strategy to create additional valuable intellectual property to support IBSRELA and XPHOZAH. Our job is to maximize the value of these franchises by building a comprehensive IP portfolio, and this patent is an important step in just doing that. Third, we launched 2 development programs, which along with our IBSRELA pediatric program, exemplify how we plan to build out our portfolio, develop and commercialize innovative medicines for patients with unmet needs that align with our long-term strategy, leverage our internal core competencies that reflect thoughtful use of our financial resources to create durable long-term shareholder value. In the fourth quarter, we announced that our Phase III program to expand the IBSRELA label to include chronic idiopathic constipation or CIC. Assuming addition of this indication, IBSRELA would be better aligned with real-world prescribing habits, allowing us to be more comprehensive in our messaging, serve more patients and increase the scale and the opportunity for IBSRELA. As well, we announced the commencement of the development program for our next-generation NHE3 inhibitor, RDX-10531, which we refer to as 531. Building on our foundational expertise in NHE3 inhibition, 531 presents us with the opportunity to potentially extend our reach into new therapeutic areas. Finally, coupled with this extraordinary performance is continued disciplined cash management and execution, resulting with ending 2025 in a stronger financial position than was the case at the end of 2024. We made bold patient-centric decisions in complex market environments. We strengthened our leadership team to pursue our growth aspirations, and we positioned Ardelyx for long-term growth and value creation. We are in a great position. I'm excited about where we're going and our ability to identify and capitalize on the opportunities ahead. In 2026, we will elevate our organization to even higher levels. Our priorities haven't changed, but our expectations for them have. We're delivering on our vision for what the future of Ardelyx is becoming a consequential patient-centric enterprise built on a broad, thoughtful portfolio of best-in-class medicines. We are focused on significantly growing IBSRELA and maintaining XPHOZAH's momentum. With the guidance we shared in January, IBSRELA is clearly demonstrating its blockbuster potential and is on track to deliver $1 billion in revenue in 2029 with significant growth thereafter. IBSRELA is a powerful engine for the company. We are determined and extremely excited about our future and the many opportunities ahead. Our confidence is high, and we have the leadership, the team, the strategy and the urgency to execute and achieve these goals. With that, I'm turning the call to Eric, Laura and Sue to walk you through specific drivers and our outlook in more detail. Eric? Eric Foster: Thank you, Mike. It's great to be with you all again. 2025 was an outstanding year. It was marked with incredible commercial execution and performance. We grew IBSRELA by more than 70% versus the prior year with record highs across all key performance metrics. For XPHOZAH, we ensured patient access continued, and we increased total dispenses year-over-year. Our teams drove clinical conviction among HCPs, created greater brand awareness for patients and ensured the prescriptions that were written were filled. We thoughtfully invested across the commercial organization to improve the patient and HCP journey and accelerate access to our medicines. Those investments turned into consistent quarter-over-quarter growth for both IBSRELA and XPHOZAH and set the stage for what will be an important growth year in 2026. Let me start with IBSRELA. We reported an incredibly strong year in 2025, generating 73% growth over 2024. In Q4, we delivered our highest net revenue and strongest demand quarter since launch. Our strategy is sound and led to record growth in 2025. IBSRELA is a first-in-class medicine with a winning and sustainable position among patients who continue to experience symptoms despite treatment with the secretagogue. And there are many patients who continue to experience symptoms and need a different option. The IBS-C market is robust and continues to grow double digits with nearly 7 million prescriptions written in 2025, an increase of 11% compared to 2024. As much as 77% of patients on the secretagogue, report that they continue to experience symptoms despite treatment. Our strategy, increasing depth and breadth of writing, strengthening our engagement with patients and supporting prescription pull-through drove notable increases in new and total writers as well as new and refill prescriptions. In the fourth quarter, we finished the year with a record high number of total writers and new and refill prescriptions. We are confident we have the right levers to drive significant demand. To allow us to capture more of the IBS-C market in 2026 and well into the future, we are investing in 3 key areas. First, the prescriber continues to be a key focus. We continually optimize our field sales team to drive greater reach and frequency with our target, high-writing health care providers who represent approximately 50% of the IBS-C total prescription market. That optimization allows us to continue to grow the prescriber base and expand the depth of prescribing. Our in-market messaging remains focused on IBSRELA's differentiated mechanism of action and its strong clinical profile. Our message is resonating in driving HCPs to prescribe IBSRELA. Second, we're planning to double down on the high-impact investments we made last year to improve our prescription pull-through. We are increasing the presence of our field reimbursement managers to support patient access and brought significant value to our performance last year. We will also be encouraging HCPs to send prescriptions to the IBSRELA pharmacy network, a limited group of specialty pharmacies that offer a patient-centric, high-touch experience who are more equipped to handle prior authorizations and the payer hurdles that restrict patient access. When prescriptions go through a specialty pharmacy, fulfillment rates are higher, and we see on average an additional prescription per year for patients. This is a high-value opportunity that we will continue to invest in. And third, the patient. Patients with IBS-C are highly active in their health, well-being and condition. Our research has demonstrated that when patients are introduced to IBSRELA, our messaging of a different option to address their IBS-C symptoms resonates, and they are likely to ask their physician for IBSRELA. Taking that one step further, we also know that when a patient requests IBSRELA, the majority of the time, the health care provider is willing to write the prescription. This year, we are increasing our opportunities to engage directly with patients. Our plans are to educate, empower and mobilize patients to take control of their IBS-C by seeking new information and talking to their doctor about the symptoms and the treatment options that are available. We continue to drive significant volume at a rapid pace by activating patients, deepening and broadening, writing among target health care prescribers and continually improving our prescription pull-through. We have the opportunity to further strengthen the value of IBSRELA franchise with the addition of the investigational CIC indication. This label expansion, if approved, is expected to have a meaningful impact on our business and further strengthen HCP and patient confidence in IBSRELA. Not only can it unlock the opportunity to help patients with CIC, but it would also allow us to further grow adoption among patients with IBS-C. These 2 conditions are closely associated and the addition of CIC would allow HCPs to consider IBSRELA more closely aligned with how they typically manage patients. These efforts, along with the lack of novel competition currently in development, present a desirable market and an opportunity that can afford IBSRELA the ability to grow volume until we are faced with a generic entrant. I'm excited about the opportunities in front of us. We are united with a common purpose to help those impacted by IBS-C, and we are committed to act with urgency to reach our true potential. Moving on to XPHOZAH. In 2025, we had consistent growth quarter-over-quarter through the year. I'm proud of our team's ability to navigate the market while also improving patient access to its highest point since launch and increasing total dispenses by 9% and paid dispenses by 41% when excluding Medicare compared to 2024. We are pleased with the performance in 2025 and confident in achieving the growth we expect in 2026. XPHOZAH will continue to be a contributor for Ardelyx, and our primary focus remains on supporting and ensuring access for all patients regardless of insurance coverage. We will continue to drive clinical conviction among health care providers for earlier utilization while also growing the prescriber base and expanding depth of prescribing. With the majority of patients treated with binders not having fully controlled phosphorus, the high unmet need remains. We have an agile, high-performing patient-focused team who is committed to unlocking the full potential of XPHOZAH and bringing this important medicine to patients in need. We are focused on broadening reach by continuing to expand access, employing targeted sales initiatives and a cross-channel strategy to increase patient engagement. I have a tremendous amount of confidence in our ability to deliver on our priorities for this year. Everyone in the organization is executing at a high level and delivering our shared goals from our commercial team to our clinical development, medical, manufacturing and corporate teams. We are investing across the commercial organization to strengthen our position in the market, support patients along their journey and accelerate our growth momentum in the years ahead. I will now turn it over to Laura. Laura? Laura Williams: Thank you, Eric. I'm really pleased to join you today. In addition to all the great work Eric shared with you in support of IBSRELA and XPHOZAH, I'm excited to talk about the progress we've made to advance our pipeline of new medicines to help patients. While we've been conducting studies with tenapanor in pediatric patients with IBS-C as part of our post-approval commitments for IBSRELA since late 2022, our research and development teams have also been advancing 2 new programs, which signal an important inflection point for our company as part of our corporate growth strategy. As you know, IBSRELA and XPHOZAH were discovered and developed by scientists at Ardelyx. Their initial discovery efforts were aimed at treatments for IBS-C and began with evaluating potent, minimally systemically absorbed selective NHE3 inhibitors that block sodium absorption in the gastrointestinal tract. Inhibition of NHE3 produced an increase in intestinal luminal water content and improved intestinal transit time. These efforts culminated in the discovery of tenapanor, which was also shown to maintain intestinal barrier function and decrease visceral hypersensitivity in animal studies. The clinical effect of this NHE3 inhibition was improvement in constipation and abdominal pain as demonstrated in our clinical trial in patients with IBS-C, and that led to the approval of IBSRELA. Notably, it was also through these early studies with tenapanor that we uncovered the primary pathway for phosphorus absorption, the paracellular pathway and tenapanor's ability to block phosphorus absorption via that pathway eventually led to the approval of XPHOZAH. And our recent pipeline programs resulted from our knowledge and expertise around NHE3 inhibition with tenapanor. First, let's start with the planned CIC label expansion. As Eric mentioned, the addition of a CIC indication would better align IBSRELA with the standard treatment patterns that physicians use when diagnosing and treating patients with CIC and IBS-C, which represent a continuum of functional glut disorders, whereby patients present with overlapping symptoms of constipation and abdominal pain with the primary issue of having infrequent and difficult bowel movement. The main distinction between the 2 conditions is that in addition to constipation, IBS-C is also characterized by abdominal pain, often accompanied by other abdominal symptoms like bloating, cramping and discomfort. However, the reality for many patients is that they often alternate between the 2 conditions and therefore, might be diagnosed with either one over time. The need for treatments with different mechanisms of action has proven essential for the management of IBS-C, and we believe this holds true for CIC as well. We are confident in tenapanor's ability to manage patients with CIC, and we have designed a robust clinical trial to support this hypothesis. Why are we confident? First, in our clinical development program for IBS-C, the T3MPO study, we demonstrated tenapanor's ability to safely and effectively treat adults with IBS-C, which is typically considered the more challenging condition. Secondly, in a post-hoc analysis of the T3MPO data, looking at just the constipation component, tenapanor showed a significantly better durable, complete spontaneous bowel movement or CSBM responder rate compared to placebo. And finally, we've had very productive discussions with the FDA and are encouraged that the strong safety package from our IVF clinical studies when combined with the safety and efficacy results we expect to establish from a single Phase III clinical trial will be sufficient to support a supplemental new drug application or sNDA. Last month, we enrolled, randomized and dosed our first patient in ACCEL, the Phase III clinical trial that evaluates the safety and efficacy of tenapanor in adults with CIC. ACCEL is a randomized, double-blind, placebo-controlled clinical trial with a planned enrollment of approximately 700 patients across 110 sites in the U.S., of which more than half are already up and running. Patients will be randomized into 1 of 4 treatment groups, which include 3 different tenapanor doses and the placebo group with each active dose group randomized in a 3:1 manner versus placebo. The study is comprised of a 2-week screening period, a 26-week randomized treatment period and a 4-week follow-up safety period. Our primary endpoint is measured at week 12 and will be the proportion of patients who achieved a durable CSBM response defined as an increase from baseline of at least 1 in average weekly CSBM frequency and at least 3 CSBMs, both occurring during the same week. Additional information about ACCEL, including key secondary endpoints and evaluation of safety can be found on clinicaltrials.gov. We have a thoughtful comprehensive recruitment plan and expect to have the study fully enrolled by the end of this year. That time line allows us to complete data analysis and report top line results in the second half of next year with subsequent sNDA filing shortly thereafter. This is a well-designed clinical trial with a strategic regulatory path that will hopefully allow us to ultimately bring this therapeutic option to patients. Now moving on to our next-generation NHE3 inhibitor, 531. As leaders in entrepreneurs in this space, we are excited about NHE3 inhibition. And I'd like to first provide some scientific background. Sodium/hydrogen exchangers or NHE, are transport proteins called antiporters that reside on the membrane of cells and there are 9 distinct isoforms or subgroups. Their fundamental role is to maintain normal sodium, water and pH balance in our cells. NHE3 is an antiporter that is found in the gut, primarily the small and large intestine as well as the kidney. It transports sodium into the cell and hydrogen out of the cell, thereby regulating sodium absorption, maintaining body salt and fluid balance and blood pressure homeostasis. In preclinical studies, 531 was approximately 10x more potent and 30x more soluble than tenapanor. Those improvements alone not only support the potential for once-daily dosing, but may also provide more opportunities across different therapeutic areas. So where does that take us? Right now, we are focused on finalizing our preclinical studies to support an IND submission in the second half of this year with plans for a Phase I first-in-human safety trial to begin shortly thereafter. Additionally, we will continue to conduct preclinical research to further inform strategies for our clinical development programs, and we will continue to follow where the science and data lead. I am very excited about the potential for tenapanor as a treatment option for adult patients with CIC and the opportunities that 531 may offer across several therapeutic areas. These clinical development activities not only bolster the growth of our company, but equally and perhaps more importantly, they continue to expand our efforts to make a positive impact in the lives of patients, families and caregivers and the health care providers who help manage their care. I look forward to sharing additional updates in the months ahead. With that, I will now pass it to Sue. Sue Hohenleitner: Thank you, Laura. Four months ago, I joined Ardelyx as it was clear to me that I had a unique and incredible opportunity to become part of building a great company, helping patients and creating real value for shareholders. On one of my first days with Ardelyx, I heard Dr. Laura deliver a powerful message that resonated deeply with me, the patients are waiting. To me, that phrase reflects urgency, purpose and accountability. When we deliver with excellence for patients, shareholder value creation follows. Since October, my conviction has only gotten stronger that we are at a turning point for our company's future. We are turning our commercial momentum into a multibillion-dollar opportunity, a once sparse pipeline into a robust development portfolio and a strong organization into an extraordinary one by elevating our game and building the capabilities required to compete and win. Furthermore, we're turning a disciplined capital allocation into a clear strategic advantage and investing with purpose. This is more than progress. We are turning a critical corner as we drive towards profitability and meaningful cash flow generation, allowing us to strengthen our balance sheet, fund our ambitions and build long-term shareholder value. Now let me walk you through the financials. For 2025 results, I'll be focusing my commentary on the full year performance. However, you can see the fourth quarter results on the slide and in the press release we issued earlier this afternoon. We had significant year-over-year total revenue growth of 22% with full year 2025 revenues of $407.3 million compared to $333.6 million in 2024. That growth was driven by a significant increase in IBSRELA demand, which grew revenues to $274.2 million, an increase of 73% compared to the full year of 2024 and finishing 2025 at the upper end of our most recent guidance range. As Eric outlined, that growth was driven by increases in total prescription volume. We also reported $103.6 million of XPHOZAH revenue in 2025, compared to $160.9 million in 2024, a decrease of 36%. As you know, as of January 1, 2025, we no longer receive Part D reimbursement for Medicare patients, who represent roughly 60% of the total XPHOZAH patient base. However, our focus on protecting patient access, driving clinical conviction and supporting prescription pull-through drove year-over-year growth in total expenses by 9%, and we grew paid expenses by 41% when excluding Medicare. We are tremendously proud of the efforts made this year to advance our objective that every patient prescribed XPHOZAH, received XPHOZAH regardless of their coverage. Now turning to expenses. Research and development expenses for 2025 were $71.5 million, compared to $52.3 million in the prior year. This increase reflects development activities for our ongoing pediatric trials as well as the ACCEL trial for CIC, preclinical research activities for the 531 program and increased medical engagement with the scientific community. Selling, general and administrative expenses were $337.2 million for the full year 2025, compared to $258.7 million in 2024. The increase was primarily related to continued investments to drive demand and adoption of IBSRELA. Our net loss for the full year 2025 was $61.6 million or $0.26 per share compared to a net loss of $39.1 million or $0.17 per share for the full year of 2024. The net loss for 2025 includes $49 million for noncash expenses from share-based compensation compared to $37.4 million in 2024. We finished 2025 in a strong cash position with $264.7 million in total cash, cash equivalents and short-term investments, an increase from $250.1 million at the end of 2024. We now have had 2 consecutive quarters that we generated positive cash flow due to growing revenue. Now turning to guidance for 2026. First, looking at our revenue projections for IBSRELA, we continue to anticipate 2026 revenues for IBSRELA to be between $410 million and $430 million. That represents at least 50% year-over-year growth at the low end of the guidance range. Similar to 2025, we expect growth to be driven by quarter-over-quarter increases in demand, along with improved prescription pull-through. As for the phasing of revenue, we expect the overall market dynamics in 2026 to be similar to those we saw last year. As we've shared in the past, the IBS-C market historically contracts in the first quarter due to co-pay resets, insurance changes and prior authorization renewals, among other factors. We expect those factors to similarly impact Q1 of 2026 in addition to the recent winter storm burn that affected a large portion of the country. As in prior years, we expect the market to rebound in the second quarter. Using 2025 as a proxy, we recorded approximately 16% of the full year IBSRELA revenues in the first quarter, and we anticipate that 2026 will likely follow a similar pattern. 2026 growth will be supported by thoughtful investments that will also fuel continued growth to $1 billion in 2029, representing a CAGR of 38%. We expect growth to be driven thereafter by continued adoption of IBSRELA among IBS-C patients as well as growth from patients with CIC assuming approval and market launch of tenapanor for CIC. And to build on Mike's comments earlier regarding the new formulation patent, we recognize that there's an opportunity to see IBSRELA growth continue even beyond 2033 when our composition of matter patent expires. IBSRELA will have the same winnable position, and we anticipate volume growth to continue until we face generic competition. Now turning to XPHOZAH. We expect revenues to be between $110 million and $120 million in 2026. We're focusing on driving depth and breadth of XPHOZAH prescribing and investing at an appropriate level to ensure that XPHOZAH remains a financial contributor for Ardelyx. We expect that XPHOZAH will experience similar market dynamics in the first quarter as IBSRELA. We are reaffirming our expectations of $750 million before the expiration of the XPHOZAH method of use patent in 2034. And as is the case with IBSRELA, XPHOZAH growth is expected to continue until we face generic competition. Just a note on our gross to net deduction rate. We expect our future GTNs for IBSRELA and XPHOZAH to be similar to the results we saw in 2025, which were in line with our expectations. Two of our key priorities for 2026 are to deliver commercial growth and to advance our pipeline, which requires high-impact investments in R&D and SG&A. With that said, we expect overall 2026 operating expenses, inclusive of R&D and SG&A to increase by approximately 25% for a total OpEx of up to $520 million. We are continuing to fuel the pipeline, and with that comes increased investments in R&D, reflecting both the ACCEL Phase III trial for tenapanor and planning for a Phase I trial for 531, along with other expenses to support our engagement with the scientific community. We also expect SG&A to grow to support a disciplined investment approach to drive IBSRELA growth through commercial execution, improved prescription pull-through and patient engagement. These high ROI investments reflect areas of growth in 2026 and will generate momentum to deliver on our longer-term IBSRELA guidance expectations as well as our planned pipeline expansion. Our strong cash position of $265 million, supported by the significant revenue growth we expect is sufficient to cover all of our planned operating expenses and allow us to reach consistent positive cash flow with our current operations. We remain focused on thoughtful capital allocation throughout this year as we prioritize growing the top line and further advancing our pipeline. Before I turn the call back to Mike, I want to say how proud I am to be here representing Ardelyx for my first earnings call as our CFO. I am both excited and optimistic about the future and the tremendous value we will create as a team for patients and for you, our shareholders. With that, I'll hand it back to Mike. Michael Raab: Thank you, Sue, and I'm thrilled to welcome you to these calls. Your perspective further strengthens our confidence as we communicate the clear growth trajectory that we're on. As you heard from Eric, Laura and Sue, our priorities are focused and execution-driven, significantly grow IBSRELA, maintain XPHOZAH momentum, further advance our pipeline and continue delivering strong financial results. We are moving with urgency and discipline against these priorities, and we look forward to demonstrating continued progress as the year unfolds. With that, we'll open the call to questions. Operator? Operator: [Operator Instructions] And our first question will come from Dennis with Jefferies Company. Anthea Li: This is Anthea on for Dennis. Could you talk about your level of confidence on the underlying volume growth for IBSRELA to get to your $410 million to $430 million IBSRELA guidance? What's really driving that outside of big TAM? And how much of that guidance assumes improvements on the pull-through and the shift to specialty pharmacies? Michael Raab: Yes. First, I mean let me address that from a top line, we wouldn't give you the guidance. We have great confidence in reaching that number. As we've talked over the years, Anthea and with Dennis, is if you look at the size of this market, and the number of patients that are needing a new alternative versus what they have with secretagogue, there's a vast patient population out there to access this. So our confidence is significant and hasn't wavered, honestly. Eric, if you can go some of that, too. Eric Foster: Yes. Thanks very much for the question. As Mike said, we've got tremendous confidence in the guidance that we've given for 2026. In order to drive volume, we're continuing to optimize our sales force. Last year, the team did an excellent job in execution was able to drive the 73% growth. And we'll continue to optimize that so they can drive top of the funnel. As Mike said, 77% of the patients out there on secretagogue are currently continuing to experience symptoms. So we know that the market is there. As it relates to pull-through, we are going to double our field reimbursement manager team. We know that they provided significant value to us last year and relates to increase in approvals and resubmission rates. So we know that we can continue to improve there, and we've got a team that's going to expand and refocus there. With regards to the IBSRELA Pharmacy network, we're really excited about this opportunity. It's actually something that we started to work on towards the end of last year. And we know that these patients, they need high touch and a more patient-centric option to go to a retail pharmacy. So what we put in place is the opportunity for them to get the care that they need to work closely with them and the physicians to make sure that we get a higher rate of fulfillment. So when you think about all those 3 things together, we feel really good about 2026 and what we're going to be able to deliver. Operator: And our next question will come from Allison with Piper Sandler. Allison Bratzel: First, just for Sue. Following up on some of the prepared remarks on expenses, just could you provide any more color on the cadence of the RV and SG&A step-ups for '26? And just with those increases, how should we be thinking about the path forward or the path toward sustained cash flow positivity? And then just on the $410 million to $430 million guidance for this year and going to $1 billion for IBSRELA in '29. Do you feel your existing commercial infrastructure is sufficient for hitting that longer-term guidance? Or just how should we be thinking about incremental investments on that front? Sue Hohenleitner: Yes. Thank you, Allison. I'll start out with your questions around OpEx. So yes, we are going to be increasing our OpEx about 25% year-over-year based on the guidance, where our top line is going to grow more than 38%. So good news is we are growing the OpEx, but not necessarily as much as we are growing the top line momentum. In terms of what we're doing, these investments that we're making, this is really all about growth, growth not only in the commercial business, but also within the R&D pipeline that Laura talked all about. A lot of the sales and marketing that we're going to be investing in, these are not relatively new programs. These are things that are proven, high ROI programs that are really going to drive that growth. We are going to be and continue to be significantly disciplined and in all that we do. And the other thing I would like to note, too, is as the year has already started, we have already begun these investments. So the clip that we're on is a pretty good clip to get to do that. In terms of cash flow positivity, we have been cash flow positive. We're very proud of that the last 2 quarters, and we'll continue to do what we can to drive that. We're not really guiding to positivity at the moment, but stay tuned. Michael Raab: I guess the other thing I would note is, and I'll have Eric comment on it. As you've seen throughout -- when we started the IBSRELA program 3 years ago, we started with 30 people. We expanded to 60. We expanded to 124. We now see the benefits of the fans and the field-based folks out there. So understand that we always look at how to optimize and invest, and that's something we will continue to do as this program continues to expand. And certainly, you can imagine the future with CIC that there's other opportunities to continue to expand in this organization. Eric? Eric Foster: Yes. I would say in terms of really maximizing the return from the investment, we're recognizing that we do have an opportunity to improve on reach and frequency. So you may have seen we posted some positions online for the ABD role, where we're going to be going up around 15 to 20 roles. As I mentioned, we will be doubling the size of the field reimbursement team. And I feel pretty confident over that over the next couple of years. We are starting those investments now so we can maximize the return that we're going to be able to get in 2026, as well as into 2027. And so I don't anticipate too much changing there. But of course, we are always looking at -- always looking at the market and our performance and see ways that we can be better for patients. The other thing that I would just call out from a marketing standpoint, the team has really done a nice job of digital marketing and making sure that we're engaging with physicians, reaching that population that's out there. And so this year, you will see a concerted effort and focus on the patient. As Mike mentioned, you know that it's a sizable patient population out there, and we have an opportunity to reach out, engage with them. We know when they are aware of IBSRELA, they go into the office and the physician will write that prescription. So we want to make sure that we're pulling through not just on the sales side, but also on the marketing side, the team has already started that. And the investments that we're making in Q1, you'll see those will be fairly consistent throughout this year. Operator: We'll move next to Chris with Raymond James. Samuel Alexander Leach: This is Sam on for Chris. Just one on the CIC trial. Can you talk more about the 2 lower doses you're testing? If I recall correctly, these dose levels weren't quite as efficacious in IBS-C. So what are your expectations for how these dose levels will perform in this trial? And is having multiple dose options part of your strategy in CIC? Or are you trying to find just one optimal dose? Laura Williams: Yes. I think at the end of the day, we want to obviously make sure that as we evaluate safety and efficacy that we are able to actually look at a dose that we don't expect to provide as much, right? You typically want to look at the least effective dose. And so that is the lowest dose. We don't expect a lot from that. But I think as I said earlier, CIC seems to be the less difficult condition to treat. And so it makes sense for that middle dose of 25 milligrams BID. And then the 50-milligram dose is obviously the dose that we use and the data that we use in our T3MPO trials to actually provide us some probability of success for this trial. So it's a nice way to look at dose response in a single Phase III well-designed, robust study. Michael Raab: And I'll just highlight that, too, is we're going to follow the data, right? And what these 3 different doses tell us will tell us what we move forward with. Operator: And next, we'll hear from Matthew with H.C. Wainwright. Matthew Caufield: Great to see the successful quarter. So with IBSRELA offering its differentiated NHE3 inhibitor profile, what do you see being the greatest distinctions in the future for the CIC market when we think about the other GCC agonists or serotonin receptor agonist mechanisms, for instance? Really just any color on the unmet need and the differentiation there? Laura Williams: Thanks for the question. It's a great question. I think at the end of the day, what we talked about before was the fluidity, right, between these 2 conditions, IBS-C and CIC. And so just as we've seen with IBS-C, the need for a different mechanism of action, right, because a number of patients on other drugs are still symptomatic. And so that is important also with CIC. And I think that really speaks to the potential utility of tenapanor in that patient population. Michael Raab: And you look at the evolution of how CIC, functional compensation, IBS-C are characterized by the Rome Foundation, it is continuing to evolve over time. And notably, the CIC population is certainly larger, but many of those patients early on are well-treated by over-the-counter medications. And if you look at the prescriptions that we talk about where there isn't a differentiation in IQ or other data in terms of what is for IBS-C or CIC, you're seeing a mix between the 2. So that's why the continuum that Eric mentioned of how we can speak to IBSRELA and NHE3 inhibition as a different choice versus all the secretagogues, which is basically it. And the serotonin is a motility drug, completely different mechanism and impact on the patient. So this seems for us, and I think as we hear from the work that we're doing, that it is right for this to be going into CIC because there is such a continuum between CIC and IBS-C. Operator: Next, we'll hear from Roanna with Leerink. Roanna Clarissa Ruiz: So I was curious for CIC, what will prescribers focus on most in terms of the primary and secondary endpoints in the Phase III study? And is there an efficacy bar that you're thinking about for defining a highly successful trial in CIC? Michael Raab: One comment then I'll probably go too far with it, I'll ask Eric to comment [indiscernible] in the field. What's interesting is when you talk to gastroenterologists about this, they know how to make people have bowel movement, right? They know that they can do that. And if they're going to have a hard time succeeding with the different over-the-counter and other things that they do, they move to pharmacological intervention. And so those patients that are not getting relief this primary endpoint of CSBNs are ultimately in a durable response that Laura described in the endpoint, that's what you want to see in a patient that's having these challenges with bowel movements. And that's what you look for. Secondary endpoints, quality of life benefit. But at the end of the day, someone with chronic idiopathic constipation, you want them to be able to have bowel movement. Eric Foster: Yes. I would just add, these patients are chronically constipated, as Mike said, and it has a significant impact on their life. So first and foremost, from a primary endpoint, we want to make sure that it can work in constipation and have a lot of confidence there. From a secondary endpoint, as Mike mentioned, quality of life, patient-reported outcomes, those are areas that we're going to focus on to be able to show that we can treat not just the CIC, but the patient as a whole and feel really good about being able to do that. And lastly, as Laura mentioned, with a differentiated mechanism of action, these are multifactorial conditions and patients need options. And so we want to be that option for them just like we are with IBS-C. We've got a good position there and feel like we will be able to create a similar market and opportunity for CIC. Operator: And next, we'll hear from Yigal with Citigroup. Jin-Wook Kim: This is Jin Kim on for Yigal. Congrats on the progress. Maybe just a quick one from us. Any additional color you can provide on additional patents or other layers of protection you could -- you're thinking about building up in the future? Michael Raab: Yes. I mean I think as I said in my opening comments, our job in this business is to continue to strengthen our intellectual property position for products like XPHOZAH/IBSRELA and that's what we're continuing to do. I think this patent on the formulation is really important, the fact that it's listed in the Orange book exactly what you would want to see. And needless to say, I think without any specifics of what we're going to file or have filed, there are other things that we are working on to further strengthen that position. Jin-Wook Kim: And maybe just one more, if I could. How are you thinking about long-term XPHOZAH growth post 2026, given potential adjustments in Medicare base rates for phosphate binders? Any additional color you can provide on that? Michael Raab: I remind you, Medicare base rate and phosphate binders, we do not benefit from that. We made the decision, as I noted in my opening comments that 18 months ago, we made a determination not to participate in that. So our business is focused on in terms of the revenue-generating business, Medicaid and Medicare -- Medicaid and commercial, excuse me. And the Medicare segment is what Sue referenced to as well is to make sure that any patient that is appropriate and needs XPHOZAH for our label has access to it. And that's what we're extremely proud of, where you saw both the non-Medicare segment, 41% growth during that first year of the tenapanor period and an overall growth of dispenses of 9% in the face of all that's going on. So we're extraordinarily proud of that and certainly a longer answer than I think your question, but the base rate increase is not relevant to this business. Operator: Our next question comes from Laura with Wedbush Securities. Wing Yip: This is Thomas on for Laura Chico. So perhaps one question for IBSRELA. So historically, you've positioned IBSRELA for later lines of treatment for IBS-C. But as you're now projecting over $400 million in revenue for this year, just wonder if there might be more leverage to reengage with payers and reexploring how frontline use can fit into the picture. And to that end, I wonder if frontline utilization, how much if at all factors into your 2029 peak revenue target? Michael Raab: Sure. No, thanks for the question, Tom. And it's interesting. We've talked about this before is it's 50,000 new patients coming on to IBS-C indicated therapies a month. There is over 7 million prescriptions written last year for IBS-C therapies. We need a small fraction of that in order to get to our aspirational numbers. So we're extremely confident in the market opportunity there that's for our indication without having to go to frontline. Notably, however, our clinical work, our package insert is a first-line therapeutic. The payer dynamics, which continue to be the fuddling to me in this industry and the challenges to get good medicines to patients are the challenge that we all face. I think the work that Eric and our market access team and the leadership that we have there is having us be very thoughtful about how we ensure appropriate market access and lessening as many hurdles as possible. Going after frontline is not an objective that we have and is not factored into the numbers. Although as we've noted in other calls, there is some organic growth in first-line use because I think people have conviction the benefits this product is providing their patients. You want to add, Eric? Eric Foster: Yes. I would say last year, one of our priorities on the commercial side was building out our payer and market access team. We've done a nice job of bringing in the right team. These individuals are engaged with payers, and they continue to put hurdles in place, and we are working with them to make sure that patients can have access to our products. So we don't aspire to have first-line therapy at this point in time. You mentioned kind of later line utilization. And I would say when we look at our internal market research, it's typically around second in third line. So our goal is to be the first branded product post the brand or generic utilization. And so that's the team what they're messaging out there. And based on the tremendous amount of success that we saw last year in 2025, we continue to feel that that's the right position. But yes, we continue to work with all of the stakeholders that are out there to make sure that patients have access to our products. And again, we'll continue to invest in those areas and feel good about the direction we're at. Operator: And we'll move next to Julien with BTIG. Julian Harrison: Congrats on the progress. First, can you talk about how the recently issued 299 patent contributes to your overall IP strategy for tenapanor? Wondering if the patent covers unexpected effects or any other features that you believe help strengthen the patent. And then I thought I heard in prepared remarks that CIC labeling could potentially bolster your ongoing efforts in IBS-C. Just wondering if you could expand on that some more, what dynamics would you expect to be at play there? Michael Raab: Sure. Just a brief comment on the intellectual property. This is a formulation patent, very clear and straightforward. It's now Orange Book listed. It goes back to 2042. And that's the important thing to focus on is building that sort of [ bulwark ] of support as we continue to build this business. So feel good about it and ultimately, other IP that we will pursue. But this is a strong formulation patent for the commercial formulation of the 2 products. Eric Foster: Yes. And I'll take the second part of that question as it relates to CIC and IBS-C. So as Laura mentioned, I mean, these 2 conditions are closely related, and we know that physicians use the screening docs in both indications. And so as we gain experience and if approved, an indication in CIC, we know that it will improve physician confidence across both CIC and IBS-C because we feel like we can be the product of choice for those physicians. So when we did our research, not only did we see improvement in the CIC, but we also saw increased confidence in the IBS-C side, and that's what continues to feed into our optimism as we think about really the true value that IBSRELA can provide for those patients out there with CIC and IBS-C. Operator: And we'll move to our next question from Aydin with Ladenburg. Aydin Huseynov: Congrats on a great quarter. I've got a couple. So first, IBSRELA question. So you guide now 2029 $1 billion plus. So you consistently got $1 billion, but we previously assumed I think that would occur in 2033. So do you have any comments, any forecast, any sort of guidance as it comes to 2033, how -- what should we expect for that year? And when do you think that PPA actually may happen for IBSRELA? And the second question I'll ask is about the CIC trial. So those -- as you mentioned, those are -- those have always been interrelated indications. And so you decided to start the trial. Just curious to understand how the things changed over the past several years. So was it previously you didn't start the trial because of financial constraints? Or what are other potential reasons that sort of simulated. Michael Raab: Sure. I mean I'll answer the second part first, but then actually ask Laura to address it as well. [ I'm cheap ] and wanted to make sure that we had enough capital to do the work we need to do. Honestly, that's the very simple calculus that got us to where we are today. The fact that we ended last year with more cash than we did the year before gave me the confidence that we can do this and invest appropriately into the pipeline. And then for your first question, the fact that we gave you the numbers, $1 billion in '29, I would argue that our internal projections might have been close to that, and we were not yet -- we decided to not yet provide that. We will continue to grow thereafter. LINZESS continues to grow, has not peaked. So this business, this patient population where there's a huge, huge need continue to come to therapy and more innovation that comes, the more patients that are going to evolve. So what peak ultimately looks like, we're all going to get there together and starting where we are now with the kind of growth of 73% over '24 and a 38% CAGR to get to $1 billion, the math is pretty straightforward. So I would urge you to take a look at that and the kind of growth that you see in the IBS-C marketplace where we see the kind of growth with only one mechanism of GCC agonist before us, should give you some perspective as to what the market through LOE would look like before [indiscernible] Operator: And we'll move next to Peyton with TD Cowen. John Peyton Bohnsack: This is Peyton on for Joe. I guess just a quick one for me. Could you talk about how the CIC trial is powered? And then what proportion of patients need to be CDSM responders and that you're targeting? Laura Williams: Yes. So the powering, it's a pretty robust sort of sample size calculation. We powered it at 95%. So we feel really comfortable there. And when you couple that with the data that we saw in our T3MPO studies, it gives us a lot of confidence in terms of the probability of both technical and regulatory success. So as I said before, the sample size is about 700 patients, and obviously, that reflects the 4 sort of treatment arms, right, 3 active doses and placebo. And again, that's about 173 patients per arm. John Peyton Bohnsack: And the proportion of patients that need to be CDC responders per arm? Laura Williams: Yes. Our initial -- when we looked at the data in terms of our T3MPO studies, we saw about at least a 20% difference between placebo and tenapanor. And so our sample size calculations are such that we're looking really about around the same sort of difference, 18% to 20% difference between placebo and active drug. And that is for the 2 that for the 25-milligram and 50-milligram dose. Operator: And our next question comes from Jennifer with Cantor Fitzgerald. Jennifer Kim: This is Jennifer on behalf of Prakhar Agrawal from Cantor. I wanted to ask about IBSRELA. Can you talk about the IBS-C market where you're finding the greatest opportunity? And what is driving the market growth of double digit? And how long do you think this is sustainable? And on XPHOZAH, you shared that the peak opportunity being at $750 million. Can you talk about how you get to that number based on the current trends? Michael Raab: Sure. IBSRELA market, I'm sorry, if you could repeat the question. I didn't hear you clearly. Jennifer Kim: So with the IBSRELA drug on IBS-C, I wanted to understand where is the greatest opportunity? And what is driving the market growth of double digit? And how sustainable do you think it's going to be? Michael Raab: I think in the previous question that I answered with 50,000 patients coming in every month from the GCC agonist already, there is a -- and 7 million patients already on therapy. There's a very small percentage of that, that ultimately we need to get to $1 billion. So confidence in there is high, particularly given our clinical differentiation. And with the XPHOZAH very much the same kind of dynamic, right? I mean if you look at the Medicare population that we lost, the original numbers I've gone to before is 550,000 patients on dialysis 60% of those are Medicare. You lose those 330 -- 220,000 patients that are Medicaid and Medicare. Those are revenue-generating patients for us. It's less than 100,000 patients closer to 50,000 that you require in order to get to the guidance that we gave. Operator: And this concludes our question-and-answer session. I'd like to turn the conference back to our host for any additional or closing remarks. Michael Raab: Thank you, operator. To our investors, our employees and really especially our patients, thank you for your continued engagement and support. We're encouraged by the progress we've made and excited about the opportunities ahead. We remain focused on discipline execution and long-term value creation and we appreciate your continued confidence as we move forward. With that, we can now end the call . Thank you operator. Operator: And this does conclude today's conference call. Thank you for attending.
Operator: Good morning. This is the conference operator. Welcome, and thank you for joining the Imerys 2025 Annual Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Alessandro Dazza, Chief Executive Officer; and Pierre Lebreuil, Chief Financial Officer of Imerys. Please go ahead. Alessandro Dazza: Good morning to all of you. Thank you for joining us today to review Imerys Q4 and full year 2025 results. I think the first word is dedicated to Pierre Lebreuil, our CFO, next to me, our new CFO. Pierre is not new to Imerys. He has been with us for more than 20 years, new in his role. I'm very proud of this promotion because Pierre will bring strong leadership to the team, experience and will guarantee continuity in this business. Pierre, welcome. Pierre Lebreuil: Thank you, Alessandro. Alessandro Dazza: And as usual, let me start by giving you some highlights of the year we just closed. 2025 revenue amounted to EUR 3.385 billion, broadly in line with last year. Q4 at EUR 800 million, also broadly in line with last year, both on a like-for-like basis, reflecting, I would say, solid pricing in a market with subdued industrial activity and construction demand in North America and Europe still lacking. Full year 2025 adjusted EBITDA landed at EUR 546 million within our guidance despite currency headwinds impacting EBITDA for the full year for EUR 22 million, and this was particularly evident in Q4 given the devaluation of the U.S. dollar. Year-on-year performance, EBITDA-wise, was also broadly in line with last year at minus 0.4% at constant exchange rates and excluding, of course, perimeter and joint venture effects. So all in all, very resilient for our core business, supported by disciplined pricing and ongoing continuous cost management. Q4 '25, also very similar to the rest of the year. The group generated free operating cash flow for the year of EUR 127 million before strategic CapEx and expenses and around EUR 80 million as reported. Strategic CapEx in 2025 were relating only to our lithium projects, and I will return on the topic a bit later. Imerys structure remains sound, investment grade confirmed. Current net income was EUR 146 million, and the Board of Directors will propose an ordinary cash dividend of EUR 0.75 per share at the shareholders' meeting on May 12 of this year. The payout ratio is consistent with all last previous years. Last important topic, the group did a noncash goodwill impairment of the solution for Refractory, Abrasive & Construction business for an amount of EUR 467 million. We will return on this. This impairment has no impact on the group cash position or financing capacity. It purely reflects an accounting adjustment necessitated by changed market conditions and assumptions do not call into question the soundness of this business, and I will further elaborate on this. Here, we see a little bit our sales performance by geography for the full year and Q4. Europe, main markets posted a light recovery in Q4, which is -- gives us good hope for 2026, improving construction and improving industrial activity. Positive sign for the future. For the full year, however, as we see here, the business is still behind 2024, fundamentally due to low construction, industrial and automotive activity, partly only compensated by good and solid performance in consumer markets. North America, we had a very differentiated picture throughout the year, solid first part and a weaker Q3 and Q4, the trend that we have seen already in the last 6 months, fundamentally impacted by weak industrial construction. Should be noted that a further impact on this activity is the devaluation of the U.S. dollar, which is affecting sales in euro as we report of -- at the level of 5% compared to last year, so very significant. Asia sales continued to grow nicely, not only in India, but also in China, which remains quite dynamic, especially around new technology, electric vehicles and, I would say, strong exports. South America, after a strong first half, slowed down a bit in the second part of the year, partly in relation to U.S. tariffs on Brazilian products. Let's now look rapidly at our main underlying markets and their trends, which, of course, partly reflect already what I just described. But overall, I would say Q4 in line with Q3 in terms of trends, maybe with some signs of recovery in Europe and continuous strong growth of electric vehicles and energy storage. Construction was not a great year, especially in the U.S. In Europe, where we see, however, a reverse of this negative trend, so positive signs for the future. Consumers remains very resilient in all geographies. Automotive, poor in Europe, a bit more stable in the U.S. and a very strong China, very strong EVs as well. And industrial activity normally follows the other markets. So I would say, in line -- I would almost say in line with the average of the others. Imerys does not only rely on underlying markets, we proactively target growth. And in order to give you an idea of some solid avenues of future growth, you see on this slide some of the recent business developments of the group. We start, of course, with our conductive additives business. It's continued to grow, thanks to capacity expansion. You remember in the last 3 years in Belgium as well as in Switzerland, same for our investments, in China, in automotive, lightweighting on polymers in India for refractories and construction. And last example, which we have not publicized a lot, but also because it is still ongoing, a capacity increase for our high-purity diatomite filter aid called Celpure, which is used widely in the pharma business with strong growth, which we will accompany with new CapEx. Together, they are contributing more than EUR 30 million revenue in '25 with further growth ahead as we ramp up sales. Similarly, on innovation, launching new products takes time. That's why it's important to have a pipeline, but it is the basis for future growth. I will not enter into the many details. Here are only a few examples. There is a lot more. Some are already generating commercial sales, some are under qualification and will be the engine of future growth. The fact that specialty minerals have unique and varied properties, this creates new ideas, new applications every year on a continuous basis. And we know, as you know, Imerys has the widest portfolio of specialty minerals in the world. If you look at our -- the development of our EBITDA in this slide, you see the robustness of our business model. On the left side, you can see the evolution of the full year adjusted EBITDA year-on-year. We do have a significant impact of perimeter coming from the divestiture, as you remember, of our assets serving the paper market in July '24. Joint ventures, which did an exceptional year in '24, especially the first part of '24 and exchange rates, FX. If you remove these, let's say, external factors, what is most important, the core activity of Imerys delivered a very resilient EBITDA basically in line with last year despite what we all know was a challenging context in 2025. On the right side, you see the balance between price and costs, which highlights the good and continuous work done by the group, especially on cost reductions, first and foremost, but also on agility to react to market changes in terms of pricing when situation change. This remains and will continue to be a key factor for future success and profitability of this company. An important topic we mentioned today and we go in more detail, we already announced in October with our Q3 results, an improvement program. So here, finally, more details on it. We are launching a cost and performance improvement program named Project Horizon, which aims at restoring our targeted profitability, will consolidate the group's competitive edge, so our competitiveness, will drive efficiencies and facilitate the agility needed in this ever-changing environment. It focuses on simplifying and streamlining the organization of the group. Structurally is important because these savings are here to stay, structurally lowering our cost base, adjusting our industrial footprint and rationalizing our capacity worldwide when possible. The program is ongoing. It is subject, of course, to the completion of the required social and legal processes. On the financial side, on the right, Project Horizon targets annual cost savings of at least EUR 50 million to EUR 60 million run rate per year versus a starting point 2025 cost base. And we do expect to have benefits of at least 50% of the program already in 2026 with the rest coming in 2027. We expect the cash cost of implementing such a program at approximately 1 year of saving, which makes it particularly attractive. Let me now give you a short update on the 2 key -- other 2 key topics for the group, lithium. First, announcements have preceded this call. So you are aware on EMILI in February -- on February 11, we announced that the French state has acquired a minority stake in the project. It is a key milestone for the future of the project. It's an investment of EUR 50 million in the equity of the company, which will support and finance the EMILI project in finalizing the definitive feasibility study until the end of '26 and probably in early '27. As far as our second project, Imerys' British Lithium is concerned, the scoping study, which is the step before the pre-feasibility study, was concluded and finalized in early '26, confirming at the end, a high value and a strategic relevance of this project. However, the group has decided to place the project on maintenance and care. And consequently, there will be no further investments in this project in the nearby future. With regards to the Chapter 11 process of the North American Talc entities, another milestone, the confirmation hearing as planned, started on February 2 and was concluded on time on February 6 at the Court of Bankruptcy in Delaware. We anticipate the court to issue its ruling in the following weeks. The potential confirmation, if positive, will then need to be subject to -- or subject to an appeal will need to be reviewed and affirmed by the U.S. Federal District Court. We remain confident in a positive outcome of this process. Moving to our sustainability performance. I'm pleased to share that we have successfully completed our '23-'25 SustainAgility road map. You see here some indicators. Of course, I will not read them all, but 14 out of 16 have been overachieved. This demonstrates how deeply we have integrated sustainability in the core industrial strategy of this group. And knowing that it is a topic of particular interest, if we focus a bit more specifically on CO2 emissions and climate change, we can look at the next slide. Our Scope 1 and 2 emissions amounted in 2025 to 1.8 million tons of CO2 equivalent. This is a 28% reduction versus 2021, the starting point, which puts us well ahead of the pace required to reach 42% reduction by 2030. On Scope 3, we have already achieved 22% reduction against 2021 baseline, nearing our 2025 target for 2030. This performance is great and derives fundamentally from actions and investments in several areas, in particular, energy efficiency, heat recovery, switching to low-carbon energy. This achievement also confirms that we have met our sustainability performance targets for our 2021 sustainability-linked bond with a positive effect on the interest rate. We've done well in the past. We move on to the future, and we are launching our third road map to building on the experience of the last 8 years and this continuous progress. We've taken the opportunity to strengthen and simplify our midterm objectives and focus really on what stakeholders expect while being, of course, fully aligned with the latest CSRD guidelines. I will not go through the list, but I assure you that our targets are both ambitious but also reachable. I now hand over to Pierre for a detailed analysis of our financial results. Pierre Lebreuil: Thank you, Alessandro. Good morning, everyone. It is a pleasure to be there with you today for the first time. So let me recap some of the key aspects of our financial performance, starting with revenue. Group sales were EUR 3.4 billion for the full year 2025. This represents a 0.7% decrease at constant exchange rates and perimeter compared to last year with volumes slightly down and prices holding well. As a reminder, the perimeter effect includes a negative impact of EUR 165 million from the disposal of our assets serving the paper market in July '24. It is partly offset by the EUR 50 million of sales generated by the Chemviron business acquired at the beginning of 2025. Currency had a negative effect of EUR 82 million, mostly coming from a drop of the USD versus euro from the second quarter onwards. You can see Imerys performance for the fourth quarter at the bottom of the chart. Trends in sales volume and prices were similar to what we saw for the full year. The currency impact was, however, much more negative. It represented 4.2% of sales and was driven by impact of the weak USD. Let's now have a look more in detail at our 3 business segments. Beginning with Performance Minerals. This business generated EUR 2 billion of revenue in 2025, representing 60% of Imerys group sales. Overall, the business remains very resilient given market circumstances, showing just a slightly negative organic growth compared to last year at minus 1.3%. Full year 2025 revenue in the Americas was down by 1.3% at constant scope and exchange rates versus last year and stood at EUR 841 million. Sales were impacted by a weak residential market in the U.S., suffering from high interest rates, unsold housing inventory and by a soft consumer market. Prices held well. Full year 2025 revenue in the Europe, Middle East, Africa and Asia Pacific region decreased by 1.7% at constant scope and exchange rates compared to last year. Volume were down by 2.8%, driven by muted construction and automotive markets. This decline was partly compensated by a good level of activity in the consumer market. In Q4, the performance was in line with previous quarters. Despite lower volume, Performance Minerals adjusted EBITDA is above last year by 4% like-for-like, a strong achievement, driven by price discipline and cost management. The EBITDA margin was resilient at 17.8%. It is worth noting that performance on the Chemviron, the diatomite and perlite business acquired in January '25, was ahead of expectation, thanks to quick synergies implementation. Let's now look at our solution for Refractory, Abrasive & Construction business. Full year sales to the refractory market were impacted by the low industrial activity in Europe and in Asia, while the U.S. market resisted better. Pricing remained steady. It is worth flagging that organic growth was positive both in third and fourth quarter of 2025, driven by commercial actions and strong sales of advanced ceramic products. Full year 2025 adjusted EBITDA declined by 9.8% at constant scope and exchange rates due to lower volumes, which were partly offset by a positive price/cost balance and cost savings initiatives. Let's now have a look at Solution for Energy Transition to complete this segment review. Starting with Graphite & Carbon. Full year 2025 revenue increased by 11% like-for-like, driven by solid end market, primarily electric vehicles, along with new product launches and robust conductive polymers business. Fourth quarter revenue was stable as some external and temporary factors delayed sales by a few million euros. Full year 2025 adjusted EBITDA increased by 41.2% over the previous year. This substantial improvement is primarily attributable to significant volume increase. Adjusted EBITDA margin reached 25%, a gain of 5.5 percentage points. Let's now focus on TQC results. As a reminder, TQC is our 50% joint venture in high-purity Quartz business. Full year 2025 revenue amounted to EUR 167 million, a significant drop from a record-breaking previous year. Performance was affected by disrupted solar value chain, even if inventories are now at healthier levels. Revenue improved in H2 '25 at EUR 85 million, outperforming both H1 2025 and H2 '24. Full year 2025 net income dropped to EUR 35 million. TQC delivered for the full year a solid 36% EBITDA margin. Now let's look at the group's profitability. For the full year, adjusted EBITDA reached EUR 546 million, corresponding to a 16.1% margin. Looking at Imerys' direct operational performance highlighted in the box in gray color, you can see that EBITDA was very resilient with just a slight decrease of 0.7%, a great achievement given the economic context and supported by price discipline and cost management. On a reported basis, EBITDA decreased 19% in comparison to 2024. This reflects the lower contribution of joint ventures by EUR 74 million, perimeter changes for EUR 30 million and an unfavorable exchange rate effect of EUR 22 million. The picture is similar for the fourth quarter, where adjusted EBITDA matched prior year levels once adjusted for currency fluctuation, changes in perimeter and joint venture performance. Let's now move to the bottom of the P&L. Net income group share is a negative EUR 409 million. As detailed on this slide, it is impacted by other operating income and expenses amounting to EUR 555 million. This EUR 555 million are mostly related to 2 items. The first one is a noncash goodwill impairment charge of EUR 467 million related to the solutions for Refractory, Abrasive & Construction business. This impairment reflects a lower performance of the business plan than anticipated 1 year ago and the fact that antidumping measures on Fused Minerals import from China finally implemented by European Union are less protective than initially anticipated. It is important to flag that markets have eventually stabilized, and we do expect a progressive recovery of this business from 2026 onwards, as already noted in Q3 and Q4 '25 when RAC posted positive organic growth. Savings expected from the Project Horizon should further support recovery. The second items are noncash write-offs related to Project Horizon for EUR 41 million and to the decision to place Imerys British Lithium on maintenance and care for EUR 31 million. Let's now have a look at the cash flow generation. Current free operating cash flow amounted to EUR 78 million in 2025 or EUR 127 million before strategic CapEx. In comparison with 2024 year, free cash flow generation is primarily impacted by a decrease in dividend received from joint ventures, with no dividend received from TQC in comparison with approximately EUR 70 million received in 2024. You will note as well the EUR 26 million increase in working capital, primarily driven by higher inventory in the RAC business area, where we had anticipated a stronger impact on sales of antidumping measures in Europe, which finally did not materialize. Inventory and more generally working capital will definitely be an area of continued focus in 2026. Lastly, paid capital expenditures amounted EUR 317 million. New CapEx booked in 2025 amounted to EUR 297 million, including EUR 47 million related to our strategic investment in the lithium projects. The remaining EUR 250 million recurring CapEx were well below historical level of more than EUR 300 million and below our estimate provided in H1 2025. We do expect that capital expenditures in 2026 will continue to be limited and in the EUR 200 million to EUR 270 million range. This should allow us to achieve a robust cash generation in 2026. To conclude this financial review, let's now look at net debt. It slightly increased in 2025 as a result of strategic CapEx spend and dividend paid. I will highlight a couple of additional points. First, net financial debt went down in H2 2025, confirming the positive trajectory of our net cash generation. Second, we do not expect any significant strategic CapEx in 2026 as the financing of the definitive feasibility study for the EMILI Lithium project will benefit from the contribution of our partner in the project. I would also like to remind you that we successfully placed a EUR 600 million senior unsecured notes last November. The average maturity of our bonds is consequently extended to 4.3 years from 3.4 years at June 2025. Lastly, Imerys' investment grade was confirmed both by S&P and Moody's in second semester 2025. Net debt represents 2.5x the adjusted EBITDA, reflecting the solid financial structure of the group. On this positive note, I will now hand back to Alessandro for the outlook. Alessandro Dazza: Thank you, Pierre. So let me summarize this presentation by saying 2025 was a challenging year, but I think the group, especially in its core activity, did quite well. We have managed to keep sales flat, our overall EBITDA flat, excluding external factors, FX, perimeter, all JVs. Performance Minerals increased its profitability. Graphite & Carbon was exceptional. And RAC, which was negative compared to last year, posted growth in the second part of the year, which makes me quite optimistic for the future. How do we see '26 going forward? Don't expect a guidance as we -- as in the past, we will not do this. We release it typically after having seen the outcome of H1. Personally, I'm optimistic, but I've learned to be prudent as markets have been slow in recovery. Yes, we expect good construction in Europe, but we are still uncertain on the speed of recovery in the U.S. and automotive, which is a big market for the group, remains difficult to interpret. For sure, electric vehicles will continue to grow strongly in Europe as well as in China. So with this prudence, which is I think needed so early in the year, what I know is that the group will deliver what is in its hands, and I'm talking about our restructuring program, Project Horizon is ramping up capacities that we have built. So they are available. The markets are there. We don't need to invest further. We need to ramp it up as we showed in '25 and will continue, and we'll continue with our innovation efforts because we need to build the future. So thank you very much, and I would like now to open to Q&A. Operator: [Operator Instructions] First question is from Sven Edelfelt, ODDO. Sven Edelfelt: Yes. Welcome to Pierre. So I will have a couple of questions. Alessandro, I quite understand the usual view of not giving any guidance, but this year is a bit more complicated to understand because there is a cost cutting, construction of somehow improving in Europe. You mentioned that you managed to the core business, you managed to make it stable this year. So if you add up the number of EBITDA for '25 plus the cost cutting, it's probably a minimum. Hello? Alessandro Dazza: Yes, we hear you well, Sven. Sven Edelfelt: Okay. Sorry, I've got another call. And secondly, on asbestos, it seems that it's going extremely well since the last hearing. I see a lot of certificate of no objection being published. So there is a hearing on the 24. Can we consider a positive outcome as early as next week? And the last question is on CapEx. I think you mentioned EUR 250 million. Is it a maximum? And can we expect CapEx to be a little bit below this level? Alessandro Dazza: Thank you, Sven. Many questions. I'll try to address them all. As I said, we don't give a guidance. Therefore, I will not comment what '26 looks like. Yes, we will do the cost-cutting program because it's in our hands. I trust that construction will rebound, especially in Europe, but it's not in my hands. That's the market. And we know we have seen construction in the U.S. rather slowing down in the second part of '25. So we do need construction in the U.S. also to be solid before we can say, yes, it's going to be a good year. And that's why my prudence, which is really we are exposed to markets. If you remember a year ago in this room, I said '25 will be a good year, volumes will go up. And then we had tariffs and then we had interest rates that did not drop fast enough, and we ended up with a slightly negative volumes. So for me, prudence is the minimum that is required in this very challenging and rapidly challenging world. But we will deliver what is in our hands. And you mentioned CapEx. you've seen the agility of the group. Typically, we invest EUR 300-plus million. We saw that this year volumes are -- sorry, in '25, we saw volumes are not coming, so we could reduce rapidly our CapEx, and we ended up for, let's say, running rate for the core business with EUR 250 million. What will be '26? We will adjust. We will adjust as volumes grow. But I expect in a normal year to be maybe EUR 260 million. Don't forget, there are CO2 rights that now need to be booked as CapEx. So I think in the region, EUR 250 million, EUR 270 million could be a realistic number, and we will really adjust it based on what we need. We have good invested assets. I think it is the new normal to go down to these levels. The EUR 300 million plus is the past. And I remind you that, as Pierre mentioned, in '26, we will not have strategic CapEx because our strategic CapEx was the lithium projects. We have paused the U.K. We have found a partner that contributed capital in France. So for '26, there will be no further expenditures. And I can continue to comment on other cash items, but we'll do it later. Lastly, Chapter 11. We have always been confident. I think it was important to start this confirmation hearing and to conclude it. So it went on time. No surprises. We can remain confident. We shall remain confident, but now it's in the hands of the judge to issue the ruling. It's the final hearing, the confirmation hearing. So it will be a very comprehensive ruling. So I expect several tens of pages, maybe hundreds of pages. So it's something that will take time. I'm convinced because of the complexity of the case and the requirement of the law. Frankly, this 24 date, 24 that you have mentioned is not known to me. We have no outstanding deadline. It's really waiting for the issue of the ruling. So we remain confident, but we can only wait for the ruling. And I think I addressed all your questions, Sven. Operator: Next question is from Auguste Deryckx, Kepler. Auguste Deryckx Lienart: I have 2 questions. The first one is on the lithium project in the U.K. The decision to end this project contrast with the positive momentum on prices. What should we conclude from this? Is this project failing to achieve the targeted cash cost? Or is it linked to the French stake in the EMILI project? So basically, what are the reasons for this decision? And the second question is on the cost-cutting plan. A large part of it is for 2026, but there is also costs associated with this plan. So should we expect a net impact close to 0 for 2026? Alessandro Dazza: Thank you, Auguste, for the questions. The lithium project in the U.K., so British Lithium is a good project. We have finished the scoping. So we know roughly the potential of the deposit, the cost of the CapEx and the cash cost of production tomorrow. It's a good project. Of course, scoping means you have less certainty on these numbers than you have when you do a pre-feasibility study, which is complete in France and/or a definitive feasibility study, which is exactly what we are doing in France. So the project is good and it's not ended. It's paused. Maintenance care means you have something, it's of great value, but at the moment, you decide not to pursue. So we paused it. So we could restart it. It will depend on several things. One of them is do we find investors that join us. I always said we need investors to join us. These projects are too big in size for Imerys alone. So we need investors to join us. So -- and secondly, the project in France is way more advanced. We are at least a year, 1.5 years more advanced in terms of studying engineering pilot plant. So we prefer to go full steam on this one today and focus all our resources on this one and accelerating rather than running 2 in parallel, which would have been complicated. So this is the analysis. Lithium prices, you're absolutely right, jumped. In December, November, when we spoke last time, they were around $10. They are today around $20 per kilo. So they doubled. I remind you, as we always said, we believe the mid-, long-term price of lithium should be between USD 20 and USD 25. That's what all expert studies show. At that price, EMILI Lithium project is more than EUR 1 billion NPV. So we are talking about a fantastic project. Yes, this level of price will raise new interest of investors. So we do expect to receive and we are in discussion to further consider partnering, first of all, as I said, for France, and we will see in the future for the U.K. On the cost cutting, I think your analysis is roughly okay. Costs will go -- cost of implementation -- cash cost of implementation will go with savings. Typically, you will have social plans, redundancy. So the moment you exit people, you will have -- you will incur the cost, but you will have the savings. So I would say, if we manage to achieve at least half of the savings in '26 and a full scale in '27, we will probably have a bigger part of costs in the first year and a bit less in the second year since the overall cost, which I think at 1 year of savings max is very competitive, I would say, because I think we will manage well this cost spending. I think cash-wise, yes, you might be more or less at 0 in year '26. I think it's a fair assumption, whereas we will have the full benefit then recurring from '27 without costs. Operator: Next question is from Sebastian Bray, Berenberg. Sebastian Bray: I have 2, please. One is on the level of interest charge. Is the full year '25 level now recorded a good proxy for what to expect in future years? I appreciate that there was a step-up in the cost of interest because of the successful bond refinancing, but I suspect there might be 1 or 2 one-offs in the '25 interest charges. Are we now at a stable good level as we look forward? And my second question is on the Quartz company. It looks like things are getting better. Can you talk a little about the pricing and volume trends as we've moved into the half year of '25 and into '26? Is this business returning to positive pricing territory or is the improvement simply the result of better volumes? Alessandro Dazza: Thank you, Sebastian. I'll let Pierre comment on the expectation of '26 financial charges compared to '25. Pierre Lebreuil: Sebastian, so as you rightly pointed out, and as you know, we refinanced in last November, a EUR 600 million bond. Basically, the coupon for the new bond is 4%. Where the coupon for the bond we refinanced was around 1.5%. So it's easy to do the math, as you can see, just mechanically you can expect in 2026, a finance charge increasing by roughly EUR 15 million, all other things being the same. Alessandro Dazza: And on the Quartz company, your comment is correct, the business is stabilizing and returning to a more regular path of progressive -- slow progressive recovery growth. Inventories are stabilizing in the value chain. Of course, the competitive pressure is there when volumes are lower. So there is more competition that has caused a reduction in pricing in the market. We don't comment specifically on volumes nor on future prices because it's a very small market and therefore, we should be extremely careful. But I would say, overall, a positive -- gradual positive trend to be noticed going forward. Sebastian Bray: Helpful. Just to clarify on the finance costs. There are no one-off items or anything else in the interest charges for '25, that would mean that the actual level is different to what was reported. Pierre Lebreuil: That's correct. Nothing worth mentioning here. Operator: Next question is from Ebrahim Homani, CIC. Ebrahim Homani: Pierre, congrats for you new position. I have 2 questions, if I may. The first one is on the Q1. The comparison basis will be a bit more challenging. Do you expect the continuing improvement of the organic growth sequentially in the Q1 2026? And my second question is on the impairment. Could you give us more details behind this impairment? And on the EUR 1.3 billion of goodwill in the balance sheet, are there still elements at risk? Alessandro Dazza: Ebrahim, sequential for me is Q1 on Q4. Typically, Q1 is stronger than Q4. So sequentially, yes, there will be an improvement. If you compare to last year, too early to say because we only saw January. As I said, markets are not rebounding rapidly, as I stated in my outlook. So difficult today to guess. What is for sure still there in Q1 is an FX impact. So the dollar was in Q1 last year, 104. So a very strong dollar a year ago. Then from Q4 -- sorry, from Q2 onwards, similar to where we are today. So we will still have an FX impact in Q1 of 2026 compared to last year, and then it will basically fade away because we will be more closer to current levels with last year levels. Other than that, too early to say. I said, some market share recovery, Construction Europe, paint, others are still in the middle. Automotive, for sure, we will see growth in EVs and battery materials in general. U.S. for me remains still a question mark, so to be seen. On the impairments, it's very simple. The business RAC carries a goodwill, which derives from old acquisition. And the assessment of today's market conditions, and we can discuss basically is an acknowledgment that there is a new normal, especially in Europe after the energy crisis and increased competition from Asia. The value in the books did not -- the goodwill did not represent the real value. So we took this accounting entry. As I said, it's noncash. It has no impact on the company itself. It's a correction. It's an exercise you do every year at the end of the year, which automatically means for all other businesses, we see no need for this. Otherwise, we would have done it. And I think what is important to note is that the business, which suffered in '24 and in '25, as you have seen, if you look back at our previous communication, finally stabilized and even is starting to recover. We had organic growth in Q3 and in Q4. The antidumping measures are in place. They were temporary before. They are in place. Yes, they are less than we expected because there are free quotas for some volumes, but they will bring some relief to this industry in Europe in the future. So I think this business remains solid and should probably post some positive news going forward. I think we addressed... Pierre Lebreuil: Let me add as well, the RAC business area in addition, as our other business area will benefit from the horizon plan, which you need as well to factor in Europe. Alessandro Dazza: Absolutely. Competitiveness of the group will be improved, thanks to our cost and performance improvement program, so that will give us an extra competitive lever going forward. Operator: Next question is a follow up from Sven Edelfelt, ODDO. Sven Edelfelt: Yes. It's me again. Sorry to come back. I want to better understand this question for Ebrahim on the goodwill. So this EUR 467 million is coming from Kerneos. But I don't think actually Kerneos profit is lower than 10 years ago. I know you bought it in 2017, but I'm not sure Kerneos profit is lower than 10 years ago because of the current EU-ETS on the clinker price surge across Europe. So is it because the Kerneos goodwill has been spread across the RAC business unit? Or is it because Kerneos exposure to China? Just to clarify. And then I would have a follow-up on the lithium project. I'm a bit surprised by the valuation of the project, EUR 150 million or EUR 160 million, if you take into account how much the French state has invested. So is there a commitment from the state to fund more of the project in the coming year? Can you perhaps elaborate on this optionality? Alessandro Dazza: Sven, I'll let Pierre comment on the concept of goodwill on the business. Pierre Lebreuil: Yes. Indeed, as you rightly pointed out, goodwill are tested only at business area level, so at RAC level. So the fact that we are now booking an impairment for RAC, you are correct when stating that this goodwill originated from Kerneos acquisition in 2017. But still, we are testing globally the goodwill for RAC. And it does not mean whatsoever that this goodwill impairment is related to a weak Kerneos business. As you understood and as previously mentioned, we are far more suffering from Chinese competition in our Fused Minerals business than in our cement business. Alessandro Dazza: Correct. Thank you, Pierre. And the -- let's say, the acknowledgment of this change in market condition is really after the spike in energy in Europe, which did not happen in Asia. So the market has changed in competitive terms between Europe and Asia, and that's mostly the high energy intensity products like Fused Minerals. On EMILI, we did not disclose any value, and so I do not comment on the value. And I can confirm that there is no commitment in any form of any of the partners to continue, just a will to work together to develop this project, and we will take decisions when they come. Maybe, Sven, what you correctly noticed is I believe the state today enters or entered at a time where lithium prices were very low and therefore, probably did a good deal joining the project in early stages. Today, I think our project has a higher value. So we will try to find new partners because we want to rapidly ramp it up and do it. So we will need new partners, as we always said. But I am convinced that the cost of joining the project will change given the much better expectations that the market has developed. And you see also in the value of companies producing and selling lithium that have really increased significantly over the last few months. So -- but we will, with our partner, go step by step as we have decided. Sven Edelfelt: Okay. So -- but can you confirm that the EUR 150 million price roughly is based on the lithium price of $20, not $10? Alessandro Dazza: No, no, because I don't confirm neither the value nor -- betting on future prices is complicated. So everybody can do his own guess. So there is -- but a deal closed now started for sure, several months ago. And therefore, the starting point was a lower lithium price for sure. That's why I'm saying going forward from now on, I believe the EMILI project has a much higher value because people believe in $20 today. When you are at $10, it's difficult to -- I always believed in $20 per kilo because I think that's the price that the world needs to allow projects to start, to be profitable. Not too expensive, it cannot be $50, $100 or $80 as it was because then cars, batteries will become too expensive, but you need a minimum price to allow projects to exist, to be profitable and therefore investors to invest. And for me, it's anything between $20 and $30. So that's where we are now. It's good for the future. And based on this, we will value the projects going forward. Operator: [Operator Instructions] Gentlemen, we have no more questions registered at this time. Alessandro Dazza: Thank you. I see on the screen, we have a question on cash generation for '26. I'll answer it quickly. I would like to compare rather to '25. I believe '25, we had an alignment of events that were fundamentally negative or impacted negatively our cash generation. We spent more than EUR 50 million on the lithium projects on strategic -- what we call strategic CapEx. It will not recur in '26. As we just said, one project is paused. The other one is financed to move forward. We had an increase in working capital, EUR 26 million, as Pierre showed in the previous -- in one of the previous slides, mostly because we expected a strong sales development in RAC when the duties were introduced, the antidumping duties. It didn't come. So we will reduce this inventory. So first, there will be no growth of inventories. On the contrary, this effect should even reverse because we will adjust to the new market, and therefore, it will help significantly '26 cash generations. We did not receive dividends from our main joint venture. I remind you that TQC invested in capacity expansion in '24 and '25 in the U.S. first and in Norway afterwards. As said, therefore, we decided with our partner in 2025 to pause dividends. But the capacity is concluded. The capacity expansion is concluded. Ahead of us, we have a business that will continue to deliver solid net income, solid EBITDA above 30% as we have seen in '26 -- in '25, sorry. So there will be solid cash generation and therefore, pending, of course, agreement with our joint venture partners, but I do believe there will be room to restart paying dividends from this fantastic business. We will pay a lower dividend in '26 compared to '25, which again will generate cash generation for the group. And as you have seen and somebody of you asked, CapEx -- running CapEx day-to-day are under control, and I do not expect a significant increase next year. Therefore, in terms of paid, we will see this level coming down to a more what we book you pay, whereas we are still coming from higher booking and therefore, higher paying than booking. So in general, I think we will see a significant positive improvement in 2026. And I hope I have addressed the question. If there are no further questions, we will close. Let's allow our room to confirm, please. Operator: We have no further questions registered at this time. Alessandro Dazza: Thank you very much. Then thank you again for dedicating this hour to Imerys, and we wish you all a good day. Thank you. Pierre Lebreuil: Have a good day.
Operator: Hello, and welcome to Inseego Corp.'s Fourth Quarter 2025 Financial Results Conference Call. Please note that today's event is being recorded. [Operator Instructions] On the call today are Juho Sarvikas, Chief Executive Officer; and Steven Gatoff, Chief Financial Officer. During this call, certain non-GAAP financial measures will be discussed. A reconciliation to the most directly comparable GAAP financial measures is included in the earnings release, which is available on the Investors section of the company's website. An audio replay of this call will also be archived there. Please also be advised that today's discussion will contain forward-looking statements. These forward-looking statements are not historical facts, but rather are based on the company's current expectations and beliefs. For a discussion on factors that could cause actual results to differ materially from the expectations, please refer to the risk factors described in the company's Form 10-K, 10-Q and other SEC filings, which are available on the company's website. Please also refer to the cautionary note regarding forward-looking statements section contained in today's press release. With that, I'd like to turn the call over to Juho Sarvikas, Chief Executive Officer. Please go ahead. Juho Sarvikas: Good afternoon, everyone, and thank you for joining us today. Q4 2025 was another strong quarter for Inseego. We generated revenue of $48.4 million and adjusted EBITDA of $6 million, both above our guidance and marking our third consecutive quarter of sequential growth in each metric. These results capped a year of steady, disciplined execution. We exited 2025 with a meaningfully higher quality and more diversified revenue base driven by broader product breadth and increased customer diversity. Shortly after year-end, we further strengthened our operating momentum by improving our capital structure by retiring all preferred stock. We accomplished this at a meaningful discount, enhancing the company's long-term flexibility and are pleased to welcome Mubadala Capital as a significant common stockholder. Steven will walk through the financials and outlook in more detail later in the call. I'd like to step back and discuss how our performance in 2025 and our trajectory going into 2026 demonstrates that the strategy I outlined when I stepped into the CEO role a year ago is working. To frame that discussion, let me briefly revisit our strategy. We are building an enterprise wireless broadband platform that combines cellular-first connectivity with intelligence, manageability and scalability at the wireless edge. That strategy has remained consistent throughout 2025 and is grounded on 5 clear strategic priorities. First, scaling carrier revenue to a broader enterprise-focused Fixed Wireless Access and mobile portfolio. Second, accelerating Inseego's evolution into a solutions company by creating a platform that includes industry-leading wireless hardware, network and device management and subscriber life cycle management. Third, expanding and diversifying our routes to market and customer base. Fourth, maintaining financial discipline and strengthening our capital structure. And fifth, building a world-class management team and Board of Directors to drive long-term growth and scale. Our fourth quarter results and 2025 full year progress are consistent proof points of execution against these strategic priorities. With that context, I want to do 3 things on today's call. First, I'll walk through how we executed in the fourth quarter. Second, discuss what we delivered across the full year in 2025. And third, share how that execution positions Inseego for its next phase of expansion as we move into 2026. With that, let me now turn to my first topic, how we executed in Q4. Starting with our core business of cloud-managed FWA and mobile solutions. We continue to see strong performance from our FX4100 FWA product with T-Mobile during the quarter, reflecting ongoing enterprise demand and solid sell-through. During Q4, we significantly expanded our Tier 1 carrier footprint for Fixed Wireless Access. As we shared on our last call, we meaningfully broadened our reach and customer diversification by securing an FX4200 FWA award with AT&T. Equally importantly, we just announced this Tuesday that we also signed Verizon for the FX4200. Both AT&T and Verizon have placed initial stocking orders, and we expect commercial sales to begin ramping up in earnest in the first half of 2026 as these programs come online. With the addition of Verizon, all 3 U.S. Tier 1 carriers have now chosen Inseego to support their enterprise FWA offerings. This marks an important inflection point for our business. As carriers increasingly position FWA as a primary connectivity solution for businesses, alignment across all 3 Tier 1 carriers validates our strategy, reinforces our position as a partner of choice as enterprise adoption accelerates and establishes a clear foundation for meaningful growth in 2026. Turning to mobile. Our hotspot portfolio delivered its strongest quarter of 2025 with revenue increasing 27% sequentially to $20.4 million. Mobile represents roughly 40% of total company's revenue in Q4, underscoring the increasingly diversified mix of our platforms across mobile, FWA and software and services. Growth was driven by higher carrier stock volumes and solid channel activity as enterprises expand their use of mobile connectivity. With all 3 carriers committed to Inseego as a key part of their mobile portfolio, we see mobile as a durable and important pillar of our enterprise wireless platform. Continuing with our fourth quarter execution, we've made strong progress in evolving into a solutions company and advancing our platform strategy. In Q3, we shared that we have delivered a major release of Inseego Connect, our network orchestration SaaS offering, expanding its functionality and usability. In Q4, we began to see an impact from that investment. For the first time, Inseego Connect is being taken to market alongside our FWA solutions by all 3 Tier 1 U.S. carriers, each through their own commercial models and routes to market. This represents an important milestone. The combined offering of the FX4200, FX4100 and Inseego Connect reflects a clear shift from device-led selling to solution-led selling and establishes Connect as a foundational element of our enterprise wireless edge platform. As we continue to expand, this solution-based approach is an important source of differentiation for Inseego. We also continue to invest in our subscriber life cycle management platform, Inseego Subscribe, building out the leadership team and platform capabilities. Subscribe is a strategic investment area and an important component of our long-term software and solutions growth strategy. Turning to revenue diversity. With our fourth quarter execution, we broadened our revenue base to initial FX4200 orders from both AT&T and Verizon and delivered a strong quarter in our channel business. Importantly, channel growth was driven by traction across multiple areas rather than a single large transaction, reflecting healthier and more diversified demand. I'd like to take a step back now and review what we delivered over the full year of 2025. At the start of last year, when I arrived at the company, we set out clear execution-focused objectives, execute and scale our FWA and MiFi business, strengthen our two-pronged go-to-market strategy and increase our investment in software. And throughout the year, we've not only stayed tightly aligned with these priorities, we've delivered against them. We meaningfully expanded our enterprise wireless broadband footprint by doing exactly what we said we would do. I reset the product strategy when I joined a year ago, and those products are now launching. Not only that, but I also focused on diversification of our customer base. So those new products are now launching across the broadest customer base the company has ever had. It took a year, but we got there. Throughout 2025, we continued elevating software and platform integration as core elements of our value proposition. Inseego Connect increasingly became positioned as the management, intelligence and control layer of the wireless edge. We made progress towards more integrated hardware and software solutions and took steps towards greater differentiation at the platform level. This laid out the groundwork for deeper software attach and solution-led selling as our portfolio and routes to market continue to expand. To highlight the scale of this growth, we entered 2025 with 3 products offered to 2 carriers. And entering 2026, we are now in the middle of expanding to 6 products across all 3 carriers. In parallel, we've broadened our go-to-market approach in 2025. Along with the expanding and diversifying carrier base, we laid the groundwork for VARs, MSPs, SSPs and MSOs and built the product, commercial and operational capability required to support broader enterprise engagement. All of this execution was delivered with continued financial discipline. We maintained strong double-digit adjusted EBITDA margins through a transition year, managed costs carefully while funding growth investments and strengthened our capital structure. This demonstrates our ability to invest in growth while maintaining profitability and operating rigor. And finally, 2025 was a year of further strengthening the organization. We significantly up-leveled the management team and Board of Directors, added operating depth across product, technology, sales, operations and supply chain from the C level down and built the infrastructure required to support the next phase of growth. That brings us to 2026. 2025 was a year of building the foundation for long-term growth through disciplined execution of our revised strategy that requires significant product investment. In 2026, we're continuing to make product investments in the first half of the year to drive growth. This also includes increased spend in go-to-market capabilities to ensure the success of new products and platforms we're bringing to market. This is a deliberate need to scale the business. Looking ahead to 2026, the market backdrop continues to strengthen and expand our opportunity. Enterprises are increasingly prioritizing resilience, always on connectivity with Fixed Wireless Access emerging as a primary connectivity solution. That shift is reinforced by carrier commitments as all major U.S. carriers continue scaling enterprise FWA programs. Industry forecasts reflect this momentum with ABI Research projecting North America enterprise FWA service revenue to grow at a 37% compound annual rate through 2030, expanding from roughly $2 billion to more than $11 billion. We see similar momentum in federal, state and local government, where cellular is supporting distributed operations, public safety and mission-critical connectivity and where security concerns have made U.S. designs an important consideration. At the same time, AI-driven workloads and accelerating mobile data traffic are increasing network complexity and raising the importance of performance, visibility and centralized management. As enterprises and governments expand their use of cellular, managing cost, usage and performance becomes as critical as connectivity. Taken together, these dynamics, including the growing convergence of cellular and satellite and continued advances in cloud technologies are elevating the importance of wireless edge and driving demand for integrated platforms that combine connectivity with management and control. This environment aligns directly with Inseego's platform strategy and positions us for our next phase of growth in 2026. Against this backdrop, our core priorities remain consistent. What changes in 2026 is the scale and intensity of execution. Compared to 2025, this is a much more front-loaded year with a higher concentration of carrier launches and product introductions in the first half, specifically in Q1. With that in mind, we're entering 2026 focused on 5 key areas. First, we will continue to scale enterprise wireless broadband across FWA and mobile. With all 3 U.S. Tier 1 carriers now aligned with Inseego, 2026 begins with multiple carrier launches in Q1 and ramps as operations get underway. That requires increased investment early in the year, but the result is a higher carrier-driven revenue run rate, broader channel participation and continued expansion opportunities as we move into the second half. Second, we will accelerate portfolio expansion. In the first half alone, we expect to introduce 4 new products. This includes the rollout of 3 new MiFi products across all major carriers, the introduction of a new entry tier enterprise FWA offering and expansion into additional verticals. This represents the most comprehensive enterprise wireless portfolio in the company's history with all products managed through a common software interface rather than a stand-alone hardware. Third, we will deepen the software and platform layer. Inseego Connect continues to evolve as the management and intelligence layer of the wireless edge. And in 2026, we will expand its role as our installed base grows rapidly. This allows us to introduce additional services, increase software attach and offer more value to customers and partners through a single integrated management experience. Fourth, we will broaden routes to market. The investments we've made in products and platforms are already opening doors with new VARs, MSPs, MVNOs and service providers. We are encouraged by early momentum, including progress with MSOs, and we expect partner-led activity to increase meaningfully as new products come to market. More of our growth going forward will be informed by this new expanding partner ecosystem. Fifth, we will advance our subscriber life cycle management capabilities within Inseego Subscribe. Finally, we will continue to execute with discipline. As we accelerate investment to support carrier ramps, product launches and go-to-market expansion, we remain focused on balancing growth with profitability and long-term margin expansion. Before I get to Q1, I want to briefly address the current memory market dynamic. Overall, as you've all seen, there's a lot of discussion on price increases and supply shortages as the suppliers have pivoted towards AI and data center. We have done a huge job in securing supply, and I do not see any meaningful impact on our deployments. When it comes to pricing, we've acted early, and we have been able to lock in modest price increases for products in the first part of the year. In addition to this, we're working with our large customers on price increases and cost sharing. Let's now talk about Q1. Overall, I'm bullish on 2026. We have more products going to more customers than this company has ever had. Q1 is a transition quarter, and there are several moving parts as we introduce a new mobile product generation and work with new large customers to develop joint go-to-market for FWA. While we still expect Q1 to grow year-over-year, there are 3 reasons for lower sequential Q1 revenue. First, we have had engineering delays in delivering our new mobile products that have pushed revenue to Q2. Second, one of our large Tier 1 FWA carrier customers has higher than initially expected inventory that they're selling out in Q1. And third, that same Tier 1 carrier recently changed their go-to-market strategy to address a broader set of customers, but causing a short-term disruption on selling logistics. In summary, 2025 was about implementing the strategy I laid out when I joined a year ago and building the foundation for growth. Now 2026 is about execution and scale. We're launching more products, ramping more Tier 1 carrier programs, expanding our software platform and broadening our partner ecosystem across MSOs, VARs and MSPs. This is positioning us to drive significant growth as the year progresses and scale Inseego at the enterprise wireless edge. We are energized by the trajectory of the business that we see exiting Q1 and confident in delivering the year. With that, I'll turn over to Steven to walk through the financial results and our outlook in more detail. Steven Gatoff: Thank you, Juho. Hi, everyone. Thank you for joining us. I'd like to cover 3 topics today. First, I'll take you through some details on the Q4 and full year 2025 financial results. Second, I'll provide an update on a material improvement in our capital structure that is adding to stockholder value. And third, I'll share some color on the financial profile of the business and provide guidance for Q1 and look at the full year 2026. As we always do, we'll wrap up the call by opening up to your questions. In 2025, we delivered 3 consecutive quarters of sequential revenue growth, culminating in a strong Q4 that exceeded guidance and paired with strong gross margins and disciplined spending resulted in solid profitability in the form of adjusted EBITDA that was the second highest on an apples-to-apples basis in more than a decade. On the top line, total revenue for Q4 was $48.4 million, driven by higher mobile volumes, increased channel activity, continued strength in FWA and a consistent contribution from our Inseego Connect and Inseego Subscribe SaaS offerings. As expected, mobile revenue was strong in Q4 2025 and was driven by a more broad carrier adoption and ordering cadence. While FWA revenue declined sequentially from the record Q3 2025, which benefited from new product rollouts at a carrier customer that we discussed last call, FWA revenue in Q4 was up 50% year-over-year and was driven by the diversification of our carrier customer base and solid channel activity. Software services revenue was $12 million in Q4, consistent and again providing a stable high-margin contribution to results. For the full year 2025, total revenue was $166.2 million, reflecting sequential quarterly momentum throughout the year. Moving through the P&L. Non-GAAP gross margin in Q4 2025 was 43%, up 75 basis points sequentially and driven by sales of some high-margin mobile products and the continued contribution from our high-margin SaaS services. For the full year 2025, non-GAAP gross margin was also 43%, reflecting an overall strong FWA business and our software services contribution and also the highest level of gross margin has been on an apples-to-apples basis in more than a decade. Non-GAAP operating expenses for Q4 were $17 million or 35% of revenue, reflecting the targeted investments in sales and marketing and R&D to support Tier 1 execution and new product launches that we talked about last quarter. As we also talked about and we'll review in a few minutes, we're continuing to make those investments in Q1 2026 to drive both revenue growth and scale as we move through 2026. For 2025, non-GAAP operating expenses were $59.4 million or 35.7% of total revenue. Adjusted EBITDA in Q4 2025 came in at $6 million, a 12.4% margin, among the highest dollars and margin percentage also in more than a decade. About $1 million plus of benefit was from the timing of R&D spend that pushed out of Q4 into Q1 2026 that I'll get to in a moment. For the full year 2025, adjusted EBITDA came in at $20.1 million, representing a 12.1% margin. We see this as an important overall proof point in our ability to invest in growth in the short term while maintaining profitability over the long term. Turning to the balance sheet. We ended Q4 with $24.9 million in cash, a very manageable debt balance of $41 million or approximately 2x LTM adjusted EBITDA. The strong cash finish to the year was a function of a combination of favorable outcomes on customer payments, inventory dynamics and strong working capital management by the team. Overall, the balance sheet strength underpins how we run the business and leads directly to my second topic, our capital structure. Last month, on January 14, we retired 100% of our outstanding preferred stock. It had a liquidation preference of $42 million as of December 31, 2025, and we exchanged it for $26 million of aggregate consideration, representing a 38% discount that immediately accrued to common stockholders. Total consideration consisted of $10 million in cash, $8 million in additional senior secured notes and approximately 767,000 shares of common stock. The cash is paid in 3 equal installments, 1/3 or $3.3 million was paid at closing, 1/3 will be paid 6 months following closing and the remaining 1/3 will be paid 12 months after closing. This transaction represents another purposeful initiative to simplify and strengthen our capital structure. By retiring the preferred at a meaningful discount to its liquidation preference, we reduced long-term obligations, improved balance sheet quality and immediately enhanced common stockholder value. The preferred stock was held by an affiliate of Mubadala Capital. And so as a result of the exchange, they now hold the position in our common stock. We're pleased to have them in the value creation going forward as a long-term common shareholder. With that context on our capital structure, let's now turn to our thoughts on the business and financial guidance for Q1 and the full year 2026. As we discussed on the last call, we started investing meaningfully going into Q4 2025 in new product development and go-to-market capabilities to drive revenue growth in 2026. We're committed to and expect to deliver that revenue growth outcome. We also talked on the last call how 2026 would be front-loaded with spend in the first few months impacting profitability to similarly support carrier ramps, multiple product launches and overall portfolio expansion. Importantly, with the now expanded carrier customer base, that spend positions us to scale the business, drive operating leverage and deliver profitability improvement in the second half of the year. To add more color on the revenue profile, as we've seen historically, Q1 has been a baseline quarter for the year from a revenue perspective, where Q1 has been down from Q4 for 3 of the last 4 years. We see this dynamic for Q1 and 2026, albeit for 3 specific factors. First, the second half of 2025 benefited nicely and particularly from a strong ramp of our new FX4100 FWA product with a Tier 1 carrier and from elevated mobile volumes driven by carrier promotions. Second, we have a Tier 1 FWA customer who went through a sizable company reorg and business realignment, as Juho mentioned, that impacted Q1 volumes and timing. And third, our new MiFi portfolio is set to launch late in Q1 2026, delayed from our initial target date, but that's setting up to drive a meaningful contribution beginning in Q2. And so while Q1 2026 revenue is lighter than desired on new product rollouts and transitions, we remain very positive on the outlook for both mobile and FWA in 2026 as we execute with our Tier 1 carriers and continue expanding our routes to market through SSPs and VARs. Looking at non-GAAP gross margin, we expect Q1 to reflect a lower mobile revenue margin, partially offset by a return to solid gross margin contribution on FWA and consistent software services. Total non-GAAP operating expense dollars are expected to increase modestly sequentially in Q1 2026 on the P&L and more so in total dollar spend in Q1 due to 2 drivers. First, as I mentioned, R&D spend originally planned for Q4 2025 shifted out to Q1 2026 on adjustments in product delivery timing. That shift out in spend resulted in more than $1 million of higher adjusted EBITDA in Q4 2025 and a corresponding higher spend level, therefore, now in Q1 2026. This funding of new product build-outs will also be seen in higher levels of capitalized R&D in the quarter as we've discussed. The second dynamic driving higher current spend in Q1 is the investments in sales and marketing that we've been talking about as part of the 2026 growth driver investment. Pulling this all together, we're providing the following guidance for Q1 2026. Total revenue in a range of $33 million to $36 million and adjusted EBITDA in a range of $1 million to $2 million. Overall, looking back at 2025, we see a similar dynamic for 2026 of growth and profitability coming off of Q1, growing in Q2, growing in Q3 and growing in Q4, with the important difference that there's now a foundation of a more diversified customer base and product portfolio, along with a rightsized balance sheet that provides important flexibility. And so on that strong foundation, we're also providing guidance for the full year 2026 for total revenue of approximately $190 million. With that, we appreciate your time and support and are glad to open the call for questions. Operator? Operator: [Operator Instructions] And the first question will come from Scott Searle with ROTH Capital. Scott Searle: Nice job on the fourth quarter and really nice to see the diversified customer base and product portfolio building over the course of '26. Maybe just to start, Steven, I wanted to dive in quickly on the memory front. I know you had some comments in terms of your opening monologue, but it sounds like you guys are managing that pretty well. I'm wondering if you could detail that a little bit more in the first half of this year. It sounds like it's going to be a shared burden with your MNO customers going forward. And then as it relates to the 2026 guidance, certainly implies things ramping up over the course of the year, as you articulated, it averages out to like $50 million a quarter. So that's a pretty big step up. I'm wondering, given the expected time lines and product introductions, what the comfort level and visibility that you have to that? And a lot of moving parts from an OpEx standpoint and gross margin standpoint, Steven, I'm wondering if you could give us a little bit of guidance about how we should be thinking about adjusted gross margins -- excuse me, adjusted EBITDA margins in the second half of the year. Steven Gatoff: Yes, sure. In a sense -- I will tag team. Juho and I on a good chunk because certainly on the memory part that Juho was talking about. And the short answer on the first part, Scott, is that on memory, we're pretty well locked in for Q1 certainly and really most of the first half of the year, and we'll get to that if you want to... Juho Sarvikas: Maybe the big thing, Scott, on the memory -- and thanks for the great question really is that we have so much new exciting products and customers ramping in first half. And I wanted to make sure that we have sufficient buffer to also capture upside, channel fill, all of that good stuff. So from a memory standpoint of view, as we were doing that, we realized somewhere around 6 months ago that the memory market is going to get tight. So we took the appropriate actions. So I feel good about the first half inventory situation as well as the pricing environment. Steven Gatoff: Awesome. And then good question, Scott, quite a few of them on the dynamic guidance. But the crux of what you're saying in our view is that, yes, things ramp quite quickly so that the Q2 -- we gave guidance, obviously, for the year, but the math, if you just sit there pretty back of the envelope, you would see that Q2 ramps to the high 4s, and then you would expect Q3 and 4 to have a 5 handle on it. Like yes, like that's how -- that's the math that gets you to $190 million. And so we get that. And so you -- in our view, you're thinking about it, right? And a similar dynamic, which is consistent with what we've talked about probably for the last 1.5 quarters which is EBITDA is the lightest in Q1 and then starts to grow and scale as we go into Q2 and then certainly in Q3 and Q4, where we said the average for the year doesn't really exist in nature, right? The first half of the year is at a lower rate and then the second half of the year is at a much higher rate, and we're exiting the year at a nice dollar amount of EBITDA and margin percentage. Let me pause there. Does that hit up what you were asking about? Scott Searle: That's perfect. And if I could just quickly tack on. Juho, there's been a lot of dynamic changes within the industry, I think, from a competitive standpoint. I'm wondering if you could give us some thoughts in terms of how you see your share shifting over the course of 2026. A lot of moving currents, I think, competitively in the mobile hotspot market. But then also, if you can provide a little bit of color in terms of some of the new product portfolio. Is that mostly going to be MiFi? Are there some other products that we should be expecting to see in new categories potentially taking us in international markets in the second half of the year? Juho Sarvikas: Scott, excellent questions. So I'll start with the mobile part. What I'm super excited is that we'll have now all 3 large carriers launching our new mobile generation. And like we discussed in the prepared remarks, we were hoping to see that earlier in Q1, but it will now take place towards the latter part of Q1. But the thing with mobile is that it's a predictable run rate business. Think of it like a light switch. Once you launch the product, you get the share in the category. All 3 of them are also positioned in a higher volume segment than where you've seen us historically. So I feel really good about the MiFi volume. And I think I've been fairly open about it. Look, I think in mobile or in hotspot, our job really is to go and consolidate the market. And these 3 across all 3 is a huge, huge milestone. I also see opportunity towards the latter part of the year or going forward in expanding a hotspot. There's also a value segment. And I also believe there's a great opportunity in the premium segment. So mobile, we innovate the category. We're huge fans of, and we look forward to continuing investing and growing, growing in that. I believe your second question was then on the portfolio. So I already described the mobile part of the story. Like you know, in FWA, today, we have, if you think good, better, best. We have the better with the FX4100 that we launched about 9, 10 months ago. We recently introduced FX4200, which is the best. And now what we're going to roll out during the first half is an entry-level, yet enterprise grade, same manageability, everything you know us for, but a lower tier router. So we'll complete this good, better, best for SMB, enterprise, call it, carpeted environments. And then, of course, there's a lot of other attractive verticals. So that would be my summary on the immediate portfolio expansion. Operator: The next question will come from Tyler Burmeister with Lake Street. Tyler Burmeister: So as we think about the 2026 guide across your mobile and your FWA businesses, the FWA side of the business continues to gain momentum and you kind of highlighted the mobile side of the business as being stable. Just wondering with the new customer ramping this year and mobile coming off a softer '25 and different dynamics, should we still expect the Fixed Wireless Access side to be a relatively larger contribution to growth this year? Steven Gatoff: Awesome. Thanks, Tyler. We'll tag team as usual. So we expect mobile and FWA both to grow on a revenue basis in 2026 for albeit different reasons, right? Fixed pie, if you will, on mobile, growing pie on FWA. So you all share all the thoughts on that. And on both the revenue and customer base. So short -- just to make sure you said flat, but it's a growth driver, both of them. Juho Sarvikas: Yes. The one thing I would add here or highlight is that, like I mentioned when I was answering Scott's earlier question, there's plenty of room to grow in mobile, and we're going to go as fast as we can, and that pony will do extremely well. At the same time, FWA on the back of the portfolio expansion, the customer expansion is going to be also a great story in 2026. So if you look at 2026, we'll see which one of these 2 categories ends up running faster. But if you take the long-term view, the FWA TAM for mobile. Also, now with these product introductions, our share in mobile will significantly grow. So if you take a longer-term view, it will be in -- the mix will be in favor of FWA. Tyler Burmeister: That's great. And then we talked maybe a little bit less about the MSO and the distribution channel opportunities on this call. So I was just wondering, as we look out this year, could we possibly hear some announcements or start seeing maybe some more meaningful contributions from those customer groups this year? Is that maybe a little bit further out opportunity for you guys? Juho Sarvikas: Thanks, Tyler. I think that's a fantastic question. So -- and I'm sure you're asking because I've been mentioning in my remarks, and I have been talking about it a little bit already. Look, to me, the MSOs, whether it's cable or fiber, many of these guys actually have cellular assets as well, right? They're kind of like a carrier. So like I would even put them in the same bucket as the large -- 3 large carriers, and there's brilliant FWA use cases with the MSOs, starting with failover, day 1, all of that. And we've done massive investment in both products where the FX4200 is actually the ideal, I'll call it, router platform for that use case, but also in our cloud with deep understanding of those use cases. So MSO is definitely something where I expect that we'll have great discussions as the year progresses. The VAR and the managed service provider, let's call this the channel, this is a different type of an animal. Now you have a fairly fragmented set of partners. By the way, I did mention or I should mention that the 3 large value-added resellers, CDW, Insight, and I can't believe I'm flagging on a third one now, are all going to launch -- we've already introduced programs. They're all stocking the FX4200 as of late last year. That is going to be a steady ramp. It's a little bit like the FWA. So these large guys, whether they are the carriers or the MSOs, they will drive big immediate volume uplift. The VARs and the MSPs in the long term become significant growth driver for us, but will be a slower burn. The third large value reason, of course, is SHI. Did I answer your question? Tyler Burmeister: Yes. That's great. Operator: The next question will come from Christian Schwab with Craig-Hallum Capital Group. Christian Schwab: Good quarter, and congrats on all the deals. As we look at the software business, you have one customer who's a material percentage of that software and services revenue. Is there an opportunity with the other 2 customers to deploy a similar program as your historical leading customer? Juho Sarvikas: Christian, thanks for joining us. Actually, I'll answer both aspects of the software business. Let me start with the Inseego Connect, which is our device management platform, orchestration platform. One of the really important things that we've implemented now, especially with the FX4200, but much broader is that since we've made that investment over 2025, in creating a world-class device management platform with great differentiation capability. Our go-to-market motion has really changed on the routers. It really is a solution first sale attach rate, but also the value capture is growing. The installed base, of course, takes time to grow. But again, here, if you take a multiyear view, Inseego Connect is a really important part of our story. It also provides other service opportunities for us where we can expand, as you might imagine. If you look at the subscriber life cycle management platform, yes, for sure. We've done significant investment here as well, and we're looking at from a business development standpoint of view, expansion opportunities. It really does have a unique feature set, especially if you go into the Fed and government space where you have a lot of compliance, a lot of complexity in terms of how you manage those customers, and there are significant benefits for carriers, broadly speaking, to leverage that platform. Christian Schwab: Great. I guess my second question, with the broadening base out of all 3 carriers, there seems to be a greater industry focus on enterprise class Fixed Wireless Access versus just residential. From a bigger picture standpoint, do you believe any of this has to do with Industry 4.0 initiatives or greater acceleration finally of private 5G networks by the carriers and their thoughts? Juho Sarvikas: So there was an immediate gold rush in FWA when 5G merged to consumer. The problem with consumer is the ARPU and the consumption profile. Very, very data demanding, massive consumption profile and you're competing against cable and other value props for the consumer. Enterprise, on the other hand, has a very rich ARPU profile. And if you think about it, the usage profile is completely the opposite of the consumer because you'll be working through the day, you maybe should not be streaming Netflix at the office. So just like from the basic dynamic standpoint of view, very favorable from a carrier P&L standpoint of view. There has been a significant constraint on the industry, and it really has been spectrum. So C-band when the auction happened, launched a massive wave of FWA expansion. There was a recent acquisition that one of the carriers made that you're very much familiar with. And all of a sudden, FWA and especially the business or enterprise segment became top of mind because now you have the capacity to go there, and it has the highest ARPU. So one of the really foundational things that we believe in is that cellular will take over the world in 2 ways. One, 5G performance is now broadband like as opposed to 4G. 6G is yet again another 10x faster. So you could make the case where now cellular should become the primary and there shouldn't be a discussion around it. It will also release massive amounts of spectrum, massive amounts of capacity when you can utilize higher on auction spectrum assets that are still out there yet to be deployed. And then look from an enterprise end customer standpoint of view, super easy to deploy, single management interface. You don't need to worry which of your location to get fiber or cable or how do you patch all of that together. So I think there's a lot of benefits that will continue to accelerate enterprise FWA. And that was one of the data points I was sharing is this 30 -- high 30s CAGR on service provider revenue increase in the enterprise FWA. Operator: The next question will come from Lance Vitanza with TD Cowen. Lance Vitanza: I've got a couple, if I could. The first is it's good to have Verizon back in the fold. That said, I do wonder what this means, if anything, for the variability of results going forward. I'm just wondering beyond the initial rollout, just looking ahead here, do you expect this to -- I mean will your visibility be better or worse off for having Verizon back in the mix relative to working with AT&T and T-Mobile? Juho Sarvikas: That's an FWA question. I'll take it, Lance. So the way to look at it is that I kind of go back to my previous answer, there's a strong economic incentive. All 3 players have made the statement that they're investing in FWA for enterprise, where we got with our existing large customer, it took a couple of product generations, and it took some time to develop the co-selling motion and to be able to drive that kind of volume uplift. So at this early stage, I can't really tell you like how fast each of these opportunities will grow. But I think we have very reasonable expectations, reasonable expectations that inform the guide for 2026 that Steven was sharing. Lance Vitanza: Okay. Great. And then -- so just to sort of go back to Scott's question about the full year EBITDA outlook. If I'm doing the math right, I think you put up about a 12.1% EBITDA margin for 2025. Should we be thinking about 2026 as kind of being in and around the same ZIP code? Or could there be upside or potential downside maybe for investment spend and so forth? How should we think about that relative to margin profile year-over-year on the EBITDA line? Steven Gatoff: Good question. Similar outcome, Lance. And so far as the answer for the year doesn't really exist in nature because we would expect to exit 2026 at those levels you're saying, at the higher levels, kind of where we are now-ish. But the first part of the year is going to be a bit lower. So the average for the year is somewhere in between that's not really existing. So if it's -- you can see the math for Q1, right? So if the first half of the year is single digits and the second half of the year is getting into a decent double digit, you'll do the math on the average. But the short answer is the rates that we're at, we would expect to be seeing in the second half and exiting the year for sure. Lance Vitanza: Perfect. Understood. And maybe just one last one for me. And just sort of thinking a little bit longer term, is double-digit revenue growth sort of sustainable over the next few years, do we think? Or should we be sort of thinking I'm not expecting guidance here. I'm not expecting that '27 will necessarily look as robust as 2026. But will those years -- will we continue to see robust growth, do you imagine? Or does 2026 sort of bring us back to kind of more of a new plateau level would you expect? Steven Gatoff: Of total revenue growth? You're saying, hey, can you grow total revenue at double digits in the next couple of years? Lance Vitanza: Yes. Steven Gatoff: Yes, we can. I think we said that at the end of last year as we're setting up for this year. And candidly, the growth profile for 2026 is a nice double digit with a pretty low week lane we might say internally, Q1. And so if we're pulling that off in a year where we're ramping a whole bunch of new products and transitioning, right, we're going from a company that was one product, one customer to many products, all 3 carriers, and we're doing that all this quarter. So like that's a big deal. And once that gets up and running, like that's a really nice model. And so a little probably long-winded, but the short answer is yes, we do believe that's a double-digit growth for the next several years. Operator: This concludes our question-and-answer session. I would like to turn the call back over to management for any closing remarks. Juho Sarvikas: Thank you for the great questions and for joining us today. Steven and I will be at the ROTH Conference next month, and we hope to see many of you there. I also wanted to thank our awesome employees for their hard work and dedication and our shareholders for your continued support and confidence in our vision. We are excited to have you with us on this journey. Thank you again for your time, and we look forward to catching up soon. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: Ladies and gentlemen, thank you for standing by. My name is Colby, and I will be your conference operator today. At this time, I would like to welcome you to the Pulse Biosciences Q4 and Full Year 2025 Earnings Call. [Operator Instructions] I will now turn the call over to Trip Taylor. You may begin. Philip Taylor: Thank you, operator. Before we begin, I would like to inform you that comments and responses to your questions during today's call reflect management's views as of today, February 19, 2026, only, and will include forward-looking statements and opinion statements, including predictions, estimates, plans, expectations and other similar information. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are more fully described in our press release issued earlier today and in our filings with the U.S. Securities and Exchange Commission. Our SEC filings can be found on our website or on the SEC's website. Investors are cautioned not to place undue reliance on forward-looking statements. We disclaim any obligation to update or revise these forward-looking statements. We will also discuss certain non-GAAP financial measures. Disclosures regarding these non-GAAP financial measures, including reconciliations with the most comparable GAAP measures can be found in the press release. Please note that this conference call will be available for audio replay on our website at pulsebiosciences.com in the News and Events section on our Investor Relations page. With that, I would now like to turn the call over to Co-Chair of the Board and Chief Executive Officer, Paul LaViolette. Paul LaViolette: Thank you, Trip. Good afternoon. Thank you, everyone, for joining us today. At Pulse Biosciences, we aren't just making a better medical device, we are creating a pulsed field ablation platform to completely shift how physicians treat disease. We intend to transition the entire medical field away from using energies that apply extreme heat or cold to destroy tissue and toward our much more precise method, nanosecond pulsed field ablation or nsPFA. Our technology has potential to completely disrupt multiple soft tissue ablation markets. And here are the reasons why. First, it offers incredible precision. Our system directs ultra-short duration bursts of energy, lasting only a few billionths of a second to only the precise locations where therapy is needed. Second, nsPFA creates a human body compatible healing advantage by initiating regulated cell death. Third, it operates with blisteringly fast speeds measured in billionths of a second. Precisely because of the speed and efficiency in ablating cells, we deliver less cumulative energy due to significantly shorter treatment cycles delivered in record fast procedure times. And finally, we have built an imposing legal fortress of intellectual property. We added 67 issued and 77 pending patents in 2025 alone, equivalent to adding a new piece of intellectual property every 2.5 days throughout the year to protect our novel developments. In total, 250 patents have been granted to Pulse Biosciences and an additional 180 patents are pending approval. Overall, we made progress in calendar year 2025. Today, I will walk through those updates and our plans for 2026. After that, I'll turn the call over to our CFO, Jon Skinner, to review the financial results, and we will conclude with a question-and-answer session joined by Bob Duggan, Co-Chair of the Board. At the start of 2025, we defined a focused set of objectives for the year. Our highest objective was and remains to advance our nanosecond PFA platform into late-stage clinical development to treat atrial fibrillation in both electrophysiology and cardiac surgery. In addition, we plan to explore launch feasibility of our soft tissue ablation system prior to gaining a specific therapeutic claim using Category II reimbursement. We are pleased to report we made progress across each of those goals in 2025, and that noteworthy progress continues into early 2026. On the clinical front, we secured IDE approvals for both our electrophysiology catheter and our cardiac surgical clamp programs, positioning both to move into pivotal trial enrollment. In parallel, we significantly expanded treatment of patients in our European feasibility studies across both cardiac platforms, generating increasingly robust data sets to show superior workflow and procedural consistency. We also started publishing those data sets and through today have produced clinical performance of interest in each of our 3 clinical programs. On the commercial front, we continued the highly controlled launch of the Vybrance platform for soft tissue ablation in a targeted disciplined manner. We did so by focusing on supporting a few select institutions dedicated to procedural excellence in order to validate the clinical and economic model. We fully appreciate the essential value of FDA indication clearance as well as reimbursement certainty. We anticipate this to be a worthwhile work in progress over the next 4 to 8 quarters. Operationally and financially, we executed well and maintained disciplined expense management, exiting the year with a strong balance sheet that will enable us to execute on our clinical priorities in 2026. As we look ahead to 2026, our focus is clinical and market development execution. In electrophysiology, we intend to commence and complete enrollment in the nPulse cardiac catheter IDE study while continuing to treat patients in Europe in support of expansive clinical data essential to our successful CE Mark submission. In cardiac surgery, we intend to expand and accelerate IDE site activation and complete patient enrollment in 2026, while continuing European feasibility activity and preparing for an additional CE Mark submission by the end of the year. In soft tissue ablation, we are completing enrollment of the PRECISE benign thyroid nodule study, deepening commercial utilization in key accounts, driving the business model to our goal of financial viability and continuing to demonstrate the clinical advantages of the Vybrance nsPFA treatment. Each of these milestones advances our position as the disruptor in PFA therapies and first mover in nanosecond pulsed field ablation, a position that is reinforced by our significant intellectual property estate. Pulse Biosciences is advancing a platform that integrates advanced biophysics and precision engineering that will be changing for the better the standard of care for multiple disease states affecting patients worldwide. I will now start with our nPulse cardiac catheter system for AF ablation. While our nsPFA technology is a versatile platform designed for multiple clinical applications across the body, our primary focus is transforming heart care for AFib patients. We have developed the world's first one-shot ablation solution for atrial fibrillation. Our nPulse cardiac catheter can treat a targeted area of the heart with a 5-second single-shot burst, delivering circumferential pulmonary vein isolation or PVI. The nPulse cardiac catheter minimizes the need for the physician to reposition the catheter or overlap lesions. The nPulse cardiac catheter incorporates several differentiated design and performance features that set it apart from existing ablation technologies. We have previously presented data on acute procedural measures that validate workflow advantages and our recently presented outcomes data provide the first long-term clinical evidence of procedural success and are available on our website at pulsebiosciences.com. Because nanosecond pulsed energy is delivered so rapidly, the system delivers minimal cumulative energy to tissue. This results in no measurable tissue temperature elevation and low neuromuscular stimulation, which contributes to shorter procedure times and may reduce required anesthesia levels. In addition, the catheter incorporates a patented proprietary flexible electrode design that enhances maneuverability and conformability within the left atrium, allowing physicians to deliberately move the catheter within the left atrium and rapidly achieve stable positioning, enabling seamless procedural efficiency. In comparison to the current standard of care, the clinical benefits we reported in February 2026 have been nothing short of outstanding. In our European studies presented at the AF Symposium on February 5, the lead investigator of our feasibility study provided comprehensive as well as compelling data on procedural speed, workflow, safety and outcomes durability. Key study findings were outstanding and highlighted 100% procedural success or freedom from AFib at 6 months and 96% procedural success at 1 year for evaluable patients. Overall, freedom from atrial arrhythmia was 90% at 12 months as shown on a Kaplan-Meier curve and the data are available on our website. All 3 of these endpoints represent new standards of therapy effectiveness for nsPFA treatment of paroxysmal AF. Procedural efficiency remains remarkable. While still early on, we are routinely seeing physicians finish these ablations in just 6 to 8 minutes or faster, which could cut total procedure times by over 50%. These results reflect the underlying advantages of nanosecond PFA, deeper lesion formation with fewer applications and lower cumulative energy to deliver durable isolation. Physicians continue to highlight the simplicity of a single-shot approach and the reduction in catheter manipulation and lesion stacking compared with legacy technologies. The nonthermal nature of nsPFA continues to show a favorable profile, allowing physicians to treat efficiently and proceed to additional targets without delays between dose deliveries, unlike microsecond PFA, which requires prolonged recharging times. The Pulse Biosciences system directly addresses limitations of current generation catheters, microsecond PFA or thermal modalities by enabling complete durable isolation in a single energy delivery with the potential to cut procedure times in half. We expect to use the data from our European feasibility study to finalize our CE submission in the second half of 2026 with the potential for CE Mark approval in 2027. We are focused on accelerating our market entry strategy through strategic mapping partnerships. To bring this revolutionary nsPFA technology to the global market as swiftly as possible, we are actively pursuing strategic partnerships with world-class mapping providers and EP market leaders. Such a partnership should produce a tremendous win-win. By integrating our best-in-class nanosecond PFA solution with an existing best-in-class mapping ecosystem, our potential partner or partners can capture and solidify their market share with the most advanced energy solution available, while Pulse would benefit from nanosecond PFA worldwide commercial launch acceleration. These synergies should ensure that physicians and patients gain rapid access to the fastest, most precise and durable nanosecond PFA solution in present time. Let's now discuss our surgical ablation clamp. Our nPulse cardiac clamp is the first in the world FDA-approved IDE pivotal study, NANOCLAMP AF for a surgical device that delivers PFA. This represents a significant landmark in cardiac surgical innovation. Our system is designed to deliver fast, contiguous transmural ablation lines during open heart procedures for patients with atrial fibrillation. We believe the current treatment of preoperative AF with concomitant ablation is significantly underutilized and the speed and effectiveness of ablation delivered with nsPFA can transform this therapy and market. Our IDE program is progressing and enrollment activity is underway and expected to conclude during 2026. As a reminder, NANOCLAMP AF is a prospective single-arm multicenter study designed to assess the primary safety and effectiveness of the nPulse cardiac surgical system in treating AF during concomitant cardiac surgeries. We intend to enroll 136 patients in approximately 20 sites, including 2 international locations. In Europe, we continue to generate excellent results. Data presented previously at EX highlighted what we consistently see with this system, very fast total ablation times, clean lesion sets and reproducible workflow in the surgical environment. Surgeons continue to emphasize the importance of speed and predictability in this setting, which aligns well with the intuitive workflow and short energy delivery times observed with our system. These initial treatments keep us on track to file for CE Mark by the end of 2026. Beyond the significant clinical progress of our cardiac programs, the nPulse Vybrance percutaneous electrode system is validating in real-world use our technology in non-cardiac soft tissue applications. The nPulse Vybrance system is initially being used by physicians to treat symptomatic benign thyroid nodules, eliminating the need for traditional surgery. This is a very common and disabling condition associated with 250,000 new annual U.S. diagnoses. This annual incidence converts into 150,000 total or partial thyroid removal surgeries each year. And this is precisely the clinical practice opportunity we are exploring with our minimally invasive application of nsPFA to reduce nodule size and eliminate patient symptoms. Our current nPulse Vybrance technology has the potential to shrink nodules while sparing vital nerves, blood vessels and sensitive structures in the neck. In the fourth quarter, the team generated $264,000 in revenue from Vybrance systems and electrodes, an increase in revenue versus the third quarter. We are taking an extremely disciplined approach as we closely monitor individual account procedural volumes, site-by-site patient outcomes, all local procedure reimbursement results, procedural efficiency and overall clinical and business success factors routinely considered by each hospital when adopting a new procedure. Our approach remains deliberate, evidence-based and focused, operating at an intentionally limited scale to demonstrate how meaningful this opportunity can be within key accounts at large hospital systems in selected geographies. From a clinical perspective, the PRECISE benign thyroid nodule study remains on track to complete enrollment of 50 patients in the next few months. We plan to further expand the study to 100 patients over the ensuing 2 quarters. Broad adoption and viable long-term market expansion is our goal. It is important to note that scientific recognition of this work is on the rise. Data from Dr. Stefano Spiezia in Naples, Italy, have been accepted for a podium presentation at NAFID, the North American Society for Interventional Thyroidology in March. In parallel with the PRECISE-BTN study, we are expanding the clinical scope of the Vybrance platform. In the fourth quarter, we announced a research collaboration with the University of Texas MD Anderson Cancer Center, one of the world's leading oncology institutions to evaluate the use of nanosecond PFA for the treatment of both benign and malignant thyroid tumors. Under this collaboration, we are conducting an FDA-approved IDE study evaluating nsPFA for the treatment of papillary thyroid microarcinoma and expect to complete enrollment by year-end 2026. In addition, preclinical work is underway exploring the potential application of nsPFA in anaplastic thyroid carcinoma, a highly aggressive cancer with limited treatment options. We view this collaboration as strategically important for several reasons. First, it meaningfully expands the potential indication set for the percutaneous electrode beyond benign disease and into cancer, while remaining within the same core workflow of endocrine surgeons targeting thyroid disease. Second, it reflects external validation of the nonthermal mechanism of action of nanosecond PFA, particularly its ability to ablate cellular tissue and initiate regulated cell death while sparing surrounding critical structures, an attribute that is especially relevant in the neck because of the high density of critical nerves such as the recurrent laryngeal nerve, which controls the vocal cords, major blood vessels, the trachea and esophagus. And third, partnering with a world-class institution such as MD Anderson reinforces institutional and physician belief that the Vybrance nsPFA platform has broad applicability and will expand over time beyond its initial commercial use case in benign thyroid nodules. While this work remains in the research and feasibility stage, it underscores the platform nature of nsPFA and its multi-decade potential to address a wide range of soft tissue applications as clinical evidence develops. Economically, the Vybrance system is driven by recurring disposable electrode utilization and minimal facility overhead. The opportunity and model align with the growing trend toward minimally invasive procedures performed in lower overhead settings. We look forward to continued adoption of the Vybrance system and additional data publication in the second half of 2026. It is clear to us that multiple therapeutic FDA clearances beyond the soft tissue ablation clearance, while not yet achieved, will be essential to building a significant revenue growth business. Our commitment to generating clinical evidence, which will be highlighted later this quarter, will be the next critical step toward achieving FDA therapeutic clearances. With that, I will turn the call over to Jon to speak about our fourth quarter and full year financial updates. Jon? Jon Skinner: Thank you, Paul. Now I will highlight our GAAP and non-GAAP financial results before providing commentary on future cash use. I encourage listeners to review today's earnings release for a detailed reconciliation of non-GAAP measures to the most comparable GAAP measures. In the fourth quarter, we generated nominal revenues comprised of both nPulse Capital and Vybrance disposable sales. Total revenue was $264,000, up from $86,000 in Q3. This sequential growth was driven by both capital and disposable devices. Cost of product revenue was $260,000 for the quarter, slightly lower on a sequential basis as compared to Q3 2025. Total GAAP costs and expenses decreased by $1.7 million to $18.5 million compared to $20.3 million in the prior year period. The decrease in GAAP costs and expenses was primarily driven by a decrease in nonrecurring expenses. To remind everyone, non-GAAP costs and expenses exclude stock-based compensation, depreciation and amortization as well as nonrecurring costs. Total non-GAAP costs and expenses in the fourth quarter of 2025 increased by $2 million to $13.3 million compared to $11.3 million in the prior year period. The expected increase was driven by increasing clinical trial and early commercial launch activity. GAAP net loss in the fourth quarter of 2025 was $17.4 million compared to $19.4 million in the prior year period. Non-GAAP net loss in the fourth quarter of 2025 was $12.2 million compared to $10.4 million in the prior year period. As of December 31, 2025, cash and cash equivalents totaled $80.7 million compared to $118 million as of December 31, 2024, and representing a decrease of $14.5 million versus Q3 of 2025. Cash used in operating activities during the fourth quarter of 2025 was $14.8 million compared to $9.1 million used in the prior year period and $13 million in Q3 of 2025. We have also recently completed important corporate housekeeping filing a $200 million shelf registration. This provides the company with flexibility to support the balance sheet in an expeditious manner to ensure we have the resources required to achieve upcoming clinical milestones. Cash usage aligns with investment expenditures in pivotal trials, device scaling and initial commercialization. Expense growth remains deliberate and focused on long-term value creation. We continue to maintain ample liquidity to fund operations and clinical programs through major inflection points during 2026. With that, I will now turn it back to Paul for closing remarks. Paul LaViolette: Thank you, Jon. We are standing at the forefront of a medical transformation, leveraging Nanosecond PFA energy. Our Nanosecond PFA platform is no longer just a concept. It is scientifically validated, clinically proven in early use and its vast potential is slowly but certainly emerging across the fields of electrophysiology. We are moving forward with speed and purpose to establish Nanosecond PFA as the new global therapeutic standard. Our mission is steadfast, delivering significantly better outcomes for patients and creating robust long-term value via an emerging new era of patient and physician-friendly therapy for our shareholders. We are enthusiastic about the promising journey ahead, and thank you for your continued support. Now joining us for the question-and-answer session is Bob Duggan, Co-Chairman of the Board. Operator, please open the call for questions. Operator: [Operator Instructions] Your first question comes from Anthony Petrone with Mizuho Group. Anthony Petrone: Congrats to a strong start to the year in 2026 to the team. Maybe Paul, I'll start with Vybrance and then jump into nPulse for pulsed field ablation. Maybe looking at Vybrance here, we're 2 quarters into the launch. The team is expanding in a limited launch release phase here. Maybe just as we think about the next couple of quarters, when do we transition from limited release to a broader release for Vybrance? And then maybe just a recap on the enrollment time lines for the post-market surveillance study for thyroid, and then I'll have a follow-up on nPulse. Paul LaViolette: Yes. Thank you very much, Anthony. I appreciate your comments. Vybrance is exactly where we want it to be right now. It is in a market development mode. We are at a limited number of centers, and we are evaluating exactly how it works and exactly what we need to really scale it. I would say that phase is going really well. You alluded to the fact that the team is stable. We're focused on quality and as one would say, going deep rather than going broad. And we're very focused on data, and I'll talk about the benign -- the BTN study in a second. We're very focused on data. We're very focused on repeating quality outcomes for patients in multiple centers, and we're now at a number of centers. And we're very focused on accelerating the reimbursement process. So data will drive all of that and ultimately, data will drive a further therapeutic indication from FDA. We think those are the things that are required in our line of sight before we push on an accelerator to expand commercialization broadly. I've done a lot of market development work in my career in med tech, and it's really important to get the foundation right. That's what we are really focused on. We are very pleased to report increasing revenues. But we're really focused on the qualitative build-out of the market development and market enabling factors that will underpin revenue growth going forward. And so our focus is on building that rock-solid foundation for the long term because we know given the size of this market, given the lack of alternatives to these patients, given the quality of the outcomes we're seeing, given the, I'll call it, exclusivity of nsPFA and its ability to treat benign thyroid nodules in comparison to other minimally invasive alternatives or surgery, we know that we have that right formula. And so we're really focused on ensuring that we build that foundation because growth in patient treatments, growth in activation of patients both in converting them from surgery to less invasive nsPFA and in recruiting patients off the watchful waiting list. We know those things will happen once we build the fundamentals. On the recap, if you will, of the enrollment, we had mentioned in our prepared remarks that we expect to finish enrollment in the next few months. We are right on track for that. We have already enrolled a majority of that patient target in the first few quarters, and we're on track to finish it over the next 1 to 2 months ahead. So we feel very good about completing that enrollment on time. And then as I said earlier, our plan is to expand the study. We think we have the likelihood for very favorable clinical outcomes. We think those clinical outcomes which are very focused on quality of life and qualitative performance of those patients symptom relief based on the ThyPRO-39 score. We think that data set in concert with the data set that we will present at the NAST conference, which will focus on long-term outcomes from our feasibility study in Europe. We think the combination of those two will really create a very strong data set for additional regulatory authorization. So that's our focus with the current enrollment completed on time and the plan for expanded enrollment to increase the robustness of that data set. Anthony Petrone: Very helpful. And then I'll just squeeze one in on nPulse. So obviously, good showing at AF Symposium '26. 96 procedural success rate at 1 year, 22-minute dwell time in the left atrial wall and 90% freedom for arrhythmia. So a quick 2-part question. One is we move away from that medical meeting a few weeks ago. What has been the reception from the community? There seems to be quite a bit of buzz at the conference. And then what are the updated time lines for the IDE study in terms of enrollment? Can it actually be accelerated just coming off a strong feasibility study? Paul LaViolette: Yes. Thank you, Anthony. Receptivity to the data, I would say, has been exceptionally positive. The buzz in the meeting, which I appreciate your comment on, I think you read that accurately. The reason AFib is so exciting is because as a business, it treats the single most common arrhythmia in our population. And so it's a very large market. We all know that over time, the retreatment rates for ablation generally fall in the real world in that 20% to 25% or 25% plus range. And so technology after technology, system after system have come along. We've seen the progression from RF to PFA. Most physicians would still say, in the real world, regardless of the system use, the recurrence rate requiring retreatment is still about 1/4 of the patients. So when we report a 96% 1-year procedural success rate or a 90% rate for left atrial freedom from arrhythmia, that is an exceptionally differentiated outcome. It needs to be validated in a pivotal study. But it is, I would just call it noteworthy, and it has garnered a lot of attention. So we feel very good about how folks in all constituencies, if you will, physicians, patient populations, the corporate entities in the cardiovascular space, I think the reception to the data has been very, very positive. The time lines are, as we discussed, previously. We're expecting to commence enrollment in our study in the next 1 to 2 months ahead. We would then expect to enroll relatively swiftly. Our plan is to complete -- to start enrollment and complete enrollment in 2026. And you asked about acceleration, and certainly, we're prioritizing this program, and we're looking at all ways feasible to accelerate. I think in my experience, I've run dozens of pivotal studies. There are many factors that contribute to enrollment velocity, nothing more important than physician embrace of the technology. It's important to have a clean protocol, one that yields high patient flow through the screening process, one that fits well into the workflow of the clinical setting and physician interest in the technology because they believe it will treat their patients well and importantly, because it represents an improvement in workflow, in speed and ease of use. That is a very powerful combination. We've previously demonstrated with our data that our workflow is superior. We hadn't until the AF symposium put forth data that would imply an outcomes benefit. So those 2, we think, will accelerate physician interest and attention to the study. And when you look at that study hurdle of 155 patients in our protocol and look at the number of centers and the interest in participation in the study, we think it can move along quite swiftly. Operator: Your next question comes from the line of Suraj Kalia with Oppenheimer. Suraj Kalia: Gentlemen, I'd like to echo congrats on the exceptional data for nPULSE at the AF Symposium. Paul, if I could, just piggybacking on Anthony's question, right? So we do expect or at least hope pace of enrollment would pick up. But one of the things that Dr. Reddy had said at the presentation, Paul, was the nPulse wasn't really integrated effectively with mapping. I'm paraphrasing, but you get the point. For the IDE Pulse, are any steps being made to make the nPulse more effectively integrated with, let's say, CARTO or EnSite? Just trying to analyze or assess if there could be some incremental benefit in the IDE from mapping integration. Paul, next question, if you could give us any update on the next-gen nPulse. And are you seeing any spillover on the NANOCLAMP side of the equation, just given the EFS with nPulse? I know I threw in a lot in there, Paul. Hopefully, you got all my questions. Paul LaViolette: Thank you, Suraj. So I'll try to get them all. The question really -- the first question is about the potential benefit associated with a more completely or more effectively integrated catheter with mapping system. And so first of all, for those who may not have been at the AF Symposium, we did conduct a live case that morning from -- that Saturday morning from Prague, which put on display a more completely integrated system between catheter and the mapping software. That is a good example of, I'll call it, contemporary display of catheter rendering on a system. And it is precisely the quality of that rendering that had not been available for those first 150 cases. So that is what, Suraj, your point is alluding to. And the answer to the question is yes, we do expect to have improved software integration in the IDE, number one. And it remains open to speculate -- and I think Dr. Reddy commented on this in a couple of ways. It remains open to speculate how much better the results can be, and he somewhat jokingly implied that you can't get much better than the results we've already achieved. On the other hand, he also said that through the dozens of cases that he had performed in the feasibility study, he couldn't really tell exactly where the catheter was. And now having performed cases with a more integrated system, he could. And he felt that, that would improve the accuracy of his lesion creation and potentially reduce the number of lesions he might make. Already at a record low for nPulse, but he could do even fewer lesions with high confidence that he was placing them precisely where he wanted. So I do think we could receive both acute procedural as well as outcomes benefits from improved integration, and we do expect to have improved integration available in the IDE. The next-generation nPulse system is a device that is still in the development phase. So we're not providing time lines on that. Suffice it to say, it is intended to be a device that would integrate a regional footprint ablation system, which is what we have today with the current 360 as well as a, I'll call it, a focal or a large footprint focal device integrated in the same product. What that would allow, of course, is pulmonary vein isolation and then left atrial ablation points or lines without having to exchange the device. So that, we think, is a really breakthrough concept and will have significant procedural benefits, but is still in the development stage. And then lastly, your question about spillover benefit from nCLAMP. And I think the answer to that question is yes. And of course, those benefits are nsPFA derived. We're now applying the same energy to cardiac tissue in different methods and for the same indication, but with different ablation line patterns. And as we previously reported, we've done comprehensive remapping of those open surgical cases, which builds our confidence in the, I'll call it, the potency, the power of our ablation energy. We now have seen that 96% procedural success rate, that further reinforces the potency of our ablation energy. We have outstanding safety being derived from both cohorts of data presented at ESC for surgery, at AFS for electrophysiology. You can imagine that those data sets are being submitted to the FDA. We feel we had an excellent process for IDE approval with FDA. I'm certain that the TAP program status and the breakthrough designation of the clamp device provided some tailwind, if you will, for the approval that we ultimately receive for the IDE for the EP catheter. So those, of course, will both be going through their data collection and ultimately, submission processes around similar times. And really, what that provides the FDA with is just more safety data, more clarity that we can deliver great lesions in either lesion set, interventional or surgical. And I think it's difficult to specify the benefits, but we know that there are real synergies as we generate great data in each application and both of those data sets go into the FDA to essentially comparable review teams on nearly overlapping time lines. Operator: Your next question comes from the line of Josh Jennings with TD Cowen. Joshua Jennings: It was great to see the stellar feasibility results for nPulse at AFib Symposium. During the data presentation, Dr. Reddy and others kind of discussed the clinical success rate that 90% freedom from atrial arrhythmia at 12 months, exceeding expectations and maybe even higher than what we expected just based on procedural success or lesion durability alone, suggesting the possibility of some other biologic impact or modulation beyond just the conduction block. You reviewed some of the hypotheses behind that at the Pulse event at the symposium. But maybe if you could just review those? And is there any way to confirm any of these hypotheses with either an animal model or anything on the preclinical side? Paul LaViolette: Yes. Thank you, Josh, and very good question, and thank you for paying such close attention to everything that was reported at AFS. It's great to see. I would echo exactly what you said. These are hypotheses. We don't know that any incremental mechanism is actually required in order to achieve the results that we've seen. I think the first thing I would say is that the reason a hypothesis for incremental benefit might be pursued is because the original data that we presented were so strong in comparison to a history of delivering lesions with PFA that clearly maxed out at lower levels. It leaves one to question how it is that such a significant leap can be made. We have less wonder about why that leap can be made. We've been making lesions in preclinical models for years. We have tremendous understanding about the power of nsPFA and that it is a differentiated energy. Yes, it's a form of pulse electric field delivery, but we really do believe it is a different type of energy. It has a different mechanism of action already as we've defined than microsecond PFA and the consistency and depth and the transmurality of our lesion generation, we think is on its face, the explanation for superior results. That being said, we certainly can conduct preclinical experiments to assess whether other nerve targets that might be extra atrial could be effective. But while we will work with our clinical advisers to do that, I would say we are less inclined to search for a novel mechanism because we believe we understand the clinical results and why they are a direct result of the energy that we are delivering. What's unique about nsPFA, and we see this in multiple indications, is that it is hard to imagine how effective it can be while being so fast, while being so nonthermal and fitting into workflow as exists already in existing clinical practice. But that is what we're seeing essentially time after time. So we believe the most important thing to replicate is not a novel mechanism that is the result of speculation, if you will, but rather to replicate these clinical trial results. They've been derived on a large n. We're continuing to follow those patients. So I think the most important clinical discovery will be how does the next tranche of patients as you build up the full 150 now going to beyond that and follow those patients 6 and 12 months and continue to just reinforce the fantastic clinical results. To us, that's more important than looking at preclinical models for atrial ganglia ablation. Joshua Jennings: Understood. And then just to follow up on the tail end of your answer, just how should we be thinking about the timing of future updates to the feasibility study results and particularly the final results that will be submitted, it sounds like for CE Mark approval. Paul LaViolette: Thank you so much, Josh. Timing, really the next event will be at HRS. We plan to submit data for review at HRS. And that, of course, will be, I'll call it, on a rolling time line. So as many patients as meet the endpoints by the various presentation cutoff deadlines, that's what we'll present. We think that will provide us a very nice increment in total number of patients over time. And so that will be the next event in addition to an update when we commence enrollment in the study, which we expect, as mentioned in the next few months. So very nice updates coming between the announcement of first patient enrollment as well as HRS by just a few months down the road. Operator: Your next question comes from the line of [ Jesse Crawford ] with Luxury Lifestyle Design and Development. Unknown Attendee: Thank you guys. Thanks for putting on these calls. These are actually really, really beneficial to everybody, especially all of the people who really believe in the technology. I'm one of those people. I evangelize for Pulse all the time. And when people ask me what it is, I kind of have to give them the dumbed down version of it, but I kind of equate it to the tricorder in Star Trek. People laugh at that analogy, but I really think this is the future of kind of the 2 holy grails of treatment for cancer and heart disease. So as an avid investor, I like to participate in the calls, but I also have AFib. So I would be very interested in participating in one of the clinical trials. I'm that big of a believer in it. Paul LaViolette: Well, thank you, Jesse. And I appreciate your transparency about AFib. The fact of the matter is it is so common. We can't go very far without finding a patient right in our midst. And AFib is so common. It's growing in incidence. And what we're faced with right now is, as you well know, a progression through early diagnosis and then most commonly drug therapy, which is often undesirable for the patient, some combination of anticoagulation therapy and antiarrhythmic medication. And I think the ultimate vision for a therapy is to pull forward the option that can be offered to a patient to allow for a very safe and highly effective intervention as first-line therapy so that a patient that is tolerating atrial fibrillation, which is obviously associated with higher risk factors that, that you would not have to tolerate AFib because the balancing act between first-time effectiveness and safety is so favorable that you can be offered the option of going straight to an intervention. We know that with AFib, the earlier one intervenes, the likelihood is that the AFib is not advanced in its complexity. And if it resides still in the pulmonary veins, one is more likely to treat it definitively, which is to say an ablation can be a cure. And that's not really the way patients are provided therapy opportunities today. That requires more data, more changes in guidelines. But I think the trend as supported by the kind of early results that we've seen so far could be supported by this kind of a breakthrough technology. So we really appreciate your support and your evangelizing. And I would say from what I've seen, if I had AFib, I would want the therapy, too. So we are like-minded. So thank you, Jesse. Unknown Attendee: Thank you. I'm very -- actually a very pharmaceutical treatment at averse. So this is very exciting to me and a lot of my friends as well. And I guess a follow-on question to that would be for Bob on what his strategy is for partnerships? Robert Duggan: Jesse, good to hear your question. You sound -- your viewpoint on the product and our efforts and the technology is really a duplicate of my own here and I'll get to the money question that you just asked. The challenges have really been it's a novel technology. This is not MicroPulse. It's a nanoPulse. It's different from, say, laparoscopy as robotic procedures where people recall robotic as it's an extended form of laparoscopy, but it was quite a bit different, had a real significance. That had to be proved out, and we've had fortunately, the benefit of working with the world's top-class surgeons, and we're comfortable now. So we go into this final study on the CA side. It won't be the final study, but it will be a study that we would expect we would go forward and get approval from. So we're very optimistic about that. When it comes to reimbursement in this business industry, which I've been in for a couple of decades, you -- it's really a high priority to have a label. But to get a label, you've got to have the top quality professionals using your product and really signing off on its ease of use and the duration of outcomes that they achieve because some of these are the best of the best and they can get almost anything to work. So you really have to democratize it for a bit. So we're well into all of that now. On the -- but importantly, we do not have a label from anything other than soft tissue ablation, which we cannot directly pinpoint and tell people. Here's what you should do or train them for that and originate that. And given the scarcity of people through a trial, we do not have reimbursement. Paul said on the call, and I think it's accurate, that will come over the next 4 to 8 quarters. And so those that are potentially frustrated on the Vybrance, it's just -- we just have to live with that. I've seen many companies rush in without that. They get stalled out and you become a company that your revenues are not able to even match your expenses. So we will not be doing that. And it will take a little bit of time on the Vybrance side. We're still working now to get a label on the CAF side and the clamp side, but we believe those are coming in 2027. But we think the probability of that is extraordinarily high. We are more than pleased with the outcomes. And just one touch more back on the Vybrance side. We look forward to the readouts on that trial coming by midyear. So that news is all good. Now how do you turn around and fund that? That will require additional funding, but it could come in the nature of a partnership. It could come through distribution. There are any number of forms that, that could take place. We did a significant rights offering a year ago or so and you saw us participate in that. And we're still living off of that. We have about $80 million in the bank closing the year out. We have another $2 million in warrants as the stock would trade over $22 a share for another few weeks. So that's what we have in mind. We watch it carefully knowing that we've always got access to money. We haven't had to go and get 2 years' worth of equity dilution in order to have a couple of hundred million on account. But we're very pleased with our following now. We're very pleased with the leadership. And I would say there's a touch of frustration on the Vybrance side where the singular importance of being able to achieve a label has been long coming. But we're now closing that gap, and we'll get on that. And as much as -- I wish I could say it was 2 to 4 months, but it's really going to be about 4 to 8 quarters out before we have that lined up. And then it's Katy bar the door. So I appreciate your enthusiasm. I think you called it correctly. I too have AFib. And as soon as this is labeled, I'll be getting it, if not sooner. It's -- I've been in the operations, seeing the procedures, some without full anesthesia. -- just really, it's just warm my heart to know that I've participated in this and the benefits that will be accruing from it. So I hope that addresses your questions, Jesse. Operator: And with no further questions in queue, I'd like to turn the conference back over to Paul for any closing remarks. Paul LaViolette: Well, first of all, thank you, Bob, for those comments and really for the great questions we received. On behalf of the team here at Pulse Biosciences, thank you all for your interest. We look forward to providing you with updates throughout the very busy 2026 we have ahead. So thank you all for joining, and good afternoon. Operator: This concludes today's conference call. You may now disconnect.
Operator: Good afternoon, and welcome to indie Semiconductor's Fourth Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded. I will now turn the call over to Ashish Gupta, Investor Relations. Mr. Gupta, please go ahead. Ashish Gupta: Thank you, operator. Good afternoon, and welcome to indie Semiconductor's Fourth Quarter 2025 Earnings Call. Joining me today are Don McClymont, indie's CEO and Co-Founder; Naixi Wu, indie's CFO; and Mark Tyndall, EVP of Corporate Development and Investor Relations. Don will provide opening remarks and discuss business highlights. Naixi will then provide a review of indie's Q4 results and business outlook. Please note that we'll be making forward-looking statements based on our current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative of views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For material risks and other important factors that could affect our financial results, please review our risk factors and annual report on Form 10-K for the fiscal year ended December 31, 2024, as supplemented by our quarterly reports on Form 10-Q as well as other public reports filed with the SEC. Finally, the results and guidance discussed today are based on consolidated non-GAAP financial measures such as non-GAAP operating loss, non-GAAP net loss and non-GAAP net loss per share. For a complete reconciliation to GAAP and the definition of the non-GAAP reconciling items, please see our Q4 earnings press release in addition to a presentation summarizing our quarterly results and more details on our non-GAAP measures as posted on our website in advance of this call at www.indie.inc. I'll now turn the call over to Donald. Donald McClymont: Thanks, Ashish, and welcome, everybody. indie delivered a solid fourth quarter with revenue of $58 million, exceeding the midpoint of our outlook by $1 million and up 8% sequentially. Let me provide some context on the market environment before turning to our business achievements. First, on our markets, the automotive industry is entering a pivotal new phase as ADAS, or advanced driver assistance systems, and automated driving and safety functionality are rapidly maturing beyond optional or premium features and into standardization at L2 and above. OEMs across all vehicle classes are recognizing that consumers expect a baseline of active safety features, including lane assist, automatic emergency braking, blind spot detection and collision warnings. These trends reveal a market undergoing structural transformation where software-defined intelligence, regulatory readiness and scalable sensor technology are reshaping the competitive landscape. This continues to present a significant opportunity for indie to capitalize on by leveraging its technology investments for the readiness of these mass market ADAS segments. Additionally, the humanoid robotics market is rapidly transitioning from research labs to industrial and real-life applications. This creates exciting opportunities that we're actively pursuing today, and we plan to expand our activities here going forward. Our ADAS and automotive technologies align perfectly with humanoid sensing requirements by providing the robot eyes and ears. To that end, we are already seeing strong adoption of our radar, vision and even interface solutions by industry leaders, both in the U.S. and China. For example, our vision products have been deployed by companies, including Figure AI and Unitree amongst others. Powered by breakthrough advances in embodied AI, evolving workforce needs and decreasing manufacturing costs through shared automotive components, this dynamic industry is accelerating towards becoming a major global economic driver by the 2030s. Let me now turn to our recent business progress and key achievements during the past quarter. Beginning with radar, our Tier 1 partner, who launched their Gen 8 77-gigahertz radar solution in Q4, is rapidly gaining strong commercial traction with even more global OEMs, including car manufacturers from Northern and Central Europe, North America, Japan, China and India with models ranging from entry-level through mid-tier high-end passenger cars and all the way to high-value commercial vehicles. The indie-based solution delivers far superior performance and cost basis compared to competing and previous generation products, additionally earning a claim at CES this January. We began initial shipments to our Tier 1 partner in December as planned and are scaling production to fulfill the massive opportunity estimated at well above 50 million units annual demand once we are beyond the ramp-up phase. To support this ramp and mitigate allocation issues, we're expanding our production capabilities, including porting designs to second source foundries here in the U.S., satisfying local supply sourcing demands. We are also securing additional back end and test capacity at multiple suppliers to be prepared for the ramp. With these measures in place, indie will be well positioned to fulfill the growing demand. Looking ahead, we are now in the midst of the definition of our next-generation radar platforms, which will deliver further competitive advantage in performance, cost and functionality significantly beyond current levels. Overall, I'm extremely pleased with the progress of the current generation radar rollout and expect momentum to build through '26 and beyond. Within our vision portfolio, we see continued momentum with design wins for our industry-leading image signal processor SoCs, including our iND880 and our AI-based edge processor. Our DRAM-less architecture is creating new opportunities for us, as it allows our customers to overcome the current memory supply issues while reducing the bill of materials and lowering system resource demands on AI processors. With this technology, we have secured new design wins in e-mirror and camera mirror systems at leading Tier 1s across passenger vehicles and trucks with production beginning in late '26 and continuing for several years. Within the China market, we have recently secured a design win with the leading electric vehicle manufacturer with our iND880 for our camera mirror system, which is expected to start ramping towards the middle of 2026. This is a very critical design win for indie as we believe it will open more strategic opportunities going forward for our ADAS portfolio at this key customer. In Q4, indie completed the integration of emotion3D, creating a powerful ecosystem that unites AI-based perception algorithms with our hardware SoC capabilities, offering flexible stand-alone or integrated solutions within the cabin for driver and occupancy monitoring. Additionally, we have recently announced a strategic partnership with Mahindra, a leading Indian passenger and commercial vehicle manufacturer for the supply of our perception software for their Electric Origin SUV series, including XEV 93 and BE 6. From our photonics business unit, we were awarded a design win, including NRE for a distributed feedback laser for a LiDAR application outside of the automotive market, potentially opening new opportunities in diverse market applications where high-precision, high-speed 3D spatial information for real-time detection is critical. In addition, we have secured our largest booking of LXM lasers to date, supporting key customers in quantum communications and sensing as our success continues in this adjacent quantum market. Within our power group, the Qi 2.0 wireless charging platform production with Ford remains on track for the first half of 2026 with adoption from multiple subsequent OEMs expected to follow. indie is already gaining significant traction for our Qi 2.2 25-watt wireless charging solution, which offers seamless scalability via firmware upgrade. Moving to the Qi 2.2 solution enables faster power delivery, stronger magnetic alignment and broader device interoperability without replacing hardware, making this a highly attractive solution for customers and partners. This product is already demonstrating strength as evidenced by a leading Tier 1 wireless charging partner upscaling to our Qi 2.2 platform with another North American OEM. Recall on our previous call, we highlighted the shortage of package substrates prevalent in the industry caused by ever-increasing demand for AI chips. We are pleased to report we have made meaningful progress by qualifying second source package and substrate vendors. However, we expect the broader supply environment to remain constrained, and we will need to remain laser focused to manage the situation through 2026. I will now turn the call over to Naixi for a review of our Q4 results and business outlook. Naixi Wu: Thank you, Donald, and good afternoon, everyone. indie's fourth quarter revenue was $58 million, exceeding the midpoint of our outlook by $1 million, representing sequential growth of approximately 8% and flat compared to the prior year period, bringing our full year revenue to $217.4 million. The non-GAAP operating expenses during the quarter totaled $36.8 million, consistent with our outlook, thereby achieving our goal of $8 million to $10 million savings. As a result, our fourth quarter non-GAAP operating loss was $10.1 million compared to $11.3 million last quarter and $14.2 million a year ago, demonstrating our continued progress towards achieving profitability. With net interest expense of $2.3 million, our net loss was $12.4 million and loss per share was $0.07 on a base of 220.4 million shares. Please refer to the presentation located on our website for a more detailed breakdown of non-GAAP measures. Turning to the balance sheet. We exited the quarter with total cash and cash equivalents, including restricted cash of $155.7 million, a $15.5 million decrease versus the third quarter, of which $6.8 million was used for our semi-annual interest payment on the outstanding convertible notes. As you may recall, in the fourth quarter, we announced that indie had entered into a definitive agreement with United Faith Auto-Engineering Co., Ltd., UFA, a publicly listed company in China, to sell our entire outstanding equity interest in Wuxi indie Micro for gross proceeds of approximately $135 million, payable in cash upon closing, net of applicable taxes and fees. The transaction continues to progress towards closing. As part of the customary closing conditions, UFA obtained its requisite shareholder approval in late 2025. The transaction remains subject to regulatory approval in China, including both Shenzhen Stock Exchange and CSRC. While the timing of the closing remains uncertain, we continue to be optimistic that it will occur by the late 2026 time line we previously communicated. Moving to our outlook for the first quarter of 2026. We expect to deliver total revenues between $52 million to $58 million with $55 million at the midpoint. We anticipate a decline in first quarter revenue from Wuxi to $21 million due to a lower demand from reduced EV subsidies and the Chinese New Year shutdown. However, we expect our revenue from our core business to grow by an impressive 20% sequentially to $34 million at the midpoint. We expect our non-GAAP operating expenses to be $37 million for Q1, relatively flat to Q4 2025. Assuming a net interest expense of approximately $2.6 million with no tax expenses, we expect a $0.07 net loss per share based on 223 million shares at the midpoint of the revenue range. From a financial perspective, with our strong focus on managing operating expenses and our solid balance sheet, including anticipated proceeds from the sale of Wuxi, indie is financially well positioned to support our path to strong and profitable growth as design wins ramp through 2026. With that, I will turn the call back to Donald for closing remarks. Donald McClymont: Thank you, Naixi. Our core business remains solid as evidenced by strong fourth quarter results. Radar and vision programs remain firmly on track, highlighted by our Tier 1 partners' recent release of their advanced Gen 8 radar product, growing commercial adoption and our first radar chipset shipments late in the quarter. With the addition of high-growth adjacent markets such as quantum sensing and humanoid robotics, indie's technology leadership and expanding product portfolio positions us well to drive growth. We believe no other semiconductor company offers a product portfolio as well suited as indie's to meet the diverse sensing needs of these emerging markets. That concludes our prepared remarks. Operator, please open the line for questions. Operator: [Operator Instructions] Our first question is from Cody Acree with The Benchmark Company. Cody Grant Acree: Congrats on the progress. Naixi, just one point of clarification. Can you give me the Wuxi revenue for Q4? Naixi Wu: Yes, it was around $29.7 million. Cody Grant Acree: And could you just maybe go through the reasons again for the sequential decline? And then what do you expect that to do looking into Q2? Naixi Wu: The decline mostly has to do with the upcoming Chinese New Year shutdown and the reduced EV subsidies that the local people are getting. Cody Grant Acree: And any color on expected ramp into Q2? Donald McClymont: I mean we do expect it to recover in Q2. As of course, you know, we're in the process of selling that business, but yes, we do expect it to bounce a little bit in Q2. Cody Grant Acree: Okay. Great. And Donald, maybe can you just provide any further color on the slope of the ramp of your radar programs that you're expecting for the balance of '26? Donald McClymont: Well, I mean, since last we talked, we've made phenomenal progress together with the customer. We see the traction through the OEMs just getting ever stronger, so we feel absolutely phenomenal about where we are with the program. In fact, we're also really beginning now the discussions on what comes next for the next generation. But I mean, the OEM traction has just been off the charts, and it gives us a good problem to solve. We need to focus now on making sure that our supply chain is robust enough to support the ramp that we expect. But we feel we're in a really good spot right now. Cody Grant Acree: And just a follow-up there. The constraints that you're feeling still on substrates and packaging, what impact do you expect that to have in the first quarter? Donald McClymont: I mean it had a little bit of a trailing impact into the first quarter. I mean we -- the product portfolio basically, in the type of products that had substrate exposure, did have some risk mitigation, so some products that we had inventory of shipped. Probably there was maybe a little bit less than $1 million of demand that is still questionable that we might get or not based on supply, but we've made some significant progress versus Q4 where it affected around $5 million in that quarter. Operator: Our next question is from Suji Desilva with ROTH Capital Partners. Sujeeva De Silva: Congratulations on the progress here on the Tier 1. Donald, you've given us backlog numbers in the past. Any update there? Any new design wins to talk about? I know you have at least 2 big programs coming, but any color there would be helpful. Donald McClymont: Yes. I mean, as you know, we only really update our strategic backlog once a year. You can see from the script that we did make some progress on the sales side and add some new discrete designs out with the larger programs. We do expect that the sell-through into the OEMs from the large radar program also will increase over time, and we've seen a lot of momentum in that during the last quarter. But no quantifiable update right now. Sujeeva De Silva: Okay. All right. And then aside from Wuxi in China, can you talk about the progress there in terms of design wins and traction for your products for the core part of the business? Donald McClymont: Yes. I mean we're doing well in all regions. I mean, again, I mentioned in the script that we have exposure to OEMs based over all parts of Europe, also in Asia, China, even India actually as part of that. So I mean, we're feeling very good about where we are generally worldwide. Operator: Our next question is from Jon Tanwanteng with CJS Securities. Unknown Analyst: This is [ Will ] on for Jon. Is there any update on the size of the opportunity within robotics and drones or in the quantum space and if or when those can become significant contributors? Donald McClymont: Well, the robotics space is hard to call, but I mean, we are just seeing a phenomenal amount of activity in that space. And the products that we make for automotive are basically 100% compatible with the needs that these guys have for these applications. So we are very optimistic about it. We do feel that it can be a very material market as we progress through the rest of this decade. In terms of quantum, that's a little bit easier for us to quantify. We are beginning to make some significant traction in that space. We shipped about $1 million worth of optical products in that application in 2025, and we expect maybe around a trebling of that through 2026. So we are seeing increased momentum in that space also. Unknown Analyst: And in regards to the supply chain constraints, can you add some more color on how you're thinking about the time line to a full resolution? Donald McClymont: I mean it's -- the tightness is really driven by the uptick in AI demand, and so we don't see that really going away anytime soon. From our perspective, just operationally, we're expanding our supply base to make sure that we have significant mitigation for all of the programs that are key to us, and we made some pretty good progress in the last 90 days to address that. We are seeing signs that several suppliers are making investments to improve capacity, likely something that would begin to take effect in 2027. But I mean, at this point, we feel decent about where we are. We've -- as I said, we've made some good progress in bringing on new suppliers. And we hope that we can manage through this '26 year without really taking any bumps on our side while we get through to '27. But that's basically the best visibility we have right now. Operator: Our next question is from Anthony Stoss with Craig-Hallum. Anthony Stoss: Donald, in the past, I think you talked about the total range of expected radar revenue for you guys for 2026 to be somewhere between, I think it was $30 million to $50 million. Perhaps you can give us an update on that. And then also love to hear kind of thoughts on just OpEx for the rest of this year on a quarterly basis. Donald McClymont: Well, I mean, in terms of the radar volume, it's still in that same ZIP code. Nothing really has changed in the short term. What we are seeing is just gathering momentum with newer OEMs, which we hadn't really anticipated would be early adopters, and it turns out that they are going in that direction. That means that we will have like a steady and steep ramp over the course of '26, '27, '28 and '29 even as some of these design wins, of course, are for longer-term models, which are out in time. But I mean, generally speaking, the momentum has been strong behind the program. And I think you can assume on OpEx side that it's basically going to be about flat. Maybe a couple of lumps here and there as we invest in tooling, but no more than $1 million plus/minus. Anthony Stoss: Got you. And then if I could sneak in one more outside of the Wuxi Group just within your core business, what percentage of that core still remains in China? Donald McClymont: Probably in the 25% to 30% range, perhaps. Maybe not quite as high as that anymore, actually. I'm not sure. I -- yes, it's a little bit less than that now probably. Operator: Our next question is from Craig Ellis with B. Riley Securities. Craig Ellis: Donald, congratulations on the 20% core business growth in the first quarter. Can you just help us understand what the top 2 or 3 drivers are to that growth? And is radar on that list? Or are we in just smaller volumes in 1Q? Donald McClymont: I mean radar is still relatively small volume in the last quarter and this quarter. But in any design and any -- and especially in a program of this magnitude, the first products that you ship are very much the most important. It cleans the pipe and improves the existence that the designs are real and the products are working. We have seen continued progress also in our vision chips. Basically, the drivers are coming from the ADAS side. Our iND880 processor has been super successful. And now that we're beginning to bring to market a version of that chip, which also has an AI edge processor integrated in it, we're seeing continued momentum in that space also. Craig Ellis: And then a follow-up to the prior question just on the arc of radar through time, and it sounds like it just continues to scale from what could be $30 million to $50 million through 2029. But I think we've talked about this business being a $100 million business in the past on an annualized basis. Are you starting to get visibility on when we could get that? And would that be 2028? Or would it be potentially sooner or really when you get out to 2029? Donald McClymont: I mean, I think, the answer to your question is, yes, we are getting continued visibility improvement in this as we progress through the whole process of deployment. I mean we're -- it's probably a little early to call exactly when -- what date that we cross $100 million. But I mean, we are feeling increasingly confident and positive about where we're going with this right now. And I mean, it's kind of driving us crazy, the amount of support work that we're having to do and the amount of supply chain expansion that we're having to do in order to prepare for it. So I mean, if that gives you an indication of where we think we are, then I hope that's sufficient. Operator: Our next question is from Cody Acree with The Benchmark Company. Donald McClymont: I think Cody actually already asked his question. Cody Grant Acree: Yes. Yes. Actually, I just had a quick follow-up, Donald. Sorry, I was on mute. Just your comment lastly about increasing your supply side. Last quarter, you mentioned your efforts to double source for some of your customer requests. Can you just update us on the progress there? And just what are you looking forward to on spending for that? Donald McClymont: I mean from packaging side, we enabled a new substrate supplier and also a new packaging house. So basically, now we have 4 combinations of substrate and packaging house that we can use. We do expect that we will also, for some of the very large volume programs such as the radar program, bring on second source foundries, particularly as we need to have China for China, non-China for non-China supply base in that space. And I think -- and I mean, in answer to your question, the short term, we have had a little bit of increased OpEx, which we signaled in the last quarter in order to cover some of that, which has now run through the books. And at this point, we're basically seeing our OpEx remaining reasonably flat through '26. There may be a couple of bumps in the road as we spend on tooling, but it's -- each bump is probably, I mean, less than $1 million. Operator: There are no further questions at this time. I would like to hand the floor back over to Donald McClymont for any closing comments. Donald McClymont: Well, thanks, everybody, for attending, and I hope to see you at the conferences in the next few weeks. Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
Operator: Thank you for standing by, and welcome to Mineral Resources FY '26 Half Year Results Briefing. Your hosts today are Malcolm Bundey, Independent Non-Executive Chair; Chris Ellison, Managing Director; and Mark Wilson, Chief Financial Officer. We will start with 15 minutes of prerecorded opening remarks before we move into live Q&A. [Operator Instructions] This call is being recorded with a written transcript being uploaded to the MinRes website later today. I will now hand over to Chris Ellison, Managing Director. Christopher Ellison: Good morning, everyone, and thanks for joining us. This is the MinRes FY '26 half year results announcement. I'm Chris Ellison, Managing Director. I'm joined today by our Chair, Mal Bundey; and our CFO, Mark Wilson, and Mark is going to run you through the financials when I get through this section. Before we begin, I want to acknowledge the tragic loss of our colleague and friend, Tim Picton, who sadly passed on the 19th of January. As our Strategy Director, Tim's brilliant strategic mind and extraordinary work has left a long-lasting legacy to our company. Last month in Federal Parliament, the Prime Minister paid a fitting tribute to Tim, which detailed the many extraordinary achievements he had made in just 36 years on the planet. He's deeply missed by his colleagues. He's missed by his MinRes family. He's missed right across Australia by a lot of people, and our thoughts remain with his family. This morning, I'm proud to report the first half of FY '26 has been our strongest 6 months ever. We delivered record underlying EBITDA of $1.2 billion for the half based on revenue of $3.1 billion with nearly $300 million in free cash flow. Over recent years, MinRes has seen periods when iron ore prices have been over $220 a tonne and spodumene up beyond $8,000 a tonne. Remarkably, this half outperformed them all and despite much softer commodity prices. Iron ore had an average of around 100 tonnes during this period, less than half the historic highs. And while lithium prices have rebounded in recent months, the September quarter only averaged $849 a tonne and the first half sat at around $972 per tonne. This first half result was the result of 3 main areas. Firstly, outstanding operational performance. Onslow hit nameplate in August. And we improved performance in the lithium mines, which resulted in recent guidance upgrades. Secondly, record mining services earnings, which was up 29% on the prior year. And finally, cost discipline. The Onslow Iron FOB cost of $52 a tonne and costs at Wodgina and Mt. Marion both track to the bottom end of guidance. Let me just reiterate what Onslow Iron means to MinRes because it's central to the quality and the strength of our earnings. At $100 a tonne iron ore price, Onslow Iron will generate over $1 billion of annual EBITDA. That's demonstrated by Onslow Iron having contributed just over $500 million in the past 6 months. This result validates the key strategic decisions made over recent years. Many of those decisions related to the investment, planning, construction and ramp-up of Onslow Iron. It's worth remembering that many thought this project couldn't be done without building a costly rail line and a deepwater port. We saw opportunity where others didn't and put our in-house expertise and world-class innovation to work, which prompted some to question our capability to deliver. Despite this and some early challenges, we stayed the course and we delivered in record time. As a result, we entered FY '26 with plenty of momentum and achieved several key milestones. We safely ramped up production to nameplate capacity in August. We completely finished the upgrades to the haul road in September. And most importantly, we've sustained nameplate production, and we've proved the quality of our innovative supply chain from the jumbo road trains to the transhippers. Importantly, Onslow Iron also showcases the scale, innovation and executional excellence of our Mining Services business. In the half, Mining Services delivered record volumes of 166 million tonnes and generated EBITDA of $488 million, up 29% on the prior year. The division is firmly on track to generate almost $1 billion in annualized EBITDA. Our Mining Services capability is world-class and fundamentally different from traditional listed peers who focus largely on civil and mining work. The Engineering and Construction division has decades of experience and a reputation of delivering lump sum fixed price projects. We're the only organization I know of in Australia that can do these feats, and we've done them for over 20 years. We design, we build and we operate, and we do it faster and more cost effectively than anyone in the industry. That integral capability gives us a clear competitive advantage and highlights the unique service we bring to our clients and JV partners. After the success of Onslow Iron, interest has increased from potential clients looking to similar integrated solutions. We were awarded 2 new contracts and renewed 3 contracts during the period, and the long-term outlook for the mining services remains strong. We expect to continue growing volumes and earnings into the future. Let's talk a little bit about lithium. In June last year, we sold cargoes for around USD 600 a tonne. We averaged around $970 a tonne during the half and prices continue to rise. We sold a cargo for $2,500 in recent weeks and the supply-demand curve certainly is changing significantly. We stayed disciplined through the weaker price environment. We cut costs. We drove efficiency improvements. We made tough decisions but necessary to ensure that we could capture the upside as the lithium demand increases. Wodgina achieved processing recovery rates of around 70% in the December quarter, a key milestone. We expect recoveries to improve further as we access more fresh ore and we go deeper into the pit towards the end of this calendar year. Marion also saw some great gains with higher feed tonnes, improved recoveries, and we're continuing to progress the study around the flow plant and the underground. The POSCO transaction was announced in November. It reflects our track record monetizing assets with world-class partners. The JV will materially strengthen our balance sheet while ensuring we retain significant exposure to the lithium market, and we retain our mining services contracts. We're also assessing further growth options in lithium, including the potential restart of Bald Hill. These studies are ongoing and we'll update the market when appropriate. I'll now briefly touch on the balance sheet. When we committed to Onslow Iron, I described it as a transformational project that would generate significant cash flow and drive the deleveraging of our balance sheet. That vision is now a reality. The project's earnings power has significantly improved our balance sheet. In 6 months alone, our net debt balance fell almost $0.5 billion to below $4.9 billion and our leverage more than halved. Our liquidity has strengthened to over $1.4 billion, and the POSCO transaction is expected to be completed in the first half of calendar '26. MinRes will receive approximately $1.1 billion in additional proceeds. With 2 more transhippers coming online from the middle of this year, we expect to lift Onslow Iron capacity towards 40 million tonnes run rate. This will support stronger cash generation and it will further assist our deleveraging trajectory. Looking ahead, we're focused on more of the same, operating safely, delivering on our guidance, optimizing our existing assets and continuing to strengthen our balance sheet. There's still a lot of work to be done, but let's remember, the past few years have been the best growth and development period in our history. This has included bringing Onslow Iron from concept to full production in 3 short years, responding quickly to the changing lithium market. We exited the hydroxide business. We idled the mines. We optimized the hard rock deposits and improved the recoveries. We've grown our Mining Services business. In short, from '23 to '26, we've doubled it. And we've not just doubled it, the earnings are sustainable for decades and decades to come. They're a high-quality income stream. We're recycling $3.3 billion in capital through world-class partnerships through the iron ore, lithium and the gas businesses. We sold down on the haul road. We were in the process right now of concluding a deal with POSCO on our lithium business. And we sold down on the gas and brought Hancock in as a long-term JV partner on the exploration assets that we have in both the Perth and Carnarvon basins. And look, finally, I want to acknowledge the most important part of our business. We've got over 7,000 men and women in our business that tirelessly work every day. They underpin our success. I'm proud of everything they've achieved, and I'm excited about what's to come in the months and years ahead. I also want to acknowledge Mal Bundey, our new Chairman. Mal come on board in April, and he has just been a powerhouse. He's done a huge amount of work right across the business, including refreshing the Board who again have worked tirelessly, and they continue to strengthen our governance and our framework and in step with the operational and financial performance the business is driving. Finally, I want to thank all of our shareholders and our partners, our JV partners and our clients for their unrelenting ongoing support. Thanks, and I'll hand over to Mark. Mark Wilson: Thank you, Chris, and good morning, everyone. I'm pleased to present MinRes' financial performance for first half fiscal '26. It's a strong result that reflects the fundamental transformation of our business now underway. As Chris outlined, we delivered record underlying EBITDA of approximately $1.2 billion on revenue of $3.1 billion for the half year. This was the strongest 6-month period in the company's history. What makes this result particularly significant is the quality of the earnings. This wasn't the result of commodity price luck. Rather, it was built on operational excellence, volume growth, cost discipline and the successful commissioning of Onslow Iron at its nameplate capacity, driven by our Mining Services business. This performance reflects the strength of our diversified business model and the repositioning of our portfolio to transition to higher-quality assets, along with increasing recurring Mining Services earnings. Mining Services continues to be the bedrock of the business and delivered a record underlying EBITDA of $488 million. This was driven by record production volumes and an EBITDA per tonne margin of $2.10. It also included a significant contribution from the Onslow Iron Road Trust, which is an infrastructure-like cash flow annuity stream that is inflation indexed. It's important to note sustaining CapEx for Mining Services was only $24 million, highlighting the strong free cash flow generation of that business. In iron ore, underlying EBITDA was $573 million. And of this, $519 million was from Onslow Iron, demonstrating the substantial positive cash flows from this long-life project. In lithium, we reported an average SC6 equivalent price of USD 972 a tonne, which delivered underlying EBITDA of $167 million. Importantly, balance sheet deleveraging has clearly commenced. We generated free cash flow of $293 million in the 6 months after CapEx of $600 million with net debt declining by almost $0.5 billion to approximately $4.9 billion. Liquidity strengthened to over $1.4 billion, consisting of more than $600 million in cash and a fully undrawn $800 million revolving credit facility. In October, we successfully refinanced our USD 700 million bond, pushing the maturity out to April 2031 at our lowest ever coupon rate of 7%. That offer attracted significant demand and was a clear vote of confidence from the debt capital markets, both in MinRes and in our strategy. Completion of the POSCO partnership, which is expected in the first half of this calendar year, will bring in $1.1 billion and put us on a clear path to be below our 2x net leverage target by June. At our AGM last November, we outlined an updated capital allocation framework and financial policies following extensive Board review. This framework provides clear discipline and transparency around how we allocate capital and manage the balance sheet. First, liquidity. We significantly raised our liquidity buffer from a minimum of $400 million to $1 billion at all times, including at least $400 million in cash. This ensures we have a substantial buffer to withstand commodity price volatility and take advantage of potential opportunities. Second, leverage. We've amended our target to below 2x net debt to EBITDA through the cycle, allowing only temporary exceptions during major capital projects, provided there's a clear path back to target within 12 to 18 months. The amendment from a prior gross leverage target better aligns with market practice and does not penalize the business for holding elevated levels of cash on the balance sheet, and we believe this is a prudent measure in a cyclical industry. Third, dividends. Our discretionary dividend policy of paying out up to 50% of underlying NPAT remains in place. However, dividends will now only be paid if our liquidity and leverage thresholds are met or there's a clear line of sight to meeting them within 12 months. And ultimately, any dividend decision will be weighed against the growth opportunities available at the time. Right now, however, the Board has taken the prudent decision not to declare an interim dividend as we focus on fortifying the balance sheet. Finally, growth investment. All growth decisions must satisfy high return thresholds of 20% return on invested capital post tax and remain firmly aligned with this refreshed capital allocation framework. In summary, first half of fiscal '26 demonstrates that we're delivering on our commitments, record earnings driven by operational performance rather than extraordinary commodity prices, a strengthened financial position with increasing free cash flow generation and a clear framework for disciplined capital allocation that will drive sustainable returns for our shareholders moving forward. Thank you. We're now happy to take your questions. Operator: [Operator Instructions] Our first question today comes from Lachlan Shaw from UBS. Lachlan Shaw: 2 from me today. Maybe can I start just at Onslow. So obviously, transhippers 6 and 7 coming in shortly, getting your notional capacity towards 38, but you are flagging sort of pushing towards 40. How do we think about that in terms of -- is that just a case of sweating the chain overall? Is there sort of incremental capital to come there? How do we think about that? And then I'll come back with my second question. Christopher Ellison: Yes. I think, look, I've said that a couple of times, much to my team's dismay, but they like call it, call out 38, and 38 is a safe number. We should get there fairly simply. I mean, we're running 35 now. Transhipper #6 will get us to 38. Given time, with the crews bedding in, getting the channel passing and all of those incremental things happening, we've got a bit of dredging to do that'll give us a bit more weight on board, over the next few months. So my expectation is I want to drive them towards sweating the assets up to around $40 million. Operator: Lachlan, did you have your second question? Okay, our next... Lachlan Shaw: Yes, I do. Operator: Sorry, go ahead. Lachlan Shaw: Should we think -- be thinking about 40 million tonnes in FY '28? Christopher Ellison: No, no. Think about 38. Transhipper 6 and 7 rock up around about May, June. We'll be trying to get 6 in action, so it will probably kick into life about late July. It will start performing. Transhipper $7 will be there to sort of support them on the maintenance and kick in a few tonnes as well. That really won't come to life until about October, so we already lose those tons going into the first year. If you want to go out a year beyond that, you can be a bit more hopeful. Lachlan Shaw: Got it. And then just my second question then. So just in terms of Wodgina, we've seen a few of your peers start to talk about restarting capacity, latent capacity, but also some potential new operations and DSO coming in as well, maybe in the second half. Obviously, you're still talking to getting on top of the strip by the end of this calendar year. And then likely having the mine capacity, the fresh ore feed to support 3 trains from the start of calendar '27. Can you just help us understand, is that -- what's driving that? Is that a sort of purposeful decision to target margin? And just the context here, I suppose, is just a really good performance in terms of recovery uplift there, and potentially more to come once you get more fresh ore feed coming into the concentrators. Christopher Ellison: Yes. No, look, that's all about the strip. I mean, we were going a lot quicker, going back 18 months ago when the price turned down. We pulled back on a lot of the mining equipment just to make sure we could control the spend. But we expect to have most of that rock off by the end of this year. And once we've done that, we'll have a clear run on those 3 trains, and the actual feed going into the plant, the grade increases a little bit as well, so another kicker for it. So come start of next calendar year, Wodgina will be in a truly good place. Operator: Our next question comes from Adam Martin from E&P. Adam Martin: I suppose first question, just on the sort of deleveraging. Clearly you've had to slow spending. I'm just wondering whether that's sort of held the organization back in any way, thinking maybe about Mining Services, whether there's sort of more opportunities to delever, but maybe you could just comment on that, please? Christopher Ellison: Yes. No, I wouldn't say that holds us back in Mining Services. We take advantage of every mining services opportunity. That's the expectation from our clients. We always make sure we're there to deliver for them, as if we own the ore ourselves. We've certainly, it's probably a once-in-a-generational event to build an iron ore project. I mean, Rio done it once, BHP done it once, FMG did it once. It takes a lot of capital. We had a window of opportunity to do that. And I think that there's no doubt now our shareholders are going to see the benefits in spades. So we're still out there looking around at other opportunities, but at the same time, I mean, carefully managing the balance sheet as we've set out that we would. Adam Martin: Just a second question, just on gas. It looks like you're sort of ramping up exploration. You've got a few wells there in the Perth Basin and one or two in the Carnarvon Basin. Is that -- just to sort of refresh on the strategy there, you're sort of building up resources to get in production. Just talk us through, what the strategy there is, please? Christopher Ellison: Yes. Well, look, we've got a couple of areas in both the Perth Basin and the Carnarvon Basin that look very promising. And what we'd like to be able to do is we'd like to be self-sufficient in gas for the long term, at least for the next sort of 10-15 years out. It's all about -- in our business, it's really all about controlling the costs that you can control, so energy, transport, shipping, all of those sort of things, we work hard to control. Exchange rate, commodity prices are out of our control, but the more we control, the more we can reduce that bottom line. Operator: Our next question today comes from Rahul Anand from Morgan Stanley. Rahul Anand: Chris, indeed, a good set of numbers and obviously a business really starting to hum along now. Look, I've got 2 questions on the Mining Services business. First one is around the Mining Services EBITDA margin realized at about $2.0. Quite a good result there, and I think perhaps a bit higher than I think where your guidance was, I guess, just sub-$2 I think from Mark. So I guess, where do you see that trajectory going forward as Onslow continues the ramp up or is fully ramped up, and then you're kind of looking at a mix of contractor trucks coming off in your system? That's the first one. I'll come back with a second. Christopher Ellison: Okay. Look, that's a little bit higher than what we expected, but I mean, we overperformed at Onslow Iron. We got the contractor trucks out quickly, got the road repairs done, got all our trucks back on the road. So we got back to a normal, steady state of operation. And we were sitting in there on ramp-up rates, which were higher than the steady state rates. So that really sort of was the kicker that that give us that little bit extra. It wasn't intended that way, it's just that we got super-efficient and we over-earned on the mining services. Rahul Anand: Just to clarify then, Chris. Are all the contractor trucks now off then? Christopher Ellison: Yes, yes. So we're 100% on the main haul road. And we only have the big jumbo trucks running there. We're not mixing any other trucks with them. They've been gone for a number of months now. Rahul Anand: Brilliant. Okay, look, my second question is around the order book in the Mining Services business. I guess, how are you seeing the order activity currently in the market? And then also, in terms of the new contracts that you're looking at, is that primarily going to be in the crushing space that your focus is given how good the margins are? Or would you also consider to kind of pick-up projects where there's an opportunity to build, followed by crushing, so to speak, just because the way the contracts are being given out, given construction can have pretty variable margins as well? And then, how are you thinking about the book in terms of domestic and international as well? Christopher Ellison: Yes, we're mainly sticking to domestic right here, right now. We have been -- as you know, we've been looking further afield, but I've been waiting to get some resources off the Onslow Iron build so that I could use them. We've got one fairly large construction team, probably I rate it the best in Australia. We've had them together for we got members in there that have been around for 30 years. So that's part of our Mining Services business. We can actually go out and build a project on a lump sum number. So that allows us to be able to deliver high quality, build, own, operate, crushing and processing plants, so we know what that number is. We can build it for a lesser cost than almost anyone in the industry, that helps us with the margin. Going forward, there's going to be a mix of Mining Services. The big trucks, the jumbo road trains are proving fairly popular. We've got a number of them out to third parties. We're also looking across the board to use that combined skill and currency we've got. So we go out there and we'll go and build a processing plant or a total mine site where we can operate it for a period of time. It may end up down the track that we pass it over, and they write us a check, but there's a whole combination of things that we're offering our clients, where we can sort of satisfy their needs. We're getting a lot of inquiries around that. We've been able to prove that we can still do what we do through building Onslow Iron. And it's awfully tough out there in Australia right now with the industrial relations and a range of other things, the costs. I'm going to say in the last 5 to 6 years, the cost of building a mine in Australia has all but doubled and the time to get them built has even grown as much. So it's getting to a point where it's really tough to get a return on these big commodity mines. Operator: Our next question comes from Mitch Ryan from Jefferies. Mitch Ryan: First one, just with regards to sustaining capital, obviously relatively low in the half. I'm trying to get a feel if it's been suppressed to aid in deleveraging or what you think a steady state number will look like going forward? Mark Wilson: Mitch, it's Mark. We're still thinking in terms of about $500 million a year. Recognize it might have been a little bit lower in the first half, but yes, still holding the $500 million that we've talked about previously. Mitch Ryan: Okay. And then my second one, can you just provide a timeline of when we can expect capital numbers for each of your lithium projects or growth projects that you're thinking about, such as Wodgina Train 4, Mt. Marion [ float ] and underground and Bald Hill? Can you just remind me of when we should expect that? Christopher Ellison: Yes. Haven't got a fixed time on that. As we've said, we're looking at a few of those brownfield opportunities and the returns on them are fairly significant at -- even at reduced values of lithium. We'll probably look -- as soon as we get through them, we're looking at, obviously float and going underground down at Marion. We're halfway underground now. That's almost a no-brainer to get that sort of moving, but again, we're trying to be cautious. We want to make sure that we deliver on the balance sheet. So we're not going to jump the gun on that, and I want to make sure before I go spend any money on those sort of areas around the lithium, that we got something sustainable going forward in terms of the value of, selling the spot. It's feeling good at the moment. It certainly feels like the supply has got a deficit in it. It's pushed the prices up and it pushed them up dramatically. But look, we need just a little more time. I mean, to be comfortable, I want to get to the end of this financial year and be able to have a look at the leverage on our balance sheet and go that we've delivered and now we're in a position where we can go out and start developing the business. Operator: Our next question comes from Kaan Peker from RBC. Kaan Peker: 2 questions from me. One, what is the maximum growth CapEx range MIN is willing to spend while the leverage is still remaining above that 2x? Is there a hard cap on group CapEx until this metric is achieved? I'll circle back with the second. Christopher Ellison: Yes. Look, the Board has done a lot of work around the balance sheet. As you know, we've been really vocal about it over the last 6 or so months. There's been a lot of work done around that. So we've got a Strategy Day coming up in for all of the management, the Board are getting together and trying to have a look at where we're going. And look, I think post that, we'll be able to make some statements. But look, at the moment, pretty hard and fast on just sitting here and doing as we said, just keep growing the balance sheet, keep delivering, making sure that the tonnes are coming out of Onslow Iron. Let's see how the lithium settles down. I mean, we're just really not going to go out and do too much. The one thing I might consider doing over the next few weeks, we're just doing a lot of work around the Bald Hill mine, and it kind of makes sense to bring that back online. But again, we just want a bit more evidence that the demand out there is sustainable. I don't want to go turning that on and keeping it running for a short period of time. Kaan Peker: And on Onslow, I noticed that you talked about dredging, but given that transshipping is the bottleneck, what's the tipping point or the trade-off with capacity transshipping, particularly around the channel passing and dredging costs? I mean, can you materially move above 40 million tonnes without additional CapEx on the fleet? Christopher Ellison: The jury is out on that at the moment. Look, all of the stuff that we've got, the transhippers and everything, they're the first in the world. And I mean, there's no doubt they are operating above expectations and what we hoped we would get out of them. Same with the road and the haulage. But right at the moment, we're right in the middle of cyclone season. We bring those other 2 transhippers in. We've got a lot more control over our planned maintenance. The weather, we're always at the beck and call of the weather up there. We're in the middle. We've just had a cyclone go across. That cost us 5 days. But we expect probably 10x that sort of downtime per annum. We've allowed for it in our run rates. But it's sort of a wait and see. In terms of the channel, look, we had a bit of silt that's come into the channel from the cyclone, and down in the turning basin, down to our Perth, the bow thrusters have stirred up the bottom a lot and we've got some uneven ground down there. In the next few weeks, we're going to drag a bar across it with one of our tugs and sort of smooth that out. And then down the track, April, May, we'll bring in a little suction dredge and we'll hoover that bit of silt out of the channel. So there's no real restrictions on that. But look, we're just going to keep doing what we're doing. We're saying 38 million tonnes, the number you can hang your hat on at the moment, but we'll incrementally keep working our way at all of those efficiencies and 18 months from now, I hope I'm telling you even better news. Operator: Our next question comes from Ben Lyons from Jarden Securities. Ben Lyons: Maybe just following on that line of thinking, Chris, please. You mentioned the Tropical Cyclone Mitchell. More interested, I guess, in how the haul road held up. Can you just enlighten us to how much water was on the ground? Whether you observed any sort of superficial damage? Whether you had water across that sort of estuarine section near the port loadout facilities, et cetera? Christopher Ellison: Ben, it was about -- it was only about 1/3 of the rain that we had going back a year ago. And when you get 3x the volume, I mean, we had all that pooling up there and it was brand new. I mean, we thought we got it right. We got it 95% right. And I mean, it was good you went up and saw the road and there was nowhere near the damage I don't think that MinRes was expecting. There's been zero damage to the road, is the answer. That new surface that we put on and taking the asphalt right out to the edges and not letting the water ingress down into the base has worked 100%. So yeah, really happy with that. We pretty much -- as soon as the cyclone was gone and the roads were open, we had the trucks straight back on the road. And there was no concern about it getting spongy or anyone. I mean, it's going like a treat. I mean -- and as you know, we put a fair bit of concrete down inside the base of the road and just paid dividends. So we're getting everything that we expected. Ben Lyons: Second question's on the POSCO lithium transaction. Just obviously, you've seen a very sharp recovery in prices. Just wondering if there's a bit of seller's remorse, having struck the deal at lower prices. I guess, historically, we've been somewhat habituated to expect a renegotiation of previously agreed contractual terms, about sort of watching our sell downs in and out of downstream processing, et cetera. So just in light of that robust recovery in lithium prices, just wondering whether there's any CPs that might possibly work in your favor to extract some more favorable terms on that sell down? Christopher Ellison: No. Look, Ben, when you -- we're sort of traders. We buy and sell a lot around assets. And you always look back and wonder if you've done the right thing. But look, I've got no doubt. I'm happy with the deal that we've done with POSCO. They were fairly generous on the day. They were looking at the next 30 or so years out when they set the number. And we get that equal value. So we'll take that capital, we'll be able to reduce debt and we're going to have some capital left out of that to take some of these brownfield opportunities we got both at Wodgina and down at Marion. So by the time we do those upgrades, the flotation plant at Marion and Wodgina, we'll actually have more attributable ore to MinRes than we've actually got now. So it's really positive. So we'll end up with more spod coming out of the ground that we can sell. We'll have that capital to put into the projects. And of course, don't forget, we're going to have Bald Hill sitting down there. It's 100% owned by MIN. Look, I expect not too far down the track when we can afford it and when it sort of fits in the jigsaw puzzle, we'll probably be able to grow that place. I mean, it's a great ore body and very large crystals. It separates incredibly well, so the recoveries down there are great. So yeah, look, just great opportunity in front of us, but the POSCO capital is going to make that work really well for us. Operator: [Operator Instructions] Our next question today comes from Rob Stein from Macquarie. Robert Stein: Chris and team, a quick one regarding commercial structures of lithium offtake. You've seen some of your competitors strike some deals with floor pricing to protect downsides. Is that something that you guys are willing to entertain at this point in the cycle, noting prices are well above some of those floor terms, just to secure baseline returns for some of these capital decisions you're potentially going to make in the future? And I've got a follow-up. Christopher Ellison: The answer to that is no. We wouldn't put those in place. Those sort of deals take an average of about 5 indexes, and typically on a rising market over the last 3 months. We're typically getting above the top index on all of the cargoes that we've been selling. So no, we have no need to do that. Robert Stein: No problems. And then a follow-up, just on your capital allocation framework. If we project at spot going forward, looks like you could be paying a dividend next year or even at the end of this year. How do you think about that in terms of incremental sources of capital and returns? You've obviously got the 20% return hurdle, but is there internal tension on some of those projects that you're progressing to try to get back on the dividend-paying machine? Christopher Ellison: Yes. Look, I can certainly tell you, the largest shareholder is not opposed to dividends. But in saying that, too, I mean, we've got to balance, I mean, and we have a look at what the opportunities are sitting in front of us. I mean, if we can go and invest, for example, in some of that brownfield stuff or if something comes along that looks like it's got those 20%-30% ROICs, we're going to weigh that up with where the best value is for our shareholders, and sometimes that capital growth is a much better option. But it just depends on the day. Again, I mean, there's a lot of work being done around that. And when we go through our week on strategy, we'll be looking at all those sort of things. Operator: Our next question comes from Paul Young from Goldman Sachs. Paul Young: Chris, it's been a pretty good last 6 months, but it's been a pretty tough couple of years. And I might be getting ahead of myself here a bit, but I know you're always thinking about sort of what's next. I mean, Ashburton has transformed the business. So I'm just curious around when the leverage is below 2x, have you been thinking about adding any new sort of Tier 1 greenfield mining projects to the portfolio or is the focus more around the Mining Services growth? Christopher Ellison: Look, the answer is, I mean, we never stop looking. We've always got our BD people always out there in the market looking. We never turned down a Mining Services contract. Look, there's a range of opportunities sitting out there and there's no doubt. Well, I think we've got to start looking a little bit offshore as well. And again, good opportunities out there. One of the strengths that we've got is that we've got a long history with a lot of the bigger mining companies. And there's always opportunities out there to be able to partner up with those mining companies that, for example, they may have deposits in different parts of the world, but they don't have the skill set or the in-house capability of being able to get that thing built at a predetermined number, where they know they're going to get the right return, and we can bring that to the table. So yes, look, well, the answer is, I mean, we've never stopped looking at opportunities. And again, over the next few months, we're really going to start having a look at what's available to us, because as you know too, it takes a bit of time to get an Onslow Iron permitted and to get everyone on board. Paul Young: Maybe just the second question on Mining Services again. You said I think you won 2 contracts in the half and your CapEx was $31 million, so pretty looks like 2 modest contracts in the half, but good to see some growth coming through. Just domestically, looking at the opportunities, are the opportunities really in the Pilbara still and maybe up in Weipa? Just the capability of the team, like, how much volume and new projects can you actually add? What are the capabilities of the team? When do they actually start getting stretched? Christopher Ellison: Again, we can handle 2 or 3 of those sorts of projects at any given time. It's rare that that happens. You mainly get 1, sometimes 2 coming along. But there is -- look, certainly, in the top half of Australia, there's some amazing opportunities sitting out there over the next 4 or 5 years, and I'm going to go, I said this a couple of years ago, it's probably the best I've ever seen, but I think it's even looking better now. And a lot of that compounds what I just said, that all of the construction companies in Australia have basically disappeared over the last 20 or 25 years. We have that capability in-house and it's kind of rare. So we'll give them a fixed number and go out and deliver. That gives us that really good partnership opportunity. We bring real value to our clients. Operator: Our next question today comes from Ben Lyons from Jarden Securities. Ben Lyons: Not sure if it's one for you, Chris, or possibly Mark, but just a question on iron ore spreads. Still recently early days for Onslow and we've seen a bit of fluctuation in the price realization over the journey so far. Just looking at some various price reporting agencies that we track, and we can see, like, a lot of variance between the 61% FE and the 58% and lower grade iron ore spreads. So just wondering if you can possibly comment on what your commercial team might be seeing at present, just in terms of realizations or discounts versus the benchmark? Christopher Ellison: The discount has been, in terms of us as a seller, it's been very good over the last 6 or so months. We've got another advantage too, Ben, is that, the Onslow Iron product, I mean, 3/4 of the MinRes product goes to Baowu. Baowu have spent in excess of USD 500 million, putting a couple of yards up in China, blending yards, and the Onslow Iron ore is going to get blended with the Simandou ore. So that's a big help to us. There's no doubt there's a bit of a drive on with this China Mineral Resources Group. And they've been in discussion with a number of the big miners. And I have no doubt that's all around trying to manage the pricing going forward. But look, certainly, I mean, we still see good demand. I mean, I keep reading in the paper the stockpiles are up or something's expected to downturn, but we seem to be sitting in there around that sort of $95 to $105 range, and it feels like it's going to hang in there for some time to come. We do try and put about 1/3 of our product out that we sell it, forward sell it, to make sure we have that locked away, but we try and keep a balance with that as well, because it's not always smart to -- sometimes you can outsmart yourself on that. Ben Lyons: Yes, okay. Maybe just a two-parter, Mark, just on housekeeping, just to make sure I can squeeze it in. The first part is, obviously, Aussie inflation's been running a bit hot recently, so just wondering what that calendar year, haul road charge has reset to versus the $8.27 last calendar year, please? And the second part, it looks like you've stopped capitalizing interest, which is great in terms of quality in the financial statements, but we didn't get a note to the accounts for the interest expense. So I just wanted to clarify that there is no capitalization of interest in this interim result? Mark Wilson: Ben, it's $8.54. And in terms of the capitalization of interest, it's almost negligible. There was a tiny bit at the start, carrying over from July, at the start of July, but not of any significance. Operator: Our next question comes from Lachlan Shaw from UBS. Lachlan Shaw: Great. I just wanted to go to Mt. Marion and just to understand, you're signaling capacity there, about 500,000 tonnes of SC6 versus rough sort of guidance around 390 at midpoint, for the [ BFY ]. What's in that capacity? So is that inclusive of the float circuit? And what's the expected sort of upstream there? Is that inclusive of the underground that needs a bit more work? Obviously, you've got more pit work happening, but just keen to understand sort of how that comes together. Christopher Ellison: No, the 500,000 tonnes is based on current steady state. That does not include the extra recoveries we're going to get out of the float plant and there's no feed there coming from underground. So it's just moving forward as is. Operator: Excellent. Thank you very much. There are no further questions. That concludes today's call. Thanks for your time, and have a great day. Please reach out to the MinRes team if you have any follow-up questions. You may now disconnect.
Operator: Welcome to the Fourth Quarter 2025 WillScot Earnings Conference Call. My name is Sherry, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Charlie Wohlhuter. Charlie, you may begin. Charles Wohlhuter: All right. Thank you, Sherry, and good afternoon, everyone, and welcome to our fourth quarter and year-end 2025 earnings call. With me in the room today are Worthing Jackman, Executive Chairman; Tim Boswell, President and Chief Executive Officer; and Matt Jacobsen, Chief Financial Officer. Today's presentation materials may be found in our Investor Relations website at investors.willscot.com. Before we begin, I'd like to direct your attention to Slide #2, containing our safe harbor statements. We will be making forward-looking statements during the presentation and our Q&A session. Our business and operations are subject to a variety of risks and uncertainties, many of which are beyond our control. As a result, our actual results may differ materially from comments made on today's call. For more comprehensive review of the factors that could cause actual results to differ and other possible risks, please refer to the safe harbor statements in our presentation and our filings with the SEC. And now it's my pleasure to turn the call over to our President and new Chief Executive Officer, Tim Boswell. Timothy Boswell: Thank you, Charlie, and good afternoon, everybody. We appreciate you joining us on today's call for a discussion of the operating environment, our strategic priorities, our fourth quarter 2025 results and our outlook for 2026. I'd like to begin by saying that I'm grateful for and humbled by the opportunity to lead and support this remarkable company and its people on our next chapter of evolution. After spending considerable time across our operations in 2025 and as I approach my 14th anniversary with the company, I'm very excited about how we're positioned in the market, our talent level, the alignment of our team around priorities and our culture and values that define how we show up every day for our customers and for one another. Today, our business is emerging from a period of rapid transformation with an opportunity to set a new standard of performance in our industry through focused execution of our strategy. As we will discuss today, we are beginning to see momentum from our commercial initiatives to improve local market execution, develop our enterprise accounts and industry verticals and expand our more differentiated value-added offerings. We're backing this up with the strongest operational capabilities in the industry. Dependable execution is at the core of our right from the start value proposition, and we are executing a multiyear continuous improvement road map to further improve both our customer experience and our margins. This is a simple formula that builds upon the already outstanding financial characteristics of our business that include industry-leading free cash flow conversion and strong returns on capital. And while we have not assumed any turnaround for purposes of our guidance, we do see encouraging signs of progress across the business and the entire organization is aligned to drive a return to growth and shareholder value creation. This obviously starts with stabilizing the top line. Matt will cover the details of our Q4 results. The total revenue was down 2% year-over-year in the quarter, excluding write-offs, with the decline nearly all attributable to lower seasonal storage demand from one customer. Revenue from modular products was effectively flat year-over-year. So the lease portfolio is stabilizing as a result of our initiatives despite the continued contraction of nonresidential square footage starts in Q4. Adjusted EBITDA of $250 million in the quarter was right on top of our guidance, although the 44% margin was a bit lower driven by the revenue mix and some SG&A items. Cash generation remains strong with $91 million of adjusted free cash flow in the quarter, and we returned $30 million to shareholders through share repurchases and our quarterly cash dividend, while reducing $41 million of debt balances. Capital allocation was balanced as we leverage -- as we manage leverage prudently and prioritize opportunities with the strongest returns. And overall, there were no surprises in the quarter from my perspective, which is important as our team focuses on getting back to more consistent and dependable execution for shareholders. Looking ahead to 2026. Our initial guidance is intentionally conservative consistent with the approach that we articulated after the third quarter and does not assume any improvement in business trends. Our internal plans and compensation targets comfortably exceed this outlook, although the market backdrop remains mixed, and we think the conservatism is prudent given our recent trends. That said, our top priority is returning the business to steady organic growth, and we believe there is a path to deliver positive organic revenue growth inflection in the second half of the year. And we're seeing early results from our initiatives that if sustained, would get us there. First, entering 2026, sales staffing is up 13% year-over-year and with greater tenure, stronger sentiment and lower turnover across the sales organization. In Q4, we strengthened our regional sales management layer so that we have consistent oversight and accountability at the local level, clearly aligned incentives, and improved sales enablement systems. We absolutely have a productivity tailwind from this team, and I'm very happy with the changes that we've implemented. Second, enterprise accounts is accelerating with our focus on developing existing accounts and underpenetrated industry verticals. Enterprise account revenue was up 7% year-over-year for the full year in 2025 and up 10% year-over-year in Q4 excluding one large seasonal container customer. We expect to carry this momentum through 2026, delivering mid- to high single-digit revenue growth from the enterprise portfolio. And third, our expanded offering and focus on the customer experience absolutely complement these efforts, giving us more ways to win on every opportunity and in some cases, opening new opportunities that we may not have pursued historically. This is all consistent with what we shared in Q3, although we are a bit further along with the implementation and with clear visibility into the impact on our leading indicators. From an order perspective, our modular pending order book is up 17% year-over-year, with a significant impact from large RFP wins in the enterprise accounts portfolio, which are often tied to large project demand such as data centers, power generation and large-scale manufacturing. This excludes demand related to the upcoming World Cup, which we expect will be an additional 2,000 units of demand in Q2 and Q3, albeit on short duration. If we exclude all enterprise account activity, modular pending orders are up 5% year-over-year, so we are seeing increasing order volumes across customer segments and across all product lines within our modular offering. This is on the heels of 3% year-over-year activation growth in the fourth quarter on our modular products and with strong order growth continuing into January and February. We've also seen order rates on our portable storage product lines, up 11% year-over-year over the last 13 weeks, with that growth all coming from RFP wins within enterprise accounts, including some shorter-duration retail store remodels. So it is good to see growth in the storage order rates, but it is not yet as broad-based as we are seeing in modular. So it is early in the year, though our commercial team is well organized and with the significant order backlog, we are increasingly focused on operational readiness to support demand and have 3 key initiatives in flight across our field and centralized operations. First, as Matt will discuss, we are advancing our network optimization plan, following approval by the Board of Directors in December. This will allow us to exit surplus real estate positions and idle fleet while maintaining full service and coverage capabilities in all markets that we serve. Second, heading into Q2, we will be rolling out our enhanced scheduling and route optimization platform, which we expect will improve our dispatch function and transportation margins as well as customer service. And third, we're continuing to make improvements across our support center operations, resulting in accelerated cash collections, reduced days sales outstanding and significant improvements in Net Promoter Scores related to our invoicing and customer service functions. We prioritized each of these initiatives to improve efficiency and the customer experience. And these will be sources of operating leverage when activity levels pick up across the network and reasons we're confident in our longer-term target range for EBITDA margins. Before I turn the floor over to Matt, I'd like to thank the entire WillScot team again for their support through our recent leadership transition. Over the last several months, we have worked hard and collaboratively to align on our strategic priorities. And we have a shared understanding that our success will be defined by disciplined execution that delivers consistent, repeatable results across the organization. The initiatives we have in motion from strengthening our go-to-market strategy, to continuous improvement of our operations, create a pathway back to sustainable organic growth and shareholder value creation, which is our focus. Matt? Matthew Jacobsen: Thanks, Tim. I'll get it in the details shortly, but overall, results at the end of the year were in line or better than we had guided. In the fourth quarter, total revenue was $566 million and adjusted EBITDA was $250 million representing a margin of 44.2%. Revenues in the quarter came in a bit better than we had expected, but were down $38 million or 6% versus the prior year quarter. Excluding the cleanup of out-of-period AR that we discussed last quarter, revenues were down approximately $12 million or 2% year-over-year, the majority of which was driven by the reduction in our seasonal retail container volumes with one customer. While higher sales and delivery and return activity supported revenue performance above our guide, the shift in revenue mix weighed on consolidated margins by about 50 basis points versus our expectations. We also incurred elevated levels of health insurance costs in the fourth quarter, which compressed margins by another 60 basis points and reduced the favorability to our guide from an EBITDA perspective. For the full year 2025, total revenue was $2.28 billion and adjusted EBITDA was $971 million at a margin of 42.6%. So overall, we ended up the year a little better than we had guided and are focused on operational discipline and cost control as we position the business to support a growing order book in early 2026. If we look a little bit closer at our leasing revenue on Slide 5, we can see the underlying stability in our leasing revenues. Here, you can see our performance with and without write-off activity. Write-off activity within leasing revenue was flat sequentially at approximately $25 million, but up approximately $19 million versus the prior year quarter. However, our modular space leasing revenues in the quarter were essentially flat to prior year, which when combined with improved activity levels and the growing order book, as Tim highlighted, indicates lease revenue stabilization in our largest product class and the opportunity to drive revenue inflection in the second half of 2026. Portable storage leasing revenue was down approximately $10 million from the prior year as expected driven by lower volumes and end-of-year seasonal storage business, partially offset by a modest sequential increase driven by our climate controlled storage offering. And VAPS revenue in the quarter was essentially flat in absolute dollars, both year-over-year and sequentially with increasing VAPS penetration, which was up by 100 basis points year-over-year to 17.8% of total revenue or 17.4% for fiscal year 2025. Turning to Slide 6. In the fourth quarter, adjusted free cash flow was $91 million, representing a 16.1% margin and $0.50 per share. For the full year 2025, adjusted free cash flow totaled $489 million and exceeded our guidance of $475 million, representing a 21.4% margin and $2.70 per share. Consistent free cash flow conversion continues to be a unique strength of our business and has demonstrated remarkable resilience as the lease portfolio positions for inflection. As shown on Slide 7, for the full year, net CapEx totaled $273 million, up 17% compared to fiscal year 2024. While we estimate approximately $200 million of our CapEx is for maintenance CapEx, we've been investing above maintenance levels to service large project demand with our FLEX product, additional complexes and also in our newer product categories to support growth where customer demand is strong. We will continue to prioritize demand-driven investments in the more differentiated, higher-value products. We also opportunistically allocated $145 million towards acquisitions, paid down $146 million in borrowings and returned $151 million to shareholders through both repurchases and our quarterly dividend distribution program in 2025. We will continue to take a balanced approach to allocating capital by managing leverage while being opportunistic with share repurchases and potential acquisitions. Moving to Slide 8. We ended 2025 with total debt of under $3.6 billion with a leverage ratio of 3.6x. During the quarter, we amended and extended the maturity of our ABL credit facility to October of 2030 and use some of our availability to redeem $50 million of our 2031 notes, which carry the highest interest rate in our debt stack. Our next maturity is not for another 2.5 years, and we have sufficient flexibility and liquidity to fund our capital allocation priorities. Slide 9 is new and provides an overview of our network optimization plan, which was approved by the Board of Directors on December 18. As leases expire over the next 4 years, and we exit approximately 25% of our leased acreage, we expect to realize between $25 million and $30 million of annual real estate cost savings. Said another way, the annual growth rate of our occupancy costs should decline to a mid-single-digit average growth rate over the period. versus the 10% plus that we've been seeing over the last several years, helping support achievement of our EBITDA margin target range. As part of this plan, we recognized a noncash restructuring charge of $302 million from accelerated depreciation on our rental equipment in the fourth quarter that reduced the net book value on approximately 53,000 units to salvage value, which is approximately $10 million. The move aligns with our strategy of shifting the portfolio towards higher-value offerings as presented at our Investor Day last March. In turn, stronger unit economics of our overall portfolio will support improved margins and ROIC, while still preserving sufficient capital to meet demand in all product categories. With regards to the optics of our utilization rates, the average size of our entire fleet over the quarter does not fully reflect the network optimization plan since we recognized the accelerated depreciation on the units in December. Therefore, you will not see the entire impact on our utilization until the first quarter of 2026, but we have provided a pro forma view in the appendix, which shows that our utilization for both modular space and portable storage products increases by over 700 basis points after removing these units from the fleet. As we ramp up our network optimization initiative, we will also begin to incur cash costs related to rental equipment disposals and fleet relocation costs totaling about $60 million over the next several years with an estimated $35 million in 2026. From a presentation perspective, fleet disposal costs will be included in restructuring expense and both fleet disposal costs and fleet relocation expenses will be added back as we present adjusted EBITDA, adjusted net income and adjusted free cash flow. The related salvage value for recycling containers and estimated real estate proceeds in future years will partially offset these cash implementation costs, but will have limited impact on earnings. And finally, on Slide 10 is our 2026 outlook for revenue of approximately $2.175 billion and adjusted EBITDA of $900 million. As we spoke about in the third quarter, relative to the $971 million of adjusted EBITDA in 2025, we're entering the year with an approximately $50 million headwind in our traditional storage business. Our outlook of $900 million is a conservative view relative to our current run rate beginning the year and does not include benefits from ongoing internal initiatives that, if sustained, could drive year-over-year leasing revenue growth at some point in the second half of the year, and place us on a growth trajectory into 2027. As Tim mentioned, we're driving internal plans and compensation targets that would inflect revenue in the second half of the year and comfortably exceed the revenue and EBITDA guidance. For modeling purposes, the first quarter is the slowest period of the year for activations, and we will incur increased variable rental costs for the spring activation period as seen in the sequential progression of our adjusted EBITDA margins. Based on where we're starting the year, we would guide to approximately $515 million of revenue for the first quarter and adjusted EBITDA of approximately $200 million. Beyond the first quarter, we anticipate revenue to increase sequentially by 7% or 8% into Q2 as we support our highest logistics activity quarter, including the beginning of the World Cup. For net CapEx, we expect to invest about $275 million in 2026. Our net CapEx plan maintains the same strategic approach, prioritizing high-value and differentiated product categories and will be slightly front-half weighted to support demand. Approximately 70% of our net CapEx will be split evenly between normal modular refurbishments and new fleet purchases of differentiated product categories such as FLEX and complexes to support large project requirements. 25% directed towards continued VAPS investment and the remaining 5% towards infrastructure. Clearly, the $275 million net CapEx guide implies that we're investing into growth opportunities that are not fully reflected in our revenue and EBITDA guidance. As we progress through the year, we will adjust investment levels to reflect the demand environment. Though based on what we're seeing right now, we expect to invest at this annualized level in the first half of the year. Further down the P&L, we expect total depreciation and amortization to be approximately $400 million for 2026 or approximately $100 million per quarter. About $310 million related to rental equipment and the remaining $90 million includes approximately $40 million of amortization expense and $50 million of other depreciation related to infrastructure. Based on current debt balances, we would expect interest expense to be approximately $215 million for 2026 including approximately $9 million of noncash expense. And just as a reminder, the cash timing of bond interest payments is concentrated more in Q2 and Q4. And finally, regarding taxes. Our effective tax rate remains approximately 26%, but cash taxes will remain isolated to state and local levels as they were in 2025 as we do expect our NOLs to shield [indiscernible] the federal level in 2026. Based on current projections, we expect to become a full federal cash taxpayer in 2027. So in summary, the end of 2025 finished up as expected, and our outlook for '26 as we sit here today, is a conservative view relative to our run rate entering the year. If the positive commercial momentum that we're seeing today continues, we believe we could see year-over-year leasing revenue growth at some point in the second half of the year, which would drive us comfortably above our current outlook. Our internal team is fully aligned on inflecting revenue in the business and returning to growth. Back to you, Tim. Timothy Boswell: Thank you, Matt, and thanks again to our entire team who are aligned and focused on delivering results and delivering them in the right way, consistent with our values. WillScot is uniquely positioned in the marketplace with opportunities for growth that only we can execute, given our differentiated capabilities and without constraints given our outstanding financial profile. I'm incredibly excited about our prospects in 2026 and beyond. And I see clear alignment between the strength of our culture, the execution of our strategy, the growth of our business and long-term shareholder value creation. This concludes our prepared remarks. I will now turn it back to the operator to open the line for Q&A. Operator: [Operator Instructions] Our first question will come from the line of Andrew Wittmann with Baird. Andrew J. Wittmann: So I guess I just wanted to kind of check in on the order book. I mean, Tim, you gave some pretty decent stats here about orders kind of returning. You kind of hedged the comment that it's kind of early here. You got to see if this holds. Are you seeing anything seasonally that maybe accelerated some of the orders that maybe they're running above trend? Or what are some of the other factors, I guess, that would lead you to believe that maybe this is good, but maybe it's not sustainable here because obviously, the guidance is much lower. So I thought maybe you could just elaborate on that, please. Timothy Boswell: Yes. As you know, Andy and good to talk to you, the seasonal activity usually picks up as we move deeper into Q1 and early Q2. So in a normal year, we still wouldn't have seen kind of the typical impact of that seasonal increase in construction activity in the lower 48 states in particular. What I did call out is a number of larger RFP wins in our enterprise accounts portfolio. And that is a very big driver here of the momentum we're seeing in the business. As you will recall, we reorganized that team back in Q2 of last year, added some leadership depth across the team and organized it across 5 key industry verticals, and we're seeing traction really across all of those with construction being the greatest. If I unpack what's going on in the construction vertical, data centers, not surprisingly, are popping up all over the United States, and we are present on many of those. And as we look at data center activity, specifically in contractual written revenue, we expect that subvertical could be up 50% year-over-year in 2026. So we don't see that slowing down. So overall, the modular book is building earlier in the year than we would typically see and with a strong bias towards enterprise accounts. We do have the World Cup coming up. We try to keep that separate from the stats that we gave you just because that will be kind of a one and done deal at least this year until we get to the Olympics, but really encouraged by what we're seeing through the enterprise account team. And then the other important commercial strategy has been on dialing in our local market execution. And we made a number of structural changes through the second half of last year that I'm very pleased with. I think we're getting good momentum across the local sales org as well. We're seeing that in some of the more transactional product lines within Modular, which are also up from an order standpoint, not so much yet in storage, but those changes are fairly recent and the early trends are encouraging. So a little too soon to extrapolate all of that across the rest of the year, especially not knowing how the typical construction season is going to build, but I'm happy with the progress year-to-date. Andrew J. Wittmann: Got it. That's helpful. I guess for my follow-up, I wanted to ask about VAPS as well. To me, I mean you've talked about kind of trying to go to market a little bit differently there that maybe the last year or 2 wasn't totally up to your standards. It looks like there's a little bit better momentum coming out here. I guess my question is, is that true? Have you made changes? And do you believe that they're benefiting on the VAPS? Or obviously, you're still not to your target levels, but just starting to get a little momentum there. So I just -- I wanted to give you an opportunity to talk about that and let us know what you're doing there and seeing there on that initiative? Timothy Boswell: You're right that the penetration levels is measured in terms of percentage of revenue of the lease revenue book are slightly increasing. I'd say that's more of a function of the mix shift and the traction that we're seeing in the modular portfolio than it is improvement in terms of penetration on a per unit basis, which as you'll recall, is how we used to look at it. I still think we have some opportunity and work to do there. And as I think about our commercial initiatives in the first half of 2026, we made some changes to the regional sales leadership structure at the local level across the network and modular VAPS penetration in furniture, in particular, is a very high priority for that team as we kind of get back to the best practices that we know we're working a couple of years ago. So I still put that in the opportunity column, Andy, and the only other thing I'd add there is the offering is continuing to expand. Fencing and perimeter solutions is set for a nationwide rollout this year. So we are going to have a tailwind across that solution set in addition to the traditional offering where we've got a further penetration opportunity just across all the volume that we're delivering. Operator: One moment for our next question. And that will come from the line of Angel Castillo with Morgan Stanley. Angel Castillo Malpica: Tim, I appreciate all the color. I guess, just trying to make sure I understand this because as we think about maybe a second half inflection point here, I guess I'm not entirely following why we're seeing modular orders on the non-enterprise build or rise 5% year-over-year, but you're also talking about, I think, some perhaps maybe you're seeing some backlog build that's a little further out or earlier than normal. But why wouldn't we see some of this reflect itself at least in 2Q and see more of a ramp up there? Is it just -- is this a factor of more mega project than local? Or why wouldn't we see that, I guess, that non-enterprise piece as well showing up earlier? Timothy Boswell: Well, as you look at the pending order book that we have today, we do expect a sizable portion of that to convert in the first half of the year. What we're not doing is extrapolating these activity levels deep into Q2 and the second half of the year, just given it's early in that traditional construction season when activity would typically build. So the early signs are indeed encouraging. The majority of that order book activity should deliver in the first half. Lead times have not changed dramatically as I look across the portfolio. There is a heavy mix of mega project activity, as I mentioned, data center, power gen, manufacturing, really across all geographies, but we're just not prepared today to extrapolate that into the second half of the year. Angel Castillo Malpica: Understood. And then sorry if I missed this, but I guess did you say what your 2026 free cash flow guidance? And just curious if you didn't, what that is and what the free cash flow margin kind of implied, -- just help us bridge the puts and takes as we think about next year's or I guess, this year's free cash flow versus last year? Matthew Jacobsen: Yes. Angel, I can take that one. I mean we've kind of included most of the most of the components there. But our math would say around $415 million of adjusted free cash flow. So just one thing to note there, we do expect, like I said, to incur roughly $35 million to implement our network optimization plan. That would be excluded from that $415 million. So think of that as kind of an adjustment to get back to an adjusted free cash flow -- but really, between interest and the different pieces there, that's about where we're ending up. So pretty resilient, honestly, and kind of looking at how the business has performed over the last few years in a macro decline. And as we start to get to that inflection point, the free cash flow has been really resilient. Timothy Boswell: Only thing I'd add to that is just the CapEx guide, given the activity levels that we're seeing right now in the first half of the year, we do expect to be investing at that $275 million net CapEx annualized level. We'll, of course, revisit that weekly is kind of our practice based on the demand that we're seeing. If we see these levels continuing. I expect we hit that $275 level for the year. If things slow down, we'll obviously pull it back and you'd see that free cash flow margin pop back up north of 20% versus where it sits in the current guidance. So we'll continue to take a demand-driven approach to the net CapEx. Operator: One moment for our next question. And that will come from the line of Steven Ramsey with Thompson Research Group. Steven Ramsey: I wanted to see if you could parse out the enterprise forecast of the mid-single to high single-digit growth for 2026. And if the pricing contribution in enterprise is similar to the modular segment displayed in 2025, that points to volume being an equal contributor to the enterprise revenue growth. So maybe you can parse just the drivers of enterprise revenue. Timothy Boswell: Steven, I think this is an easy one. It's really volume driven, right? We don't see significant pricing differences as we segment across enterprise and other customers. We take a dynamic approach to pricing. We look at customer characteristics and project characteristics and all those good things. But at the end of the day, you don't see significant price or VAPS penetration differences between the enterprise accounts, especially in modular versus other customer segments. So the growth in that segment is volume-driven, and that's a function of going deeper with customers where we already have relationships, but maybe didn't have as robust of an account strategy as well as the vertical business development strategy. And as you know, we touch every sector within the North American economy. Historically, we've been very organized around construction and we're taking that same focused approach and applying it to 4 or 5 other key industry verticals that we talked about at the Investor Day, where we know we've got great marquee accounts, great value proposition and opportunities to grow with our existing offering. Steven Ramsey: Okay. That's helpful color. And then I wanted to think about the sales staffing and the measurements you gave on numbers of better tenure, maturation, et cetera, and how that connects to the better order and activation trends coming in on a lag. How much of the activation in order growth is the maturing staffing and seeing more and capturing more opportunities versus the mega projects being better? Timothy Boswell: I'd say it's earlier in terms of the impact of the field sales organization. Some of the changes that we put in place at the end of 2025 are just kind of taking hold now. We've completed our first month of the year from a commission standpoint and exceeded the targets that we had deployed across the field sales organization. So that's a good start for the year and bodes well for earning potential across our sales organization. So that's a good thing. As I look at the objective metrics, staffing up 13%, turnover is -- or at least voluntary turnover is half of what it would have been back in the middle of 2024 when we were experiencing peak disruption from the field reorganization we measure employee sentiment across all categories quarterly, and that is a driver of performance, whether you're in a sales role or any other role, and we're seeing improvements there. So all of those are either quantitative or qualitative indicators that tell me we've got tailwinds across that team. We have made systematic improvements from a sales enablement standpoint in our sales HQ. This is our CRM system where we're taking a more prescriptive approach to prioritizing opportunities and next best actions for sales reps through our CRM as well as through phone routing and other things. So sitting here today, we really don't have any other changes that we're contemplating for the field sales organization. I feel like that work is done. The team is in place. The leadership is in line. The incentives are consistent across really all sales roles, which has been a long time coming. And I'm happy with the positioning and it's time to let them run. Operator: One moment for our next question and that will come from the line of Kyle Menges with Citigroup. Kyle Menges: I was hoping if you could just talk about the positive rate you're seeing in portable storage. So and just maybe what's driving some of that? And talk a little bit about how you're balancing rate versus market share within portable storage? Timothy Boswell: Okay, I'll start. Matt, I'll probably miss some details, so you can jump in. If you look at the as reported average rate up 9% year-over-year that we report in the investor presentation that is almost entirely mix driven by rapid growth within our cold storage offering. If I think about traditional storage, those spot rates have bottomed over the last couple of quarters, it feels like and are off significantly from where they would have been back at the peak in the middle of 2023. So I think we've digested that headwind, and that's included in the $50 million revenue headwind that Matt referenced for the traditional storage business. So I think that is behind us at this point. The favorable mix shift is driving that growth in AMR. Our order book related to cold storage sitting here right now is up 105% year-over-year. So that's performing quite well and has an added benefit of taking us into sectors and customers where we really didn't have a hook previously. A good example of that would be third-party logistics, warehousing and distribution. We've had customers in that sector forever, but not with a targeted strategy. The flexible cold storage offering is really attractive across those 3PLs, warehousing and distribution and retail. And it's allowing us to then pull other more traditional parts of our offering into those types of customers. So really happy with how that's performing. It's a good example of how we're repositioning the portfolio towards higher value-added solutions. Higher value-added solutions allow us to capture that value and pricing, and that's what you're seeing in the storage AMR. Matthew Jacobsen: Yes. Not much to add there other than the containers, if you look at them, by themselves are up about 1% year-over-year. So we're continuing to get impact of all the different pricing levers that we have, but it's been relatively -- it's been very stable, which is not a bad thing, but makes contributing to the overall increase. Kyle Menges: Helpful. And then a follow-up question on AI and just how you're leveraging AI internally. And in your prepared remarks, I think you said that efforts you're making around minimizing logistics costs, I think, some efforts around collections as well. I mean you seem like areas that would be ripe for AI implementation. So curious what you're doing today and if you're exploring just any use cases for AI internally in the future? Timothy Boswell: We are indeed, first and foremost. We hope everybody just keeps spending on AI and building data centers. It's probably the most impactful thing that we see in the business right now. We've been stepping into this area for a couple of years now. We started with AI tools in our branches and video monitoring of movements within our branches for safety purposes. Our pricing optimization platform is AI-based. Internally, we have developed a sales call coaching model that is AI-enabled. And just to dig in on that one a little bit. This is a tool that can review all of our sales call transcripts. It's got a scoring rubric, whereby it can identify sales calls that could have been improved in some way. It helps our sales coaches, diagnose very quickly, which reps need coaching on what topics and be a lot more efficient with how we spend that sales manager resources time right. So there are a host of ways that we can deploy these tools in the back office. That said, we don't need to jump straight to being cutting edge on all things, right? There's still a lot of basic blocking and tackling in the back office, where we're seeing traction on collections and customer service, the old-fashioned way, which I think can drive real margin improvement in the business. But I completely agree with you. There are aspects of our sales model, aspects of our customer service model, employee training, where AI is very relevant, and we are very open to those opportunities. Operator: And one moment for our next question. That will come from the line of Tim Mulrooney with William Blair. Benjamin Luke McFadden: This is Luke McFadden on for Tim. Can you provide some insight into how conversations with your local customer set have been trending recently? I know things like interest rates, tariffs, building costs were headwinds for that customer cohort this past year is sentiment or confidence in the outlook for 2026 improving at all with that customer set? Timothy Boswell: The best barometer there is the feedback that we're getting from our local general managers and our local sales team. And going back to November when we had those teams in for budgeting and I've been out on the road recently, meeting with the teams for early updates in 2026. And that sentiment and that energy level is notably improved relative to where we would have been last year. I can't say that's all customer or market driven. A lot of that is being better organized internally and with better structure and accountability in place relative to how we entered last year. So I think that's probably the bigger driver of the two. Benjamin Luke McFadden: That's helpful color. And as my follow-up, I know one of your ongoing commercial priorities has been to do improve and do a better job winning subcontracted business. And the large projects where you work closely with the prime GC. Can you provide an update on your progress there around winning that subcontractor work? Timothy Boswell: Yes. This is pretty exciting, actually. Back in -- it was early Q4, we introduced a kind of a rewards program and referral program for our larger general contractors. And this is a way to partner with our largest contractors and provide our customers with an incentive to help bundle more of that subcontractor activity with us. It has huge benefits to the primary general contractors because they get more control and visibility and uniformity, frankly, across all of the subs coming on to the job site. And from our perspective, obviously, it's almost like an indirect sales channel that allows us to capture that activity more efficiently than targeting every subcontractor individually. So very encouraged with the early performance of that program. And if you think about our focus on local sales market execution, one thing that we had gotten away from over the last couple of years is having true account ownership at the local level. So what we've done is gone across every territory in North America. Obviously, every ZIP code rolls into one of our territory sales reps. And within those ZIP codes, we've got top accounts for which that territory sales rep is personally accountable for. So I think historically, we've done a good job targeting construction project activity through our various systems. What we got away from was just that ongoing account management and relationship development at the local level. And we've absolutely reemphasized that later in Q4 and going into 2026. And I think that's a really important ingredient for the effectiveness of the local sales organization. And it mimics that account focus in that account strategy that we've put in place at the enterprise level. So we're trying to do it at both ends of the spectrum. Operator: One moment for our next question. And that will come from the line of Manav Patnaik with Barclays. John Ronan Kennedy: This is Ronan Kennedy on for Manav. Are you helping with the underlying volume and price assumptions for the respective segments for 1Q and/or full year '26. And can you comment on if and how conservatism such as I think what was discussed in Andy and others question as to not extrapolating order book conversion or not including any impact of commercial initiatives is specifically impacting those assumptions and the opportunity for upside there? Matthew Jacobsen: Ronan, thanks for the question. I'll try and capture that here. I mean I think as we look at our pricing and volume assumptions and kind of what's in our guide and what we think is opportunity kind of above our guide if the trends continue. Is that kind of what you were kind of trying to get after? John Ronan Kennedy: Yes, yes. And if you're able to help with how to think fundamentally about volume and price, where that's been taken back, respectively, by conservatism and the potential upside? Matthew Jacobsen: Yes. No, I think as we look at our guide and we think about volume and price, I mean, you -- as we said in our opening comments, the guide that we've provided is kind of a continuation of recent trends, right? And those trends have been having some volume pressures, obviously, on the storage side of the business, we're starting the year with about a $50 million kind of headwinds. So we're not assuming that, that picks up and starts to reverse. On the modular side, that's been a bit more stable, right? We showed modular leasing revenues were basically flat year-over-year, and we're kind of starting from a standpoint of that being the starting point for -- at least from a revenue perspective, not volume, but revenue starting point for the year and that kind of continuing forward. And if these trends that we're seeing recently are sustained for a couple of quarters, you start to then get to a point where you're getting closer and closer to some potential volume inflection. That won't happen in 2 quarters, but you're moving in that direction. And that's ultimately what we're all focused on is driving internal volume growth, doing that smartly, not at the expensive price, but driving consistency there as well. So we're just -- we're being conservative in the guide because it's only 1.5 months in. And this is what we know today, but we know that can also change as things go forward, and we'll be watching it closely and give you guys an update here in a few months. John Ronan Kennedy: Got it. And if I may, as a follow-up, can I ask -- are you helping with how to think about -- and I know, Matt, you just alluded to, it's only so far into the year, cognizant of that time frame. But going back to last March and the strategic -- or the initiatives and the targets rolled out for the 3- to 5-year horizon. I would say things haven't necessarily played out as anticipated, certainly from a market demand dynamic standpoint, then you had the 325 introduction of further strategic initiatives, prioritization of some optimization initiative and a fundamental shift to the more conservative approach to forecasting and guiding. Is there a way to think about the 3- to 5-year targets in light of all that? Or is it -- look, they're 3 to 5 years and there's still plenty of time, and that's why it was 3 to 5 years? Or just interested in your thoughts on that, please. Timothy Boswell: Ronan, I'll take this one. And I think you ended in pretty much the right place. Obviously, we didn't finish 2025 where we would have hoped back in March of 2025. And so you can think of the starting point to get to those longer-term revenue and EBITDA targets is obviously lower. And the implication there is it may take more time to get there. So look at the outer end of that range. In terms of our strategic initiatives, the only thing that's new relative to where we were in March is the network optimization initiative. And that was a function of, hey, we see the market bottoming in a place that's lower than we anticipated, which means we've got an opportunity to optimize both fleet and real estate. So that's a -- that was a new 1 relative to where we would have been not quite a year ago, but the focus on local market execution has -- in terms of the changes that we've implemented has played out very much with what I -- how I would have planned about a year ago. Enterprise accounts, the same. The focus on the value-added offering, the same. I mentioned in my prepared remarks, the focus operationally on route optimization and scheduling. We talked about that in March a year ago. We talked about optimization of back-office processes, and we're making progress across all those things. The reality is you can't really see the impact of that -- those margin-oriented initiatives because they're being offset in 2025 by the natural negative operating leverage in the business in this environment. So in my prepared remarks, I alluded to the fact that these are structural improvements to the business and the margin profile and margin potential in the business that we expect will manifest themselves when we get volume back -- flowing back through all the branches. I like what I see sitting here in mid-February from a volume standpoint, but in order to get that impact, it has to be sustained and that's why we're taking a cautious approach to the guidance. Operator: One moment for our next question. And that will come from the line of Faiza Alwy with Deutsche Bank. Faiza Alwy: I wanted to follow up first just on the conservatism comments again. I just want to make sure I'm understanding -- so as you're talking about revenue inflection in the back half, is that included in the guide as of right now? Or are you essentially saying that if current trends sustain then that's where we will be? Matthew Jacobsen: It's more the latter there, Faiza. Thanks for the question. I think we're seeing some good commercial indicators right now. But don't know that those will sustain themselves to get us to a point where we would see second half inflection for sure. So our conservative guide is based on the run rate coming out of last year based on kind of where that would play out. So if we do see a sustained consistent year-over-year improvement in the commercial activity, that would be above our current guide. And that's where we see that there could be a potential for inflection in the second half of the year, but that's not included in our guidance. Faiza Alwy: Perfect. And then I have to ask about data center since we've been sounding so positive on that for good reason, I'm sure. Maybe help us think through like what percentage of the business is that vertical at this point. I suspect it's small, but maybe you can give us some background on like what's that RFP process like as you think about those RFPs, like what has been your win rates there? And what -- essentially, I'm trying to figure out what the competitive dynamics are there? Because I think a lot of us believe in that, that activity continuing. So any additional perspective there would be helpful. Timothy Boswell: Yes, I'm not going to have a precise quantification of this for you, Faiza, but I'll give you maybe a way to think about it. And first and foremost, I'd say, from our perspective, this activity is picking up, not slowing down, at least that's been our experience here from Q4 coming into Q1. And as I said in either in response to an earlier question, we measure the new contractual revenue that we write in any given period. This is number of units times the price, times the duration is the total project value. And we think that the data center sub-vertical could increase by 50% or so on that metric in 2026. So that's a meaningful increase, but you're talking about less than 5% of our overall revenue at the end of the day. So it's a very important and kind of unique change in the demand environment. We are absolutely taking advantage of it. I can think of data center projects from Des Moines to Milwaukee, Lubbock and Abilene, Texas, Indianapolis, Jackson, Mississippi, Chicago, Reno is on fire, Northern Virginia. So it's everywhere, right? I can't quote you the win rate off the top of my head, but we're on all of those projects. There are situations I'm thinking about Micron, not a data center, but related to that supply chain where we'll have hundreds of units, but actually can't supply the entire demand across that project, and it's fundamentally changing the nature of the Boise market for the next 10 years probably. So this is a very significant change as I reflect back to other changes like this in the business, like when the business was bottoming coming out of the GFC, we had a very significant increase in oil and gas activity in 2011, '12, '13, which really led the reinflection of the nonres market coming out of the GFC. This feels a little similar to that, but I haven't seen anything quite like this since that time. Operator: One moment for our next question. And that will come from the line of Philip Ng with Jefferies. Philip Ng: I think in your prepared remarks, you talked about nonres square footage starts were down about 6% in '25 and about 12% for the quarter. Is there a good way to think about the typical lag of that number to your units on rent because you're calling out pretty encouraging orders. I know it's very early to start the year. So just curious what kind of end market assumptions are you kind of baking into your outlook for this year? Timothy Boswell: It's a good question, Phil. This is Tim. And our activation volumes typically align with project starts, right? So the encouraging thing from my perspective is we're seeing meaningful activation and order growth in a declining starts environment. And that's a bit unusual in our business. To me, that means 2 things. We're outperforming that metric as an organization I think that's got a couple of pieces to it. One, the local sales organization is better organized today than it would have been a year ago; two, the enterprise efforts and the mix of that activity is working in our favor because we are disproportionately well positioned to serve the needs of these larger industrial projects. In the case of some of these things like this large soccer tournament that's coming up, I'm not sure anybody could do exactly what we're doing for the customer. That's just a function of our unique capabilities and our unique value proposition. And I think the way we're organized right now, we're better positioned to take advantage of that. Philip Ng: That's helpful, Tim. I guess, kind of dig a little deeper on that. Can you remind us like what percent of your business is actually tied to backlogs. I'm not as clear how good of a leading indicator is that in terms of leasing revenue, just overall, it just would be helpful to kind of get a little more color on that. And have you seen your units on rent, I guess, inflect like your order book, at least through early February? Timothy Boswell: Yes. On that latter point, I mean, we had a modest increase in modular unit on rent in January, which is seasonally unusual. We haven't seen that in storage. So it is activations lead to orders or orders lead to activations. It's the basic sales funnel and the order book that we see right now supports activation growth leading into Q2. And if that's sustained, typically for a couple of quarters, you get unit on rent inflection, and that's been the goal here for some time. And we're not making that assumption in the guidance to Faiza's question a minute ago, but if sustained these activation levels and order levels would support it later in the year. Operator: [Operator Instructions] Our next question will come from the line of Scott Schneeberger with Oppenheimer. Daniel Hultberg: It's Daniel on for Scott. Could you please provide the bridge from the EBITDA in 2025 to the guide for 2026. I know you have the storage headwind, but the other components are you able to quantify that? Timothy Boswell: Yes, Daniel, that is the biggest component. It's really a $50 million kind of headwind that we're facing. And then if everything else, we've provided some conservatism to that point, which then brings us down to the $900 million. Really that's the main thing, right? So if -- obviously, if our commercial activity sustains like we've seen recently, we would go -- we would do better than that. And that's what we're driving to internally as a team. That's what all of our compensation is based on. But that's really the main brick in the bridge. Daniel Hultberg: Okay. So there's a lot of real swing factors in that range that could put you higher and lower? Matthew Jacobsen: I mean there's obviously other opportunities and risks, but it really does boil down to that storage headwind. Daniel Hultberg: And on M&A, last year in the second quarter '25, you had a pretty big M&A spend. Will there be a trickle through to EBITDA growth in '26 from that? And the level of M&A spend you had in '25 and in '24, is that a good way to think about it going forward? Timothy Boswell: It's a good question. You can assume that the impact of those acquisitions are fully in our run rate exiting 2025. So I don't expect anything incremental for purposes of 2026 that we haven't already talked about. I think it's a reasonable M&A level to assume, but we don't really give M&A guidance given it's difficult to predict the timing and probability of those transactions. I would just point you back to the capital allocation framework. And over time, I think we've demonstrated that we have been able to deploy that roughly 25% of our available capital into tuck-in acquisitions. Nothing imminent to announce sitting here today. But over time, I think that's been a reliable capital allocation framework. Operator: We have now reached the end of today's Q&A. I would now like to turn the call back over to Mr. Tim Boswell for any closing remarks. Timothy Boswell: Thanks, Sherry, and thanks again to the entire WillScot team for your focus and dedication. Thanks to everyone on the phone for attending and for your interest in WillScot. We look forward to following up with many of you here in the coming days and weeks and providing another update after we conclude the first quarter. Thanks very much. Operator: Thank you, ladies and gentlemen. This concludes today's conference. You may now disconnect.
Operator: Hello, and welcome, everyone, to the Kingspan Preliminary Results 2025. My name is Becky, and I will be the operator today. [Operator Instructions] I will now hand over to your host, Gene Murtagh, CEO, to begin. Please go ahead. Gene Murtagh: Excellent. Good morning. Thank you, and welcome, everybody. I'm joined here by Geoff and Dave to take you through our 2025 results. If you could please just go to Slide 3 in the results deck titled 25 in summary. And just in brief, we saw revenue growth to EUR 9.2 billion, which was pre-currency growth of 9%. On the EBITDA, we were just over EUR 1.2 billion, which similarly was 9% up. And trading profit was just over EUR 955 million. And again, like-for-like growth or pre-currency growth of 8% which brought our EPS to EUR 3.70. And once again, on our continued emission reductions program right across the group, we've seen since 2020, a Scope 1 and 2 internal reductions of 70, 7-0 percent which is pretty extraordinary, and that continues to advance along the lines that we've discussed previously. Backing up those results clearly and exiting the year, the insulated panel order bank as part of the envelope was ahead 8%. And actually, the intake in the same product group is ahead 8% for the first 6 weeks of this year. And in the Advances business unit, the revenue was up 12% in the year, which obviously accelerated through the second half. The backlog at the end of the year was ahead 24% in that whole product group. And the order intake in the Advances product set is double prior year in the first 6 weeks, and we expect that growth rate to actually accelerate from this point forward. So all in all, it was a strong year given the circumstances. We entered this year with, I would say, very encouraging backlogs and activity right across the business. And notwithstanding the weather hampered start to the year, which won't surprise anybody, we do expect to see significant growth in 2026. So just for some more color on all that, I'd hand you over to Geoff now. Geoff Doherty: Thank you, Gene. I'm on Page 6, the financial highlights. Firstly, group revenue at EUR 9.2 billion, up 7% or 9% at constant exchange rates. The principal FX move year-on-year was U.S. dollar to euro. To be specific on that, the average translation rate from euro to U.S. dollar was 1.08 in 2024 versus 1.13 in 2025 in terms of our average translation rate. Group EBITDA, EUR 1.22 billion, up 7%. Trading profit, EUR 955 million, up 5% or 8% at constant exchange rates. Earnings per share at EUR 3.70. Our total dividend for the year, EUR 0.555, a payout ratio of 15%, which is our policy guide. Strong free cash flow of EUR 429 million, and I'll come to the components of that shortly. Trading margin at a headline down 10 basis points to 10.4%. But actually underlying pre-acquisition, we were actually ahead by 20 basis points to 10.7% year-on-year. Net debt, we ended the year at EUR 1.88 billion. And in terms of leverage, net debt-to-EBITDA of 1.65x. Turning to Page 7, just bridging revenue and trading profit year-on-year. Our 2024 revenues of EUR 8.6 billion. Clearly, the significant component of sales growth during the year was the EUR 707 million contributed by acquisitions year-over-year. And then we had the FX move of 2% or so, clipping sales by EUR 138 million. From a profit perspective, 2024 was EUR 906.7 million. Currency shaved EUR 21.4 million of that. It's worth highlighting that of that EUR 21.4 million, EUR 19.6 million of that occurred in the second half of the year because that's really when the pronounced exchange rate move actually happened. Acquisitions contributed EUR 49.5 million in the year, initially dilutive, but will kick on from here in terms of trading margin and underlying profitability up by EUR 20 million. The geographic profile of sales set out on Page 8, pretty consistent year-on-year. The Americas at 22% of the business. Rest of World, 8%. And Europe, all told across all territories, 70% of the business in both '24 and '25. Turning to free cash flow on Page 9. Naturally, the strongest component of free cash is the EBITDA of EUR 1.22 billion. Working capital, an outflow of EUR 151 million. Our working capital to sales ratio was 11.9%, which on a 5-year view, is an efficient performance. It happened to be up by 50 basis points on the very low level of December '24. And about half that move reflects the timing of acquisitions versus year-end. CapEx, EUR 325 million. And we're guiding EUR 350 million for this current year. The other significant cash flow item, tax of EUR 132.8 million, in line with our income statement charge with an effective tax rate of 16% in 2025 and our guidance for 2026 is an effective tax rate of 16.5%. So all of that combined to give us free cash flow of EUR 429 million. From a capital perspective, that's set out on Page 10 in terms of the reconciliation of opening and closing net debt. We reduced debt by the free cash. We deployed EUR 258 million in acquisitions and incurred EUR 168 million in deferred consideration. We also acquired 2.2 million shares during the year for a consideration of EUR 148.6 million. That's an average share price of EUR 67.58. Dividends paid of EUR 99.5 million during the year. So net debt ended the year at EUR 1.88 billion. A feature of the business for a long period of time has been the strength of our balance sheet, some commentary around that on Page 11. The group has significant liquidity. The principal strands of that are our undrawn EUR 800 million green revolving credit facility, which is fully committed to May 2028. We have cash balances on hand of approximately EUR 600 million. Our total gross debt is about EUR 2.2 billion or so between private placement and public bank. And the weighted average maturity of all of our drawn debt is a little over 4 years, and we have no significant maturities in the current financial year. So with that, I will hand back to Gene. Gene Murtagh: Thank you, Geoff. So just to look at the structural growth drivers of the business. Once again, a lot of you will be familiar with this. But just in summary, if we can go to Slide 14, which is titled multifaceted growth drivers for the insulated envelope. And again, we'll go through this in some more detail with Dave shortly, but the 3 primary strands here are growth and penetration, which continues even in European markets, not to mention North America, APAC and South America with very significant runway for us there into the long term. The continued geographic rollout of the business continues. Again, I would stress, even in Europe and all of the other regions that we've just mentioned. And the product portfolio within the envelope is expanding way beyond what it was 5, 10 years ago. Obviously, huge growth in the QuadCore business, but expansion into other technologies like wood fiber and the acoustic insulation sector, stonewool, not to mention, obviously, the roofing expansion, which is going on worldwide and most significantly in North America, where we have very large ambitions for our business there. And I'd say similarly on Slide 20, which is the growth drivers for Advances. And this clearly is quite extraordinary and won't come as a surprise to anybody. But the sector itself we're operating is demonstrating very strong double-digit growth in itself, which naturally we're in the middle of. The business is growing share as we go along as well. So just market share growth as we expand our product portfolio is a significant driver for us. And then the share of wallet is just way beyond what it was even 5 years ago, where per megawatt we had exposure of about $100,000 per meg, and that is now 5x that and growing. As we've expanded the product portfolio, got into water cooling and now obviously into air handling, that continues to grow. And that spread of business and share of wallet, we expect to continue to expand significantly into the future. David O'Brien: Thanks, Gene. If I could take you all to Slide 16 now, please. I think just as we enter a period where the macro backdrop looks like it's a little more stable than it's been for some time, it's probably worth reflecting on the markets that we faced over the last 5 to 6 years. And what the slide is showing you is look at a very challenged backdrop, particularly across Europe compared to 2019 on a volume basis, which if you look at the total footprint of the Kingspan markets, it looks like volumes in our addressable market down between 4% and 5% globally when we compare that to 2019. And over the same period, organically, insulated panel volumes have grown by nearly 14%. So it's been a very consistent 3% outperformance, which will become more evident as markets stabilize, with the conversion to more energy-efficient products has never been stronger. If I can bring you on then to Slide 23. Look, you've seen our global expansion map before and really in taking advantage of all of the opportunities that Gene has outlined across the data business, the roofing opportunity that we have started in Europe and are embarking upon in North America, alongside the structural growth of the vast array of our products. You can see the investments we are making across the globe now and over the next 2 to 3 years to unlock all of that potential. So we look to have projects in the pipeline that will require investment of about EUR 1.2 billion, which is nothing out of the ordinary in terms of capital allocation, but has the potential to unlock about EUR 2 billion of revenue over the fullness of time, which, again, if you flip on to Slide 24, will underpin that consistent long-term growth story that you've been familiar with Kingspan. With that, I'll hand it over to Gene. Gene Murtagh: Thank you, Dave. So just on Slide 25, which is the outlook and how we're feeling about the near-term future. We've -- as we said earlier, we've entered the year with very strong backlogs right across the business. They have continued to grow significantly through the first 6 weeks, although clearly, dispatches and deliveries have been hampered somewhat by weather, but we expect that to recover pretty swiftly through March, April and beyond that. And really just when we step back, the business clearly has grown consistently over the last forever. We reached our target for 2025. We expect growth of in or around 10% in earnings for the current year. And we would expect that rate of growth to accelerate beyond that into 2027 and '28. Difficult to be specific about that, but we're certainly seeing a pipe of longer-term activity and engagement that would give us a high degree of confidence to deliver what we've just expressed there now. So with that, we would be delighted to take your questions. Operator: [Operator Instructions] Our first question comes from Shane Carberry from Goodbody. Shane Carberry: The first one, maybe just to follow up on that last point you were making, Gene, about the kind of level of growth over the kind of medium term or out to the end of the decade. Can you just give us a little bit more color on exactly what you mean in terms of that trading profit growth exceeding what we've seen over the last couple of years would be helpful. And then the second is just thinking about the product evolution from a data perspective and how you kind of keep a pace with all the change that's happening in the industry. And are you still confident in terms of achieving a kind of EUR 600 million EBITDA number kind of over the next 4 to 5 years? Gene Murtagh: Okay. So on the first point, so we really have multi-stranded growth across the business. And it's actually very, very exciting, very encouraging. But if you look at our envelope for a start, like we've clearly got the evidence through the backlog and order intake in the insulated panel product strand. And obviously, our entry into roofing, which has been both acquired and now increasingly organic, predominantly in North America, which just hasn't kicked in at all, and that's something for second half of this year and into 2027 and beyond. And that's going to be significant. And as I say, clearly not evident just yet. We've got another dimension which is happening, and I think it's going to be significant and here to stay for some time, which is inflation. So there are all kinds of trade barriers coming up left, right and center. The result of that is that our big inputs like steel and chemicals are going to be subject to significant inflation in the current year, it's happening, and we see it happening consistently quarter-by-quarter into the future. And as odd as that sounds, that actually is a very positive dynamic for the group once you get past the lag phase. And that's going to be, I think, more and more materially evident as we go through even 2026. And then beyond that, which affects both Advances and the Envelope business is just this truly seismic transition that's going on in the tech sector and in particular, around the move towards AI. Like as a group, we are positioned right at the core of all that, and that's both internal and external. And just when you just piece all that together, and you consider the level of tangible engagement we've got with our client base, which is now much more long term because of the nature of these projects. The pipeline we're looking at is actually just really extraordinary. On the product evolution piece, we've obviously been able to keep at or above the pace of that moving from what was just a simple access floor, which was giving us exposure today to going back 20, 25 years, in fact, like now the product portfolio is just not comparable to that, and it continues to expand. So in terms of us being able to keep the pace of that, all I can say is the evidence of the past is that we have been able to do that. We're able to pivot and move with whatever the technology and the solutions have been going all along. And I'd be extremely confident that we continue to be at the forefront of that with our clients. And confidence around the EUR 600 million EBITDA, yes, we'd be at least as confident on delivering that as when we kind of mentioned it 3 or 4 months ago. And that's obviously whatever kind of 4- or 5-year target. But the trajectory towards that is very, very evident. Operator: Our next question comes from Cedar Ekblom from Morgan Stanley. Cedar Ekblom: I've got 2 questions. One quite simple one. On your free cash flow, you had quite a big swing in working capital in 2025. I wonder if you could just give us a little bit of commentary around the working capital investment there. Is that simply associated with new plants? Or is there something else that we need to think about there? And then how we think about that sort of working capital development into 2026. And then secondly, on your roofing portfolio, can you talk a little bit about your decision to invest beyond these 2 initial assets? I believe that recently, the commentary was around making a third investment in residential roofing. It would be good to just hear how you're thinking about that cadence. And then beyond maybe the next 2 years or so, can you talk to us about what your ambition is in the U.S. roofing space? You're a new entrant. There's a lot of concern around disruption to pricing, et cetera. And I'd just like to hear how you would like your business to be positioned towards the end of the decade? Geoff Doherty: Cedar, just to take the free cash flow question first. Over time, a highly efficient measure for us is a working capital to sales ratio less than 12%, and that's been the measure of efficiency over time. At the end of 2024, it was 11.4%, which was particularly low and particularly efficient for a number of reasons. It was 50 basis points higher at the end of December 2025 to 11.9%. That's our assumption as we go into 2026 in terms of average working capital levels. It can be -- it can vary for a whole number of reasons to within 50 or 60 basis points, but 11.9% is what we see the profile of the business. The -- specifically, about half the move during 2025 was associated with the timing of acquisitions and the working capital move between the date of acquisition to year-end. So that will naturally normalize as we move through 2026. Gene Murtagh: And then Cedar, on the roofing side, we've got the first 2, as you mentioned, Oklahoma and Maryland, they're happening as planned. On the commercial roofing side, we will be moving to a third facility as well in the not-too-distant future, more than likely in Utah. So that's going to give us really an ability to service the market pretty much nationally. And as you mentioned there, our intended entry into the resi side, that's kind of always been on our radar. It won't surprise you to know that we've been looking at acquisition opportunities on that side as well. It's a huge market. There are tens and tens of facilities around the country and us entering with one will hardly even be noticed. But obviously, we've got to step into it at some point. That clearly, just by the nature of the size of the project is more long term, probably more like a 3-year project. And as you know, that side of the roofing market is pretty challenged at the present time, but that's just a moment in time. So we just see it as part of the wider roofing portfolio longer term. How will be received or what our success rate will be, that's all TBC, but we haven't failed yet. In terms of disruption, market pricing, it's not something I'd be particularly concerned about. It's a huge market. It's a growing market on the commercial side. We would expect that certainly in the earlier years that our capacity additions will be readily absorbed by the general pace of growth in the market. And our previously stated ambition of getting to a 15% share of the addressable side, bearing in mind, we don't want any presence in the EPDM market or the bitumen market. That remains our ambition, and we have every confidence of succeeding in getting there. Operator: Our next question comes from the Florence O'Donoghue from Davy. Florence O'Donoghue: I have a couple of questions. I might just ask on Advances. First of all, just in terms of the order book, how much visibility that gives you when you talk about it being the intake levels doubling and just generally, the conversion of an order book, is there a long time lag, just the kind of dynamics of how that works. And then the second one I might ask is just -- you mentioned in the document about the boards business in Europe in terms of capacity management and actions you've been taking. Just a little bit more color on that would be very much appreciated. Gene Murtagh: Yes. So just on the Advances backlog floor, it's approximately 9 months, but it's actually becoming even longer. So it's getting larger and longer. And then we would have very solid engagement of work right through '27 and even into '28. Now that's obviously not -- they're not purchase orders. And so not entirely bankable. But on the basis of the type of engagement we've had with these end clients going back, we'd have a fair degree of comfort in that work coming through. And none of that will come as a surprise when you look at the general scale of investment into AI. It's only a tiny little bit around the edge that we're after. And in terms of the board capacity, we have been -- it's obviously not a huge part of the group any longer. It's become overpopulated, to be frank, particularly in Europe, largely granted by Brussels, which is completely daft, but that's the situation we've got. So it's become unattractive in many markets. We have invested in the -- probably the finest plant in the world in Winterswijk in the Netherlands, huge capacity. And what we're on course to do is to really kind of gear up on that facility and get out of lesser performing more niche manufacturing plants around. So Finland, we've exited. Sweden, we're in the process of. We have a facility in France that we're not starting up, and we're likely to take out of commission another facility somewhere in the middle of Europe. And like I say, really just gear up on one core plant in the Netherlands and just make that work hard. But importantly, we're going to be repurposing this capacity. It's not going in the bin or going to be growing cobwebs. So at least 2 of those lines I've just mentioned are going to be -- one of them is brand new in Rian in France that like I said, we're just -- it's not wise to start it up. It's going to be going into the roofing sphere in the U.S. and one other of the European facilities is likely to be Utah destined as well. So we just see a better future for those assets in that market, and that's kind of what we're about doing. Operator: Our next question comes from Arnaud Lehmann from Bank of America. Arnaud Lehmann: A couple of questions on my side. Firstly, on Advances, obviously, you decided not to IPO the business. Can you confirm that this is now a closed idea and that you're going to keep 100% of Advances and obviously keep the full consolidation of this high-growth business? And secondly, just a follow-up on U.S. roofing, as you know, there's been a decent amount of consolidation and M&A activity in the distribution side of it. Is that an opportunity for you in terms of the new owners of these assets are maybe more open-minded to take on your products? Or does that create new challenges. Gene Murtagh: Great. So Arnaud, yes, the Advances IPO idea is put to bed, that's it. We're retaining 100% and moving on. That is that. It was a fantastic exercise, very interesting for us as well. But that's where we've ended up. In terms of the U.S. roofing, yes, there's an awful lot of moving parts on the distribution side, which to be honest, it's neither positive nor negative for us because we're starting from 0. So it's opportunity one way or the other is the way I would characterize that. Bearing in mind, by the way, that we're obviously through our Insulated Panel business a direct-to-market model. So our relationships are with specifiers, delivering direct to site and invoicing contractors is our primary presence in North America. So we're going to be multi-stranded in terms of how we approach the market, which we're already doing. So distribution, we see as a route as opposed to the route. And it will take us a while to find our feet, but we have a blank page and we're looking forward to it. Operator: Our next question comes from Elodie Rall from JPMorgan. Elodie Rall: My first question is actually going back on Q4. If you could get us maybe a bit more color on the organic growth for both businesses, price volume, that would be helpful. And my second question is going back on U.S. roofing on '26 guidance, what do you have with regard to that part of your business? And how should we model start-up costs as the plants are ramping up, please? Geoff Doherty: Thanks, Elodie. I'll take those questions. Firstly, as it relates to Q4, I mean, as we've said before, we're -- our business ought to be judged over a 12-month period, you get ebbs and flows through various months and quarters. We guided in November that we would do approximately EUR 950 million of trading profit, and we came in at EUR 955 million. I think it would be fair to say as well that our intake in Q4 was strong, both within Envelopes and Advances such that we ended the year on the panels dimension to envelopes with the backlog 8% ahead. So that did build through Q4. And as we've highlighted previously, the intake in advances was strong as well, both in Q4 and beyond that. As regards to the components of the growth into this year and the 1050, since we gave the guidance of 1050 in November, the FX headwind has become steeper. Weather has been more acute in the early part of the year. Notwithstanding both of the factors, we're still -- we still have a lot of conviction around the 1050 given the momentum in the business. Specifically within that, there's about EUR 30 million of scope in terms of the run rate annually of acquisitions we've already made. So they're the constituents of that. Operator: Our next question comes from Yassine Touahri from On Field Investment Research. Yassine Touahri: I think the main question I would have is that what kind of sequence of organic growth do you see throughout 2026. I think the organic growth was very slow in 2025 in H1 and H2. I understand that the first quarter will be a little bit slow as well. Do you see an acceleration for the rest of the year? And it would be great if you could give us a little bit of more color on the element of the growth in trading profit. What is scope, what is organic, what is FX. Geoff Doherty: Yes. Just to deal with the last part of your question first, the scope is about 20 -- sorry, EUR 13 million in terms of acquisitions that we've already made and annualizing that through 2026. FX at current spot rates, so we can only assume what's out there at the moment is broadly a EUR 17 million or EUR 18 million headwind for '26 versus '25. Much of that is in the first half because the euro-dollar rate really moved in a pronounced way from the second quarter. So much of that is the first half. As we've highlighted, Q1 is likely to be soft enough for the early part due to weather. But we -- given the backlogs that we have, we see momentum picking up considerably from March onward. And it's always difficult for us to kind of trend things from quarter-to-quarter. But over the course of the year, we're absolutely poised for decent growth. Operator: Our next question comes from Pujarini Ghosh from Bernstein. Pujarini Ghosh: So going back to the roofing in the U.S. So could you talk about the progress on the build-out of the plants? And you just highlighted that potentially the contribution to the P&L in 2026 is not that material, but then how should we expect that to progress in 2027? And also regarding your approach to commercial roofing going greenfield and then potentially considering M&A for residential roofing that you just talked about. What is the difference that you see in the market, which informs the difference in the way you're considering entering the market in these 2 sides of roofing. And my second question is a little bit broader. Could you talk about your exposure to OpenAI and any potential opportunities or headwinds you see in the medium to long term? David O'Brien: Pujarini, thanks for the questions. Just on Roofing first, to be clear, we're leading out with an organic investment. We've said we're keeping our options open with regard to potential M&A. But at the moment, the investments in Oklahoma and Maryland are organic investments. Similarly, on commercial, when we move towards the West Coast, that will be organic as well. And as we appraise and go after the shingles market, that's again an organic investment. None of that precludes M&A, but we are leading out organic for the time being. Gene Murtagh: Yes. And as regards to the broader question of exposure to OpenAI, I guess, AI, never mind OpenAI, just AI itself. It's -- like what's going on is -- there's no other word for it, except extraordinary. And yes, our exposure to it is extremely significant. And honestly, like we've had -- we've seen exciting times in the past and growth in Kingspan, obviously, over the years. But in terms of what we're looking at for the next number of years, like who can see way beyond. We're kind of looking at activity levels just way beyond growth levels that we've ever experienced in the past. So our exposure to it is, yes, very significant. Pujarini Ghosh: And the Roofing profit contribution in 2027, if you have any indication? Geoff Doherty: I mean, we should see sales activity from the end of this year in Roofing and will ramp up through 2027. Trading margins in Roofing will still be single digits in 2027, but building out to group average rates into '28 and beyond, and that's assumed in our forward guidance. At this stage, we would expect sales in the U.S. in Roofing to be somewhere in the region of $150 million to $200 million in 2027 and building out to $300 million to '28. Operator: Our next question comes from Julian Radlinger from UBS. Julian Radlinger: Two from me. So first of all, the stronger or the very strong order intake in advances year-to-date, that's obviously similar to what we've seen from many other data center exposed players. I suppose why might that not lead to upside to the EBITDA guide for Advances for EUR 300 million that you gave a few months ago. Is that because you're basically sold out for 2026 already and that order intake translates more into 2027? Or what are the moving parts here? And then second question on inflation. So you called this out explicitly. Is that more steel or MDI that you're seeing just because I'm looking at MDI prices, they were actually -- I think they're actually down year-to-date in the U.S. So is it more about steel here? Gene Murtagh: Okay, Julian. So yes, just on the Advances EBITDA, so like that's progressed. If you say -- if you go '24, '25, '26 and it's largely organic, it's kind of EUR 180 million, EUR 230 million, EUR 300 million. So that's obviously pretty lively. So I guess in all of that, we were indicating that it was going to grow significantly, and I think that's kind of -- that qualifies as significant. But we're not going to hold the business back. And the EUR 300 million number for this year would be a minimum, actually, to be honest. So let's see how that progresses. And then in terms of the other point was inflation. So steel by far and away, like it's multiples of size and impact versus chemicals, not just MDI. So we do see it has been predominantly steel. It's largely as a result of protective measures all over the place, and it's starting to kind of jump ahead now. MDI, whatever MDI is doing in the U.S. just spot, I wouldn't be particularly -- like for a start, our consumption in the U.S. would be tiny by comparison to Europe. So -- and in Europe, it's definitely trending upwards. And if it's not, I'll just have to speak to the procurement guys because that's the message I've got. Operator: Our next question comes from Chase Coughlan from Van Lanschot Kempen. Chase Coughlan: Just 2 quick ones. Firstly, could you provide a bit more color around your pricing strategy for this year? I mean you just discussed raw material changes, but also in the context of potentially wage inflation, what sort of pricing measures you're taking throughout the course of '26. And then the second question going to Advances. Obviously, there was sort of somewhat of a rebrand over the last few months. I think it's likely to cause some more traction commercially. I'm just curious on what you're hearing from competitors, especially given the more modular solutions you're offering? I think Vertiv was quite bullish on this in their last results. So I'm just curious on what you're hearing there and how you're seeing that rebrand play out with customers. Gene Murtagh: Yes. So in terms of pricing, like our approach successfully at all times has been just to pass through. So whatever cost inflation we're seeing we have all always succeeded in getting it through to market. That's over decades. So we don't expect that to really be any different. From a wage inflation perspective, that's not a particular kind of dial mover for us. The materials would be much more significant and much more public and obvious in terms of our ability to actually pass it through as well. So that's kind of our approach to that. In terms of the positivity that Vertiv have been propagating, we clearly would agree with that. We see it. We're growing into it. We're coming from opposite ends of the spectrum, if you like. We're literally coming from the floor up through the white space into gray. I'd say predominantly, Vertiv is at the higher tech end, very deep in gray and to some extent, kind of moving south into the white. So I think yes, there's certainly enough for all. But I think, yes, we'll be looking -- our Advances business will be increasingly looking more like it, I'd say, more so than the other way around. Operator: Our next question comes from Priyal Woolf from Jefferies. Priyal Mulji: The first one, I guess, is just a clarification just on the U.S. residential roofing. I appreciate you talked about this being something that you're looking at more in the longer term. But in your usual slide on global expansion, you've talked about a plant in Georgia in 2028. So I just wanted to check, is that locked in? Or is that sort of still TBC? And then the second question is just in terms of capital allocation. You've reiterated that you're looking at the EUR 650 million share buyback in tandem with other growth opportunities. Should we interpret that as you potentially don't fully reach that EUR 650 million level if you see bigger or more interesting organic and M&A opportunities. Or you think you'll get there regardless and it's more just about the timing, which is the uncertainty. Gene Murtagh: Okay, Priyal. So just on the first point, that remains our ambition and our plan. Like that clearly can flex. It's not going to come forward, but it could push out. And that will depend largely around timing of machinery, plant construction, all that kind of stuff as well as market conditions. We clearly want to -- at whatever point we enter that site, we want conditions to be as favorable as possible. And naturally, right now, it's about as bad as it's been in recent years. So thankfully, it's not right now that we're entering because they're all under an awful lot of pressure, as you know. But 3 years from now or whatever, that's some time out. And on the buyback... Geoff Doherty: Just on the buyback and capital allocation, generally, as we've said previously, we, at all times, compare opportunities that are external to Kingspan versus buying ourselves in terms of the relative valuation of both. We're fortunate that we have a healthy pipeline of development opportunities within the business, both organic and inorganic. And we'll continue to get that balance right and assessment right as we move through the year. We've done about 23% of the announced program, and we'll just see how that evolves through 2026. . Operator: Our next question comes from Harry Goad from Berenberg. Harry Goad: Just a question on the Panels business, please. Can you give us a rough idea of what the annual increase in new capacity is? I appreciate you probably can't be too exact year-to-year, but in terms of the percentage number on average over the years, just to think about the sort of steady increase in contribution from that division. Geoff Doherty: I guess it's difficult to give a global answer to that in terms of capacity is pretty regional and localized. We're addressing different markets in different parts of the world. Naturally, we've seen very strong intake in a lot of the regions that we've entered over the last decade, in particular, like Latin America, APAC, all of those, we've put down a lot of capacity in recent years, but we're now seeing the fruits of that come through intake and orders. So as I say, it varies very significantly from one region to another and capacity is regional. David O'Brien: Rather than think about it as one lump sum, Harry, if you go back to that Slide 16, just think about the average construction cycle and the investments that we're making, that feeds the 3% outperformance very consistently. Operator: We currently have no further questions. This concludes today's call. Thank you all for joining. You may now disconnect your lines. Gene Murtagh: Great. Thanks. Fantastic. Thank you all for joining, and we'll be in touch over the coming days.
Operator: Good afternoon, ladies and gentlemen, and welcome to the Rimini Street Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, February 19, 2026. I would now like to turn the conference over to Dean Pohl, VP, Treasurer and Investor Relations. Please go ahead. Dean Pohl: Thank you, operator. I'd like to welcome everyone to Rimini Street's Fiscal Fourth Quarter 2025 Earnings Conference Call. On the call with me today is Seth Ravin, our CEO and President; and Michael Perica, our CFO. Today, we issued our earnings press release for the fourth quarter and fiscal year ending December 31, 2025, a copy of which can be found on our website under the Investor Relations section. A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables following the financial statements in the press release. An explanation of these measures and why we believe they are meaningful is also included in the press release and our website under the heading About Non-GAAP Financial Measures and Certain Key Metrics. As a reminder, today's discussion will include forward-looking statements about our operations that reflect our current outlook. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today. We encourage you to review our most recent SEC filings, including our Form 10-K filed today for a discussion of risks that may affect our future results or stock price. Now before taking questions, we'll begin with prepared remarks. With that, I'd like to turn the call over to Seth. Seth Ravin: Thank you, Dean, and thank you, everyone, for joining us. Fourth quarter and full year results. Our fourth quarter results reflect solid execution and continued accelerating sales growth adjusted for the Oracle PeopleSoft support and services wind down. We grew our core Rimini Support subscription billings and launched our next-generation Agentic AI ERP solutions. Overall sales bookings and billings continue to improve, and we delivered strong ARR subscription renewals as well. We closed 19 new client transactions over $1 million in TCV and totaling $58.1 million compared to 22 transactions totaling $51.9 million last year. We added 73 new logos that included household global and regional brand wins. We saw accelerating momentum in bookings, pipeline and RPO throughout the second half of 2025, reinforcing our confidence in delivering growth in 2026. ERP software is dead, the rise of Agentic AI ERP. ERP software is peaking technically, and we will deliver new ERP capabilities and ERP process execution faster, better and cheaper with more agility and speed to market, leveraging Rimini Street's Agentic AI ERP solutions. Meanwhile, we will keep existing ERP software releases delivering value for many years to come at significant savings. Our Agentic AI ERP solutions can be easily and quickly deployed over the top of existing ERP software without the cost or risk of unnecessary ERP software upgrades, migrations or replatforming. Rimini Street can reduce operating costs by up to 90% for existing ERP software landscapes, allowing clients to bank the savings or reinvest the savings into Rimini Street's Agentic AI solutions to modernize rather than replace their current ERP infrastructure. We're positioning Rimini Street as the bridge between existing traditional ERP software infrastructure and the capability and benefits of modern AI innovation, and we expect growing subscriptions for both Rimini Support as our core service offering and our new AI for the real-world service offerings to fuel top and bottom line growth in 2026. Key benefits of Rimini Street's Smart Path vision, model and offerings include funded innovation model. Rimini Street's support model frees up capital that organizations previously spent on mandatory software vendor upgrades, allowing them to reinvest in AI-driven high ROI projects, layering over existing ERP systems. Instead of migrating to new software products, releases or platforms, Rimini Street promotes layering AI and automation on top of existing, customized and stable enterprise ERP software. Strategic partnerships and alliances. Collaborations with AI platform companies such as ServiceNow allow Rimini Street to offer advanced AI-powered agentic solutions that automate business processes without requiring any upgrades, migrations or replatforming such as having to buy and implement a new SaaS subscription. Innovative support services. Rimini Street uses its own proprietary AI applications, including reductions of more than 23% in case resolution time. Risk and cost avoidance. Clients can avoid the risks and cost of unnecessary ERP upgrades, migrations and SaaS implementations while receiving support for existing, stable and highly customized code that ERP software vendors often refuse to include in their standard support contracts. Introducing Rimini Agentic UX solutions powered by ServiceNow. Also during the fourth quarter, we announced the release of our first 20 Rimini Agentic UX solutions developed through our partnership with ServiceNow and designed to deliver Agentic AI ERP capabilities over existing Oracle, SAP and other ERP systems without requiring upgrades or migrations. These solutions are already in production and are helping clients achieve significant operational gains, including 50% to 60% faster approvals, 70% to 80% reduction in order cycle times, improved audit readiness and greater than 95% data accuracy. Each solution targets a specific ERP process challenge, spanning sales, procurement, logistics, faster data, finance, maintenance and compliance and delivers ROI in days or weeks compared to the months or years required for traditional ERP upgrade or migration projects. For example, our client Molida Group reported meaningful streamlining of SKU master data creation using Rimini's AI-assisted workflows, validating the platform's ability to simplify historical manual processes. Rimini Street positioned Agentic AI ERP as the next evolution of enterprise systems, arguing traditional ERP software is peaked in value and lacks the agility organizations need. Instead of costly vendor-mandated upgrades, the company's Rimini Smart Path enables clients to redirect existing budgets towards rapid automation and innovation. Agentic AI ERP transforms ERP from a system of record into a system of action, enabling exponential efficiency gains and empowering organizations to modernize processes, reduce costs and accelerate growth, all without disruption. Partner and alliance ecosystem progress. We continue strengthening our ecosystem of global partners and alliances, including technology, service and channel relationships. These partnerships extend our reach, bring complementary expertise and help clients execute modernization strategies that combine Rimini Street support with world-class platforms, cloud services and AI tooling. This ecosystem is becoming a strategic multiplier for us, accelerating adoption, expanding influence and enabling shared go-to-market opportunities. Summary, we will build on our 2025 investments, success and momentum and help clients navigate business and technical complexity in the age of AI, reduce costs, reduce labor requirements and improve operational performance across ERP and enterprise software landscapes, establishing and protecting competitive advantage without software vendor-driven cost, risks or constraints. Now over to you, Michael. Michael Perica: Thank you, Seth, and thank you for joining us, everyone. Q4 and fiscal 2025 results. Our fourth quarter results reflect solid execution and early signs of momentum, highlighted by record remaining performance obligations, RPO, growing 11.1% year-over-year. Full year 2026 billings, excluding support services for Oracle PeopleSoft software products, increasing 4.2% and annualized recurring revenue, ARR, increasing 3.1% year-over-year, excluding support services for PeopleSoft products. We ended the year with a strong cash position and a stronger balance sheet. Our capital allocation actions included ongoing share repurchases. Regarding client retention, as our full suite of support becomes increasingly integrated with our Agentic AI solutions, we are enhancing client retention while providing clients with what we believe is a clear lower risk path to innovation and modernization of their existing ERP environments. Revenue for the fourth quarter and the full year 2025 was $109.8 million and $421.5 million, respectively, a year-over-year decrease of 3.9% for the quarter and a decrease of 1.7% for the full year. Excluding support services for PeopleSoft products, revenue decreased by 0.4% for the quarter and increased 1% for full year 2025. Fourth quarter 2025 included a onetime $2.1 million revenue recognition, while fourth quarter 2024 included a onetime revenue recognition of $5.4 million. Excluding all the aforementioned items, Q4 revenue grew 2.6% for the quarter. Annualized recurring revenue was $411.4 million for the fourth quarter, a year-over-year decrease of 0.8%. Our revenue retention rate for service subscriptions, which makes up 96% of our revenue, was approximately 88%, with approximately 86% of subscription revenue noncancelable for at least 12 months. We note that for the full year 2025, FX movements negatively impacted our total revenue by 0.01% compared to a negative impact of 1.3% for 2024. Billings for our fourth quarter were $171.3 million, relatively flat year-over-year and full year 2025 billings were $427.9 million, an increase of 1.2%. Full year billings, excluding billings associated with support services for PeopleSoft products, increased by 4.2% on a year-over-year basis. Gross margin was 60.4% of revenue for both the fourth quarter and the full year 2025 compared to 63.7% of revenue for the prior fourth quarter and 60.9% for full year 2024. On a non-GAAP basis, which excludes stock-based compensation expense, gross margin was 60.8% of revenue for the fourth quarter and 60.9% for full year 2025 compared to 64.0% of revenue for the prior year fourth quarter and 61.3% for full year 2024. As previously mentioned, both the current and prior year fourth quarters included onetime revenue recognition of $2.1 million and $5.4 million, respectively, which positively impacted revenue, gross margin and earnings. As noted during our Investor Day presentations last December, our use of innovation and other analytics deployed on top of our existing systems of record provides us with confidence in our ability to build from this current gross margin level. Operating expenses. Reorganization charges associated with optimization costs for the fourth quarter were $2.6 million and for full year 2025 were $4.5 million. Sales and marketing expense as a percentage of revenue was 37.7% for the fourth quarter and 36% for full year 2025 compared to 32.8% of revenue for the prior year fourth quarter and 34.9% for full year 2024. On a non-GAAP basis, which excludes stock-based compensation expense, sales and marketing expense as a percentage of revenue was 36.8% for the fourth quarter and 35% for full year 2025 compared to 32.2% of revenue for the prior year fourth quarter and 34.4% for full year 2024. General and administrative expenses as a percentage of revenue, excluding outside litigation costs, was 15.8% of revenue for the fourth quarter and 16.6% for full year 2025 compared to 16.3% of revenue for the prior year fourth quarter and 17% for the full year 2024. On a non-GAAP basis, which excludes stock-based compensation expense and litigation costs, G&A was 14.7% of revenue for the fourth quarter and 15.4% for full year 2025 compared to 15.1% of revenue for the prior year fourth quarter and 15.7% for full year 2024. Outside litigation cost was $21,000 for the fourth quarter and for full year 2025 was $4.8 million compared to $675,000 for the prior year fourth quarter and $6.1 million for full year 2024. During 2025, as part of the Oracle litigation settlement, we received $37.9 million of the $58.7 million in legal fees we previously paid to Oracle during 2024. Going forward, we do not expect litigation expenses to be material and will be included in the G&A line item moving forward, obviating the need to disclose these expenses separately in our income statement. Net income attributable to shareholders for the fourth quarter was $724,000 or $0.01 per diluted share compared to the prior year fourth quarter of $0.07 per diluted share. Full year 2025 net income was $0.39 per diluted share compared to a net loss of $0.40 per diluted share for full year 2024. On a non-GAAP basis, net income for the fourth quarter was $6 million or $0.06 per diluted share compared to the prior year fourth quarter of $0.12 per diluted share. Full year 2025 non-GAAP net income was $0.23 per diluted share compared to net income of $0.48 per diluted share for full year 2024. Our non-GAAP operating margin, which excludes outside litigation spend, reorganization costs and stock-based compensation, was 9.3% of revenue for the fourth quarter and 10.5% for full year 2025 compared to 16.7% for the prior year fourth quarter and 11.1% for full year 2024. Adjusted EBITDA, as defined in our earnings release, was $11.5 million for the fourth quarter or 10.4% of revenue compared to the prior year fourth quarter of $20 million or 17.5% of revenue. Full year 2025 adjusted EBITDA was $49.8 million or 11.8% of revenue compared to adjusted EBITDA of $53.1 million or 12.4% of revenue for full year 2024. Balance sheet. We ended the fourth quarter of 2025 with a cash balance of $120 million compared to $88.8 million of cash for the prior year fourth quarter. On a cash flow basis, for full year 2025, operating cash flow increased $60.2 million compared to the prior year 2024 decrease of $38.8 million. The results include litigation settlement proceeds of $37.9 million during 2025 and litigation-related expenses of $58.7 million during 2024. Additionally, the effect of foreign currency translation was favorable by $2.8 million and unfavorable by $8.2 million for full year 2025 and 2024, respectively. Deferred revenue as of December 31, 2025, was $288 million compared to deferred revenue of $281 million for prior year 2024. Remaining performance obligations, RPO, which includes the sum of billed deferred revenue, contract assets and noncancelable future revenue was $653 million as of December 31, 2025, compared to $588 million for prior year 2024, an increase of 11%. When excluding RPO related to support services for PeopleSoft products, the year-end balance increased 12%, reflecting our building momentum with both new bookings growth and longer duration commitments. PeopleSoft support wind-down update. As we discussed during last quarter's earnings conference call, our settlement agreement with Oracle provides, amongst other obligations and terms between the parties that the company will complete its previously announced wind down of its support and services for Oracle's PeopleSoft software no later than July 31, 2028. We have made progress in reducing both the number of PeopleSoft support clients and related revenues since announcing the wind down. Revenue from PeopleSoft Support services was 4% of revenue for the fourth quarter and 5% for full year 2025, down from 8% of revenue when we began the wind down during the second half of 2024. Business outlook. The company is providing first quarter 2026 revenue guidance to be in the range of $101.5 million to $103.5 million and reiterating full year 2026 guidance as communicated at our Investor Day for revenue growth in the 4% to 6% range with adjusted EBITDA margins in the 12.5% to 15.5% range. For additional information, please see the disclosures in our annual report on Form 10-K filed today, February 19, 2026, with the U.S. Securities and Exchange Commission. This concludes our prepared remarks. Operator, we'll now take questions. Operator: [Operator Instructions] Your first question comes from the line of Brian Kinstlinger from AGP. Brian Kinstlinger: The implied revenue change in the first quarter of '26 is about a 1.5% year-over-year decline, plus or minus. the obvious math is that the year-over-year comparisons are going to have to grow more than 4% to 6% for the remaining 3 quarters in 2026. So I'm curious as to the visibility of this, not only return to growth, but exiting the year close to 6%. Is it supported by expected new business wins or already signed business wins? And then remind us, once a contract has been awarded to Rimini, whether it's traditional maintenance or your new Agentic AI offering, how quickly does it begin and then ramp? Seth Ravin: Sure, Brian. Good to hear from you. We expect that the Q1 numbers will obviously be a component of what was signed in Q4 because these are subscription contracts rolling into Q1 and of course, business that we would expect is already closed. So given that and where we report versus Q1, we do expect that these numbers are very solid. That's why the range is pretty tight. I'll let Michael go ahead and add on top of that. Michael Perica: Yes, Brian. would keep in mind, of course, that there is the PeopleSoft component in that guidance. This is on a GAAP perspective, right? So when excluding into Q1, the PeopleSoft component, which will be down year-over-year and expected down sequentially as we run off we would -- we do expect it to be a growth period. Now for the remainder of the year, the answer is certainly, we do expect an acceleration. And we have, I would say, improved visibility relative to entering the year in the last couple of years. So certainly a higher confidence factor in our top line guidance. Brian Kinstlinger: What gives you that visibility? Is it a backlog? You've already won contracts? Is it you're excited about the new product and new salespeople? What gives you that improved visibility, particularly? Seth Ravin: No, go ahead, Michael. Michael Perica: Certainly highlighting, as we noted, the momentum. We've had a few quarters in a row here with our growing TCV, obviously laying down the foundation, giving us a higher base. The sales momentum that has been built by Mr. Hershkowitz, and with Seth as well. That, as well as our expanded suite of offerings, the conversations that we're having with our clients with regard to alternate road maps are giving us the combined increased confidence in this year. Seth Ravin: On top of that, Brian, was the -- if you look at the close rates in the fourth quarter, we actually increased our close rates to over 30% of pipeline. So I think we saw, again, a better visibility, as Michael was saying, not only around the pipeline, but a better confidence in the future ability of the close rates based on growing win rates against those pipes. Brian Kinstlinger: Okay. Just the last part of the question. Suppose you win one of these Agentic AI projects, if you will, or contracts, how quickly does that contract start? And how quickly does it ramp? And are these very sizable contracts that will move the needle? Or are they going to start small? Seth Ravin: Well, I think they're going to be all different sizes, Brian. I mean we've been doing projects already on Agentic AI. We've already been doing them for several months. Those projects have bringing -- they're bringing in both professional service revenue, which you get right away because we're delivering the service, being able to take that revenue. And then there are subscription components, which could then take a little longer to ramp in terms of the revenue. So I think you're going to get a mix of services that come in with each of these projects. And that means we should see accretive capabilities faster than you normally would just under the subscription agreements. Operator: Your next question comes from the line of Richard Baldry from ROTH Capital Partners. Richard Baldry: We look at both the COGS line and the sales and marketing lines, the absolute dollar spending came in pretty well above recent trending levels. Are there any onetime items in there? Or do you view this as sort of a new level to hit ahead? And then maybe more specifically in the sales and marketing, how much of that is maybe new heads being brought on or as a result of better billings? Seth Ravin: Sure, Rich. I think you're seeing an investment in both points. I think you're seeing us ramp up a little bit in the sales and marketing because we have new products and services to bring to market. So you're definitely going to see that. And when you look at 2026, we're looking at going from roughly mid-70s in terms of number of sellers at the company in 2025. We're in the process of hiring roughly 20 new sellers to get us into the early 90s so that we can be in a position to meet the demands that we see coming down in the pipeline. We also took a step of raising quotas for our sellers around the world, averaging 12% to 15% increases across the board. So we're doing several things to increase quota-carrying capacity. We also increased our marketing spend a bit just because we're launching the whole Agentic line. that, of course, takes some money to go out there and get the customer base moving to get the pipelines built. Those are not new levels that we're expecting to keep. We have always said that we expect eventually at scale, which we've described in the past as being somewhere around $1 billion of annualized sales that we're going to be in a position to see somewhere around the mid-30s, 33% to 35%, somewhere in that range. As far as G&A, we're going to continue to drive down costs. The litigation costs have come down substantially. We've even reduced the size of our internal litigation team, but there are still costs of compliance and wind downs of PeopleSoft, et cetera, that will continue on for at least the next couple of years. Richard Baldry: And then when you look at any preliminary evaluation of the sales pipelines or win rates in the early stages of litigation being behind you, are there any changes or like top of funnel new logo trending that is you think you can sort of tie to the exit from the litigation past? Seth Ravin: I definitely do, Rich. I think, again, it's more anecdotal. It's very hard to statistically tie it. But I think if you look at the fact that we reached a settlement in July of 2025, and you look at the increase in pipes, you look at the increase in win rates, the fact that we're making these additional moves and making investments in growing the sales team, I think that we're seeing win rates that are some of the highest we've ever seen. We expect those to continue to rise based on our analysis. And I think you're seeing us win deals that I truly don't believe we would have won on the support side, for example, even a year ago. I think we're bringing in some brand names, and we're seeing those cycle times of getting the deals done much faster because we're not having to answer and go through the normal diligence cycles around the litigation. And we're seeing that meaningfully reduce the cycle time to get a deal closed. Richard Baldry: Last for me, if your typical seasonality of collections holds, you could end next quarter with well over $1.50 in cash per share. But contrast that to the severe valuation pressure small-cap tech seen due to the emergence of generative AI. Can you talk about how aggressive you'd be willing to be on the buyback side of the table? Because it seems like you're gaining momentum on the market valuations across the board, not just you specifically, but have seen some pretty severe pressure. It seems like you're in an unusual opportunity where you could get pretty aggressive on that front. Seth Ravin: Sure, Rich. I think that as we've said before, I think everybody knows we're very focused on shareholder value, shareholder return. Post litigation settlement, we've been in a position to rethink what surplus cash looks like. And I think we're continually looking for opportunities that we believe will drive that shareholder return. But as you know, when it comes to stock buyback, it's a little bit complicated. You're limited by the share volumes. You've got calculations, you've got covenants from lenders, et cetera. All those things weigh in, including MMPI and if we have any restrictions. So it is not as simple as saying we would love to put as much money in cash as we have in surplus towards buying stock if it's truly an undervalued asset. We have to look at multiple ways to define shareholder value. And I think, Michael, you probably want to talk a little bit more on that on some of the recent moves we've made. Michael Perica: Yes. We're certainly -- we do share that sentiment, right, that there is value here, as Seth noted, with regard to our surplus, we do evaluate all of the factors around capital return, which you do very well know we have done the last couple of open windows. We did recently earlier this month, pay down another avenue that we assess deployment of our surplus our term debt by $5 million earlier this month. So we look at all these opportunities to utilize our surplus. But of course, we are highlighting our confidence entering this year. We also do feel comfortable and are looking at reinvesting in the business to continue our momentum and really drive the growth. Operator: Your next question comes from the line of Derrick Wood from TD Cowen. Andrew Sherman: It's Andrew on for Derek. On your -- Michael, RPO was a strong 12% ex PeopleSoft that accelerated from 9% last quarter. Any specific drivers of that? And this is well above your revenue growth guide? Is this just conservatism? Or is there any reason why it would take longer to translate into a higher revenue number? Michael Perica: No particular trend that altered from last quarter with regard to the constitution on the duration of our RPO. We believe, again, this is giving us increased confidence, right, in being able to at least achieve and potentially beat on the top line our expectations. But again, 2 quarters doesn't make a long-term trend, but we are encouraged by the momentum. Andrew Sherman: Yes, that's great. And then, Seth, on the go-to-market front, it would be great to hear how you're feeling about sales productivity. You talked about adding a lot of sales capacity. And how is the hunter farmer model progressing in North America? And do you think you can get the North American business back to stronger growth this year? Seth Ravin: Sure. We definitely saw increasing sales across North America in Q1 and Q2, Q3 and topping it in Q4, setting the stage again for a much stronger '26. I think as we all discussed on the Analyst Day, the bigger challenge has not been the new client invoicing growth. It has been the retention. We had higher retention losses in '25 than we expected. And of course, that flowed through the revenue numbers as well. So from our point of view, we're watching, we believe, a stabilization in North America. I don't think we would have raised quotas across the board on the sales team, all the way up through sales leadership, all the way up through Steve Hershkowitz number himself and that we have to deliver. So we're definitely feeling bullish enough to raise quotas. We're feeling confident enough to add another 20 sellers into the mix so that we have the capacity coming into the back half of the year, which, as you know, is our strongest sales quarters. So I think we're doing the things and making the investments based on that confidence that we will drive higher numbers all through the year, but of course, especially in the back half of the year. Operator: Your next question comes from the line of Alex Fuhrman from Lucid Capital Markets. Alex Fuhrman: Curious, do you expect the return to growth this year to be driven more so by increasing acceleration growth of new clients or better retention? Or is it really more about higher spend per customer as more clients adopt the new Agentic AI offering? Seth Ravin: Alex, I think we have a combination of them. We expect to see, as we already talked about for the fourth quarter, we have growing support sales. And the reason for that is the software vendors are creating environments that are really pushing customers to do new versions, to go to new releases, to switch over to SaaS and subscription licenses when they've already paid for their perpetual license. You have a lot of things going on in the mix. And our ability to come in and stabilize that environment and guarantee support through 2040 and beyond for existing software and then to be able to show them the path forward with the Agentic AI on top, this is a combination that's giving them a road map and a visibility to go decades into the future and that is creating a lot of comfort from the customers to be able to move forward with our total vision and solution. And so yes, I do think it's going to be a combination of those services. But as you saw in the Investor Day, we're about 87% of revenue comes from support, about 13% from our optimized services. And now we have the entirely new accretive innovation services. And I think we're going to start putting those numbers on the board, of course, in '26, and you're going to see those numbers start to grow in all categories. I think this is a fact that customers are coming to us for all different services, even including our security services, which are well known as well as our interoperability, all these things that are coming in and are required in order to connect big ERP systems and core transactions to the rest of what's going on in AI, and we intend to be the leaders in AI for the ERP systems. Alex Fuhrman: Great. That's really helpful, Seth. So as revenue growth accelerates after Q1, do we expect to see that growth in active customers also accelerate at a similar pace throughout the year? Seth Ravin: I would expect to see, again, growth both on the new customer line where you're going to see more logos, new logos coming on. I do think that the hunter farmer model in North America is generating results. It took a little while. I think we all know every time you switch customers around with new sellers, you reorganize your sales operation, those operations always, always have some lag time, always are slightly disruptive. And I think we're seeing the disruption end. I think we're seeing the results start to improve. And we're confident that we're going to see good results from that model, not only across North America, we're using that model now in Latin America as well. So all of the Americas is using the Hunter Farmer model, and we're looking at other deployments in different countries around the world. Operator: Your next question comes from the line of Daniel Hibshman from Craig-Hallum. Daniel Hibshman: This is Daniel on for Jeff. Seth, maybe just starting off on the adoption to date on Rimini Agentic UX. I know that came out in December, and then we had the GA here in January of the 20 additional solutions. You talked on this call about a few specific adopters. If you could help us understand the scale of that adoption. Are we talking about a handful of early adopters? Are we talking dozens? Just what stage those are at as well, whether we're talking pilots or full-scale production? Seth Ravin: Sure. I think you start off with the walk before you jog before you run. I think customers, as you well know, are so overwhelmed with the pace of change between whether there's an anthropic release or something is going on at ServiceNow or there's an acquisition, they can't keep up. This is why we've been focusing on this concept of AI for the real world. These are tools that we use when they're appropriate. The highlighting of our 21st solutions of our Agentic UX solutions really was about saying we are focused on solving business issues. We are not focused on trying to get customers to adopt a particular platform for AI. There's a lot of confusion within customers and competing platforms. So we're focused on here's the solution to a particular business problem. And oh, by the way, you can choose your platform. Of course, our preferred platform is ServiceNow. We have a close partnership with Bill McDermott and the team over there. And so I think you're watching customers very interested, very interested in the path I think they're still learning and they're getting their heads around what are we doing here. This is a different architecture. And if you look at even SAP is advocating the same architecture as we are, which is don't make changes to the software code itself, do your changes above the software code in the new Agentic layer. So we're in alignment with that architecture. The customers have never seen this before. And so this is going to take a little bit of while for everyone to really understand how these technologies work together, look at the architecture. They have their people on the ground, their technical people, try to review them. But from a business perspective, the fact that we are able to solve these problems faster, better, cheaper, get the cost of operations for an ERP system covering the world down by reducing the amount of labor required, increasing the speed to market, increasing agility in a world that's very, very disruptive right now. Those things can make a real difference in competitive advantage. So they're very interested in what we're bringing to the table. We just got to give them a little bit of time to digest them. We'll start getting these projects installed. You'll start building a reference-able customer base as we're already doing. And then that will, again, allow you to get more into that hockey stick mode, which I think is more towards -- starts more towards the back half of this year. But I think everyone needs to understand AI is such an overwhelming component of change for the business world that it's going to take a while for all this to get adopted. Daniel Hibshman: And then, Michael, on the model, just the $5 million beat very nice. I know -- I think you called out that was $2.1 million, if I heard correct, that was onetime. Just anything else to call out in terms of the sources of strength on the quarter? And then also your thoughts on why that didn't flow into the -- I believe EBITDA was around the midpoint. Just your thoughts on the flow-through. Michael Perica: So no other elements up and down the P&L that I would call out or worth noting that would be onetime-ish nonrecurring in nature of any size. The drop-through to the bottom line, both this year, the $2.1 million and the last year from a revenue was fairly significant as these were longer-term commitments where we performed on our end and were released on our ability our need to perform in the future. So that revenue got pulled into this period versus 1 to 2 years out. So yes, there was contribution to the bottom line. Operator: There are no further questions at this time. I'll go ahead and turn the call back over to Seth Ravin for closing comments. Sir, please go ahead. Seth Ravin: Great. Thank you very much, and thanks, everyone, for joining us. We will be back and talking to you about Q1 earnings pretty fast and look forward to having you all join then. Thank you very much, everybody, and have a great day. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.
Operator: Good day, and thank you for standing by. Welcome to the Telix Full Year 2025 Results and Investor Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kyahn Williamson, SVP of Investor Relations and Corporate Communications. Please go ahead. Kyahn Williamson: Thank you, and thank you to everybody for joining us on this call this morning, this evening, wherever you are in the world. We launched our annual report and full year results on the ASX about 30 minutes ago. We also have the slides on the screen via webcast for you to see today. I'm just going to take you through a brief introduction and some disclaimer statements before handing over. If you just move to the Slide 2. Very pleased to have on the call with us today, Chris Behrenbruch, our CEO and Managing Director; Darren Smith, our CFO; and Kevin Richardson, our CEO of the Precision Medicine business. I should also mention that we have Dr. David Cade, our Chief Medical Officer, on the line for the Q&A session. We'll be running through today our strategy, financial results, and update on our Precision Medicine and Therapeutics business. If you can move to the next slide, please. I am required just to give you an excerpt from our forward-looking statement disclaimer statement. So please note that on today's presentation includes forward-looking statements, including within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that relate to, among other things, anticipated future events, financial performance, plans, strategies, and business developments. These forward-looking statements are based on current information, assumptions and expectations of future events that are subject to change and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our filings with the ASX and SEC, including on our half year annual report. You are cautioned not to rely on forward-looking statements, which are made only as today's date, and the company disclaims any obligation to update such statements. Please refer to the disclaimer slide in the presentation for further information. With that, I'm very pleased to hand over to Chris to kick off the call. Christian Behrenbruch: Thanks very much, Kyahn, and I hope that my audio is nice and clear, and I certainly appreciate the introduction. Before Darren Smith, our Chief Financial Officer, goes into the numbers, I thought a bit of strategic framing would be useful for investors to understand where the company is heading and, of course, our key accomplishments in 2025. Next slide, please, Slide 5. Over the last 12 months, we started to put the depth and execution around what has been a multiyear corporate development strategy. It's useful to think of Telix as a platform with these 5 major segments, as illustrated on this slide. Moving from left to right, first up of key focus is our therapeutics pipeline, which has grown significantly and now features 3 programs in pivotal studies, as well as several high potential earlier-stage programs in rare diseases. I'm going to come back a little bit towards the end of the presentation on this topic. Because of the explosive growth of activity in the radiopharma landscape, we have also pivoted to some extent to an internal innovation model alongside our business development activities. Clearly, when big pharma is willing to pay $1 billion for an asset that has been in a few mice, there's clearly an incentive to do in-house innovation. And so we now have a significant set of technical and clinical capabilities around fundamental R&D and discovery technologies. In the middle of this vision and the engine room of the commercial business today is what we call the Precision Medicine business. This is far more than just an ATM machine that throws off a couple of hundred million of cash each year. It's a strategic validation of the targets we develop our therapeutic drugs for. It is more robust and streamlined clinical trials because we can see where our drug goes, and it's an early opportunity to build deep relationships with the physician stakeholders that underpin the future of the business. Fourth, one can obviously look at sales and a commercial team simply as SG&A. We view it as building a specialty sales organization that very few companies have. Selling nuclear medicine is not selling a vial or a blister pack. It involves selling complex clinical workflows. And as our product portfolio expands, this is a strategic differentiator because it enables us to build depth with key referral physicians and drive preference towards our product. It's also fair to note that in the major markets, this is a significant financial investment that most of our competition, both present and emerging, cannot afford to undertake. Lastly, you can develop all the great ideas you want and convince people to buy them, but if you can't deliver them reliably every single day, you aren't going to succeed. In most industries, vertical integration is probably wasteful and doesn't offer much of a moat. In radiopharmaceuticals, where you are dealing with products that have shelf life of hours to days at most, there's a huge amount of market share ownership dynamic, intellectual property, and customer differentiation in how you deliver. This is why we have invested over $0.5 billion in the last years to better control our destiny and pave the way for high-value therapeutic products. Next slide, please. To do all these things, you need cash, and we have a very high-growth business that made a step change this year, both through organic growth of our Precision Medicine business and through acquisition. We expect all of our revenue streams to continue to diversify and grow in 2026 and beyond, and Darren will cover this off on guidance later in this presentation. Kevin is also going to frame this in terms of the core growth of the Precision Medicine portfolio, which is extremely exciting. The key point is we have a hyper-growth business, and it generates the cash we need to aggressively expand, further diversify our revenue and dominate the field. Slide 7, please. This slide puts the whole strategy into perspective. As I've already said, to deliver on our bold vision for being the dominant player in radiopharma, we need a cash-generative business. We have one, and we grew it significantly this year with revenues exceeding USD 800 million or over AUD 1.2 billion for anyone that prefers their green back surge with shrimp on the barbie. Our margins have remained extremely stable despite competition, and this excellent commercial performance enabled us to invest $0.5 billion into growing our product pipeline, funding the best commercial team in the industry, and building our infrastructure and supply chain. Think about that. $0.5 billion to grow the future value of the company from earnings without shareholder dilution. Telix is a very unique and valuable story. Moving on to Slide 8, please. Before handing over to Darren, I thought it would be useful to give you a condensed view of our priorities for 2026. I get a lot of feedback that Telix is complicated, but it really isn't. This year is about doing three things and hopefully doing them better than we did last year. One, we are going to continue to grow our core business around our approved products. We actually did get a new and innovative product approved by the FDA last year in Gozellix that also leverages the ARTMS isotope production acquisition. The launch of Gozellix has been successful and is not only growing our ASP and market share, it will pave the way for many future products through both the RLS network and partner distributors with Zircaix being the next prime example of this technology platform. Two, we have 2 new products to launch, Pixclara, which is known as Pixlumi in Europe. This is for glioblastoma and Zircaix for renal cancer. We understand the disappointment that these did not get approved last year, but this is the price of being at the forefront of innovation in new technology areas. While people are well aware, it has been a tumultuous period within the FDA itself, we also made certain we took valuable learnings from the experience. We have made extensive changes to the management team. We boosted our regulatory affairs capabilities, and these programs are in good shape for resubmission and approval this year. They are highly anticipated products and will become significant revenue streams, and we have not taken our foot off the gas pedal in terms of market readiness for these products. We are preparing to launch, and I want to make that very clear. Last of all, we have several very high-value clinical programs. This is not an exhaustive list. In fact, we have over 30 sponsored and collaborative studies running from early stage to pivotal trials. But these are the ones that are going to generate the greatest commercial and financial inflection points this year and are the priority in terms of our resources and R&D investment. I note that 4 out of 5 of these studies are pivotal or Phase III studies. We have imminent data point coming out on ProstACT Global, which we will take to the FDA to gain clearance to commence Part 2 in the United States. I remind you that the study has already progressed to randomizing patients ex-U.S. for Part 2 of the study and talk a little bit about this later in the presentation. Our BiPASS biopsy study will complete enrollment this year, and we expect to generate significantly enhanced revenue in 2027 as a consequence of this Phase III study. Our current late-stage clinical studies pave the way to our first therapeutic commercial inflection point likely in 2028. So these are not distant thoughts. They are all near-term catalysts. And I will come back at the end of presentation to some of the broader sets of upcoming catalysts. Now Darren, over to you for the numbers. Darren Smith: Thank you very much, Chris. We have today reported a 56% growth in revenue to $804 million. This is in line with our revenue guidance. Notably it's our third consecutive year of double-digit revenue growth. Revenue from Precision Medicine business year-over-year. Can I just ask, I think that the... [Technical Difficulty] Operator: Please check your mute button. Darren Smith: This year -- sorry, can people hear me now? Operator: Yes, we can hear you. Darren Smith: So this is in line with our uplifted full year guidance. And notably, it's our third consecutive year of delivering double-digit growth -- revenue growth. Revenue from our Precision Medicine business increased 22% year-over-year with EBITDA improving 25% to $216 million, driven by strong demand of Illuccix and the launch of Gozellix. The Precision Medicine commercial performance permitted Telix to self-fund and derisk our investment into our R&D pipeline and commercial infrastructure to drive future growth. Further, 2025 was a year of significant investment, yet we maintained a solid cash balance of $142 million. We achieved this while exercising disciplined cost management. Next slide, please, which is Slide 11. Thank you. We've added this slide for our non-account investors. As at a glance, this slide presents the strength of our business model. The left side of the chart shows our revenue sources and their materiality. The middle of the graph highlights our gross margin in the green and that 94% of the GM is generated from our Precision Medicine business. That is approximately $400 million. As you can see, about half of the gross margin, the red flows om right are invested into our commercial sales and marketing capability, our global supply chain and our corporate functions. But more importantly, flowing right at the top half of the gross margin is approximately $200 million. That's 25% of revenue. And with this, we decide to either invest it in our development pipeline to create future value or recognize it as operating profit. So as business models go, a business that throws off 25% of revenue as operating profit to reinvest in value creation or the bank is pretty damn attractive. Now moving to our traditional P&L. I've spoken to most of the financial highlights on the previous slides, but will take some time to talk to further highlights. The group's gross margin of 53% remained consistent with the first half performance. We invested $157 million into product development, in line with 2025 guidance and mainly focused on our late-stage pipeline. General and administration expenses decreased to 12% of revenue from 17% last year, reflecting the efficiencies of scale achieved as the company continues its strong growth trajectory. As a result, we posted an adjusted EBITDA of $39.5 million, in line with market consensus. Now moving to our next slide. Telix Precision Medicine business is clearly our cash machine. Its financial metrics demonstrate its excellent performance. Precision Medicine delivered an additional $113 million in revenue, representing 22% year-on-year growth alongside a 28% increase in operating profit and a 25% increase in its EBITDA. This demonstrates the high-growth business with capacity to generate significant funds to invest in long-term value creation. Sales and marketing investments supported the launch of Gozellix, the geographic expansion of Illuccix and the launch readiness activities of Pixclara and Zircaix. As a side comment, if this was a stand-alone business growing at 20% plus per annum on an extrinsic value basis, it would be worth up to 8x revenue. This is a huge value creation for shareholders. Now moving to our next slide, in Telix Manufacturing Solutions or TMS. We've provided this level of detail on TMS in our half year results for two reasons. Firstly, to give investors and analysts clear visibility into the financial impact of the RLS acquisition; and secondly, to provide transparency into the cost base of the remaining TMS business, helping with financial modeling. As you can see, RLS delivered positive EBITDA for the first 11 months post-acquisition. At the remaining TMS facility, we increased investment compared to last year to permit us to advance operational activities facilitating clinical and commercial supply. As we now close out the full year of having RLS in the business, we will revert back to reporting TMS as one segment for commercial and competitive reasons. Now moving on to cash flow. As you can see in this cash bridge, Telix continued to generate strong operational cash flows, which we then invest into our pipeline. In 2025, Telix generated $206 million from operations, enabling the investment into progressing the R&D pipeline. Excluding our last contingent consideration earn-out payment of $52 million for Illuccix, we produced a net positive operating cash flow of $35 million. I reiterate that our investment into R&D is discretionary and can be flexed depending on our commercial performance, permitting us to effectively manage our cash position. Additionally, Telix utilized cash on hand to support targeted strategic investments such as RLS, ImaginAb, and in our FAP asset. As a result, we ended the year with a prudent cash position of $142 million. Next slide, please. As we prepare for our next phase of growth, we continue shifting allocation of R&D investment into our therapeutic pipeline. In 2026, R&D investment is planned to be in the range of $200 million to $240 million, with the largest allocation directed to the therapeutic development. This highlights our focus to transition to a high-value therapeutic business. I'd like to take the opportunity to reiterate our investment strategy. Over the next 2 to 3 years, we expect to grow revenues by advancing assets from clinical development to commercialization, expanding indications and geographic reach. We will invest the funds from this commercial growth into our portfolio and ensure that we have the capabilities, infrastructure, and readiness to deliver on our therapeutic programs. Our focus will remain on reinvesting revenues back into the business over the next couple of years rather than optimizing near-term earnings per share. We are committed to building long-term value. We believe prioritizing earnings too early can impede the strategic investments required to fully unlock the potential of our pipeline. Next slide, please. Telix has a disciplined capital allocation approach that is aligned to our corporate strategy, and it has matured a great deal over the last 12 months. We have previously spoken about our 4 areas of focus, and they are investing into our R&D, optimizing our commercial performance, strategic growth opportunities through M&A, and supply chain resilience and production capacity. We believe these 4 areas of focus will underpin our growth long term. We have continued to deliver on our strategy in a disciplined way, ensuring that we have a prudent cash buffer on the balance sheet. Next slide, please. Looking forward, we see strong momentum heading into 2026 with another year of roughly 20-plus percent revenue growth anticipated. Our full year 2026 revenue guidance is set at $950 million to $970 million, and this is based on current approved products in approved jurisdictions. This range does not include revenue contributions from pending product approvals, which will be incremental. This growth implies up to 25% growth in our Precision Medicine business and a full year of RLS revenue. Our corresponding R&D investment will be in the range of $200 million to $240 million and will be dependent on the achievement of certain clinical outcomes and development milestones. In conclusion, we delivered another year of double-digit revenue growth, made high-value strategic investments across the business, and maintained a prudent cash position. Looking ahead, 2026 is set to be an inflection year with numerous important milestones. Our revenue guidance reflects the confidence we have in the business, and we remain committed to disciplined financial management throughout 2026. I'll now hand you over to Kevin Richardson, Precision Medicine CEO. Thank you. Kevin Richardson: Thank you, Darren. My first slide, please. Last year, our Precision Medicine portfolio delivered $622 million in revenue, up 22% year-over-year. Importantly, we delivered sequential growth every single quarter. That includes Q3, our most challenging quarter, which was the first full quarter following the expiration of Illuccix transitional pass-through status and the transition to MUC, MUC or mean unit cost reimbursement for a subset of Medicare patients. Q3 allowed us to see the full impact of that change on the business. Even in that environment and despite ongoing competitive pressure, we still delivered 3% quarter-over-quarter dose growth and 1% sales growth. That performance speaks to our disciplined approach to business fundamentals and the strength of our customer-facing team. We continue to gain share based on clinical differentiation and operational reliability, our PSMA agents demonstrates fewer indeterminate bone lesions and higher inter-reader agreement compared to F-18 assets, driving confidence in clinical decision-making. We pair that clinical value with highly specialized commercial organization that engages customers every day and consistently differentiates Telix in the market. Our reputation as an innovator also positioned us for a successful launch of Gozellix. Gozellix was FDA approved in April of 2025, and transitional pass-through status became effective in October, enabling a transitional pass-through supported full launch in Q4 of 2025. We are very pleased with the early uptake and our 2026 full year guidance underscores our strong conviction in the growth outlook for our Precision Medicine portfolio. Today, we are the only company with 2 PSMA agents on the market. This dual product strategy is a competitive advantage, offering different types of customers meaningful choice across economics and scheduling flexibility while reinforcing our commitment to meeting diverse clinical and operational needs. In short, resilient growth, clinical differentiation, disciplined execution and a platform built for sustained growth. Next slide, please. What does it take to win in a maturing PSMA market? Winning in a mature PSMA market is no longer about being first. It's about executing at scale. Clinical credibility is nonnegotiable. Products must deliver consistently high image quality, strong inter-reader agreement and reliable detection at low PSA levels across all patient types. Incremental claims aren't enough. Confidence in clinical decision-making is what sustains adoption. Workflow integration matters. In a high-volume market, solutions must fit seamlessly into established clinical pathways, enable same-day imaging and support high patient throughput without disrupting nuclear medicine operations. Reimbursement sophistication is a competitive advantage. Success requires multiple product strategies that give customers economic flexibility while navigating complex and evolving reimbursement frameworks over extended period of times. Commercial infrastructure is a must. This is a contract-driven market that demands experienced field teams, market access expertise, compliance rigor, and long-standing customer relationships. These capabilities take a large investment in years, not quarters to build. Supply chain excellence separates winners from participants. Reliable, flexible dose production and delivery at scale, supported by high service nuclear pharmacy last mile experts is critical. There is no proven shortcut to mass market large volume coverage. Sustained investment fuels durability, indication expansion, life cycle management and camera technology advances all require ongoing clinical and operational investment to maintain leadership. In short, leadership in PSMA is earned through clinical trust, operational reliability, commercial scale and disciplined investment, not novelty. Next slide, please. We continue to execute our strategic plan to grow the Precision Medicine business by expanding our product offering, expand our indications on those products and expand the geographies where we market those products. Global expansion is a priority for Precision Medicine here at Telix. Illuccix is now available in 17 countries with reimbursement secured, and we hold marketing authorizations in more than 24 markets. In 2025, we focus on country-by-country access. In '26, we pivot to driving uptake, particularly across key markets, including the U.K., France, Germany, Italy, and Spain. In China, we delivered strong Phase III results with 94.8% positive predictive value, including patients with very low PSA levels. We submitted the NDA to the regulators with our partner, Grand Pharma. And with prostate cancer incidence rising and PET/CT infrastructure expanding rapidly, China represents a significant growth opportunity. While in Japan, our 105-patient Phase III study is progressing well with the first patient dose. This positions us well in the world's second largest pharmaceutical market where prostate cancer remains a leading cause of mortality. New products and new indications enhance our ability to take share and grow the market and Gozellix is off to a strong start, and we are focused on accelerating commercial momentum in 2026, and you can see that is reflected in our 2026 guidance. BiPASS is a Phase III study that represents the next wave of innovation, combining PSMA imaging, Illuccix or Gozellix with MRI to improve diagnostic accuracy and potentially reduce or eliminate invasive biopsies. This is about moving earlier in the care pathway, reducing patient risk, lowering system costs, and expanding the total addressable market to include frontline biopsy candidates. We believe moving to the front line where patients are diagnosed will give us a competitive advantage, both as the lead PSMA in diagnosis, but also in sequential scans that happen later on in the patient journey as physicians want to see consistency scan to scan. For Zircaix, we've completed 2 Type A meetings with the FDA and believe we have full alignment on key resubmission requirements. We are now focused on completing the agreed deliverables and documentation required for the resubmission. With breakthrough therapy designation, supportive ZIRCON-X data and the inclusion in major international guidelines, this remains a top priority for approval and launch this year. This is a really exciting and highly anticipated product. Moving on to our neuro platform. We are pursuing complementary submissions in both the EU and the U.S. TLX101-Tx was filed with the European regulators recently, and the U.S. submission will follow closely. As a reminder, the FDA has granted both orphan drug and fast track designation for Pixclara. Our commercial, medical, and supply chain teams are launch ready. Our expanded access programs serve patients and our customers very well, and they anticipate commercial use of Pixclara. In short, we built a global commercial platform, delivered successful launches, taken share, penetrated the available market and advanced multiple late-stage assets in high unmet needs markets. We are entering our next phase of growth with momentum and discipline. Next slide, please. So what does this strategy mean in terms of financial impact? Our current baseline business with some further life cycle management, which we've talked about, should be able to sustain a 15% to 20% annualized growth. This partially reflects the growth of the field overall, as well as our ability to continue to capture market share as the size of the market expands. The recent addition of Gozellix certainly derisked this. With indication expansion in prostate cancer alone, particularly a major opportunity in the BiPASS study, this growth over the 5 years can be closer to a 30% CAGR. And then when you add in Pixclara and Zircaix, this growth rate defensively looks more like 40% compounded annual growth, especially with metastatic indication expansions that further drive procedural volume. In short, our current product strategy, which is fully baked from a clinical perspective, just needs to clear a few more regulatory hurdles as it represents future upside for the company. It is a direct consequence of the market presence we are building, the depth of our pipeline and the quality of service we are able to deliver to the patients. This is really an exciting business with a bright future. The growth in Precision Medicine gives us the ability to finance the growth potential of our Therapeutics business. On that note, I'll hand it back over to Chris, to give you a bit of perspective on that. Christian Behrenbruch: Thanks very much, Kevin. Great update, and congratulations on all the success that your team had this year. It was a really remarkable year of accomplishment. So moving on to Slide 25, please. In a way, this slide is a simplified version of my opening slide, a highly profitable cash-generative business that would garner, as Darren said, a very healthy revenue multiple. It was a stand-alone business, but it's our engine room. And the future growth trajectory of the business will come from how that cash is invested. Kevin has already shown you very clearly, I think, how the Precision Medicine business alone can grow expansively over the next 5 years based on clinical, regulatory, and commercial inflection points that we expect to achieve this year. So again, I just want to reemphasize the point that the growth trajectory that Kevin has talked about comes from events that will be completed this year. I think it's also important to reinforce our commitment to manufacturing and supply chain. But in the context of our Therapeutics business, it's more than just reliable and on-time dose delivery. It's about R&D cost and efficiency and perhaps most importantly, intellectual property capture. We've learned over the last decade that when we use contract manufacturing organizations, do product scale up, that we simply educate the ecosystem in a way that potentially empowers competition, and we no longer wish to do that. So especially, as our therapeutics go into late-stage trials, this has become an important strategic objective of the company. To be clear, we still use CMOs, but where there's key IP around platforms, targeting agents and certain key isotopes, we are increasingly tackling this in-house or with selected partners. Moving on to the next slide, please. And this slide shows the reason why. As I've said, Kevin has already talked about what share of the Precision Medicine side of the business we think we can tackle over the next 5 years or so. And on a TAM basis, it's actually pretty conservative. But the therapeutics opportunity is about 3x or 4x bigger for the targets and indications that we are already pursuing. This doesn't even capture the potential for indication expansion into new disease areas that some of the pan-cancer targets we are developing, like carbonic anhydrase IX and FAP can potentially expand into. So it's a really bright future for the theranostics strategy. Moving on to Slide 27, please. Over the last 5 years, we've built a very strong pipeline with some key disease focus areas, and you're going to increasingly hear us talk about these disease areas as multiproduct concentration areas, frankly, much as we have done with Gozellix and Illuccix on the Precision Medicine side of the business. Indeed, to tackle some of these major unmet clinical needs, it's going to, in some cases, require a multi-asset approach at different stages in the clinical development or in the clinical patient journey. And so -- and also well-considered combination therapies with standard of care medical oncology. This is evident already, for example, in the design of the ProstACT GLOBAL and IPAX-BrIGHT studies. There are three particular attributes of our pipeline that I'd like to specifically comment on. Firstly, by taking a theranostic approach, we built a very deep relationship with the referral and prescribing physician in each of these disease areas. This is a competitive advantage, and this relationship depth has already started with our existing commercial product portfolio and will only intensify over the next 12 months. Investors often view the Precision Medicine and Therapeutics business areas as adjacent, but they are clearly not. Secondly, while we have some very high potential early-stage programs, and this has not exhausted this list because we have a pretty decent preclinical portfolio coming in behind, we have 3 late-stage programs in prostate, renal, and glioblastoma that will generate significant data over the next 12 months. Based on the current valuation of the company, these programs are essentially a free option, but we think that the data and clinical basis of these programs are very compelling. Most importantly, while 2026 and 2027 financials will reflect the commercial expansion of the Precision Medicine business, 2028 is our commercial launch year for our Therapeutics business. So it's not far away. This is why we have so much execution focus on the [Technical Difficulty] targets, learning about disease extend, exploring new patient populations and ultimately increasing the market size and market share. For the therapeutics, when they become available, the Precision Medicine business will pave the way. And so notwithstanding a few challenging but also educational regulatory speed bumps we've had, our commercial imaging gives us the skills and confidence that we can deliver on the therapeutic programs in the future. We've learned a lot this year, especially last year. Can you hear me, okay? All right. Moving on to the next slide, please. As I noted earlier, we have many different clinical studies running, some company-sponsored, some in collaboration with key opinion leaders around the globe. But the 4 major trials to watch this year are outlined here. I'm not going to go blow by blow on these because this is an earnings call, but I think it's important for shareholders to understand where the research priorities are and what the development goals and catalysts are. We are collecting a ton of patient data this year, and it's very exciting to have 3 programs in pivotal studies. This is important for patients and important for shareholders, and it's taken a lot of work and investment to get here. Moving on to Slide 29. Of course, front of mind for patients and shareholders alike is the ProstACT GLOBAL study. The study is now recruiting into Part 2 randomized part of the study ex-U.S. and is ramping up very nicely. Unlike Part 1, which is a safety dosimetry run-in study that the FDA required in order for us to include U.S. patients in the randomized part of the study, Part 2 is very streamlined and straightforward. Part 2 commenced recruitment last year following an independent data safety review that determined that Part 1 data met prespecified safety criteria to progress. We will be shortly releasing the details of the Part 1 study concurrent with our submission to the FDA to request approval to add U.S. patients into the study. We are looking forward to getting these results out into the market and to show the great progress we are making, particularly given the unique combination therapy design of the ProstACT GLOBAL study. To remind you, the data we will be putting out from Part 1 will be safety data on the 3 standard of care combinations in the global study, as well as comparative dosimetry data, which will be very interesting to see, particularly for the 2 different androgen deprivation therapies used in the study. So this is coming soon. Moving on to Slide 30. Before I wrap up with a summary of the catalysts, I thought I would share a montage of patient case studies to really tie together the company's strategy and to illustrate how integrated the Precision Medicine, Therapeutics, and Manufacturing businesses are. In short, why we are here. This slide illustrates 4 patients in 4 different cancers, all of which are advanced, extremely difficult-to-treat cases. Every day across the entire portfolio, we see examples of where our development and commercial pipeline changes lives. Sometimes it's a better understanding of the extent of disease. Sometimes it's a profound disease modification, such as the metastatic prostate and breast cancer examples on this slide. And at times, it's the glioblastoma or the kidney cancer patient that has stabilized disease or enough reduction in pain to be able to return to work. These are the real outcomes from our research, and they deliver profound and life-changing outcomes for patients. This is what motivates us and why we believe that investing our hard-earned cash into this future is so important. The technology works and will get better as we learn more and get more clinical experience. I'm also obliged to point out that for the most part, what you're seeing here are images created with the companion diagnostic imaging agents that we are also developing and highlights that this -- that not only is imaging technology critical for diagnosing and staging patients, but will play a fundamental role in predicting and measuring disease control as well. Moving to the last slide. To wrap up, this slide summarizes the year ahead. It is a big year with many inflection points across the entire business. I will not go line by line, but we have a lot to talk about in 2026, with the next 3 major catalysts being resubmission of Pixclara and of course, Zircaix and the release of the Part 1 global data. We are looking forward to delivering these important milestones to patients and shareholders as the year progresses. With that, I will pause and hand it over for questions. Operator: [Operator Instructions] Our first question comes from Laura Sutcliffe with Citi. Laura Sutcliffe: At the risk of potentially making myself a bit unpopular, I think we'd like to understand a bit more about when we might see some data for 591, the safety data. And perhaps given that you said you will disclose at the same time that you go to the FDA, whether the next steps are things that you need to do at Telix or whether you're waiting for the FDA to do something on their end to be able to get to that point? Christian Behrenbruch: Laura, thanks for your question. It's not a bad question or an unpopular question at all. So we have had an independent data safety review board that has under the clinical charter of the study has reviewed the data and progressed to randomization ex-U.S. However, in order for us to send the information to the FDA and disclose the information publicly, we need just to complete the clinical case report forms and formally close out and quality control and validate the data because that's obviously what the FDA wants to see. As soon as we have that data -- and I haven't seen it, I'm not privy to it. But as soon as it's available, we will simultaneously disclose it and submit it to the FDA. So we're not waiting on anything from the FDA. It's all on the company side, and you will not have long to wait. Operator: Our next question comes from Tara Bancroft with TD Cowen. Nicholas Lorusso: This is Nick on for Tara. Congrats on the progress and the strong guidance for 2026. We were hoping that you can dive in a little more on what you've seen in the early innings of the 2-product strategy for Illuccix and Gozellix and how you anticipate that will evolve this year to reach the 25% growth in the precision medicine revenue? Christian Behrenbruch: Yes. Thanks very much for the question. Kevin, do you want to pick this one up for your wheelhouse? Kevin Richardson: Sure. Yes. Thank you for the question. So the 2-product strategy is -- enables us to really manage the economic needs of HOPPS accounts and the way that they perceive and their preference for a reimbursed product over really a non-reimbursed product. As you know, MUC or Main Unit Cost has really kind of changed the environment and the reimbursement environment there as well as the way that the pricing happens in the HOPPS accounts. So being able to have a 2-product company enables us to manage that particular customer type and the self-standing -- or we call them IDTF group -- in a different way as we manage the preference they have for a reimbursement price or one that might be a little more price sensitive. So and then, of course, we have a longer view of the precision medicine business and PSMA specifically, as we think through what over time can happen and what will happen with CMS as they continue to evolve and change reimbursement. So that enables us to kind of manage the ASP, if you will, as the CMS may or look more towards the ASP reimbursement model. So it gives us options in the future without locking down a singular product on that. Operator: Our next question comes from Shane Storey with Canaccord Genuity. Shane Storey: Kevin, I'm going to stick with you, if that's okay. Question on Pixclara. Just maybe some descriptive piece, I guess, around the customer channel there. It's quite different from your PSMA urology presence. Is that potentially a first work example for how the Varian relationship might evolve? Just some thoughts on that, please. Christian Behrenbruch: Kevin, are you there? Kevin Richardson: Yes. So I'll take that first then, Chris. So Varian is -- we're really excited about the possibilities in that, a lot focused, of course, on PSMA and Illuccix, Gozellix. And so as we think about that from a commercial perspective, we have a -- what we call a Ninja team. As you know, there's not as many sites as there are that do PSMA prostate scanning as there are that are going to do neuro scanning. So we have a smaller team that's focused on the referral, the neurologist. And the idea behind that is we already have the relationship at the NucMed level. So we're able to drive those patients into the scanner, if you will. And then we have a team that already has the relationships at the other end of that where they're reading it. So the idea is it's a referral and then into the existing relationship we have at the nuclear medicine side. And of course, if that is not an Illuccix or Gozellix site, it gives us good access into those sites, and it's a real competitive advantage to be able to offer these more orphan drug type technologies because of that. Does that answer your question, Shane? Okay. Chris, anything to add? Christian Behrenbruch: All right. No, that's good. Operator: Our next question comes from David Stanton with Jefferies. David Stanton: I might be following a dead horse here, but I just want to make it clear and help you to make it clear. You'll be reinvesting earnings to get close to 0 NPAT for F '26, F '27 and F '28. Is that what the market should be thinking going forward, please? I ask because it's a question I get asked the most. Christian Behrenbruch: Yes, that's fine. No horse is flogged, David. Happy you asked the question. So we're not giving guidance beyond 2026, but it's a reasonable expectation that in 2026 and 2027 that we will be investing -- other than for risk management and for appropriate balance sheet management purposes, we'll be investing the majority of our earnings back into the company, okay? So that's in a number of different areas. That's in R&D. That's also in growing and developing our commercial team. And of course, we continue to also invest in infrastructure and capital works to support the business. So it's not all just R&D, but a profit objective for this year and next year is not the name of the game. Operator: Our next question comes from David... Christian Behrenbruch: Do you have a further comment, David, that you'd like to ask? All right. Well, we'll move on. This is a very challenging conferencing service, and I apologize to those that are participating. David Bailey: It's a follow-on from Dr. Stanton's question. Just from Darren, there was a clear comment there that I think that the investment in growth will consider the commercial performance. I think that was interesting from our perspective. Just as we look at the sales guidance for '26 and the R&D guidance for '26, should we think that if the commercial performance is at the upper and lower end of those ranges, the R&D will follow? As an extension of that, within the R&D spend, is the earlier stage clinical trials, are they the ones that would potentially be put on hold for a little bit to the extent that the commercial performance doesn't meet expectations? Christian Behrenbruch: I can start, Darren, and then maybe if you want to add anything. I mean -- so yes, we've focused -- we've chosen in this presentation to highlight the clinical studies that are the real priorities for the company. So that's the 5 studies, including the BiPASS study. We are obviously going to be investing in other clinical studies this year. And to the extent that we need to make adjustments -- it will be outside of that sort of ring-fenced 5 studies, the 4 therapeutic studies and the BiPASS study. We clearly expect that 2026 is going to be a strong year. We don't expect to have any difficulties in financing our R&D pipeline. But as you have noted, and as Darren, I think, made it very clear, generally, we take the view that our R&D investment is discretionary, and we can make adjustments as required. Darren, do you want to add anything? Okay. I'll take that as a no. Operator: Our next question comes from Craig Wong-Pan with RBC. Craig Wong-Pan: Just a question on the 25% growth in Precision Medicine. I was wondering how much growth was coming from markets outside of the U.S. Christian Behrenbruch: Sure. I'll answer that one and then maybe, Darren, if you want to chime in on anything that I've missed. Right now, because we only achieved our European reimbursements towards the back end of last year, it's a very small proportion of the revenue is currently ex-U.S. The majority of it is -- 95% of it is U.S.-based. We obviously expect that mix to change over the course of this year and also as we add in other markets, such as Japan, which has a high-value PET -- advanced PET procedure code that's quite internationally competitive. But for the moment, for the most part, the majority of our revenue is U.S.-based. Operator: Our next question is coming from Andy Hsieh with William Blair. Tsan-Yu Hsieh: Chris, I want to ask you about the recent collaboration with Atley and Stanford, focusing on astatine-211. So in your pipeline, you have 3 alpha emitters: Actinium-225, you have lead generator that's in progress, and then now astatine having a California supply chain. So I'm curious about your view on this isotope, another short half-life. Just wondering about how it fits into your product portfolio. Christian Behrenbruch: Yes. It's a bit of sort of outside of the major sort of activity area. But essentially, we do see value in alpha emitters. The majority of our late-stage programs, as you know, are beta-emitting isotopes. We think that they're going to be a workhorse for the foreseeable future, but we can see ALPHIX coming over the horizon. As you know, most of our clinical stage programs are with actinium. It's probably from a supply chain perspective, the lowest hanging fruit. We have one program, TLX102, which is with astatine that's in early clinical translation. We think that for applications where a targeting agent needs to cross the blood-brain barrier that radiohalogens are a better perhaps a more practical pathway than a radio metal with a chelator. So we are exploring astatine mostly in the CNS setting. Then we do, as you know, have a lead generator that we've developed. It's a very novel and very compelling generator design that we think can be rolled out for large-scale lead production. We currently today do not have any clinical programs using Lead-212, but we have a number of preclinical programs that we expect to take into patients by the end of this year that are not currently disclosed, and they have the potential to use Lead-212. We are exploring several different isotopes. But I think as a company, we've elected to put a proportion -- not a large proportion, but a modest proportion of our R&D expenditure into understanding the future landscape of alpha because we think it has some potential. I hope that answers your question. Operator: Our next question comes from David Dai with UBS. Xiaochuan Dai: Just on the gross margin for the business, it seems like it's remaining stable at 53%. But then the RLS business, the gross margin has been quite poor. So just thinking about the gross margin for RLS business moving forward, what are some of the key drivers of gross margin expansion for the RLS business that you can provide? Christian Behrenbruch: Well, I'll just make a comment, and then I'll invite Darren to chime in. So the RLS business -- so just to be clear, when we report the RLS segment, we report the RLS segment purely in terms of third-party products. So these are not Telix products. These are, for the most part, fairly generic nuclear medicine products. And RLS' operating cost is largely covered by delivering those third-party products. So a useful way to think about it is as a subsidized -- third-party subsidized manufacturing infrastructure. When we report the products that go through the RLS network that are Telix products, they are captured in the segmental reporting for precision medicine. So I just really want to make that very clear. So when you say the gross margins for RLS are not very good, it's got nothing to do with Telix's product portfolio. RLS margins -- because these are generic sort of fairly commoditized nuclear medicine products, they have a much, much lower margin. We provided an average margin last year, which I think frees a lot of people out because all of a sudden, we went from mid-60s margins down to mid-50s margins or low 50s margins. That was an average effect across all of the products in the group, including the RLS products. Does that make sense? Xiaochuan Dai: Yes, that makes sense. Yes. Christian Behrenbruch: So yes, so don't be sidetracked by RLS. The most important thing is that when we put our products through RLS, we -- that gross margin number, which we report faithfully for the Precision Medicine business as sort of mid-60%. That's our -- that above-the-line cost is our distributor margin, which clearly is different when we run a product through our own pharmacy network. Now it's critically important for us to maintain key distribution partnerships in key markets. So we obviously, do pay that above-the-line cost. But when we produce a product that goes through our nuclear pharmacy network, the gross margin is rather different. So you should expect to see, as we have a larger share of our product volume going through our in-house pharmacy network that, that gross margin number has the potential to improve and trend towards 70%. Operator: Our next question comes from Andrew Paine with CLSA. Andrew Paine: Maybe one for Kevin, but you mentioned winning in the PSMA is about executing at scale, and we've seen that in the growth and the challenges you've overcome in that market so far. You spent a bit of time talking about this, but how clear is it that moat -- how clear is that moat there for you given the potential competition on the horizon? And also, can you just dig into the changes in camera technology and how you see that as supportive to the sensitivity of PSMA imaging, which may not be fully appreciated? Christian Behrenbruch: Well, I think Kevin has done a great job of running through what the competitive barriers to entry, and there are multiple. I mean it's not just product, it's also clinical, it's also manufacturing and supply chain. So I'm not sure what competitor you're talking about that's coming immediately on the horizon. But nonetheless, we see those as, I mean, pretty well enumerated sort of barriers to entry for competition. On the topic of camera technology, generally speaking, we've seen a step change in sensitivity on PET cameras over the last 3 to 5 years because of the demand for PET imaging, not just in prostate cancer, but across a whole lot of indications, including neuro-oncology, neurodegeneration, cardiovascular disease. We're seeing a lot of camera installation going in and the next generation of scanners are in order of magnitude more sensitive. And so that just means that we have to keep abreast of it. We need to make sure that we're running clinical trials and clinical studies that demonstrate the improved utility. We are clearly detecting disease early and earlier. I mean, we have our most recent studies that were done in China, for example, with absolutely state-of-the-art scanners because they're brand-new scanners. We're seeing PSA levels down to fractions of a nanogram per ml. And so the camera technology is part of the complementary story to Tracer development that should not be forgotten about. I think I'll pause there in terms of that particular topic. There isn't too much more else to say. Is there another question? Operator: Our next question comes from Melissa Benson with Barrenjoey. Melissa Benson: So Kevin mentioned you had a full alignment on the agreed deliverables with the FDA for the... Christian Behrenbruch: Melissa, I'm sorry, I can't hear you. Now I can hear you. Go on. Melissa Benson: I'm sorry. So I think Kevin was mentioning there was alignment on the agreed deliverables with FDA, [ per the K ]. So I was just wondering if there's anything you can share regarding what those agreed deliverables are, but specifically, if there's any new clinical data required or if it's more preclinical analytical data only? Christian Behrenbruch: Yes. Most of the CMC remediation topics are around laboratory documentation, manufacturing documentation and process documentation. We do have a deliverable to the FDA around comparability between the research grade material that we used in the Phase III trial and the commercial scale-up material. But we have that data set well in hand, and it's not a material time delay to the resubmission. Operator: Our next question comes from Steve Wheen with Jarden. Steven Wheen: It's Steve here. So my question was just a bit of an extension of some of the others. But I guess for Kevin, I'm just trying to understand the European market with regards to Illuccix and Gozellix, I guess. Just they've been approved for some time. The launch in the U.S., obviously was incredibly rapid. And just trying to understand what's holding it back or slowing it to not really be much of a feature for your growth in the next 12 months? Christian Behrenbruch: Kevin, I can start and then maybe you can finish. I mean, it's not that it's not a feature. It's just that the European market has a very different reimbursement landscape. The U.S. has a much more immediacy between product approval and reimbursement, whereas in Europe, sometimes there can be as long as 9 or 12 months delay between product approval and reimbursement. And there's simply no material product sales until you have reimbursement. It's also not a class reimbursement. It's an individual product reimbursement in most countries. So until you have reimbursement, you simply don't have material sales. So for the -- what you would classify as the traditional EU 5 countries, we have only just received reimbursement in some of them. Kevin, I don't know if you want to add anything there? Kevin Richardson: Yes, there's very little other color to add in my prepared remarks, which was really 2025, the international team under that direction was really focused on gaining market access through reimbursement. And now we in that EU 5, the plans now are to execute those market launches. And so you'll see that as we continue to grow in 2026 as we execute against that launch. But Chris is right, in each country is different, each product is different. So it takes a bit to get that approved in the system and then begin the launch. So we're in the midst of that right now. Steven Wheen: Can I just ask an unrelated question just with regards to your R&D the expensing of Zircaix through the R&D line, is there a shelf life for that particular inventory just with regards to just noticed your comment that there is the potential once it's approved by the FDA that, that could then come back and be backed out of the P&L? Kevin Richardson: Yes, that's right. That's our expectation. And the shelf life goes far beyond the launch time of the product. Operator: Our next question is a follow-up from Shane Storey with Canaccord Genuity. Shane Storey: Sorry for extending the time, everyone. My question was going to come off the back of Melissa's question actually on Zircaix and except everything you've just said there. But just as far as how we should think about FDA's review phase once the resubmitted BLA is accepted, we've been sort of assuming 6 months. I just unsure how the breakthrough status and priority review might influence that, if at all? Christian Behrenbruch: Yes. We don't know yet for Zircaix. For Pixclara, we have a reasonable idea that it's going to be a rapid review also because it's a single a single issue CRL. We could imagine for the Zircaix review because there is a number of issues that it may take longer, but we haven't received guidance yet from the FDA on this topic. We will be engaging with the agency shortly on this topic as we are preparing to resubmit, but we won't know that information for a little bit when it comes to Zircaix. No worries. But I do note that it has a breakthrough designation. And I actually want to compliment the agency. They've been highly engaged, very helpful, very proactive. They gave us a lot of extra time around the Type A meeting that they really didn't need to do. So we feel like it's a pretty good collaboration, and we're working with the agency towards the drug approval and nothing less than that. Okay. I think I have a feeling that we're wrapping it up there. I don't know if there's any more questions coming through. Operator: We do have a final question, a follow-up from David Stanton with Jefferies. David Stanton: Saving the best for last. Chris, just I note that you've talked to a Part 2 interim analysis in calendar '26. I wonder if you could sort of give us any kind of timeline as to when that might be? Is it third quarter? Is it fourth quarter? What should we be thinking there? Christian Behrenbruch: Yes. Obviously, I get increasingly reluctant to estimate timelines on clinical trials because [Technical Difficulty] by like to the day or to the week rather than to the quarter. But right now, the Part 2 study is recruiting really nicely. We're seeing good site expansion and getting plenty of patients consented into the study. That interim analysis is based on about 80 or 90 events, I don't know the exact number, sometime -- somewhere around that. And we would expect that, that should lead based on the current recruitment trajectory for some time in Q4 of this year for that futility analysis to read out. So that's the reason why we have it sitting there in the calendar for this year. Well, I think that was the last question. I just want to apologize profusely to all the attendees for the audio challenges we've had today. It's a new conference provider. I'm not sure we'll be using it again in the future. But I just wanted to thank you for your questions and for your attention. Obviously, if there are follow-up questions, we'll be happy to receive them directly and follow up in due course. Thank you for your time today. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Operator: Greetings, and welcome to Weave's Fourth Quarter and Full Year 2025 Financial Results and Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. [Operator Instructions] I would now like to turn the conference over to your host, Moriah Shilton, Investor Relations. Thank you. You may begin. Moriah Shilton: Thank you, Kevin. Good afternoon, everyone, and welcome to Weave's Fourth Quarter and Full Year 2025 Financial Results Conference Call. With me on today's call are Brett White, CEO; and Jason Christiansen, CFO. During the course of this conference call, we will make forward-looking statements regarding the anticipated performance of our business. These forward-looking statements are based on management's current views and expectations, entail certain assumptions made as of today's date and are subject to various risks and uncertainties described in our SEC filings. We've disclaims any obligation to update or revise any forward-looking statements. Further, on today's call, we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. Unless otherwise noted, all numbers we talk about today will be on a non-GAAP basis, which excludes onetime acquisition-related costs, amortization of acquired intangible assets and stock-based compensation. A reconciliation to comparable GAAP metrics can be found in today's earnings release, which is available on our Investor Relations website and as an exhibit to the Form 8-K furnished with the SEC before this call as well as the earnings presentation on our Investor Relations website. Before I turn the call over to Brett, we want to let you know that we'll be participating in the Raymond James Institutional Investors Conference on March 2 at the JW Marriott in Orlando, Florida. And with that, I will now turn the call over to Brett. Brett White: Thank you, Moriah, and thank you to everyone joining us today. We've delivered another strong quarter in Q4 with 17% year-over-year revenue growth, gross margin expanding to a company record of 73.3% and operating income increasing to $2.3 million, our highest level, both in dollars and as a percentage of revenue. This marks the 16th consecutive quarter of meeting or exceeding the high end of our revenue guidance range. For the full year, we generated 17% revenue growth and 24% growth in free cash flow. These results demonstrate the strength of our model, consistent top line growth, expanding margins and disciplined cash generation while continuing to advance the platform for our customers. We're proving we can scale profitably and deliver new capabilities that deepen Weave's value to the practice. At our core, we serve the professionals who care for patients. Our customers provide care at every stage of life from the first pediatric visits to restorative procedures, chronic care management and everything in between. They are trusted professionals delivering essential services in their communities. Health care is fundamentally human. AI will not replace providers, it will amplify them. What it can do and what we are building toward is removing the administrative friction that pulls people away from patients. Our vision is simple: elevate patient experiences through a unified platform that improves business operations so health care professionals can focus on patient care. This vision is not a slogan. It guides how we build, invest and operate. The health care industry is one of the largest and most complex in the world, making it right for AI adoption, and SMB practices have historically been slow to embrace digital transformation. Health care professionals navigate increasing administrative burdens like staffing shortages, rising patient demand and reimbursement complexity. They require technology solutions to manage growth, communication, schedules, billing, insurance and payments, so they can focus on the patient in front of them while staying competitive in the local markets. Missed patient calls, scheduling challenges and shifting insurance dynamics waste time, reduce patient satisfaction, increase burnout and strain practice revenue and profitability. These operational inefficiencies create a clear and durable opportunity for automation and value creation. That's where Weave comes in. Weave is the unified AI-powered patient communications and engagement platform purpose-built for small- and medium-sized health care practices. We bring together AI agent and practice staff conversations across voice and text into unified workflows. Weave is the orchestration layer that helps practices continuously improve patient relationships, proactively assigns tasks for staff follow-up and delivers insights so practice owners can measure, analyze and optimize. Weave is a mission-critical practice system of work, built at the center of patient interactions 24/7. All conversations flow through Weave, creating operational data to drive process continuity inside our platform. This continuity extends across communication channels. A patient conversation can begin on the phone, continue over text with an AI agent and escalate back to a staff member when needed. Our platform treats this as a single persistent interaction, preserving contacts end-to-end, so patient requests are addressed sufficiently. This is coordinated teamwork between the Weave AI platform and the practice staff we support. Weave is powered by authorized secure integrations with practice management systems, making our platform reliable enough to manage scheduling, insurance verification, billing and payments. This goes well beyond responding to basic inquiries. As customers continue to recognize the value of our agentic workflows, Weave evolves from a product that practices use to an always-on teammate they rely on. We reduce administrative burden, improve conversion and collections and free staff to focus on high-value patient care. Most importantly, we strengthen the patient practice relationship, which ultimately drives more revenue and profitability for our customers. With communication history, automation and real-time performance insights, all in Weave, practices run smarter, grow faster and build lasting operational resilience. Customer reliance on Weave makes our platform indispensable, strengthening customer retention, expanding share of wallet, increasing customer lifetime value as we continuously add value through AI-powered solutions and additional products that our customers demand. We believe that AI will augment software companies that leverage and deliver its value. This is especially true in vertical, highly regulated markets like health care where moats and years of expertise matter. Weave has spent almost 2 decades building for the unique needs of SMB health care practices. Health care workflows are highly customized. Scheduling, billing, insurance verification and patient communication vary by specialty and by location. Delivering reliable AI-powered workflows in these environments requires authorized integrations with systems of record, regulatory compliance, scalability and predictable execution. Most importantly, it requires trust with providers and patients. With almost 40,000 customer locations and billions of patient interactions flowing through our platform annually, we have the data moat at scale that cannot be replicated by horizontal generative AI providers. Our extensive industry-specific data allows us to deliver high accuracy without exposing PHI. This domain expertise and trusted data foundation are durable competitive advantages. Our customers are health care providers, not technologists. Doctor owners are focused on delivering care and running their businesses. They do not have the time, resources or desire to build and maintain custom applications, particularly in an industry that has historically lagged in digitization and monetization. And that is a huge opportunity for Weave. Practices operate within strict privacy, security and regulatory frameworks. They look to trusted software partners to navigate that complexity. Weave integrates with the practice management system, utilizes the trusted practice phone number, owns the phone hardware and telephony stack and is deeply embedded in daily operations. We have yet to encounter a customer or prospect planning to replace that infrastructure with a homegrown solution. Instead, practices are seeking greater automation inside the systems that they already rely on. The acquisition of TrueLark added AI Receptionist to our offering, embedding agentic functionality directly into our platform. Our capabilities go beyond reactive automation to deliver proactive execution, scheduling appointments, verifying insurance eligibility, collecting payments, identifying coaching opportunities, analyzing outcomes and escalating to staff for full conversational context is preserved. This further establishes Weave's role as a system of work inside the practice. Additionally, we recognize that AI has the potential to disrupt some software revenue models such as seat-based licensing. However, we license per location and based on consumption, not per seat. In fact, headcount reductions in a practice lead to even higher usage and dependency on the Weave platform. As we add agentic solutions to handle additional workflows, we capture share of wallet from the practice's labor budget historically allocated to administrative staff or call centers. This simultaneously reduces practice costs and improves ROI. Adding isolated AI tools does not reduce the cost or complexity of running a health care practice. As AI becomes table stakes, the premium shifts to platforms that can act, not just inform. Weave is uniquely positioned to be that platform. Turning to our plans for 2026. TrueLark is the foundational building block of our AI Receptionist capabilities. TrueLark accelerated our road map by adding an established text-based AI agent that handles common FAQs, manages inbound leads and automates scheduling and rebooking. The acquisition materially expanded our TAM by extending Weave deeper into the front office automation and addressing -- and directly addressing the single largest component of the practice's cost structure, staffing. This is both the biggest expense and one of the most operationally complex challenges practice owners face. One of our largest customers is now booking over 1,200 appointments per month using our AI Receptionist, work that would otherwise require full-time front desk staff or just be missed. As that customer put it, "When you're thinking of software cost to cut, it is one of the last things you will ever consider because it is one of the few things that actually is bringing in revenue to the business". In Q4, we launched a unified inbox that consolidates TrueLark agentic conversations and Weave's staff interactions into a single contextual view, removing the need to toggle between systems. We continued building voice capabilities, enabling the same AI agent to operate across text and phone. In the first half of 2026, we expect general availability of our omnichannel AI Receptionists across all vertical markets. This enables practices to answer calls 24/7 with an AI agent that can address common questions, request or book appointments and intelligently hand off more complex interactions to staff when needed. These conversations are transcribed and posted into our unified inbox, preserving full context across both AI agent and staff interactions. Weave Call Intelligence then automatically prioritizes important requests and creates follow-up tasks. In the second half of 2026, we plan to extend beyond scheduling to more autonomous intake and payments, including automated payment requests after claims adjudication and the collection of co-pays and pretreatment deposits directly within scheduling flows. This is a deliberate phased rollout with a larger opportunity to expand AI across front and back-office workflows. We are excited about the opportunity ahead in 2026. Our AI road map expands our TAM, deepens Weave's role in the practice and leverages our market-leading position and scale. Before Jason dives into the financials, I wanted to recap a couple of additional highlights from our 2025 growth vectors. The specialty medical vertical continues to stand out as one of our most attractive growth opportunities. This space grew to become our second largest vertical by location count in Q2 of '25. That momentum continued, and we added more specialty location -- specialty medical locations in Q4 than in any quarter in our history. Specialty medical comprises 29 specialties, and we currently focus on just 4: primary care, physical and occupational therapy, aesthetics and medspa. Next, Weave payments grew at more than twice the rate of total revenue in 2025 with strong early adoption of new capabilities like automated payment reminders, bulk collections and surcharging. Today, we announced a partnership agreement with CareCredit, the leading patient financing solution used by over 285,000 health and wellness locations nationwide. This integration is expected to give Weave customers greater visibility into available patient credit, streamline the credit application process and improve treatment acceptance rates by making care more accessible. In conclusion, we've delivered consistent revenue growth, expanded margins and free cash flow while continuing to invest in innovation. Just as importantly, the customer successes we see today give us confidence that this value creation is repeatable and sustainable. Weave is defining the intelligent health care front office. We are building a durable, scalable business that delivers on our commitments, and we are excited about the long-term value we can create for both our customers and our shareholders. Both myself and the Weave management team entered 2026 very excited about not only the opportunity ahead of us, but also our very unique position to capitalize on the opportunities and deliver additional value to our markets. I want to thank our customers, partners, team members and shareholders for your continued trust in Weave. The progress we've made gives us strong confidence in the path ahead. With that, I'll turn the call over to Jason for a deeper discussion of our financial performance. Jason Christiansen: Thanks, Brett, and good afternoon, everyone. It was another solid quarter and a strong finish to the year for Weave, reflecting continued momentum in our growth initiatives and disciplined execution across the business. The growth in our product suite this year, including the acquisition of TrueLark, expanded our estimated total addressable market by roughly $7 billion to an estimated $22 billion. We believe there is further TAM expansion on the horizon as we add capabilities to our AI Receptionist. Across our established verticals, we see a meaningful runway for continued growth. In dental, our initial market, we are in fewer than 15% of U.S. locations, highlighting the depth of opportunities still ahead. For example, we has recently been selected and endorsed by the American Dental Association as its exclusive patient engagement solution, giving us co-marketing access to their 160,000 members and reinforcing our leadership position in the dental market. Specialty medical is our largest and newest U.S. market opportunity, and we remain in the early stages of penetration with roughly 1% share. We see a clear path to building a significantly larger business with our growing suite of AI-powered solutions, expanding market share and increasing average revenue per location. Moving to our financial results, starting with the fourth quarter, we produced $63.4 million in total revenue, which represents 17% year-over-year growth, driven by payments and the addition of new locations. Gross margin for the quarter was 73.3%, representing a year-over-year improvement of 70 basis points. We have delivered sequential gross margin expansion in 15 of the past 16 quarters, including a 30 basis point sequential improvement in Q4. Margin improvement was primarily driven by ongoing efficiencies in our cloud infrastructure and amortization of phone hardware and payment terminals as devices older than 3 years become fully amortized. We also continue to benefit from the growing contribution of higher-margin payments revenue. Total operating expenses for Q4 were 70% of revenue. General and administrative expenses were $9.6 million and provided the most year-over-year operating leverage improvement in our business. General and administrative expenses improved to 15% of revenue from 17% in Q4 2024, a decrease of over 200 basis points. Research and development expenses were $8.9 million or 14% of revenue, which represents a decrease from 15% in Q4 2024. Sales and marketing expenses totaled $25.6 million or 40% of revenue. As discussed in previous earnings calls, we made a number of targeted investments in 2025. We added sales capacity in mid-market. We grew our upsell team to increase product attach rates, including payments through a new dedicated payment sales team, and we built out a channel sales team that focuses exclusively on selling through commercial partnerships. We also increased our marketing program spend to increase brand awareness and demand in the specialty medical vertical and in promoting our AI Receptionist to new products. Mid-market and specialty medical sales accelerated in 2025, and we finished the year with strong sales performance and a healthy pipeline to start 2026 behind these investments. We continue to optimize our sales and marketing efforts and anticipate some improvements in sales and marketing efficiency in the second half of 2026. Operating income for the quarter was $2.3 million, an improvement of over $500,000 compared to Q4 2024. This represents an operating margin of 3.6%, a 30 basis point improvement over the prior year and a 90 basis point improvement sequentially. Turning to the balance sheet and cash flow. We continue to see strong liquidity and free cash flow. We ended the quarter with $81.7 million in cash and short-term investments, an increase of $1.4 million sequentially. Cash provided by operating activities in Q4 was $6.2 million, and free cash flow was $4.4 million. Free cash flow for the full year was $12.9 million, which represents 24% year-over-year growth. Our net revenue retention rate in Q4 was 93%. Our gross revenue retention rate was 89% and remains very strong for companies serving SMB customers. As a reminder, our reported retention rates are a weighted average of the previous 12 months retention rates. As such, it can take several quarters for the progress we are currently making to show through our reported retention metrics. I will provide additional onetime metrics in this year-end recap, which we believe may be helpful in understanding 2025 retention rate trends. First, when looking at gross retention, we implemented a number of initiatives in 2025 that improve the customer experience, including more tailored onboarding, new products and refined product packaging, which along with greater integration coverage and depth across all verticals, helps ensure customers receive the value they expect. These efforts yielded a steady reduction in churn in the second half of 2025, and Q4 churn returned to our 2023 and 2024 churn levels. We expect gross revenue retention rates to trend back to historical ranges of 91% to 93% over time. Previously, we highlighted how integrations with practice management systems affect churn. Customers who purchase Weave products that are not yet integrated with practice management systems or that have basic read-only integrations typically have higher initial churn rates. New verticals like specialty medical typically start with higher churn rates, which improve over time as we increase the number and depth of practice management integrations. Additionally, we have seen the ongoing trend of single locations being acquired by larger groups. While we may lose single locations to multi-location groups through acquisition, our investments in mid-market and AI, combined with high customer satisfaction rates, position us to potentially win those businesses back as part of a larger deal. Transitioning to net revenue retention rates, we discussed previously that our net revenue retention rate in the first half of 2025 was bolstered by the effects of a price increase in 2024, which accounted for approximately 250 basis points of uplift. We lapped the effect of that price increase in the first half, and our net revenue retention rate has subsequently decreased accordingly. It's also important to note that our reported retention metrics are measured on a location basis, not on a customer or logo basis. Approximately 2/3 of our current customer base is single-location practices. The addition of another location within a multi-location customer does not improve our net revenue retention rate. Looking solely at multi-location groups on a logo basis, our net revenue retention rate is 102%, while our net revenue retention rate is 93% for single-location practices. Multi-locations have a higher net revenue retention rate on a logo basis because of location additions. My final point is that our ability to expand net revenue retention has been limited because customers often adopt most of our product suite upfront. Customers often consolidate multiple point solutions when they purchase Weave's unified platform. This establishes higher initial revenue capture, though this historically limited our near-term upsell opportunities. We have seen this dynamic reflected in average revenue per location growth, which grew 10% over the past 2 years even as net revenue retention declined over the same period. However, the addition of TrueLark and faster product development cycles are now meaningfully expanding the upsell opportunity within our installed base. Our insurance eligibility and TrueLark products drove acceleration of upsells in Q4, and our penetration into the installed base for both products is still less than 2%. We ended 2025 with 39,625 active customer locations, an increase of 4,628 locations year-over-year. Before turning to our outlook, I'll briefly recap full year performance. For 2025, total revenue grew 17% to $239 million. Gross margin for the year expanded to 72.7%, up 80 basis points from 71.9% in the prior year. We delivered full year operating income of $4.1 million, representing an operating margin of 1.7% compared to 0.4% last year. This marks another year of progress in profitability, and I would like to highlight that this year's improvement came while also making targeted investments in growth initiatives, which reflects our ability to balance growth while making investments into our business. We are pleased with our progress this year and would like to thank our team members at Weave, our customers and partners for their contributions throughout the year. Looking ahead, we remain encouraged by the strengthening foundation of the business and the opportunities in front of us. For the first quarter of 2026, we expect total revenue to be in the range of $64.2 million to $64.8 million. We expect to improve first quarter operating income year-over-year and for it to be in the range of $1 million to $2 million. As a reminder, there are seasonal factors that result in a sequential increase in expenses in Q1, including the reset of payroll tax limits, benefit renewals taking effect and the timing of the annual audit fees, which are weighted more heavily in Q1. We remain committed to delivering improving margins while maintaining our bias toward growth. We are beginning to benefit from the investments made in 2025, such as those made in sales and marketing, and we will be flowing an increased percentage of incremental revenue into operating income in 2026. For the full year 2026, we expect to grow total revenue to be in the range of $273 million to $276 million. With the new products Brett discussed, which will be released throughout the year, we expect the impact of these products to positively impact revenue growth in the latter half of the year. We also expect to improve non-GAAP operating income year-over-year to be in the range of $8 million to $12 million. We expect our weighted average share count for Q1 to be approximately 78.7 million shares and approximately 79.9 million shares for the full year. In closing, I share Brett's excitement about our 2026 road map and our position in the market. We delivered a strong 2025 marked by solid revenue growth, continued margin expansion and improving profitability and cash generation. We remain confident in our strategy and our ability to execute as we continue to balance growth and profitability improvements. With that, I'll turn the call over to the operator for Q&A. Operator: And our first question comes from Parker Lane of Stifel. Matthew Kikkert: This is Matthew Kikkert on for Parker. To start, can you talk a little bit more about the CareCredit integration that you announced this morning? Just curious if that your focus is to drive incremental payments attach rate, more average payments volumes across existing customers or something else? Jason Christiansen: Yes. Great to catch up with you, Matthew. The CareCredit partnership, what that really does is open up another avenue for us to capture volumes that otherwise would flow through CareCredit themselves. They are the largest provider of patient financing solutions in the market. And this gives us access through the partnership to some of the volumes that otherwise would flow through them. So there's work now to be done on the integration and bringing that directly to market. So today, we just announced that we completed the partnership, and we'll have more color to provide in the future. Brett White: And I would add, this is kind of just the next step in our payment strategy. So kind of starting with basic payment processing, then moving into more additional financial tools, additional financial vehicles that allow our customers to offer their patients. So it makes -- takes our payment solution to basically a financial solution and the practices have more tools to offer their patients, whether it be financing through CareCredit, financing through themselves, using the Weave tools to schedule payments. So it just makes the payment product more attractive, stickier in addition to attaching more volume. Matthew Kikkert: Okay. And then secondly, for 2026, what are your expectations for growth rates across the different subverticals? Jason Christiansen: Yes. We're starting the year in a great position. We haven't broken out the growth rates for each one of the different -- the verticals that we serve. But we continue to anticipate strong growth across the growth vectors that we've talked about around specialty medical. We just talked about how Q4 was our strongest quarter from an additions perspective there. Mid-market grew nicely in 2025. We expect that to continue. And so not -- I can't speak to the underlying components, but we do anticipate to continue to see momentum and growth through those -- through the same channels. Brett White: Yes. And I would add, we expect specialty medical probably will be the strongest grower just because of the opportunity set here and all the work that we've done on adding integrations throughout this year, continue to add them throughout the year. Some of the marketing dollars that you saw that we spent in Q4 is really around developing our brand presence in that sector. So we expect that to grow, continue to be the fastest grower. I expect all of our verticals to grow nicely. The omnichannel AI Receptionist that we're rolling out is really valuable to kind of all verticals in integrated and not. I mean the tool is quite useful even without a PMS integration. So I think I expect solid growth in all verticals, but I think specialty medical will probably lead the pack. Operator: And your next question comes from the line of Alex Sklar with Raymond James. We'll move on to our next question from Hannah Rudoff with Piper Sandler. Hannah Rudoff: It was encouraging to hear that stat about the one customer, I believe you said who scheduled 1,200 appointments using your AI Receptionist. I guess longer term, as you think about it and you launch more AI capabilities and you complete the rollout of this unified inbox, how do you think about pricing to capture the value that you're delivering? Brett White: Yes. So we will definitely be able to monetize it. I think still being worked out is, is it priced as an additional module? Or is it priced as included in a bundle. So for example, you may have stand-alone TrueLark now and if you want to go to the fusion inbox where that brings everything from TrueLark and we -- all together in one place, which is the ultimate destination, is that a premium product that we price for. The really important concept, though, is that we're now going ability to attach to the labor budget because we can just prove how we save labor and how we drive revenue. So we're very confident that we can monetize the additional AI omnichannel Receptionist functionality, and I think we'll work it out over time. I think a really important point is we don't license by seat. We license by location and then consumption. And we're confident that these tools will produce a lot of value for the practices, and we'll be able to monetize them accordingly. Hannah Rudoff: Totally makes sense. And then, Jason, I really appreciate the additional color you gave this quarter around NRR and the multi-location NRR you shared. I guess you've talked about churn being higher and average sales prices being lower initially in some of your newer verticals as you have newer integrations and some of the solutions are nonintegrated. I guess have you seen these metrics stabilize for some of your oldest specialty medical cohorts? Or does that take longer than a few years to kind of stabilize and average with historical metrics? Jason Christiansen: Yes. Thank you for the question. We saw the same phenomenon. I highlighted how we saw churn decrease through the second half of the year in Q4 return to 2023, '24 rates. We saw a nice improvement in specialty medical as well in Q4. And so we've already started to see some of the improvements there. We've delivered a number of integrations on that front. We've expanded our coverage on that front. And so as those have started to mature, we're encouraged about making that declaration about where churn will trend back towards because we're already starting to see some of the proof points there that we've been talking about. Brett White: Yes. And I would add, Hannah, you mentioned, does it get better over years. And it actually happens more quickly than that. We're seeing it improve over quarters. And it's just as you get your -- improve your integrations, depth, breadth, churn rates come down. And not only do churn rates come down, but CAC comes down over time as you develop a brand, you have more word of mouth, you're more familiar in the trade shows. So it's a virtuous benefit that comes over -- trends over time. And then if you say, well, how do you know that? It's just from our history, looking through all of our verticals that we enter. And that's one of the reasons we do it as a step function as opposed to just doing a shotgun blast in a lot of verticals because the idea is you go into initial vertical, ASP is lower, CAC is higher, churn is higher. You work through that, ASP comes up, CAC comes down, churn comes down and then you kind of go into a new vertical and you kind of just stage it that way. And I've been in vertical SaaS and payments for over a decade, and this is the pattern I've seen throughout that entire period. Operator: And we will come back to Alex Sklar for your next question from Raymond James. Okay. We will move on to Mark Schappel with Loop Capital. Mark Schappel: Can you hear me okay? Brett White: Yes, we can. Mark Schappel: Okay. Great. Brett, starting with you, I was wondering if you could just kind of walk through your investment priorities and also hiring priorities for the coming year. Brett White: Sure. So I think they're the same, our investment priorities and our hiring priorities. So that's good. I think #1 on our hiring and investment priorities are product and engineering, where we've got a really unique advantage with -- since we own the telephony stack, we have the practice phone number, we have the data, we are really uniquely positioned to take the AI Receptionist technology from a text experience to kind of a native inside of Weave and then make it a full voice experience. And so we are really leaning hard into that, and investing against hiring engineers and product people to make sure that we can execute effectively on that one. I think other investment priorities are on the GTM side, go-to-market side. And we've actually made a couple of changes to our model at the end of this year and into next year, we're actually -- we used to go to -- we used to have a full-service AE model, and now we're kind of moving more to an SDR AE model. It's more efficient, and it seems to be working. So early proof points are good there. And I think those are the big investments we're making certainly in the first half of the year. Mark Schappel: Okay. Great. And then as a follow-up, some of your competitors are also highlighting AI in their products. I was wondering if you could just talk a little bit about how Weave is either differentiating or plans to differentiate its AI automation capabilities from those of your competitors? Brett White: Sure. So we see lots of companies who are -- some have some products, some just put AI on their website. I think our unique -- well, I know our unique differentiators are kind of what I started with is we own the telephony stack. We've got the trusted relationships, and we own the very specific complex industry-specific workflows. We're a trusted partner of these businesses. And they really -- I meet with customers, and they'll show me all the products they have and they say, what? Which of these can Weave do, please? They really want to consolidate functionality. So the idea of saying, for example, having an AI chatbot up in one window and Weave up in another window and the PMFs in another window, it just doesn't work great. And so we have the opportunity to bring all of those workflows together. And because we have the full experience, we can retain context through the whole discussion. So you may start with a text or you may start with a call and then the call transitions to text and then the text maybe gets escalated to a specific person and the staff who can handle only -- specifically handle that question. All of that interaction, whether it's voice or text gets retained in one place. And it also gets analyzed by our Weave call intelligence, so then you can create action items, you can create tasks, you can actually perform work, whether it be issuing an invoice, filing and checking on insurance verification, booking an appointment, rescheduling an appointment. So having the deep integrations, the deep workflows, the subject matter expertise, the relationships and the ability to kind of have seamless handoff is a real, real differentiator. These highly specific workflows are hard, and you have to learn them over time. If you get an appointment wrong, so for example, someone wants a crown done and you book a 30-minute appointment for a cleaning that really hurts the practice's day. And so having that knowledge, that experience, we've got billions of these interactions, and we know kind of over time, what type of calls result in what type of outcomes, and we can optimize practice operations using that knowledge and that deep expertise. Operator: And we will come back one more time to Alex Sklar with Raymond James. Alexander Sklar: Can you hear me now? Operator: Yes, go ahead. John Messina: It's like third time's a charm. This is actually John on for Alex. Brett, maybe we'll start with payments here. It's great to hear about the continued strength in payments. It's been a nice growth driver for you. I'm curious, though, any comments you can share on growth differences you're seeing by end market? And then maybe how we should think about payments growth and payments attach rate in 2026 and over the medium term? And then I have a quick follow-up. Brett White: Right. So I can give you some product growth highlights, and maybe Jason can talk about sectors. So we released this year a couple of really cool new features, bulk collection, but surcharging. Surcharging has been very well received. It's a great upsell product. And that is actually driving some pretty reasonable, almost significant volume growth from the new customers who adopt it. And of course, surcharging is your ability to charge the patient for the credit card fee. And so that gets us not only a better take rate, but more importantly, it just gets us more volume. So that's in early stages, but we're seeing some very nice green shoots on that one. And I'll let Jason talk about sectors. Jason Christiansen: Yes. So some of the -- I think the best -- one of the best ways to think about payments in the sectors and how it differentiates for us is when you think about the economics of a practice, the average dentist within a practice will do about $1 million in gross billings a year. And about 50% to 60% of that will go through an insurance process. So the remaining 40%, 50% is our opportunity to go after that. So when we think about going after the performance in different sectors, what's really important is to understand what the insurance component within each one of the sectors we go after or that we sell to have and what just the nature of their economics are. And so like in specialty medical, when you're dealing with primary care, you're dealing with significantly higher insurance coverage rates. And so the payments opportunity for us in that space isn't as great as it is in like aesthetics or in veterinary. And so we try to align our go-to-market efforts with the needs of those industries and the opportunity for us to expand revenue per location through them. So that's how we think about the different specialties. And it's a contributing factor. Brett talked about how we approach the different specialties and the next verticals in a step function. we look at the overall economics of those specialties as we decide what are the next specialties or the next verticals that we open up. And it's something we consider there across all the different solutions that we offer. John Messina: That was great color there. And then, Jason, maybe just a follow-up on the NRR improvements. I know it's been touched on in earlier questions, but specifically, I do want to understand how additive do you think some of the newer products like the TrueLark and your organic product expansion can be to NRR growth in 2026 and maybe over the medium term, kind of what's embedded in the guide there? Jason Christiansen: Yes. So what's embedded within the guide, a lot of the growth from the AI receptionist follows the time line and the road map that Brett laid out in his remarks. So it biased more towards the second half just based on the time line for when those products roll to general availability. I think the opportunity for growth is really strong. From a net revenue retention perspective, we're still in the early days of selling that. The impact it will have, I guess I'm not ready to provide a lot of color on that today. There's a significant upsell opportunity, but we also know that customers have typically landed heavy whenever we bring these new capabilities, which could lead to further average revenue per location expansion without necessarily leading to significant net revenue retention expansion. And so I guess we'll -- I'd like to let the dynamics play out a little bit more as we get more sales experience there, but the opportunity is quite significant, really encouraging. Brett White: Let me just add a little bit more color to the earlier question about why we stands out as having an advantage as we move to these omnichannel AI Receptionists and there's a bunch of them out there. In addition to the things I mentioned like domain expertise, a really important one is, frankly, our scale and the fact that because we're a public company, because we have scale, we have to do it right. So when it comes to data, maintaining the data security, maintaining and ensuring that the data is used properly. compliance. We've got HIPAA, we've got PHI, we've got PCI. We've got all these rules and that we have to comply with and reliability and scalability and security and being able to support the full experience front to back. These are just a lot of things that buyers are becoming more and more concerned about, especially large groups that some of these smaller kind of newer businesses just don't have the scale or the financial ability to comply with or frankly, it's probably not as much of a focus for them. And for us, it's just absolutely table stakes. Operator: There are no further questions at this time. I will now turn the call back to Brett White for closing remarks. Brett White: Well, thank you all for joining the call. We're super excited about 2026, and thank you again to the entire Weave team for posting an incredible 2025. Thank you. Operator: This concludes today's call. Thank you for attending. You may now disconnect.
Naureen Quayum: Good morning, everyone. Welcome to True Corporation's earnings disclosure for the fourth quarter and full year of 2025. My name is Naureen. I'm the Head of Investor Relations. With us today are our Group CEO, Khun Sigve; and our Co-CFO, Khun Nakul. I would also like to welcome all the analysts who have joined us in the room today and to those of you who are joining us online. Our presentation today is going to be a bit different. We will have the first segment, which will focus on the results of the fourth quarter and the full year. And we will have the second segment, which will focus on the strategy and the mid- to long-term guidance that we have provided. All our presentations are available for download on our website. We will take Q&A at the end of the presentation. For those of you who are online, please raise your hand or drop your questions in the comment box. We will do a mix of questions from the room and questions online. With that, I now welcome Khun Sigve to start our presentation. Sigve Brekke: Sorry. Thanks, Naureen, and good morning to all of you, our Asian colleagues and good afternoon or whatever to the rest of the world. And good to see also several of the analysts being present here in the room. Let me take one look back before we go forward, and I'm taking a look back on 2025 and some key highlights from that year. First, 2025 was the year where we became profitable. We reported a net profit after tax for the first time in Q1 last year and continued to be a profitable company ever since. And more importantly, we declared our first dividend since amalgamation in Q3 '25, reinforcing our commitment to disciplined capital allocation and shareholder return. Secondly, we also last year achieved a significant milestone on our network. We completed our ONE Network integration successfully and actually ahead of plan. And with the acquisition of the 2.3 megahertz and the 1,500 megahertz, we now have the biggest spectrum portfolio in the market, which puts us in a very good position to deliver best network experience going forward. And thirdly, customers remain at the core of everything we do. And we had some challenges during the year, being the earthquake, being flood, being border situation and also being the network outage that we had. But throughout there, we kept the relationship with our customers. We also unified ex-dtac customers and ex-True customers into a one digital-first platform, delivering a seamless and consistent experience through the new True app, where our customers then could get the first digital platform experience. Finally, we also started to see in the fourth quarter signs of growth momentum returning. I said when we had our third quarter presentation that we are bottoming out and returning back to growth. And that was exactly what happened in the fourth quarter. Mobile service revenue increased quarter-on-quarter. EBITDA continued to expand. This reflects a shift towards a healthier, more sustainable growth, with customers firmly at the core. These milestones represent what I call a shift from integration that we have done in the last 3 years to a disciplined execution and a sustainable performance going forward. And I'm going to talk more about that. But first, let me ask Khun Nakul to go through some of the financials from the quarter. Please, Nakul. Nakul Sehgal: Thank you so much, Khun Sigve. Good morning, good afternoon, everyone. Let me walk you through the financial highlights of Q4 '25 and full year of '25. First, as far as the service revenue is concerned, on a normalized basis, excluding the impact of the decline in domestic roaming, we are delivering a negative 0.2% year-on-year for Q4 and a flat on a quarter-on-quarter basis. For the full year, we are negative 0.2%, a shade lower than the guidance that we have given to the capital markets. As far as the EBITDA is concerned, a 10.3% growth on a year-on-year basis and a 3.2% on a Q-on-Q, with the full year being 7% growth. The net profit after tax, THB 4 billion of reported profits, 2.5x of what you saw in the previous quarter. And at the same time, normalized profit was THB 6.1 billion, with the full year reported profit being THB 9.2 billion. And as Khun Sigve said, fourth consecutive quarter of profit for the company. The leverage continues to decline. It's a negative 0.2x on a year-on-year and also on a quarter-on-quarter basis. And even here, we meet or slightly exceed the guidance that we had given to the capital markets. We do also announce a final dividend for the year at about THB 4.1 billion, which is THB 0.12. With this, the FY '25 payout is 56% of our normalized profits. Then if I go into the financial numbers in a little bit more detail. As far as the service revenue for Q4 is concerned, even though it's declined 1% on a year-on-year basis, that's primarily on account of domestic roaming and PayTV. But on a normalized basis, it remained flat on a Q-on-Q and declined on a negative 0.2% on a year-on-year basis. The full-year service revenue declined due to lower contribution from mobile as well as the PayTV segments, and I'll explain that in the second graph that you see in the middle. If you look at the waterfall from Q4 '24 to Q4 '25 and also for the full-year '24 to full-year '25, the 2 businesses that have declined is basically mobile and PayTV, where there is growth registered in online. The decline in the mobile business is primarily on account of domestic roaming, while the underlying core mobile business has grown. As far as the total revenue is concerned, first, if you can see, the product sales for Q4 '25 has increased approximately 37% due to launch of the iPhone. And this is where you see the numbers clearly indicating that increase. THB 4.2 billion has gone up to THB 5.8 billion. And then also as far as the full year is concerned, the decline of 5% that you see is primarily on account of the reduction in the network rental revenue, which is as expected -- expiration of the spectrum rental arrangement that we had with NT, and that's the reason why there is a decline. Other than that, it's stable. Then if I move on to the different businesses. First, the mobile business. Let me first walk you through the middle section, which is the subscriber growth. As Khun Sigve mentioned, we had kind of promised in Q3 that we're going to be back to growth in this business. And as a consequence, we are pleased to report a 580,000 net adds positive in this quarter, 100,000 coming from postpaid and about 480,000 coming from prepaid. The growth in postpaid is basically on account of B2B. With the growth in the subscribers and also an improvement in the ARPU, as you can see on the extreme right, the ARPU in the prepaid space has improved 2.6% Q-on-Q. Full year is approximately 10%. Also, as far as the postpaid business is concerned, it's a slight improvement, 0.4% quarter-on-quarter. That's primarily because of the seasonal roaming revenues. And as a consequence, the Q-on-Q and year-on-year blended ARPU has shown a good increase, reaching at THB 225, which is a 4.5% increase year-on-year. The revenue development is a function of the subscriber and ARPU. And as a consequence, you can see Q-on-Q, the mobile business has grown 1.2%. And the full year -- and the growth normalized for the roaming is about 1.4%, and that's where we are saying that we are back to growth as far as this business is concerned. Then let me move on to online. We registered a 1.5% growth year-on-year in online revenues, which is basically driven by the growth in subscribers. If you see the number of subscribers, we report a 32,000 net adds positive in this quarter, but the subscriber number will be a little bit of a surprise to you, and let me address this question upfront. What we've done is we have actually revised how we report the subscribers on the broadband space where we've done 2 adjustments. Number one, we've excluded B2B broadband subscribers here because that was skewing the ARPU very differently because B2B ARPU is much higher because of the corporate solutions. And the second, we had historically double counted certain subscribers who were using a fixed line phone and also using a broadband connection. And over a period of time, these fixed line subscribers don't really pay for the fixed line phone anymore. So, that's why we thought it was more appropriate to show a normalized view of the subscribers. And hence, you see a 3.3 million subs, which is increasing 32,000 on a quarter-on-quarter basis. ARPU has more or less remained flat. And as a consequence, you see on the left-hand side, the subscription revenue has marginally improved 0.8% Q-on-Q. The full revenue, including B2B, has declined 1.9%, but that's, as we had mentioned earlier, it's because of the one-time revenues on certain corporate solutions that we had in Q3. Full year is a growth of 2.2%. Then I move on to PayTV. PayTV, as you know, Q3 was a quarter where we had reported some exceptional revenues, which was basically on account of music and entertainment. These are seasonal in nature and come once in a while at different times of the year. So, even though on a reported basis, you see a 14.3% decline year-on-year and a 24.4% on a quarter-on-quarter. The majority of the decline is because of the lower seasonal concerts in Q4 as compared to Q3. As far as the subscriber is concerned, the trend is continuing from what you had seen in the past. It's roughly about a 4% decline, and the ARPU is more or less stable from Q3 and Q4. The other reason for the big reduction on our subscription revenues is -- you are all aware, it's because of EPL not being in our portfolio anymore. And let me once again reiterate, losing EPL is net positive for us as a business, even though what we are trying to do is the net savings from EPL is being re-channelized into other content that we want to do to retain our customers. Then let me move on to the OpEx picture. There is a 28.8% year-on-year decline in OpEx, which is benefited by acquisition of spectrum and also on the synergies. But first, the regulatory cost, as you're all aware, has increased 12.6% on a year-on-year basis, which is basically on account of the full-year effect on the rate, which is because of the expiry of spectrum. Some more of this effect is going to come in '26. As far as the network cost is concerned, it declined 27.5% year-on-year and also 9.2% Q-on-Q, which is benefited by 2 things. One is because of the acquisition of spectrum because certain costs are not booked now. They are actually booked below the line, even though they are much smaller. And the second is on account of the network modernization that has taken place, wherein we have reduced approximately 18,000 sites. The cost of sales have declined 4% year-on-year, but they have increased 33.7%, in tandem with the increase in the sales of the handsets as well. So, this should be looked at jointly. We have eliminated the spectrum rental cost. Of course, this is due to the expiry of the spectrum rental arrangement. And as you can see from the left-hand side of the chart, THB 1.9 billion cost in Q3 '25 is not there anymore in Q4 of '25. The other cost of providing services has declined 8.4%, mainly driven by the net savings from EPL. But of course, there are many items that are actually considered here. And as a consequence, the total OpEx has declined roughly 28.8% year-on-year and 3.4% on a quarter-on-quarter basis. Then let me move on to the profitability matrices. We report a 10.3% increase in the EBITDA on a year-on-year basis, which is driven by benefit from spectrum and also on the synergies. Q-on-Q, as mentioned earlier, is also a 3.2% growth. Full year at a 7% growth, we are actually at the lower end of the guidance that we had communicated to the capital markets. But what may be a positive surprise to some of you, we report a very healthy EBITDA margin to service revenue, which currently stands at 67.5% for Q4. For the full year, it's 63.7%. Another thing that we are quite proud of is since amalgamation, True Corporation has improved the EBITDA by THB 8.4 billion, which is 43% since amalgamation. Then as far as net profit is concerned, the reported profit in Q4 is THB 4 billion, which is increasing about 2.5x from THB 1.6 billion in Q3. As far as the normalized profit is concerned, we report a THB 6.1 billion. Basically, there are roughly about THB 2.1 billion of normalizations. And let me just walk you through those normalizations briefly because I'm sure you'll have some questions on that. First normalization that we've done, an annual impairment exercise has been carried out for the significant investments that we have in the company and for which we have recorded a THB 2.4 billion impairment. Second, the usual suspect that you see every quarter because we have been doing a network modernization. So the redundant assets that are not to be used pursuing the network modernization have been written off. That's about THB 1.2 billion. Then at the same time, we have recorded an annual impairment of THB 0.5 billion on account of goodwill for the TV business. Number fourth, we have recorded a gain, which is a deferred tax asset that has been recorded on the losses of the company of about THB 1.5 billion and also unrealized loss on forward contracts, totaling about THB 1.8 billion. And this has been recorded as a gain in this quarter. The reason why the deferred tax asset has been recorded is because now we are reporting a full year of profit. So, that's why it is an opportune time for us to record the DTA. Last but not the least, we also have a gain of THB 0.5 billion from our investment in associates, which is basically the revaluation of assets at DIF, an annual exercise, as you already know. Another thing that we are quite proud of is the financial cost has actually decreased 4% on a year-on-year basis and also the D&A has slightly increased 1.7% year-on-year due to acquisition of the new spectrum. As far as the CapEx is concerned, we report roughly THB 11.5 billion CapEx in Q4, with the full year being about THB 31.2 billion and CapEx to sales of about 17%, a shade higher than what we had guided to the capital markets. The reason why the CapEx is slightly higher is because we have accelerated investment into the broadband network, an area that we had told you many times in the past that we have been underinvesting in that area, so we want to resurrect that. So, that's the reason for the THB 1 billion increase as compared to what we had mentioned earlier. I will tell you the long-term projections on CapEx to sales at the end of the presentation. Then on the leverage. From a 4.2x Q3 2025 of leverage, we are down to 4x. Actually, we had mentioned that we are going to be less than 4.1. So, we are actually less than 4.1 at about 4x on the leverage. The good story that you continue to see is the effective interest rate on our borrowings. From 4.1%, now we are down to 3.8%. The net debt has decreased Q-on-Q, basically on account of the disciplined cash flow management that you've seen over the last 12, 13 quarters and also reduced gross borrowings. The lease liabilities have actually increased year-on-year, basically on account of the transfer of assets to DIF and accounting adjustment that we've been explaining to you since the last couple of quarters. We've also issued debentures of about THB 16 billion at 2.88% weighted average rate, which continues to reduce on every round of borrowing that we do. And at the same time, the tenor of the borrowing also increases. So, this actually healthily shows our effective debt management. We have refinanced THB 126 billion during the year '24, THB 113 billion in '25. And what we need to refinance in '26 is actually only THB 66 billion, which shows that now it's getting more and more easier for us to manage our debt portfolio. Then just to give you a perspective of '24 versus '25. On the left, you have the total revenues, but I also want to indicate that even though there is a 5% reduction in total revenues, the reduction is mainly on account of the spectrum rental going away pursuant to the spectrum arrangement that has expired. It is net positive to the EBITDA as well as to the net income, as you're already aware. The service revenue is a negative 0.2% year-on-year, normalized for the effective -- the NT roaming. The total OpEx, as you have seen, is reducing about 16% on a year-on-year basis from 24% to 25%. And as a consequence, the EBITDA has improved 7%. The net profit after tax is about THB 9.4 billion for the full year, which is increasing THB 20.2 billion since '24. Then just to give you a perspective of what we had guided to the capital markets and what we have achieved. We had guided a flat to 1% growth in service revenues. We are a shade lower to that at a negative 0.2%, as I have just explained. Even with the flat to 1% growth in the revenues, we had guided a 7% to 8% growth in EBITDA. I'm happy to announce that we meet that guidance at about 7% growth. CapEx, we had indicated at about THB 30 billion. We end the year at about THB 31 billion. And last but not the least, we had said that we're going to be profitable on a reported basis for the year, and we are profitable since Q1 of 2025. I will end this section of the presentation by talking about the dividend for Q4. At about THB 4.1 billion, this is about THB 0.12 as final dividend. The record date is going to be 11th of May, with the payout being on 26th of May, of course, subject to the approval of the shareholders. The total dividend for the year is about THB 0.31, which is at 116% payout ratio on the reported profits. And as we have explained to you, on the reported profit, it is always going to be higher because of the lot of one-offs that we have in the last 1 year. So therefore, on the normalized profit, the payout ratio is about 56%. The total dividend is roughly THB 10.7 billion for the full year. With this, I pass it on to Khun Sigve to walk you through the big moves for the next 3 years. Sigve Brekke: Yes. Bear with me now for some slides because we are now going to look into the next 3 years, and you are more than welcome to ask questions about Q4 also in the end. And I'm going to give you some perspectives on both, how we see the industry, but also what we plan to do ourselves. And as the headline on this slide, we feel that after 3 years of amalgamation and synergy focus, we have now built a solid fundament to move forward and that's what this story is going to be about. The first fundament that is in place is our network, and we have seen a significant improvement after we consolidated the network into one. We have now reached 94% 5G population coverage. We have increased the 5G speed with 23%. And with these improvements, we now see that our net promoter score has improved by approximately 28% year-on-year. The other fundament that is in place that we see an improvement in our customer interaction. Customer complaints are significantly down and customers are now changing to digital interaction with us with a higher customer satisfaction. Churn, both on postpaid and on prepaid and on the online business is also significantly down. And this comes from a focus on quality acquisitions. And as a result of these improvements, we are now back to growth with also a positive subscriber net adds as we showed. We have also made significant progress since the amalgamation around our organization. Our organizational efficiency has improved approximately 45%, supported by a flatter structure and early gains from also automation and use of AI. And looking ahead then into 2026 and '28. And let me start with how we see the industry landscape. The industry landscape is evolving, and we want to be an agile part of building our strategy around those changes. The external environment continues to be supportive for long-term digital growth. Thailand's digital economy is actually growing much faster than the GDP as such, with a 6.2% year-on-year growth. The digital economy in Thailand is expected to account for around 30% of the GDP by 2027. And at the same time, AI adoption is accelerating very rapidly, with growth estimated of 4x compared with the level we saw in 2024. And it's in this picture, we want to position ourselves for this digital future with significant growth opportunities. And to do that, we need to prepare ourselves for the industry shift. And an important part of this is to acknowledge that our customers' expectations are changing and evolving beyond only delivering network performance and traditional customer acquisition. And let me go through the 3 main shifts that we see in the industry and that we are preparing ourselves for. First, best network experience is now a basic expectation. It's a hygiene factor, not a differentiator. And customers increasingly value a seamless and end-to-end customer experience across digital channels, service interactions and also various touch points. So it's a shift from focusing on delivering a network experience alone to an end-to-end seamless customer experience. In parallel with that, when the overall telecom market now is reaching maturity with a total subscriber growth approaching its peak, as a result of that, we need to shift. And our focus, we need to shift from a subscriber-led focus, which we have had for 25 years into an ARPU and also an ARPA-led value creation. And you will hear more about that a little bit later. This shift also requires a change in how we go to the market. We are moving from a mass-market product approach in our marketing and our sales efforts where we basically had a one-size-fit-all offering to now a hyper-personalized and a much, much more granular execution model, enabled with all the data we have from our customers, but also from our network. And this evolution from a traditional way of running a telco operation that we have done for 25 years to a more telco-tech model underpins the strategy we have for the coming 3 years. And it allows us now to combine the strength of our scale with the agility required to win in the next phase of the growth. And as a result of this, you will hear me talking about these 4 big moves in the coming quarters. We have concentrated our strategy around these 4 big moves. It's a growth move. It's an experience move. It's an AI move, and it's a people move. And let me go through each of the 4 to explain a little bit more in detail. Our first move is on customer experience because, as I said, experience is now the primary way to differentiate yourself in the industry. On mobile, our key focus will be on delivering the best 5G network, the best 5G speed and the best 5G consistency. And we are now fully leveraging our leading spectrum portfolio across the 2.3 megahertz spectrum we have, the 2.6 megahertz spectrum we have and also selectively on our 1,500 megahertz spectrum. We are also refarming our 2.6 spectrum now to free up more capacity, both for 4G and 5G. And such improvements will significantly help us to increase 5G penetration with our customers. For True Online, we are revamping the entire customer experience. This includes network experience, and we are investing in the online network. It includes simplifying our customer journeys, and we expect these efforts to enable us to reduce churn further in our online business. And in addition to that, take our fair share of the online market growth that we still see existing in this market. In parallel with that, we will continue to modernize our IT systems for greater simplification and better performance. This includes simplifying our IT architecture through system consolidation. I'm talking about system consolidation on building platforms, on CRM platforms and IT customer front platforms. It includes upgrade key systems to improve performance and reliability, and it also includes enabling what we call touch-free operations for faster issue resolutions. Finally, we will also focus on delivering a seamless digital-first experience where customers can interact with us constantly across digital channel, shop and call centers. This includes enhance the true -- digital True App with more features to be at service parity with the service you get when you walk into a shop or when you call a call center, to move those physical interactions into digital interaction. It includes leverage AI to provide personalized experiences and issue resolutions as well as human-alike conversational AI agents. Our second big move is on growth, and let me start with consumer. The growth we are pursuing on the consumer side is very different from the growth we have done in the past. And let me explain what the difference is. We are shifting from selling individual products, basically SIM cards, voice and then data into now winning the entire household through a more-for-more concept. Most of our customers have only one product with True. So the first step is to have them to use our connectivity services, both on the go as they do on mobile, but also when they are at home through a better conversion offering. However, it's more than conversions. We don't want to stop there. We also want to provide our customers with relevant add-on services that addresses their entire needs that they have in the various customer segments, that being games, that being content, that being home AI solutions or other digital services, both to drive customer stickiness and to drive value creation. To do that successfully, we need to be smart in how we approach our customers. We already leverage data and AI engine to create personalized offers for each customer so we can cross-sell relevant services to the right person at the right moment and through the most appropriate channel. And when we do that, we see that a customer churn when customers are using more than one product with us is going significantly down, and we see the ARPU of the value creation going up. In our TV and content business, investments in original content is our prime differentiator after we moved out of the EPL, allowing us to drive engagement across various segments of customers, not only the TV but also on the mobile and online business. In 2026, we will aggressively scale up our production to more than 30 Thai original content series and partner up with 20 leading studios. With a library already exceeding 500 titles, we claim that we own the cultural conversation in Thailand. And this content doesn't only drive viewership, it anchors our data ecosystem and fuels our core connectivity businesses through various engagement activities, offerings and privileges across the TV products and across the mobile business and across the online business. Customer and network data allow us to move to much more granular operating model. And this is a big shift in the way we are going to do our business. And let me explain what I mean by a granular execution model. We want to shift from a traditional area management into a nanocluster execution model, where we are breaking up the country in more than 6,600 small areas, clusters and have an execution model around those 6,600. There are 3 main elements in that strategy. The first one is a data-led and local insight. So, we are using the data we had from our networks, from our point of sales, from our customers. And we leverage that deep local customer knowledge and network insights in actually making P&L per cluster to drive performance management. To do that, we need to empower local teams. We are going to assign clear nanocluster ownership with our people, with our teams and then to be dedicated to drive then faster decision and stronger accountabilities on the ground. And the last thing in this area is to target execution on each and one of those nanocluster areas to deploy highly targeted local plans per nanocluster, precision campaigning and optimize network utilization, where we are filling up the network where we have a spare capacity and we are taking down capacity where we have full capacity. That's going to be almost base station by base station. Our next focus area on the growth, big move, is on the enterprise and SMEs. We are deliberately now shifting our focus on the SME and the enterprise market from being today mainly a connectivity provider to becoming a trusted digital transformation partner. Today, our B2B business accounts for around 6% -- 7%, 8% of our overall service revenues. And if I compare that with regional benchmarks, it should be closer to 15% of our overall revenues. And we see this gap as a clear opportunity to grow by moving beyond stand-alone connectivity and into higher-value digital solutions. Customers in both enterprise and SME segments are no longer looking for only network connectivity. They are looking for integrated solutions that can combine connectivity, cloud, security, data and AI to solve real business problems. And that's where we see the growth coming in the B2B segment. And our approach is going to be focused and different. For SMEs, we want to make digital transformation simple, platform services accessible and through subscription-based, as-a-service offerings. For enterprises, we want to co-create industry-specific solutions that are tailor-made to our enterprise customers' needs. And to do that, we need partnerships. We don't want to do all those -- these servicing services and products alone. We want to do it in partnership. For example, we are closely working together with True IDC, our data center provider. We are working closely together with hyperscalers, being the Western hyperscalers, but also the Chinese hyperscalers to strengthen our data center and sovereign cloud capabilities. That will allow us to meet growing requirements both in data residency, security and regulatory compliance, especially for those customers that increasingly are asking for more trusted, locally hosted infrastructure solutions. And by combining our network strength, our digital platforms and our strategic partnerships, we want to build a scalable capability to be a leader in the B2B segment. Then let me move to the third big move, AI. We have already started, of course, to use AI in our business. Just a couple of examples on that. On the customer side, our conversational AI, Mari, as we call her, now offloads 96% of all messaging transactions that has been delivered and more than 45% of all the transactions is now happening through the AI tool compared with 2023. On the network side, AI-driven energy optimization has delivered already THB 367 million -- THB 370 million in savings since 2023 through using AI to identify low-risk, high-impact cell sites and applying intelligent sleep and wake automation in the network. We are also now working on customer value management. We're doing that together with some global consultancy help and also with some global AI players. And we are building a hyper-personalized AI engine powered by a unified customer data platform, where we are using more than 15 billion data points to reflect the true context of our customers. We are then using those 15 billion data points to understand their behaviors and preferences. We already see an ARPU effect -- positive effect coming out from these initiatives, but we have just started. Moving forward, we have established 3 key priorities on AI. The first one, it's AI for all. We want to democratize AI by upskilling our own people, but also our customers, accelerate the adoption and ensure responsible authentic AI across the organization. We want to use AI as a growth engine. And I already mentioned an example with using AI for hyper-personalized offers. And we want to use AI to power operation. We are building now autonomous, touch-free operations to improve efficiency and use that to scale performance. Our fourth and last big move is on people because none of what I'm talking about now is possible without the right capabilities, cultures and way of working. Organizational excellence, we will continue. We have done a lot of organizational efficiency already, and I talked about that earlier. We want to continue to modernize our organization to improve efficiency and improve productivity through using digital tools and process automation. AI and simplification are going to be cornerstones in this multi-year organizational efficiency program. Future-ready capabilities, AI capabilities becoming a core skill set. We are rolling now out a structured AI upskilling project and scholarships to ensure that all our employees can innovate and apply AI responsibly in their role. The ambition is that 100% of our employees will have necessary AI skills. And last but not least, performance-driven culture. We are now fostering a systematic performance-driven culture, combined with innovation to be able to both deliver on the financial ambition we have, but also to become the best place to work. Ultimately, these moves will help us to create an organization that is more agile, more capable and better at executing in this 3-year strategy. Let me close off with a slide on efficiency and what we plan to do to actually -- to deliver the profitability focus that Khun Nakul is going to talk about now in a second. Over the past 2 years, we have fundamentally reshaped our cost structure, driven by disciplined execution and full synergy realization. From '23 to '25, 2 years, our OpEx have reduced with 12%, driven by a 3% CAGR reduction in our revenue-generated OpEx. We are now splitting our OpEx in revenue generating and non-revenue generating. So, 3% reduction on the revenue-generating OpEx and a 13% reduction in the non-revenue-generating OpEx. This reduction of cost was mainly driven by realization of synergies, performance-based culture and benefits, of course, from the spectrum acquisition. But going forward, we will continue our focus on efficiency, leveraging on AI and synergies from scalability. And let me give you some examples of what we're going to do. Over the past years -- last 2 years, we have made significant network movements in making our network more autonomous, but we are still not there. The plan is to do -- to run the entire network in an autonomous model. This means smarter traffic steering, energy saving solutions and capabilities to reduce manual intervention in our network. We are simplifying our IT stacks by retiring legacy, moving to more modular architecture and standardizing the data pipelines while integration of AI can operate, also our IT infrastructure at scale. This will lead us to automate all the workflows end-to-end and accelerate time-to-market and also enable analytics in every decisions based on machines, not on human interactions. Our strategy on experience is a digital-first by design. We are empowering key steps in our customer journey by personalizing them with AI. Customers see fewer forms, faster resolution and offers that are relevant to their context, whenever they come through the app, web or contact center. And to sustain momentum, we are transforming how we work. Teams are being upskilled on AI, empowered with automation tools and measured by speed and outcomes. This cultural shift of tech plus talent is what turns today's efficiency into tomorrow's growth strategy. To then summarize, the 2025 marked a transition from, as I said, integration into execution for the 3 coming years. So, we are done with the integration, more or less done with integration. We are done with amalgamation. We are done with putting those 2 organizations together. Now for the coming 3 years, our focus is going to be on transforming the business through an execution. We enter '26 then on a strong network foundation, improved customer metrics, disciplined financial management and a clear growth engine across customer enterprise and AI-led transformation. And with the focus we have now on experience, growth, AI and people, I think we are well equipped to deliver on the guidance that Khun Nakul is now going through both for the 3 years and for 2026. Thank you. And over to you, Nakul. Nakul Sehgal: Thank you so much, Khun Sigve. Then I just have a couple of slides to walk you through the financial outlook for '26 to '28 and also deep diving a little bit on '26 itself. As you are aware, the EBITDA to service revenue, and I'm talking about the left to right, the purple bar that you see or the purple line that you see, we were at 54% in '23, and we had a commitment to you as capital markets to reach 63% by '25. Right now, as we finish '25, as you're already aware, we are at 64%, with Q4 '25 being 67.5%. We now show you the ambition for the period 2026, as well as until 2028 to reach up to 69% of EBITDA as a percentage to service revenue, which is a whopping 15 percentage point improvement since amalgamation. Focus, as usual, is going to be on the performance-driven culture as we continue to unlock the next phase of growth and also efficiency at the same time, with the core principle based on which we have always been working is the EBITDA growing faster than revenue. In year 2026, you're already aware, the spectrum savings are also going to play an important part, which has already been factored in these numbers. The second is on the CapEx to sales. You have seen that we have spoken about reduced CapEx intensity over a period. The network modernization is behind us now. We are sitting on a 5G network, which is at 94% population coverage. And as a consequence, even though the year '25, the CapEx to sales is a shade higher than what we had told you and the reason is what we have already mentioned is investment into the broadband business, this is going to continue to taper down as we go forward with approximately 13% to 14% until the year 2028, with 2026 in specific being roughly 14%. The disciplined CapEx management that we have spoken about is going to be the bedrock of how we invest into the business. Last but not the least is on the leverage. Let me first remind you, this is something that we are really proud of. We were 5.7x leverage on Q1 of '23. We ended the year '23 at about 5.2x. We had an ambition to be lower than 4.1x by year '25. We ended at about 4x. And now we continue to say that we will be improving the leverage going forward, reaching approximately 3.5 levels by '26 and approximately 3x levels by the year 2028. This is going to be followed by disciplined CapEx management, efficiency focus and also how we are going to improve the cash flows as we go forward as we've demonstrated in the past. I must remind you, 2026 as a year is going to be benefited significantly by the spectrum payments being much lower as compared to what was there in '25. Roughly THB 24 billion of savings in '26 alone is going to come from spectrum. I think most of you have already factored these in your numbers, but I just wanted to reiterate that for the rest of the audience. With this leverage, we've also considered a dividend of 70% of the consolidated net profit of the company. Then deep diving a little bit more into 2026. The service revenue, excluding interconnect, is expected to grow 2% to 3% for the year '26, which is higher than the expected growth in GDP from the Bank of Thailand of about 1.5%. The growth is on the fundamentals of the following. A lot of it has been explained by Khun Sigve, but there should be an ARPU growth in mobile, a subscriber growth in online. Growth in digital TV or media should be offsetting the degrowth that we have seen as a decline in PayTV. And last but not the least, we expect a higher contribution from B2B. Ambitions have already been shared by Khun Sigve already. The continuous EBITDA focus is going to be there for '26 as well, with EBITDA growth outpacing the growth in service revenue of about 7% to 9% and efficiencies, like I mentioned, is on the core of the DNA of this company. The CapEx is going to be tapered down. We ended the year '25, as you recall, at about THB 31 billion, with roughly 30%, 35% of the spends happening on network modernization. And as a consequence, now for the year '26, we're guiding CapEx levels to about THB 25 billion to THB 27 billion. Reiterate the dividend, which is going to be a semi-annual dividend consideration of at least 70% of the consolidated net profit. Of course, this is subject to the approval of the Board of Directors. With this, then I hand over to Khun Naureen to take over through the Q&A. Thank you so much. Naureen Quayum: Thank you, Khun Sigve, Khun Nakul. We can start with the questions from the room first. Khun Pisut? Unknown Analyst: Congratulations again on your record net profit this quarter. Pisut from Kasikorn Securities. I have 2 questions for this part. First, on the spectrum and network. If excluding the 1,500 megahertz band, still hold a spectrum advantage over AIS, if I'm correct and you have completed the network modernization over the past 3 years, is it fair to conclude that this allowed to structurally lower network CapEx, while competitors' AIS to be precise, may need to step up the spending as you may see? And with that in mind, can True not only defend the cellular revenue market share, but potentially regain some shares in the coming quarter that you lost over the last 1 to 2 years? And another question on this one is how can you monetize the 1,500 megahertz band so far? Do you -- have you seen any issues about the device compatibility in the market on this one? Sigve Brekke: Yes, I can start here. Yes, you are correct. We have a spectrum advantage. And I don't see that we have any problem now with delivering neither 5G or 4G increased capacity to the customers. I don't want to comment on AIS, but for our sake, we can fully leverage that and also then to refarm the 2.6 that we are sitting on, such that we can free up additional capacity. So, that is our plan. The CapEx we are talking about for ourselves now for 2026 is roughly around THB 50 billion, THB 55 billion, I think, going into network because we need to invest now in utilizing the 10 megahertz extra we have on the 2.3, the 10 megahertz extra we got in the auction and also the 1,500. And we are going to not use 1,500 to expand coverage. And to your question about do we see any limitation? Not really because all the new handsets now are coming with 1,500 also embedded in them. So, there is a significant number of existing customers that have 1,500. So then the other part of our CapEx for this year is going to be on online. We have not prioritized that in the past. Somehow we started to do that in the fourth quarter. Now, we're going to put more money into online. So, expect a 20% part of our CapEx going to online. The last part of it is going to IT and some other investments. IT, we need to continue to, what should I call it, simplify our IT infrastructure. We are still operating with 2 building systems, 2 CRM systems, 2 customer front systems. So, there will be investment going into that. But the majority on the network investment we already did. So, I'm quite pleased with the situation we are in now on the network side. Will we use that to -- in our competition? Yes, of course. But I said in every quarter that don't expect us to be price aggressive. We are rather focusing on customer experience. And if the customer experience we can deliver now, based on our premium spectrum position is better than our competitors, well, it's up to the customers to choose. But as I also said, it's not only about spectrum quality anymore or network quality. It's about the seamless experience that you have that it really works across regardless of which apps you are using. So, that's why I'm saying also that the focus we are having on the network side is shifting to seamless end-to-end customer experience, not only to make sure that the connectivity works where you are. Unknown Analyst: My second question is on your core revenue growth guidance, which is about 2% to 3% this year. Now it's almost 2 months past, right? Are you seeing momentum pick up already in this quarter because last quarter, you still lost the revenue by 1% year-on-year, right? Or is it more on the back-end loaded, which means that it's going to come in the second half rather than the first half in terms of the revenue growth that you target? And could you break down the expected growth by business unit like mobile, broadband and also the digital, as you mentioned, as Khun Nakul mentioned that the mobile growth has come from ARPU uplift and broadband from the subscriber growth. If you can explain a little bit more, it's going to be good. And also the key initiative that convert from the negative to the positive growth? What was your initiative that you already deployed? And lastly, on your big move strategy, Khun Sigve, how much -- should we expect all of them to be converted into the core revenue growth in the medium term? I think when you're talking about a big move, 2% to 3% doesn't seem big for me, right? And just want to hear from you. Sigve Brekke: Yes. I can take the last part of the question, and then you can take the first one. Well, the 2% to 3% is a 2026 guiding. How it's going to look like in '27 and '28? We will come back to it. And of course, it takes time to build those big moves into a growth momentum. The key initiatives, I will say, are as following. One, we will continue to focus on quality inflow to get customers in on a higher ARPU level and then with a lower churn. So that we will do on prepaid, that we will do on postpaid, that we will do on online. So the customer inflow part of -- also the effect that, that will have on the revenues is one part of it. The second part of it, as I said, it's the customer value management that we are running now where we are increasing ARPU with existing customers, get them over to packages, which are more suited to their needs. And we see effects coming out of that already. So, that's the second one. And then I will say the third one is to start to monetize services beyond connectivity and that especially, with convergence in the homes with all the IoT devices and this is in the B2B segment. Nakul Sehgal: Okay. Thank you for the question, Khun Pisut. Many subparts to one question. Sigve Brekke: He is smart enough. Nakul Sehgal: Yes. I know. On the core revenue guidance, the first thing -- and just to supplement what Khun Sigve mentioned, if you look at fourth quarter, annualize the fourth quarter, assuming there is no growth in '26, we are flat on a year-on-year basis. Unlike our competitor, they're sitting on a significant growth already because the momentum has been high for them. For us, we were going down and then we had a bump up in the fourth quarter. The way you should kind of project the numbers is keeping seasonality in mind. Of course, number of days plays a factor in Q1, but there should be a consistent growth in the businesses going forward. If there is a growth momentum coming on account of mobile, that momentum should continue, barring for the seasonalities that are there in the business. As far as broadband is concerned, online is concerned, yes, it is subscriber-led, but it will also be ARPU led as well. ARPU playing a slightly lower factor as compared to the growth in the subs. We're sitting at an ARPU of THB 498. Our competitor is sitting at THB 530. So, there is an opportunity for us to grow the ARPU as well with the plethora of services that Khun Sigve spoke about. I do not want to break the growth into each businesses. But what I can indicate, as I've always done in the past is growth in ARPU, especially in the mobile business is going to be around about the growth that you see in the GDP, 1.5-odd percent. The growth in online business has to be higher for the average to be sitting at 2% to 3% because the subscriber-led growth, coupled with the growth in the ARPU will obviously give us a better result as compared to the mobile growth only because the penetration in the mobile business is in the mid-40s or late 40s right now. And last but not the least, B2B is kind of an untapped opportunity. So, we will be working on it as we go forward. So yes, I mean, just keep in mind the Q4 numbers and then build the momentum on this going forward, keeping in consideration the seasonalities that are involved in the business as well. Naureen Quayum: Okay. Thank you, Khun Pisut. Let us move to one of the questions online first. We will come back to the room. Piyush from HSBC. Piyush Choudhary: Congratulations on great set of results. Two questions. Firstly, on capital allocation, you have raised the dividend payout ratio to at least 70%. I just want to understand like does it incorporate any future potential spectrum outflows, whether it is 2100 in 2027 or potential auction of 3500? Or would you kind of have flexibility to reduce the payout ratio if those needs arise? That is first. Secondly, on the management team side, Sigve, last time you mentioned you would like to retain the Telenor executives and move them to local contracts, whether it is Nakul, Sharad, Naureen or Head of Networks, if you can update us on the same. Sigve Brekke: I can take the second one. Yes, I'm in dialogue with these guys to actually have them on local contracts. And I think it's fair to assume that all of them will do that. So, I will retain the senior experts that are going from a Telenor expert contract into a local True employment contract. So, don't expect any change in the management team. Nakul Sehgal: Okay. Thanks for the question, Piyush. On the capital allocation, yes, we have raised the dividend payout ratio. And this is the confidence that we see in the performance in the fourth quarter as well as the bumper cash flows that you will see in the year '26 because of the spectrum savings, approximately THB 24 billion. Your question on whether it accounts for the renewal of 2100? The answer is yes. We have already factored in renewal of 2100. However, this does not include 3500 auction, because we do not have a visibility of 3500 yet. Naureen Quayum: Can we have Khun Gene next, please? Thitithep Nophaket: Thitithep from Kiatnakin PS. I have 3 questions. The first one, if you look at the mobile phone revenue growth, there's still quite a sizable gap, between [Technical Difficulty] U.S. growth and your competitor growth in the fourth quarter of the year. And we are already a few quarters after the network disruption. So, I would like to know your view, what is the main reason for the gap and how do you plan to narrow or close the gap in the next few years? Second question is on the guided CapEx to sales. You guided that the CapEx to sale was 17% last year, you would like to slash it to 13% to 14%. Now your competitor has guided 15% CapEx to sales in the next 3 years, not much different from you, it is 1% to 2% higher. But I think they did say that they would like to maintain 15% in order to widen the network quality gap. Do you think that would have any impact on your effort to close or to narrow revenue growth gap between the 2 firms? And then the last question, you target to grow EBITDA margin further by a few percentage points in the next few years. You did say that [Technical Difficulty] you can adopt the AI or make organization become simpler. But in terms of, which item of the cost are you looking to slash? Is it the network OpEx? Or is it depreciation expense? Or is it the SG&A? Sigve Brekke: Yes, I can take 1 and 2 and you take the third one. Now, the reason why AIS is still growing better than us in the fourth quarter, of course, they have a different speed into the quarter then we had. So, we came from a negative growth in the first 3 quarters, we came from a negative customer -- net customer growth into [Technical Difficulty] quarter where we then turned positive on customer acquisition, 500 million or so, and then we start to positive on growth. So, I would say that's a timing effect with kind of the speed that they came with. For us, it was -- fourth quarter was turning the curve. And that was what we promised also in the third quarter that we are bottoming out and coming back. So, I would say that's the main reason. And now we see that the churn is almost down to AIS level, still have a little bit way to go. We see that their offerings are more or less similar. But of course, we have lost customers over the last 3 years, that being the network incident or not being good enough for customer experience. So, going forward, we will both try to take our fair share of the net adds in the market and grow the number of subscribers, but also then grow the ARPU with the customers -- the subscribers that we have. On the CapEx to sale, I don't want to comment on what AIS plan to do. But what I can say is that the spectrum advantage that we now have, the single network that we built last year, I'm not going to give up on the network parity that we have with AIS now. I don't think that neither of us are ahead, neither on speed nor on coverage. And I'm not going to give that up. So, if AIS compete with us on getting the network experience better and better, so will we do. So, that's the plan. Nakul Sehgal: Yes. And then, your question on the EBITDA growth and which items of expense that we're looking at, I think the expense reduction is going to be broad-based. But primarily, AI is going to be the center point on how we're going to transform the organization. So, it will be more the SG&A that is going to reduce. The S part of the SG&A is going to increase in tandem with the increase in revenues because the revenue-generating OpEx is going to increase because we have to fuel the growth. But then the G&A part is going to be the ones that is going to be showing the improvement because of the upskilling that Khun Sigve spoke about, the IT transformation that we spoke about, the people efficiency that we spoke about as well. Additionally, there is going to be a reduction in the IT spend of the company as well. But IT as a percentage of total OpEx is relatively very small. So, the magnitude of that may not be very high. And last but not the least, the network as a cost is going to continue to be optimized. Of course, there is going to be certain expansion in the network that is always going to be there in case of a telco. But the autonomous network that Khun Sigve talked about, the efficiencies that Khun Sigve talked about of the scale, that is going to help us keep that expansion in check. So that's another efficiency area as well. Sigve Brekke: And that's why we talk about splitting up the OpEx between revenue-generating OpEx and non-revenue-generating OpEx. The revenue-generating OpEx is going to increase. And the revenue-generating OpEx should be similar to the revenue growth that you have because that is the OpEx you use for your sales, marketing efforts and so on and so forth, which means that the non-revenue generating OpEx has to go down. And I have said many times that going forward, we should have a 0 OpEx year-on-year, which means that the growth you have in revenue-generating OpEx will have to be balanced with the non-revenue generating OpEx. I don't see why with new technology, we shouldn't be able to have a flat OpEx year-on-year, based on actually a revenue growth. We may not be able to do that this year because it takes some time to get those transformative activities in place. But going forward, that is my ambition. Naureen Quayum: Thank you, Khun Gene. Can we move online to Arthur? Arthur Pineda: Yes, 2 questions, please. First, on the revenue growth guidance. Can you please run us through how you get to this? Because I understand you've anchored this to the 1.5% GDP growth, but Thailand just recently raised their targets just this week. I'm just wondering how that flows through. And related to this, how do you interpret the difference in growth outlook between yourself and AIS, where they're looking at 3% to 5% and you're looking at 2% to 3%? Second question I had is a bit more boring. But with regard to your tax rates for 2026, 2027, are you able to guide for that given that you do have some tax credits on board, which I assume are expiring? I'm just wondering how much of this can be consumed given that it does impact the dividend as well? Nakul Sehgal: Yes. Thanks for the question, Arthur. Let me take both of them. I think the one on revenue, we partly answered. That was, I think, Khun Gene, who asked about it. But let me just explain it in brief again. The reason why there is a difference in the outlook of our competitor and us is basically the momentum. And if you see -- if you are -- if you just do the math, if you're coming on a consecutive quarter of growth until Q4 of '25, if you do not even grow for the whole of '26, you're already sitting at a 3%-plus growth. Whereas on the other hand, if you're coming on a lower momentum for 3 quarters and a slight growth in fourth quarter, then you're kind of sitting on a flat on a year-on-year basis. So hence, the way you should look at our progress is, how the quarter-on-quarter we are performing versus the industry. I think I've already shared where the growth is going to come from, whether it's the mobile business, whether it's the broadband business, whether it's the PayTV, how we're going to make sure that we do not bleed on to the new business anymore and of course, the growth in the B2B and the digital as well. Then, to your boring question, I'll give an exciting answer. As far as the tax rates are concerned, yes, we have enough NOLs, net operating losses carryforward, which will enable us not to pay any significant tax outflow for the next couple of years. Naureen Quayum: Arthur, did you have a follow-up? Arthur Pineda: With regard to the tax loss carryforwards, which can be consumed, is it mostly this year? Or is it going to be split between this year and next year? Nakul Sehgal: Sorry, can you repeat that? I missed the first part. Arthur Pineda: Sorry. Any guidance in terms of how much is left and how it will be consumed between this year and next year? Nakul Sehgal: Yes. I think we have enough NOLs that can be absorbed in the next 2 years of profit. So, 2 years, yes, '26 and '27. Naureen Quayum: Thank you, Arthur. We can move on to the questions in the room. Khun Nuttapop first, yes. Nuttapop Prasitsuksant: Nuttapop from Thanachart Securities. Two questions, please. First one, you mentioned ARPU discrepancy from yourself and your competitor AIS as well. Do you think customer mix have a play in that? And would that lead to different contents that you may let out some -- you get something else on that? And just one other thing on ARPU is that, your average ARPU in both mobile and broadband seem to be at par or nearly below the -- if I'm not wrong, starting package prices of both mobile and broadband. Would that mean, again, customer mix? Or should we go another way around, in the positive side, that it means like some discounts given out like past 4, 5 years, I don't know, we will try to -- that should recover soon. That's the first one on ARPU. And the second one on impairments set, 2 sub-questions. Number one is, whether network CapEx impairment, if I may call, seems to still be high, like THB 1 billion, THB 2 billion in the fourth quarter, while your modernization things has completed. What happened? Or should we expect more in 2026, of course? And about the small investment in JVs, digital, smaller company, I think that those are the results from venture capital boom past few years back. How big is that now in your portfolio? And should we expect some kind of more impairment? Sigve Brekke: Yes, I can try to take the ARPU. I would say that on prepaid, the ARPU should be more or less the same between ourselves and AIS. However, we are probably sitting on some existing prepaid customers that came in on a more aggressive package than what AIS is sitting on. So, when those packages are expiring, of course, we will start migrating also prepaid customers over to packages, which is more or less the packages that you see sold in the market today. And the prepaid offers you see for new customers today are more or less the same. So that's -- it's a timing effect, I would say, where we will have very similar prepaid ARPU as AIS. So, I don't think the customer profile there is very different. n postpaid, it is. I think AIS is sitting on higher postpaid ARPU customers than we do. And that is basically also over the last 3 years where we did not deliver good enough experience for those customers. With now our focus on experience as a network parity and our focus on customer experience, I think over time, we also will take our fair share of those more high-value customers. On online, I think the network experience that we have had on online has not been good enough. And we have had quite some discounts for the inflow we have got on online over the last 2, 3 years. And those packages are also now starting to remove, and I don't expect us to be more price aggressive in the online segment than AIS is. So, I would say prepaid online, there should be more or less the same ARPU going forward. On the postpaid side, it will take some time. Nakul Sehgal: Thank you, Khun Nuttapop, for your question. Let me take the second one. But just -- I just wanted to add something on the prepaid ARPU. Even though the starting plans that you see in the market are THB 150, there is a certain section of customers who are receiving incoming calls. So, they obviously don't have that much of an ARPU. So just keep that in mind. That's same for us and for our competitor as well. Then on the impairment, yes, the network CapEx impairment is slightly higher. This does not only include the mobile side, it includes the online side as well. And as we are upgrading our online network, we identified areas where we need to clean up or in terms of impair, and that has been recorded in fourth quarter. So that explains why the 200 sites or 250 sites that we completed in Q4 is not leading to a similar impairment that you have seen in the previous period. As far as the other investments is concerned, we've recorded roughly THB 2.4 billion of impairment. This is on all the JV companies and the boom that you spoke about in the past, the investments that have been made there. I would say the net book value of these investments right now is not that significant anymore. So, there should not be a significant exposure coming on in account of this in future. Naureen Quayum: Thank you, Khun Nuttapop. Can we move on to Khun Wasu here? Wasu Mattanapotchanart: Wasu from Maybank Securities. I have 3 questions. The first one is about network quality and network perception. So, I'm aware that True will continue to spend on CapEx to improve quality. But how about on the perception side, are there any plans to boost the network perception for both the mobile and fixed broadband customers in the short to medium term? That's the first question. The second question is about the digital services. If I heard Khun Nakul correctly, you were saying that the digital services growth should offset the decline in PayTV revenue. So, what kind of digital services do you expect to boost the revenue growth going forward? That's the second question. And my final question is about the long-term EBITDA margin target. So, your original target, I think, in early 2025, you were targeting 67% EBITDA margin by 2027. Now you are targeting more aggressive 68% in this year. So, what led you to be more optimistic about the EBITDA margin target? Is it better expectation of revenue or cost savings or both? That's my last question. Sigve Brekke: Yes. Let me start with the first one. Yes, definitely. There is still a perception gap. The reality, I will say there is no gap between ourselves and AIS anymore. That's a claim, and that is what we see from our network studies also, but there is still a perception gap, and we are going to deal with that. We are going to run -- expect us to run both national campaigns, but more importantly, local campaigns to deal with that. So hopefully, during the year, we have also closed that perception gap with AIS on network. On the EBITDA -- guiding up on EBITDA, I think it's a mix of those 2 things. We see now that the revenue momentum that we came out from Q4 and taking into next year is good, but we also see that the transformational efficiency programs that we have really works. That's why we are more bullish on also continuing to cut costs going forward, which is not cost related to the synergies that we got from the amalgamation, but it's more cost related to a transformation of the business. Nakul Sehgal: Thanks for the question, Khun Wasu. I was thinking that you will come much earlier in the day for the questions, but it's okay. On the digital service versus PayTV, let me just correct you. What I mentioned was the decline in PayTV should be offset by the growth in digital media and not the digital services as such. So that's what we intend to do right now. Intention is because the digital -- sorry, the PayTV is declining roughly 4% on a quarter-on-quarter basis, we want to make sure that with the digital media, with the content that Khun Sigve spoke about, we are able to monetize it in a way that we are stemming the decline. Then just wanted to add on the EBITDA margin. In Q3, I remember you asked us a question that you're already sitting at 67% EBITDA margin. won't you upgrade your guidance for the year. And now that we have upgraded the guidance, now you're asking us why have you upgraded the guidance. So, Q4 '25, we are sitting at 67.5% already. So that's why we're talking about 68% in '26. Wasu Mattanapotchanart: So, when you're saying that you offset the growth from the digital media to offset the PayTV decline, does that mean when you look at the PayTV revenue in 2026, there should not be any significant decline anymore. Nakul Sehgal: Except to the extent where you're still going to compare year-on-year for EPL. That's it, yes. Otherwise, it should be normalized. Naureen Quayum: Thank you, Khun Wasu. We don't have any question -- Khun Kittisorn from InnovestX. Kittisorn Pruitipat: I have 2 questions. The first one is about the dividend payout target. Okay, you already mentioned that the policy is at least 70% of net profit. My question is, is there any target on the normalized profit? Because I mean, every quarter, we have like onetime expense. So, should we expect a similar level of normalized profit for the payout? That's my first question. The second question is about the transaction with Arise. I mean, when do you expect the transaction to be completed? That's my second question. Sigve Brekke: Yes. On the second question, I think we expect that transaction to be completed during March sometime. Nakul Sehgal: Yes. On the dividend payout target, let me first correct, the dividend policy has not changed. The dividend policy is still at least 50% of the payout on a normalized -- on a reported profit basis. However, in terms of our guidance, we have considered a 70% payout. And as far as is there a separate guidance for normalized, the answer is no. There is only one guidance on the reported profit because a bulk of the write-offs has already been done, network modernization is over. We have reviewed the investments that we have already. There should be a marginal difference between the normalized and the reported profit. That's why we are only going to guide on the reported profit going forward. Sigve Brekke: Let me also add on the dividend. And I think we also have said that the dividend policy is unchanged, but we also have a policy, have a progressive dividend, meaning an actual increase in payout year-by-year. So, we expect that also to happen. Naureen Quayum: Thank you, Khun Kittisorn. We have a question online. Can we unmute Izzati. Izzati Hakim: Just one question for me. Earlier in the presentation, I think I heard that we still are running on 2 billing systems and also CRM, even though majority of the network has been consolidated. What's the plans on the consolidation for the back-end systems? And if so, will there be implications to margins or some of the cost items or CapEx? Sigve Brekke: Yes, you are correct. We are running actually 4 different systems in parallel. And we haven't been prioritizing this because we want to have our network in place first. Now we are prioritizing that, and that is going to take us a couple of years to simplify and to modernize. But all this is in the plans that you have that we are guiding. This is more -- it's not big, big CapEx numbers if you think about what we invest in the network. It's more to make sure that there are no customer effects of it when you start migrating. We have started migrating some over to one billing system already, but we do this step by step. So, expect us -- and as Khun Nakul also said, there are not big, big cost savings out of this. This is more a customer simplicity and a customer journey effort. So, we are doing that as we speak, but it will take us a couple of years, but that is all included in the guidance that we have. Naureen Quayum: Thank you, Izzati. Any more questions from the room? Khun Nuttapop? Nuttapop Prasitsuksant: Sorry, Nuttapop, again. Just 2 quick follow-ups. The first one, I think when you mentioned progressive dividend, you mean payout, right? Not absolute, payout percentage will also increase also. Sigve Brekke: No, not the percentage. I'm talking about the actual payout, the amount. Nuttapop Prasitsuksant: Okay, the amount, alright. And the second one, you mentioned about more aggressive fixed broadband investment infrastructure. Should that lead to -- should we expect basically faster subscriber gain for you? And is that meaning you are entering into what I call new greenfield area? Or it's more like your untapped area, but there will be some tenants already there? Sigve Brekke: Yes. On the mobile -- on the online side, we are going to do 3 things with our investments. The first one is to improve the network quality of where we already are. And there are areas where we are not happy with the minute loss or with the outages we have in our online network. So that's the first one. And this is everything from modernizing the last mile in broadband to replacing batteries to also all those type of things that has not been prioritized the first 3 years. The second thing we do is to try to be utilizing the network we have built better and to the ports that we have around in the areas where we have coverage should be better utilized. So, we are trying then to pocket-wise, go in and actually do the -- connect the homes where we have past network already. So that's the second one. And the third one is to also gradually move into areas where nobody have a broadband offer. So, it's a combination of these 3 things. I think today, there are a little bit less than 10 million households in Thailand having a broadband connection. That's combining us and what AIS do. And there are 22 million households in Thailand. So, there's still a room to grow to connect those that still don't have a broadband connection. So those are the 3 things. But we -- again, don't expect us to be price aggressive to do this. Expect us to be actually very much focusing on the customers that we have and with a better experience and with that an upsell opportunity for existing customers to higher speed packages, better utilization of the network that we already have and then in what I call granular way, go into areas where we think that the customer should be served with a fixed solution. Naureen Quayum: Khun Wasu? Wasu Mattanapotchanart: Just one more question for Khun Sigve. So, you were saying that you expect the OpEx to be flat in the long term, but not this year. How long term are we talking about? Sigve Brekke: I don't have any guiding on that, but as soon as possible. And this, I have with me experience from my previous job that it's possible actually to grow revenues with a flat OpEx if you do it right. So -- and I said we may not -- I don't think it's realistic that we'll be able to do it this year. But you see already from the EBITDA guiding, which is significantly more than the revenue guiding. So, some of this is already in there. But in the coming years, in the strategy period then to close down to that, we should be able to deliver on that. Naureen Quayum: Thank you, Khun Wasu. Any further questions, both online and in the room? No? Okay then, thank you so much to everyone. And I hope you all had a happy Chinese New Year and also Ramadan Kareem to everybody celebrating. We will see you next time. Sigve Brekke: Thank you.
Operator: Thank you for standing by, and welcome to the PolyNovo First Half FY '26 Results Webcast. [Operator Instructions] I'd now like to hand the conference over to Mr. Leon Hoare, Chairman. Please go ahead. Leon Hoare: Welcome, everyone, to PolyNovo's half 1 results update for the 2026 financial year. My name is Leon Hoare, and I'm the Chair of PolyNovo. I'll provide a brief introduction before I then hand over to our CEO, Bruce Peatey, for his overview, and we will then have our CFO, Jan Gielen, provide the financial update for the half year, and then we'll take questions. I'm very pleased to introduce our new CEO. Bruce joined us in December, so it was about 10 weeks into the role. He joins us with a highly impressive background in med tech executive leadership roles across Australia, APAC and the U.S.A. And he has now engaged with the PolyNovo team around the world, including a U.S.A. visit and has met with key clinicians and customers. Impressively, Bruce has rapidly built a strong understanding of the business and has identified several areas to enhance and many opportunities to pursue. The Board are delighted to have Bruce leading the business. PolyNovo is a company already generating strong results. You will see the financial results. Suffice to say, our momentum is very positive. We've completed our new factory and expanded our R&D capability, and we have a highly talented group of professionals driving our growth. PolyNovo is focused on growth. We're broadening our global reach. We are adding to our clinical indications. We have a highly innovative NovoSorb platform technology that we've only begun to leverage. We have a pipeline of opportunities. And importantly, our products and technology in clinicians' hands provide excellent clinical outcomes. PolyNovo is at an exciting point in its journey and well positioned for strong growth going forward. I now have pleasure introducing our CEO, Bruce, over to you. Bruce Peatey: Thanks, Leon. Hello, everyone. Thank you for joining us today for our first half results, my first as CEO, and I'm extremely proud to be leading this great Australian company. Over the past few months, I've been impressed by the resilience and professionalism of the PolyNovo team during the leadership transition, and I want to acknowledge their efforts as well as the continued support of our shareholders. As PolyNovo moves into this next phase, you should expect to hear greater clarity, more consistent communication and decisive execution, things that ultimately shape long-term value. I'll start with an update on the executive leadership team. I'm genuinely impressed by the depth of experience across our management team. The balanced mix of tenure and fresh perspective gives me great confidence in our collective strength. We are delighted to welcome Amy Demediuk as our new Company Secretary and General Counsel. She joins PolyNovo this week after a stellar career at CSL, including a recent experience in Philadelphia U.S.A., but is now returning to her hometown of Melbourne. Reinforcing PolyNovo's commitment to quality, I would like to highlight that Allison Myers was recently promoted to the role of Chief Quality and Regulatory Affairs Officer. Allison joined PolyNovo last year after nearly 30 years with GSK, both in Australia and the U.K. Finally, we are progressing the recruitment of a Chief Scientific Officer for the organization. It's a critical role for PolyNovo's future to accelerate the pace of our core business expansion, pipeline productivity and strategic partnerships to fully unlock the value of the NovoSorb platform. To that end, we are building a global slate of candidates with the technical capabilities and leadership experience required to drive this next phase of growth. In the first half, group sales grew strongly to $68.2 million, up 26% year-on-year. The U.S. continues to be our key growth engine, delivering $51.7 million, an increase of 25.4%, reflecting strong execution and continued market penetration. The rest of the world delivered 28% growth. This is a good result and shows clear momentum across several markets, but I believe we have room to accelerate further. We see opportunities to strengthen execution to expand adoption and to better leverage our distribution footprint. Jan will walk through our profitability results shortly, including some timing-related and one-off items that we expect to normalize over the full year. Providing more color to the regional performance, APAC delivered an excellent first half with Australia executing well as we broadened adoption beyond traditional burn applications with both NovoSorb BTM and MTX. In India, while the team have faced a complex and slow-moving tender environment, the groundwork they've put in is beginning to pay off. We are seeing increased tender success and growing clinician adoption as more surgeons gain experience with NovoSorb products and share their results with their peers. Across North America, the U.S. continues to perform strongly, and Canada is contributing with solid growth, too. EMEA grew a respectable 22.9% with the U.K. demonstrating the versatility of our portfolio across multiple specialties. With MTX launching later this year, we are well positioned to build on this momentum. Outside the U.K., we've expanded our geographic footprint with several new distribution partners, and our focus is now on accelerating adoption in these newer markets. I'm pleased to report that we are now in the final stages of our PMA submission for an on-label indication for NovoSorb BTM in full-thickness burns. This has been a significant undertaking in partnership with BARDA, enabled by strong cross-functional collaboration across the organizations. Securing PMA approval will strengthen our position in the U.S. burns market and unlock access to other major markets such as Japan and China. The team remains on track to finalize the submission by financial year-end, and we are working diligently to ensure we deliver a robust submission. So I'd like to provide a brief update on the CMS policy changes in the U.S. outpatient market and what they mean for PolyNovo. First to note, the inpatient hospital market remains a strong growth engine for us, and it is unaffected by these policy changes. It's important to clarify that we are committed to maintaining current momentum as we build a disciplined strategic entry into the outpatient setting. Considering the reimbursement changes, we are prioritizing specific outpatient procedures where the provider economics align naturally with the NovoSorb portfolio. In anticipation of the need, we developed a NovoSorb bilayer SynPath brand, specifically for the outpatient environment. SynPath already has an existing HCPCS code, giving us the fastest pathway into the market, closely followed by NovoSorb SynPath monolayer matrix once the code is received later this year. We are currently building inventory in new product sizes appropriate for these procedures with availability expected within this half. And our U.S. commercial team is well positioned to execute across both inpatient and outpatient settings. Often the same surgeons operate in both environments, which gives us strong continuity and leverage with the existing relationships. We are also progressing discussions with office-based distributors and building the go-to-market model to accelerate entry into physician office settings as appropriate. To drive the strategy, we are strengthening market access capabilities. Already supported by an experienced consultant, recruitment is well advanced for a Market Access Director and a Senior Product Manager in the U.S., roles that will significantly enhance our competitiveness in the outpatient market. From a clinical evidence perspective, our evidence base is robust. We now have 348 peer-reviewed real-world evidence studies supporting the NovoSorb platform, giving us a high level of confidence in its clinical performance across a wide range of applications. Importantly, 65 of these studies directly translate into outpatient use, reinforcing the platform suitability across care settings. This includes 5 published studies in the diabetic limb salvage, an area where SynPath has strong potential. And we're expecting data from a randomized controlled trial in diabetic limb salvage out of Adelaide over the next 6 to 12 months, which will further strengthen our evidence base. Looking ahead, we do anticipate the need for a dedicated RCT to support CMS reimbursement in the office setting, particularly for diabetic foot ulcers and venous leg ulcers. We have a robust protocol developed to execute as the clinical evidence requirements become clearer. Our growth priorities are clear. We are focused on maximizing the value of the NovoSorb platform and accelerating the momentum already visible in our core business. NovoSorb BTM and MTX continue to deliver strong performance, and we see substantial runway ahead, both in the U.S. and internationally. In the U.S., our footprint now spans more than 800 hospitals, supported by a highly capable commercial team of over 80 representatives. Importantly, adoption is expanding well beyond burns with clinicians increasingly using our products across a range of reconstructive applications. At the same time, we are progressing the key catalysts that will underpin the next phase of growth. Disciplined execution in the outpatient opportunity, advancing the PMA submission, strengthening our presence in priority global markets and adding velocity to our pipeline through the appointment of a Chief Scientific Officer. Together, these initiatives will give us clear visibility into sustained growth, both in the second half and over the medium term as we fully leverage the versatility of the NovoSorb platform. Today, we're launching our upgraded online investor platform designed to give shareholders clear visibility of our strategy, performance and key milestones. This new hub centralizes all ASX announcements, reports, video content and insights in one place with the ability for investors to subscribe for regular updates. The platform enhances transparency and improves the cadence of communication, making it easier for investors to follow our progress and engage directly with PolyNovo. Over time, this will help us build stronger investor relationships, broaden reach and ensure the market better understands our growth trajectory. You can scan the QR code on the screen or visit investors.polynovo.com to sign up. I will now hand over to Jan to present the financial results. Thanks, Jan. Jan-Marcel Gielen: Great. Thanks, Bruce, and thanks again, everyone, for joining the webcast today. I'll start with our commercial sales performance. NovoSorb product sales were $68.2 million for the period, up 26%, which is an increase of $14.1 million. You can see from the graph presented in dollar terms, $14.1 million of growth achieved this half was greater than what was achieved at the same time last year being $11.9 million. This is a good indicator of the momentum in the business as we head into the second half. We experienced continued strong growth in the U.S., achieving sales of $51.7 million, up 25.3% on the prior period. This growth was driven by strong account acquisition, adding 95 new hospital accounts during the period and continued penetration of existing accounts. In regard to the rest of world results, we reported sales of $16.5 million, up 28.3%. This includes some exceptional results in a number of markets, some with growth rates of 50%, which I will highlight a bit later in the presentation. NovoSorb sales for the group was $6.2 million, up 195.2% with the majority of sales being in the U.S. Moving on to additional highlights for the U.S. As mentioned, the U.S. achieved 25.3% sales growth for the period. NovoSorb MTX sales in the U.S. were $6 million, up 193%. Surgeon adoption of NovoSorb MTX continues to grow and will accelerate across the customer base as more clinical evidence is generated and shared. NovoSorb MTX is now being used in over 240 accounts in the U.S. We recorded strong sales growth in our contracted U.S. networks with GPO sales up 37.8%, IDM sales up 34.1% and federal account sales up 87.2%. Contracted accounts represent 39.9% of total sales in the U.S., and these growth rates are an important indicator of the momentum in the U.S. business. The U.S. business is profitable and growing, generating strong cash flows, and we ended the period with over 800 customer accounts. Moving on to rest of world results. As mentioned, sales were up 28.3% on the prior period. We achieved some exceptional results with -- both in relatively new and well-established markets. In particular, Australia, our home market that we entered several years ago, grew by 52%, which is an excellent result. Other well-established markets such as Canada and Germany grew by 50.8% and 28.3%, respectively. These results are a good indicator of the adoption by surgeons using NovoSorb BTM, not just in large burns, but across a range of indications. Turkey's strong growth continued, up 91.3% for the period. In Turkey, they have reimbursement for NovoSorb BTM for the treatment of burns, but BTM is being increasingly used outside of burns without government reimbursement. This demonstrates the rapid seeding of BTM when we start with reimbursement in a market. India performed well, recording 49.1% growth in what was always going to be a challenging market to develop, but we are making progress. rest of world share of global sales now stands at 24%. We see significant opportunities for growth, particularly in Europe and the Middle East in the short term and new market entries such as Japan and China in the medium term. Moving on to cash flow and the balance sheet. We ended the period with $29.2 million cash on hand. Cash flow from operations of $9 million improved significantly compared to the prior period where a $12.5 million cash outflow from operations was recorded. We turned around the [ aging ] debtor days issue in the U.S. from over 90 days outstanding down to 56 days currently, which is a great result. The impact on cash flow is evident. We completed construction of the new manufacturing facility in Port Melbourne, with CapEx payments of $10.8 million for the period. $2.2 million in CapEx remains outstanding for the new facility and will be paid during the second half. It's obvious from the graph presented, aside from the one-off CapEx spend, the business would have generated free cash flow for the period. With only $2.2 million in CapEx remaining to be paid for the new manufacturing facility, we will be generating free cash flow in the second half, which will be an important milestone achievement for the business. We ended the half period with a strong balance sheet and cash flow, which will enable us to focus further investment on driving revenue growth. Moving on to the P&L. I want to start off by highlighting the underlying EBITDA performance for the period. After adjusting EBITDA for significant items being the impact of the R&D lab fire and unrealized ForEx impact on translation of the balance sheet due to the strong Australian dollar, adjusted EBITDA was $4.7 million, up 82% on the prior period. There are a number of one-off items impacting the reported net profit after tax result, which I'll now explain. BARDA revenue is down on the prior period as expected. The pivotal trial -- pivotal burns trial is near completion as we move closer to submission for premarket approval with the FDA. In connection with the BARDA pivotal trial nearing completion, the trial costs have reduced, which explains the lower R&D expense for the period. Other income includes a $4.6 million interim insurance claim related to the R&D lab fire. This offsets the $4.4 million asset write-off recorded further below in the P&L. Employee-related costs were up 12.2%, which includes $700,000 for restructuring costs in Australia. Employee headcount at the same time last year was 254, which then increased to 301 in June 2025. Since then, headcount has remained steady. Currently, we have 302 employees. Corporate admin and overhead expenses were up only 4.7% after excluding the unrealized ForEx movement on translation of the balance sheet. Due to the Australian dollar appreciating during the period, an unrealized ForEx loss of $761,000 was recorded for the period compared to a $4.6 million unrealized gain in the prior period. During the period, with inventory at comfortable levels after building them up during FY '25, we took the opportunity to bring forward attending to various tasks in our manufacturing facilities in preparation for the premarket approval submission and FDA audit that will follow later this year. To do so, we temporarily reduced manufacturing output, which in turn reduces production recovery to cover manufacturing overhead costs, resulting in an unfavorable manufacturing variance for the period of $3.7 million and gross margin of 88.8% for the half. With these activities now complete, manufacturing output in January has already ramped up without interruption and will improve our production recovery result in the second half. This will increase our gross margin back up to above 90-plus percent for the full year FY '26. And looking forward, we expect to achieve a much improved profit result in the second half. Now we're going to turn to questions. We've got covering analysts dialing in to ask questions, and then we'll move to the web platform for written questions from all our shareholders. So Operator, if you could please connect through the first caller. Thanks. Operator: [Operator Instructions] First question today comes from Shane Storey from Canaccord Genuity. Shane Storey: I'm going to start with Jan, please. Jan, when I back calculate and look at U.S. BTM sales over the period, you see that there's quite a bit of a reversion between after a very strong Q1 and it looked a little bit softer in Q2. And I suppose surgeons are telling us that November was quiet. So the first question was, was that just your general observation? And then I guess, looking ahead, how are you looking at sort of growth rates for BTM specifically over the next couple of years, please? Jan-Marcel Gielen: Sure. Thanks, Shane. Good to hear from you. So look, the second quarter this year was a little bit softer in the U.S. in November itself across a large number of accounts. We just didn't have as many large burn cases come through as we would on average. And also Thanksgiving. So generally, we see lower activity in that month. It bounced back though in December, and we had a solid result for the half, as you can see. Looking forward, I think BTM growth will continue. We still have a lot of growth left in large burns in the U.S. And when we get the PMA approval, that will assist further with penetrating that market and grabbing more market share. And with that, NovoSorb MTX, the release of that is actually assisting sales. It's not cannibalizing sales of BTM. It's enabling them to a large extent. So we've got surgeons now using BTM with MTX where before they wouldn't have used either because MTX wasn't available and the type of wound that they need to heal that needed some packing like 2 or 3 layers of MTX, they couldn't do that with BTM because it's got the temporizing film on it. So it's actually assisting our sales of BTM. So we're still bullish on sales of BTM in burn to an extent, but then we've seen great traction outside of burn. And Bruce will talk a couple of examples of that where we've got some reps are doing some outstanding sales results outside of burn in their territories. But hopefully, that answers your question, Shane. Shane Storey: Yes. I mean we were aware of that sort of adjunctive use of the 2 products together. I guess I'm pretty interested though, outside of that, maybe early observations as to what use cases or indications do you think it's winning, [indiscernible]? Jan-Marcel Gielen: Sure. And Bruce, just as with regards to MTX, you might want to jump in as well and add some color to that, but just where the product is being used. So we are seeing it being used in cases where there are large deficits and you need to stack the device. The idea of MTX as well without the temporizing film is it opens up wounds that can be treated in one step. So with BTM with the temporizing film, you need to go back into surgery after it's been applied to have the film removed. And that's why it's generally used in large burns because it temporizes the wound to the patient and gives the surgeons time to deal with other issues that the patient might have. With MTX, it opens up the opportunity to any type of wound. We know the product can heal a wound where you're missing a dermis. So now from skin cancer excisions to you falling off a motorcycle or whatever it may be, where a surgeon just wants to treat the patient and get them in and out in 1 day or overnight and not have to go back into surgery to have the film removed like with BTM. You don't have to do that with MTX. So it opens up a whole wide range of indications and basically anywhere where you've lost your dermis. We know our product works. MTX can be used. Bruce Peatey: And I'll add a couple of a words -- and I'll add a couple of words to that, Shane. The BTM in that burn space is already doing very well in terms of share and growing. But the opportunity to Jan's point, is that plastic and reconstruction space. And we're broadening into that and the trauma space as well. We're broadening into that, but that will -- that's a much bigger lateral journey for the team. And clearly, it's not as significant in individual patient experiences because you get smaller square centimeter areas of repair required, but there's a much higher volume of patients versus an acute burn. So the team is broadening into that and doing that gradually to put adjunct into our growth rate over and above major burns. If that answers your question. Shane Storey: It does. That's very clear. My last question, just if you could please remind us where the new manufacturing facility takes the business to in terms of the annual revenue demand that it could service. Jan-Marcel Gielen: You dropped out there a little bit, Shane. Is that something about manual processes or... Shane Storey: Yes, the new manufacturing facility, once that's embedded and operational, where does the whole business sort of get to in terms of the... Bruce Peatey: I think it gives us somewhere around 5x our previous capacity. Hopefully, Shane, we're using that over a journey at growing capacity. But it certainly allows us to scale our volume. That's correct, isn't it, Jan, about that sort of ratio? Jan-Marcel Gielen: Absolutely. And it just helps with the complexity as we bring in release different types of devices, different sizes, different SKUs. The modular setup of the new facility gives us a lot of flexibility in how we run shifts and how we make product. So there's that added benefit as well. Bruce Peatey: And we should have that operational in a building mode in the second half of this calendar year. Jan-Marcel Gielen: It's actually -- yes, it's complete, built. We're just going through validation and qualification activities. And July onwards is when we're looking to start firing up the facility. Operator: Your next question comes from Lyanne Harrison from Bank of America. Lyanne Harrison: Bruce, I might start with you. I know you've only been in the seat for 2 and a bit months now. But can you comment on where your 3 key focus areas might be for the next 12 months? Bruce Peatey: Okay. Yes. Thanks, Lyanne. Great to be here. I think like you say, just new in the role, clearly, working with the key stakeholders in the business, like I mentioned already or Leon mentioned, going to the U.S. was an important part of understanding the business with the majority of the revenue coming from there, but also making sure that we're getting -- building a high-performing executive leadership team is probably another focus area for me. I think there's definitely opportunity to sharpen our strategy. The strategy is working well. But as I mentioned previously, is that my focus really is on disciplined execution of the strategy and making sure that we've got a very clear path forward for the team. So really early days, very positive signs for me and what I'm seeing in the organization, but definitely some areas that we can tighten up and look forward to doing that. Lyanne Harrison: Okay. And with, I guess, the strategy outside of the United States, are you comfortable with the markets that PolyNovo is in and growing? Or is there any chance you might change or tweak that a little bit over the next few -- over the next 12 to 24 months? Bruce Peatey: Well, I think the team have done a good job expanding into markets. I think we're over 46 countries around the world now. Clearly, through my experience in Asia, I'm interested in what we can do in Asia, particularly the discussions around Japan and even China, moving forward. I think exploring that opportunity is important for me. But again, for me, it's not really a measure of how many countries we're in. It's how we're performing in those countries. So particularly the work that we've done in EMEA to expand the footprint, it's about making sure we're executing in those markets and supporting our third-party partners to help them grow the business like we've done successfully in our direct markets. Lyanne Harrison: And Jan, you talked about, I guess, some of the softness in November of last year. But can you comment on trading to date in this half, in particular, January and what you're seeing in February? Jan-Marcel Gielen: It's in line with the year-to-date result at the half. So we're trailing well, but we're only early into the second half, as you know. But I guess that should give you a good indication. Lyanne Harrison: And then if I could comment on just some of the rest of the world growth there. Australia, in particular, we saw some quite significant growth there. And you've been in Australia for a number of years now. So what's really changed to get that sort of momentum? And can we expect that to continue in the future? Bruce Peatey: I'll take that one. I think looking into the results in Australia, yes, very positive, and I'm very say, encouraged by what's possible in a market that we've been in for some time. Part of it is, it's a fluctuating type of business when you're in the burn space, of course, and that's, I think, well known. But clearly, I'm very impressed with what the team have been able to do expanding the footprint outside of burns, so into new indications, whether it's BTM or MTX, they've done an excellent job in that space. Operator: [Operator Instructions] Your next question comes from Andrew Paine from CLSA. Andrew Paine: Just coming back to the growth you're seeing in new markets outside the U.S. that you've listed in the presentation. Can you work through the outlook for some of these regions that you see as the key drivers of medium-term growth and really wanting to understand what the investment is or the required investment to ramp up these opportunities? Jan-Marcel Gielen: Bruce, do you want to take that? Bruce Peatey: Yes, I'll start with you, Jan, and I'll come in. Jan-Marcel Gielen: Yes, no problem. Yes. So Andrew, thanks for your question. Good to hear from you. Look, I think as I sort of outlined in one of the slides in the deck when we're covering rest of world. But in the short term, we still see a lot of opportunity in Europe, Middle East, to be quite honest. That's an area where I know Bruce, the chats we've been having since you've arrived that we really want to dig into and focus on. There's a lot of opportunity left in that region. In the regions we're already in and like the U.S. and markets like Australia, but particularly the U.S., and we've seen what we've done in the U.K. and Australia, there's so much more we can do outside of burn, and we're already doing it. And I'm going to steal Bruce's thunder, but we've got one rep in the U.S. who sold last year over $2 million worth of product outside of burn. He doesn't have a burn center in his territory. So that's an example of real success, expanding into indications outside of burns. So there's a lot more depth in left in the U.S. to go, enormous amount. There's -- in Europe, Middle East, there's a lot of that opportunity as well that we need to dig into with our distributor networks. And they're doing well, but there's more we can do. And then in the medium term, Japan, followed by China will be the 2 next big markets, but Japan particularly being one of the most advanced markets in terms of med tech, that's going to be really important for us. But Bruce, you want to add any color to that. Bruce Peatey: Thanks. The one thing I'd add to that is the example of the U.K., a majority of the revenue in the U.K. is outside of burns and the team has done a great job there as well. And it gives us really a best practice or a benchmark that we can work towards in the other markets. So for me, that gives us a lot of -- not just potential, but examples of where it's a reality in markets that we're already in. Andrew Paine: And just, I guess, progressing that a little bit in terms of the investment required for those opportunities. Is that -- is there any insights you can give us there? Just trying to understand the profile going forward? Bruce Peatey: Sorry, so early days. As we've leaned on distribution partners in the majority of the markets in Europe, now it's the time to look at how do we support them with maybe some direct presence, not to necessarily go direct in the market, but to make sure we've got the right support for those -- our distribution partners to help grow into these other areas with a specific level of expertise. So early days, but that's the initial thoughts. I'll be in Europe for the first time with this team next month, and that's when we start shaping the way forward. Leon Hoare: And Andrew, and in the medium term, as Bruce mentioned -- that's right. And Jan mentioned, we'll be looking at our investment requirements for our pathway to market in major countries like Japan. We await our PMA submission because that will be an important adjunct to how we sort of plan that journey, and that will require significant investment working out how we're going to actually enter that market. And longer term, that will be China as well. Andrew Paine: And just one other on FX. Can you just give us any insights of how that's moving at the moment and how that will affect the coming, let's say, 12 months? Jan-Marcel Gielen: Obviously, not helping us and a lot of other Australian, how I can I say, export. So if I had a crystal ball, I could tell you, Andrew. But at this point, with our forecast, we factored in a conservative approach. We allocate resources based on that to make sure we optimize our results, particularly for the full year coming up. So we'll see how things pan out, but we certainly keep it obviously front of mind because we do have a result we need to manage, and that's what we're focusing on. Operator: Your next question comes from [ David Naygan from AMP ]. Unknown Analyst: if you could please just follow up a little bit on some of the questions around the manufacturing variance that you talked about. I believe you said that inventory fell 14.5% to 11.9% in the result. Are you comfortable with the current stock levels to support H2 demand, particularly given the growth trajectory? And is there any risk of a supply constraint whilst this new facility is being validated? Jan-Marcel Gielen: Thanks, David, for your question. So look, no risk of any supply constraint, and it's all really well managed, and we plan everything with the intent of how it ends up coming out the numbers. So what happened for the half is we slowed down manufacturing after building up inventory levels last year, you would have noticed inventory levels got to a higher level than not where we'd normally keep them. But that was purposeful. We had to pause manufacturing and slow it down. We chose to do so in this half just to attend to some activities in preparation for the PMA submission and the FDA will follow later in the year. So we decided to bring that forward. So what that means is we just have less output than planned for the half. And when you have less output, you have less production recovery and less cost -- manufacturing overhead costs getting capitalized into inventory. So we ended up with this $3.6 million unfavorable manufacturing variance for the half. But what happens in the second half, we've ramped up production again. So already in January, it's fired up again, and the result is going to look a lot different for the full year. So for the half, gross margin was 88.8% as a result of that. But for the full year, we'll be up over 90% in line with our budget plan. So it was all premeditated but it is just, I guess, a timing issue. If we weren't reporting at the half, you would just be looking at the year-end number and gross margin will be well over 90%. So hopefully, that answers your question. Unknown Analyst: I might ask a couple more if it's all right. On the CMS output -- outpatient opportunity, -- so I know you've submitted your clinical evidence package already and waiting a response. Just curious if any feedback from the FDA on the timing -- sorry, from the CMS on the timing for the decision. And if there's any revenue contribution that you might have already assumed for your outpatient opportunity in your internal planning for, say, H2 or for FY '27? Bruce Peatey: Yes. So just on the response from the CMS, we're still waiting on that response. However, as I mentioned, we're moving forward quickly with the SynPath brand into the outpatient space. And that's going to be -- that's something that we have ready to go as far as the code is concerned. So now we're ramping up production of those specific sizes that you need for those smaller procedures that are linked to that outpatient setting. Jan, you can speak to potentially the forecasting. Jan-Marcel Gielen: Sure. With forecasting for outpatient, it's all upside to what we currently got in our plans. So there's a lot of opportunities, not just in DFU and so forth. There's a lot of opportunity for our product outside of the hospital arena and even outpatient within the hospital. But right now, we're sort of working through the sales team and the marketing team to sort of shore up our plans and then what that means in terms of sales and production, but it's definitely an upside to our current forecast. Unknown Analyst: Okay. We're treating as upside for now. Yes. Got it. And then last one for me is just on the PMA submission. Do you have any expectations for the FDA review? Is it standard review cycle, PMA review cycle? Or is there any indication that this could be expedited given BARDA's involvement? Bruce Peatey: We haven't had any indication that it had been expedited. We're anticipating a standard review process. Operator: Your next question comes from John Hester from Bell Potter. John Hester: So gents, obviously, the stock has significantly underperformed in the last 12 months or so, it's underperformed the ASX 200, and you've just recorded the weakest period of revenue growth in recent history. So my question is, you spent the last 20 minutes talking about the growth story, but it really hasn't delivered. And I'm just thinking, what are you actually going to do to get that growth rate back above 30%, which sort of is required to justify the premium that this stock has historically been rated at. Jan-Marcel Gielen: John, thanks for the question. Just from my perspective, you're right, we're talking about the growth potential in the U.S. looking into new indications, whether it's within BTM or MTX. We've spoken about the outpatient opportunity as well. And then most importantly, the rest of world, as I mentioned, even though growing at 28% is good. We think that there is opportunity to grow more in that space through that focused execution and partnership with our distribution partners. So whether it is in those new indications and then expanding MTX into the market as well in other markets outside of Australia and the U.S., that's where we see the potential. But ultimately, it's about execution, and that's what we'll focus on. Bruce Peatey: And John, I'd add to that, in the medium term, we see opportunities outside of purely BTM, MTX, SynPath that may or may not be in our hands. So we still see lots of platform and pipeline product development opportunities that will add to what Bruce has just described. Jan-Marcel Gielen: And I might add, Leon, to that. For the half, we added $14.1 million in sales and growth in dollar terms. I'm sure we're going off a lower base. But at the same time last year, it was $11.9 million. So there is a lot of momentum there. And last year was a challenging year. We've got a lot of focus in the business moving forward this year, particularly. And there's some real good examples of success. And like we talked about that rep before that selling product outside of burn $2 million worth a year one rep. So think about that and do the math. So the potential is there. We know what success looks like, and we're just going to -- with Bruce's help, make sure that we're all executing as we should be to make sure that happens. Operator: There are no further phone questions at this time. I'll now hand back for any webcast questions to be addressed. Jan-Marcel Gielen: Great. Thank you. We've got quite a few, and of that a few is complete. We've answered quite a few questions during the discussion so far. But bear with me while I scroll up. Some questions around India and just the prospects and how we've gone to date and what the future looks like there in terms of performance. Bruce Peatey: Yes. So look, as mentioned, with India, yes, we show a significant growth rate off a low base from what I've seen so far working with the India team or connecting with the leadership there. I say they're putting the building blocks in place. More than likely, it's taken longer than anticipated originally to get through that complex tender process. I'm very familiar with the Indian market, have been for many years and not that surprised that it's taking time to get through. The good news is we are starting to see more and more frequent approvals coming through from these tenders. So as I mentioned, the groundwork has been done. It's a very solid and experienced leader that we've got in place there that's built a team ready to execute. We've actually got the largest burn conference that's occurring next week. We've got, I think, what is it, the 33rd Annual Conference of the National Burns Academy. We were there last year with more and more, you could say, evidence being generated and shared on BTM last year. We're very enthusiastic to see how that has progressed over the course of the year. From what we know anecdotally and working with the team, we're seeing more and more cases where surgeons are working with BTM and sharing those results with their peers. So we're quite confident. On top of that, we've got one of our KOLs out of Australia is there in the week leading up to the [ Navacom ] meeting. And Associate Professor Marcus Wagstaff is there. Also, we have [ MJ Panderwal ] from the U.S., actually touring around the U.S. and sharing their experiences with key surgeons around the country. So it's like early days. We expect good things out of India, but in my experience, that will build over time. And from what I see, the building blocks are in place. Jan-Marcel Gielen: Great. Thanks, Bruce. I've got another question here just from -- regarding Beta Cell and just the progress of our relationship with Beta Cell. Bruce Peatey: Yes. So we -- again, we mentioned before, we're very supportive of the work that's being done at Beta Cell. [indiscernible] I met the leaders of Beta Cell last week in Adelaide and again, reiterate that support as we have done in the past, supplying product to help with the development of that really novel technology. So we intend to continue that partnership as we have in the past. Jan-Marcel Gielen: Great. Thanks, Bruce. We've got a question here around operating leverage, and I can take that one. If we look at the numbers themselves for the half, sales growth up 26%, corporate and admin costs, underlying up 4.7%. We removed that unrealized ForEx movement, which gets lumped in that category in the stat accounts and employees up only 12%. We did have some redundancy payouts and various things in the half, but headcount was steady at 302 employees. We had 301 employees at 30 June. So the leverage is there, and it hasn't come through, I guess, in the net profit after tax result because of that manufacturing recovery. But the adjusted EBITDA was $4.7 million for the half and was up 82%. So if you take that $4.7 million and if we didn't purposefully slow down manufacturing that we had to, to attempt certain things, you add on that $3.6 million and all of a sudden, it's over $8 million EBITDA for the half. So the second half is looking a lot more positive because of these one-offs that we don't have to deal with. But the operating leverage is there. And I think we'll see that coming through in the second half and next year as well as well as free cash flow, which would be an important achievement for the business. Just moving on. There's a question around the fire, and we probably should address that just on what caused the fire and if we can comment and if we can't, I think we can't. But maybe, Bruce, if you or Leon want to address that one. Bruce Peatey: Yes. So I think at this stage, investigations are ongoing. We are not in a position to comment on the actual cause of the fire at this point. But I think that's all we've got to say on that topic unless you want to add some more, Leon? Leon Hoare: Well, I mean, we're unhappy that it occurred. Clearly, the team and our insurers have done a thorough investigation. The teams are working through the rebuild project of what was the new R&D lab. The actual technical elements. We know where the focus was, but there are some technical investigations still ongoing by our insurers. On the other side, just to reinforce the point, we haven't compromised our R&D capability. All our projects are ongoing. We had our old lab that we hadn't done anything differently with. And so our team has been highly productive in the journey. We're a little frustrated that our brand-new R&D lab is now awaiting a minor rebuild, but that's where we're at. The good news is we're completely covered for those rebuild costs. Jan-Marcel Gielen: Great. Thanks, Leon. Some questions just around the R&D pipeline and what we've got planned, what's sort of on the horizon? Bruce Peatey: Yes. So it's early days. As I mentioned, I think there's a potential to accelerate our output from the R&D function. And clearly, the search for the Chief Scientific Officer and putting that critical role in place is going to help to that end. We've got a significant -- I think we've shared it before. The output from that R&D pipeline is there. We just need to get it -- say, get some more velocity into that pipeline and get that out into the market, whether it is through our commercial execution ourselves or through strategic partnerships. And that's another key decision to make to make sure that we're really maximizing the value we can extract from this wonderful NovoSorb platform. Jan-Marcel Gielen: Great. Thanks, Bruce. Some questions here around the outpatient market in the U.S. and the requirement for an RCT, whether that's needed for DFU or not? And is that only just for DFU or can we sell the product SynPath for other indications right now? Bruce Peatey: Yes. So we can sell SynPath for other indications right now. Actually, this year, we can sell it for DFU as well. The need for an RCT, we say, is anticipated, although we're still working to clarify the exact clinical evidence requirements with the CMS. So at this stage, we're anticipating it. Like I said, we've got a protocol that we've worked on to make that possible. And as we move forward, looking at how we could accelerate that as well, -- but right now, we can sell SynPath because we have the code into all of those care settings in the outpatient piece. Leon Hoare: Important, just if I can add to that before we close on that point. As Bruce mentioned in his presentation, we're working through the hospital outpatient element of that market opportunity, if you like. And that likely would be in our team's hands, but Bruce and the U.S. team are working through that. And the outside of hospital element where in probably the easiest description would be investigation mode. We're likely looking at partnerships to get SynPath to market there. CMS is still very much in flux in terms of the industry's understanding of all the outcomes, and we're learning that as we do more discovery. Jan-Marcel Gielen: Great. Thanks. Just 2 more questions. We're coming up on the hour. So let's run to the next one here. So a question on BARDA and just our relationship with BARDA and how that's going in light of the trial coming to an end and the support that we're getting from BARDA. Bruce Peatey: Well, excellent support from BARDA. I appreciated meeting the leadership there as well. We're on regular meetings with them as we go through the process to finalize the submission. They've been a wonderful partner and they continue to be. So yes, it's all very positive. Cf Thanks, Bruce. We'll make our last question given the timing. Just a question on guidance. This comes up quite often, but we're happy to answer it again. We don't provide guidance in the past, but do we intend to in the near future? Leon Hoare: I'll take that. I mean, at this stage, we're still very much a company on a rapid growth phase. As Bruce has said, we've got many opportunities in our growth going forward. We see very strong growth momentum. We see strong pipeline opportunities. We see strong market sector opportunities like CMS as one example. Medium term, we see other geographies like Japan. But near term, we're still also heavily exposed to the burn segment. and that's highly variable. So as we build a more predictable longer-term growth rate, and we'll consider guidance. But in the nearer term, we're not going to formally provide guidance for the period going forward. Jan-Marcel Gielen: Thanks, Leon. And before I hand back to Bruce, just to call out to Rachel Harwood from Macquarie. He's based in Dallas and it's quite late. But 4 questions I've got, we've answered quite well, but I appreciate you sending the questions Rachel. So with that, I'll hand back to Bruce to close. Bruce Peatey: Thanks, Jan, and thank you all for joining us today and for your continued support of PolyNovo. As you've heard, we are entering the second half with strong momentum, a clear strategy and a deep commitment to execution. Our focus remains on delivering meaningful clinical impact while scaling globally and unlocking the full value of the NovoSorb platform. I'm incredibly, incredibly proud of what the team has achieved and confident in the opportunities ahead. We look forward to updating you on our progress and appreciate your engagement today. Thanks, everyone. Leon Hoare: Thank you. Jan-Marcel Gielen: Thank you.
Operator: Good afternoon, everyone, and welcome to AXT's Fourth Quarter 2025 Financial Conference Call. Leading the call today is Dr. Morris Young, Chief Executive Officer; and Gary Fischer, Chief Financial Officer. In addition, Tim Bettles, VP of Business Development, will be participating in the Q&A portion of the call. My name is Audra, and I will be your coordinator today. I would now like to turn the call over to Leslie Green, Investor Relations for AXT. Please go ahead. Leslie Green: Thank you, Audra, and good afternoon, everyone. Before we begin, I would like to remind you that during the course of this conference call, including comments made in response to your questions, we will provide projections or make other forward-looking statements regarding, among other things, the future financial performance of the company, market conditions and trends, emerging applications using chips or devices fabricated on our substrates, our product mix, global economic and political conditions, including trade tariffs and import and export restrictions, ability to obtain China export permits, timing of receipt of export permits, our plan to list our subsidiary, Tongmei in China, our ability to increase orders in succeeding quarters to control costs and expenses, to improve manufacturing yields and efficiencies or to utilize our manufacturing capacity. We wish to caution you that such statements deal with future events, are based on management's current expectations and are subject to risks and uncertainties that could cause actual results or events to differ materially. In addition to the matters just listed, these uncertainties and risks include, but are not limited to, the financial performance of our partially owned supply chain companies and increased environmental regulations in China. In addition to the factors just mentioned or that may be discussed in this call, we refer you to the company's periodic reports filed with the Securities and Exchange Commission. These are available online by link from our website and contain additional information on risk factors that could cause actual results to differ materially from our current expectations. This conference call will be available on our website through February 19, 2027. Also, I want to note that shortly following the close of market today, we issued a press release reporting financial results for the fourth quarter of 2025. This information is available on the Investor Relations portion of our website. I would now like to turn the call over to Gary Fischer for a review of our fourth quarter results. Gary? Gary Fischer: Thank you, Leslie, and good afternoon to everyone. Revenue for the fourth quarter of 2025 was $23.0 million compared with $28.0 million in the third quarter of 2025 and $25.1 million in the fourth quarter of 2024. To break down our Q4 '25 revenue for you by product category, indium phosphide was $8.0 million, primarily from data center applications, gallium arsenide was $7.0 million, germanium substrates were $231,000. Finally, revenue from our consolidated raw material joint venture companies in Q4 was $7.6 million. In the fourth quarter of 2025, revenue from Asia Pacific was 81.5%, Europe was 17.5% and North America was 1%. The top 5 customers generated approximately 22.6% of total revenue and no customers were over the 10% level. Non-GAAP gross margin in the fourth quarter was 21.5%. For comparison, we reported 22.6% gross margin in Q3 of '25 and 18.0% gross margin in Q4 of last year. For those who prefer to track results on a GAAP basis, gross margin in the fourth quarter was 20.9% compared with 22.3% in Q3 of 2025 and 17.6% in Q4 of 2024. We continue to be highly focused on driving continued improvement, including further recovery in Q1. Moving to operating expenses. Our total non-GAAP operating expense in Q4 was $7.8 million, compared with $6.5 million in Q3 of 2025. As a reminder, Q3 included some favorable adjustments in R&D that brought our OpEx down to a lower-than-normal level. Non-GAAP OpEx in Q4 of '24 was $9.8 million. On a GAAP basis, total operating expense in Q4 '25 was $8.8 million compared with $7.3 million in Q3 and $10.6 million in Q4 of 2024. Our non-GAAP operating loss in the fourth quarter of 2025 was $2.6 million compared with a non-GAAP operating loss in Q3 of 2025 of $384,000 and a non-GAAP operating loss of $5.4 million in Q4 of 2024. For reference, our GAAP operating line for the fourth quarter of 2025 was a loss of $3.8 million compared with an operating loss of $1.1 million in Q3 of 2025 and an operating loss of $6.2 million in Q4 of 2024. Nonoperating other income and expense and other items below the operating line for the fourth quarter of 2025 was a net gain of $285,000. The details can be seen in the P&L included in our press release today. For Q4 of 2025, we had a non-GAAP net loss of $2.6 million or $0.06 per share compared with a non-GAAP net loss of $1.2 million or $0.02 per share in the third quarter of 2025. Non-GAAP net loss in Q4 of 2024 was $4.2 million or $0.10 per share. On a GAAP basis, net loss in Q4 was $3.6 million or $0.08 per share. By comparison, net loss was $1.9 million or $0.04 per share in the third quarter of 2025. GAAP net loss in Q4 of 2024 was $5.1 million or $0.12 per share. Weighted basic shares outstanding for the quarter was 44.7 million. Cash, cash equivalents and investments increased by $97.2 million to $128.4 million as of December 31. This is primarily the result of our public offering of common stock, which closed on December 30 and generated approximately $93.9 million. By comparison, at September 30, cash was $31.2 million and accounts receivable decreased in the quarter by $2.6 million. Depreciation and amortization in the fourth quarter was $2.3 million. Total stock comp was $1.3 million. Net inventory was up by approximately $4 million in the fourth quarter to $81.7 million. This continues to be a focus for us, and we expect to bring it down in coming quarters. This concludes our discussion or comments about the quarterly financials. Turning to our plan to list our subsidiary, Tongmei, in China on the STAR Market in Shanghai. We remain very interested in completing the IPO, particularly in light of the rapidly evolving AI infrastructure build-out in China, which is fueling increased China-based demand for indium phosphide substrates. We've continued to keep our IPO application current and Tongmei remains "in process" as part of much -- a more selective and smaller group of prospective listings than a few years ago. Though the current geopolitical environment is dynamic, Tongmei is considered a Chinese company and continues to be regarded in China as a good IPO candidate. We will keep you informed of any updates. With that, I'll now turn the call over to Dr. Morris Young for a review of our business and markets. Morris? Morris Young: Thank you, Gary. We were disappointed... Operator: Pardon me for interruption, this is the operator. We have lost our speakers. Give me one moment to reconnect. [Technical Difficulty] Morris Young: Hello? Am I back up? Operator: Yes, you are. Morris Young: Okay. Let me start on the beginning again, just in case I missed part of it. We were disappointed that we didn't receive as many export permits in Q4 as we had hoped based on the average processing time we had seen up to that point in October. The good news is now that we have received permits in Q1 and we are in a stronger position today than we were at the same time in the prior quarter. Gary will take you through our full quarter guidance in a few minutes. But we do expect to achieve sequential growth in revenue in Q1, driven primarily by growth in indium phosphide for data center build-out for AI. We're also very pleased to note that we are seeing a welcome expansion of our customer base for indium phosphide. We're beginning to support leading customers in the optical space that we have not -- we had limited exposure to prior to this time. This includes Tier 1 laser manufacturers and optical transceiver module makers both in China and around the world. We're excited to be able to demonstrate the technological advantage of our low EPD wafers as the market moves to optical devices with higher speed and greater sophistication for both scale-up and scale-out applications. In total, our backlog for indium phosphide wafers have reached a new high of over $60 million. As we mentioned last quarter, customers are planning for longer lead time by placing longer-term orders and giving us more visibility into their expected demand. As many of you know, the supply chain for optical transceiver is quite complex and highly globalized. We believe this geographical interdependence is providing both opportunity and incentives for the ecosystem to work together in new ways to solve global supply chain shortages. Beyond pluggable receivers, we are seeing a very large developing market for co-packaged optics for both scale-up and scale-out applications. We're actively engaging in discussions with our customers about their technical and timing requirements and believe this could be -- represent yet other inflection point in our business developing in late 2027 and beyond. From a geographic demand perspective, the massive AI infrastructure build-out and planned CapEx spending by cloud services and AI platform providers in the United States is the primary driver for EML and silicon photonic-based optical transceivers. We believe that today, our materials are being used in multiple U.S. hyperscale and we expect that end customers use will continue to broaden. In China, the data center build-out is early in its ramp. But we are seeing rapid growth as China moves to accelerate its data center expansion and AI capabilities. Our revenue related to the data center market in China are expected to grow by more than 60% in Q1 over Q4, highlighting both increased investment in these Tier 1 data centers as well as the strong desire for Chinese domestic suppliers to secure local stores at every level of the AI infrastructure supply chain. Given the strong demand environment, it is important to note that AXT is well positioned to handle increased demand for indium phosphide wafers. Since we have last reported to you in October, we have already added approximately 25% more capacity, and we are on track with our current plan to double our capacity from Q4 2025 level by the end of this year. Beyond our current plan for capacity expansion, we're working closely with our customer base to understand their long-term requirements and to align our plans globally. Our recent capital raise will be fundamental to our future expansion as we enter our next significant phase of growth. A major focus of this expansion will be an increased investment in our 6-inch indium phosphide product, and we are excited to work with our customers to meet the rigorous requirements of next-generation EML and silicon photonic-based devices. Now turning to gallium arsenide. We continue to see demand for semi-insulating wafers for wireless RF devices and believe that we have strong opportunity for market share expansion gated primarily by our ability to obtain export permits. In Q4, we saw an uptake in semiconducting wafers for both industrial laser applications and data center laser applications. VCSEL lasers a data center -- for data center applications typically do not require a lot of gallium arsenide material. As the devices are small, so they don't move the needle much as a growth driver for us. However, we are seeing increased demand for VCSEL for autonomous vehicles in China, Chinese automobile market, which is currently expanding rapidly. High-growth expansions in addition to our watching -- we are watching with interest and emerging application in robotics for VCSELs that increase the precision and dexterity of a modern robotic hand. Counter the VCSEL used in data center applications, machine vision VCSELs tend to be very large and use more gallium arsenide substrates. They also require high-quality material which we are very well positioned to supply. Again, demand is more today, primarily China-based and covers a diverse set of customers but the breadth of use case and the development is very exciting. Finally, our raw material business is -- was up in Q4 with growth from our subsidiary volume, which manufactures PBN crucibles used in manufacturing of indium phosphide crucibles. In addition, we're pleased to report that our subsidiary, JinMei, has begun to refine high-quality indium, which gave us now direct control of a guaranteed supply of yet another critical material for our indium phosphide substrates. Globally, there continues to be a greater awareness of the importance of various materials, and we are ahead of the curve in developing our unique integrated supply chain. In closing, this is a very dynamic and exciting time for our company as we enter into 2026. We're a fundamental supplier to the multiyear optical build-out in the AI infrastructure market. We have a broadening customer base of Tier 1 companies and a strong balance sheet to support our continued business expansion. And with growing backlog, the receipt of indium phosphide and gallium arsenide export license remains the single most significant gating factor for our growth. As such, we are highly focused on ensuring that we are proactive, organized and disciplined about managing the process on behalf of our customers. We also know that we must be laser-focused on running our business with the greatest efficiency. This includes our continued effort to drive gross margin improvement, OpEx discipline and inventory reduction. With strong ongoing market trends fueling the data center upgrade cycle, we believe that we have tremendous opportunity in 2026 to drive meaningful growth in our business and return to profitability. I would like to personally thank our employees for their dedication and tireless efforts during this singular moment in AXT history and I would also like to express my sincere gratitude to our customers, partners and shareholders for their ongoing support and believe that in the future, we are building together. We look forward to reporting to you on our progress. And with that, I will turn the call back to Gary for our fiscal quarter guidance. Gary Fischer: Thank you, Morris. To reiterate a couple of key points from Morris' commentary, we are seeing a strong increase in our indium phosphide wafer demand related to AI and the ongoing data center upgrade cycle. Given the geopolitical complexity surrounding this market trend, our customer base is diversifying and expanding and customers are placing longer-term orders and providing greater visibility into their needs. With all of these positive market and AXT-specific growth drivers, the most significant single factor to our growth in Q1 and beyond is the success and timing of getting export permits. Therefore, guiding for the future is somewhat tricky for us right now as we cannot predict future timing of permits or a success in obtaining them for any customer or individual order. . But drawing on what we know and what we've experienced thus far in the export permitting process, we can offer the following insight to our expectations for Q1. As of today, we have approximately $26 million in revenue that can be realized in Q1 across our substrate product lines and raw materials, for which we either have -- already have a permit to ship or for which an export permit is not required. We have a high degree of confidence in recognizing this revenue in Q1. We could see significant upside to this number in Q1 should we receive more permits for additional orders between now and the end of the quarter. But we want to stress that as we experienced in Q4, the timing for permit issuance is not predictable nor in our control and doesn't necessarily align with our quarterly reporting. As Morris mentioned, we continue to focus strongly on gross margin. Further improvement depends on a number of factors, including total revenue as it relates to absorption of fixed costs, revenue mix by product and our ability to continue to drive better manufacturing efficiency. With regards to OpEx, we expect that it will remain at approximately $9.0 million in Q1. With these factors in mind, we believe our non-GAAP net loss will be in the range of $0.02 to $0.04 and GAAP net loss will be in the range of $0.04 to $0.06. This represents substantial year-over-year progress towards our return to profitability. We estimate share count in Q1 will be approximately 53.2 million shares. Okay. This concludes our prepared comments. We'd be glad to answer your questions now. Audra? Operator? Operator: [Operator Instructions] We'll go first to Richard Shannon at Craig-Hallum. Richard Shannon: Gary, I'm going to do a quick request to give me the revenue number you gave for the quarter. It got -- my line got garbled here. I heard about '26 that you believe you can get -- highly likely to get. Was there a number to the upside there? Apologies for needing to ask this. Gary Fischer: No. We normally give you guys a range, but we discussed before the call today that we're very, very confident at the '26 number. We did say just a moment ago that we believe we could go higher if we get more permits, but we -- it wouldn't even -- it could even be more than just a normal range, which we usually have a $2 million or $3 million range for you guys. Morris Young: Well, let me try to add on to this point. That is our manufacturing are doing the manufacturing as if we can get a permit. So there is a lot of these so-called semifinished goods or finished good staging in our clean room ready to be shipped if we can get an actual permit. Gary Fischer: Yes. We are building to forecast and to the backlog, whether or not -- we're not building to permits. We're not waiting until we get a permit and then say, okay, let's get going. And so it's building and we're enthusiastic, we're excited and of course, yes, we're a little bit frustrated because it would be pretty big numbers if we can get some more of these permits. And we think that we will. We can comment more on this call, but we're hanging in there. We're not discouraged and giving up. So... Richard Shannon: Okay. I appreciate understanding your approach to the guidance and it certainly makes a lot of sense in this environment. Let me ask about the licensing process here. Last quarter, you said it was about a business day or a 3-month process here. And obviously, that didn't turn out as we saw from your pre-announcement, which is unfortunate, but we all know how governments can work from time to time here. Do you have any new insights as to how they're working here? And I guess, are there any permits that are being rejected that you don't think should be? Just more insights here on this licensing process. Timothy Bettles: Yes, I can answer that one. So this process is not transparent at all. And we're seeing quite a lot of variability. We started off in the end of Q3 by saying it was looking like we're seeing a fairly consistent 60 business day process cycle. We're now seeing a lot more variability as we go through there. And as I say, there's just no transparency to that. It's reasonable to assume that there's geopolitics playing into this as well. It's really hard to determine what and why. And it's difficult, therefore, to figure out which permits are coming in on time, which are taking longer. I'll answer the second question as well, which you asked whether there had been any permits that have been denied and why? We have actually received a couple of denials with the instructions that we can resubmit that application with more information. So this is the first time we've actually received denials on permits and we're not utterly sure why. Again, no transparency to this. We don't see any particular reason why any of these permits should not be approved. And it's a process that we're just working through. So these permits that have been denied, we've already resubmitted with MOFCOM and we're hopeful that we continue to talk to MOFCOM and they will get reviewed quickly and could potentially turn around fairly quickly. I could even make an impact on Q1 numbers if we can get a quick turnaround on them. Gary Fischer: And what does MOFCOM stand for? Timothy Bettles: That's the Ministry of Commerce in China. Morris Young: So let me add an optimistic viewpoint, the comment about that Tim just gave you. That is -- although there is a denial of an application, but they come with a specific instruction how to strengthen the application, which we think is a good indication. In other words, if they really want to deny this, one of -- they can just let it sit there. I mean the fact that they want more information about -- actually, I think it's a fixable permit application we have. And that means, hey, they are taking a very serious look at it. And hopefully, that will turn to be a permit. Richard Shannon: Okay. That is helpful. Second question here is kind of the backlog here and also following up on, Morris, your comments about customers booking further out. So we went from a backlog of $49 million to above $60 million here, and you also commented that people are -- customers are ordering further out. Could you suggest how far out they're going right now? And also, how far out are you hearing forecasts from these customers as well? Morris Young: Yes. Let me see how to answer that. Actually, let me first answer my part of the question, and I will turn it over to Tim. Well, the reason why that Tim really works with customers hearing what their demand is. Actually, one of the interesting comments we have was that we have important meetings with our customers this week, and they're telling us, Tim, at least in two occasions, people are saying, gee, our demand forecast increases every week. So that's the kind of level. I think -- I mean we know it is tight and we know it's going up. But I think people are upsizing their demand, and they're telling us what they want to do, whether they're going to go to 4-inch, how much they want to switch from 3 to 4 and 4 to 6, okay? And as far as how much inventory they are building, I think that depends upon customers. Some of the customers, we suspect they're buying into the inventory. But they also tell us, if you deliver, I'm going to take it all if you can deliver. Whereas others, I think they are telling us the real demand in the quarter because I think as of now, we cannot deliver enough of their demand. So they are giving us longer lead time to give us more incentive to build up the expansion plan and build the capacity for them. And also, I think the other thing is, Tim, you want to comment on long-term commitment that you're talking to a customer about? Timothy Bettles: Yes, I'll definitely -- I'll comment a little bit on that, and I'll also comment a little bit more on backlog and what we're seeing from this. So a lot of this backlog, remember, is scaled up based on the permit dynamics, right? So the permit dynamics, once we receive a permit to export material, we have a 6-month window to export. So a lot of backlog is built at the moment that permit comes in, we have a 6-month window maximum to deliver. And in many cases, that window, the window of which the customers are looking to receive material is a lot shorter than 6 months. So really and truthfully, this is all being gated by permits, as we mentioned during the discussion. In terms of what we're seeing in build-out for inventory, I think at this moment in time, people would like to keep more inventory. But as Morris mentioned, just about everybody we're talking to is telling us that the demand is growing literally on a weekly basis. So we just see the numbers expanding and expanding over and over. Now turning to forecast and what kind of visibility we have we are definitely talking about long-term supply agreements with a number of customers right now. And we're planning our business according to those long-term supply agreements. We're seeing forecasts out beyond 2030 for many of these customers, but of course, as I've just said, those numbers are increasing on a week-by-week basis. So it's difficult to keep track of things, but people are talking about minimum demand requirements. Moving forward for at least the next 2 to 3 years, given us forecast out beyond 2030. So all in all, I think this backlog is real. It's achievable, and it's kind of being limited by our permits at the moment. Richard Shannon: Makes sense. I'll ask one more question and jump out of line here, guys. This is on capacity additions. Just a few kind of multipart question here. I think I heard you say you're going to double your capacity from the end of '25 to the end of '26. If you could verify that? And if so, can you help us understand what level of CapEx is going to be requiring? And then looking beyond that, and Tim, you just mentioned forecast going out beyond 2030, which is interesting to hear, how much more capacity beyond that could you need? Let our minds wonder about what kind of scale an opportunity you're thinking about here? Morris Young: Yes. I think we just said we have increased our capacity by 25% now, and we do expect to double our capacity by the end of this year, okay? And how much budget would we need? It could be about $30 million, and that is sort of on the low end in a way because the first phase of the expansion, which is doubling our capacity mainly use brownfield. In other words, existing Tongmei facility, we already have a clean room available. We have the building there already and power supply and water. So I think that budget is lower. Looking beyond 2026, we are looking at possibly doubling it again in 2027. And that budget is lying somewhere around $100 million to $150 million depending upon how we want to build it because then we are talking about a greenfield. We need building, we need clean room, we need power, et cetera. Operator: We'll move next to Tim Savageaux at Northland Securities. Timothy Savageaux: Let's continue with that capacity discussion, but maybe try to put some numbers around it. If I look at where you've peaked historically, and I think we're talking exclusively about indium phosphide here, that's getting up towards $20 million a quarter in substrate revenue. And I imagine your capacity is now slightly above that given the increase you talked about in Q4. I guess question one, is that reasonable? And should we expect you to exit calendar '26 with revenue capacity roughly double those levels? And would you anticipate having the demand to fulfill that at that time or you're building maybe a little bit ahead? Morris Young: Let me first answer the question. The -- I think we calculated, I think it's approximately $35 million a quarter by the end of the year run rate, okay? It could be a little bit more -- given the price environment is dynamic as we -- the cost of indium are going up. And can we use up all this capacity? I think looking at the backlog, we can certainly do, but the problem is the gating factor is the permit. Timothy Bettles: I'll add something in here as well. Irrespective of permits, we mentioned we are seeing growth in this business in China as well. And looking at it quarter-to-quarter, Q4 was probably double revenue in China than Q1 in 2025. And we would expect -- we're looking at potentially doubling again through 2026. So we're definitely seeing growth there in China that warrants expansion as well as growth outside of China where we would need permits for. Morris Young: Tim, I agree with you, but then I don't want to minimize the importance of outside of China. I think the AI growth, the budget we're seeing is really fueling the demand for indium phosphide substrates. Gary Fischer: Yes, Tim, this is Gary. And I still speak conservative, but -- and I am. But I'm not sure you guys are getting the point is that every customer is worried about getting enough for their needs. There's a general concern. The meetings we've had this week, we're not meeting with the purchasing manager. We're meeting with CEOs and general managers. They all want to talk to Morris about capacity and about future growth. So there's a phenomenon going on here that all of -- it's unusual for -- no matter what we do for our jobs, including the analysts, this is very unique and unusual situation. I mean, I've been around the block a few times and Morris has, and this is very, very unusual. And it's actually intense. We're excited but we're scrambling, we're scrambling. And I don't see any into it near term. This is -- people are telling us that their demand is going to be going up 3, 4 or 5x over the next 4 or 5 years. And there's not how many suppliers are there. You know the answers to that, too, and we're one of them. Morris Young: Yes. I think let me add to that. I think the investor usually asks the CEO, the toughest question is what keeps you up at night? I think what's keeping us up at night is calculating how we're going to expand that capacity, how we're going to get that product to our customers and how to develop the technology that a customer wants. I mean it's very exciting but it's also very straining. We need to be very much aware of what the customer wants and satisfy their demand. Gary Fischer: Fortunately, we have recent experience at adding capacity. What -- it was almost about 10 years ago, when we learned that we needed to get gallium arsenide moved out of Beijing. And so we had 2017, '18 kind of time period where we did add capacity from green grass fields. So we have some strength here but it's going to tax us even though we are experienced. Morris Young: Yes. I do want to give the analyst point to ask the question, but I think we're talking to each other. Gary Fischer: We're too excited, yes. Morris Young: We're too excited, but I think it is a very good point. I think we -- prior to this, we probably overspent because the IPO preparation, we actually expand from one facility to three facilities. But now I think we're looking at a great demand for indium phosphide, which I think it's really meeting our challenge. And I think Gary is right. We are very well positioned to meet that demand. I think we are probably the best suited to increase capacity and also because the vertical integration we have in terms of supply chain, and we're in control of a lot of other material, which could ensure supply if indium phosphide substrate continue to grow like what we are talking about, and we have plans for that as well. Gary Fischer: A good example is our subsidiary, JinMei. JinMei makes the indium phosphide poly for Tongmei. So we have in -- our supply chain is supporting this growth process. Next question, Tim? Timothy Savageaux: I'm a little bit afraid now. But -- you actually highlighted -- you highlighted in the release even the increased presence with some big Tier 1 customers. I guess in the commentary, you mentioned maybe some in China, but elsewhere. In terms of what's going on there? Are we talking about orders with major new customers qualification? Any specific programs? And I'm not sure these 2 comments were related or not. But I'll ask if they were with regard to your increased investment in 6-inch indium phosphide, if you can maybe cover both of those points. Appreciate it. Timothy Bettles: Yes. I'll take a stab at that one, Tim. So yes, we are gaining more traction with customers, as we've said on previous calls as well that we've not been so prolific in. So we are gaining design in, we're gaining qualifications on existing products as well as new products as we move forward. And the customers are looking to expand on their demand for indium phosphide. As Morris mentioned in the call, there's already been a big move from 3-inch to 4-inch, so we've spent a lot of time and effort on scaling up our 4-inch business. . And we're also seeing a lot of interest now. And of course, we all know one customer that's really driving 6-inch demand. So we're really taking 6-inch very, very seriously. And we're expanding -- as we expand capacity both now and are doubling capacity through '26 and beyond, we're looking at adding significant 6-inch capacity in there during that expansion. And we're just plowing through the numbers right now to see what we need to drive 6-inch and how we scale 6-inch compared to 3, 4 and more of the traditional wafer sizes. Morris Young: Yes. I think -- sure, Tim. I think one part of it perhaps is the cooperative effort. Usually, when your customers don't go to me, they probably talk to the sales guy and give us orders. But I think now the dynamics is such that we sort of need to interact more to make sure that we're putting the right amount of attention to both in terms of development and capacity expansion to where they need it, okay. And then virtually also to convince us, this is the right investment we should have. Is that right? Timothy Bettles: That's correct. We're also getting a lot more customer buy-in with commitments, NRE, purchase orders to drive that business forward as well. Operator: We'll move next to Matt Bryson at Wedbush Securities. Matthew Bryson: Just can you talk a little bit about what might have been unfettered demand or shipments in Q4 or what you might be guiding to if you weren't restricted by permits? Gary Fischer: If we're not restricted by permits, then the basic question is our ability to manufacture high volume because there's no issue about demand or backlog. So the variable that you're really focusing on is manufacturing capability. Morris Young: Yes. I don't know whether the customers are telling us more demand than we can deliver. But I think we definitely have more orders than we can actually manufacture now. As we add the capacity, we're counting on who we can supply to, but of course, there's other leading factor, which is the permits. Matthew Bryson: Got it. So I mean hypothetically, assuming you could be manufacturing around $20 million of indium phosphide, you could ship it all if you could get permitted? Morris Young: Yes, correct. And that will -- we expect it to increase it to about $35 million a quarter by the end of the year. And then we are making sure every point along the supply chain receives equal attention in terms of poly, in terms of crucible furnaces, et cetera, et cetera. Matthew Bryson: Understood. And then -- so you're completely confident that of that $35 million in capacity, if you can bring it on and you can get permits that come to end of this year, you could possibly be shipping $30 million, $35 million in orders. I guess is there -- are there any customer commitments or LTAs or anything else that kind of solidifies that demand? Morris Young: What's that term you're saying? LTAs? Timothy Bettles: We've got a lot of purchase orders in that right now, and we're going through long-term agreements. Long-term agreements, I think in terms of locking up capacity are easy and we're talking to customers to lock that capacity up. The gating factor, and we've reiterated this a lot today and previously, gating factor with long-term agreements is how much can we actually ship out of the country? What can we get permits for? So we're trying to address that through LTAs. But for sure, we can definitely cover this kind of revenue volume with purchase orders and LTAs. Matthew Bryson: And then, Gary, I think the last one I have is for you. if you get to those numbers in terms of shipments for indium phosphide, so $30 million plus, can you give us some of the parameters we should be thinking about in terms of gross margins, what are the puts and takes? And hypothetically would you be able to get back to the kind of COVID era highs that you're reporting back in 2021, 2022? Gary Fischer: Yes. I mean we always like indium phosphide. And if you have to pick of our 3 substrate products that you want to see go through the ceiling in terms of volume and demand, it's the right one for us. I think getting somewhere at $40 million a quarter in aggregate, not just indium phosphide, but we should be getting hopefully somewhere close to 35% gross margin. Morris Young: I will add another point. I always describe AXT, it's a fairly unique company because we -- I describe our substrate business as the locomotive engine in the front, but we have a lot of cars in the back following us, such as indium, such as phosphorus, quartz, PBN crucibles, furnaces we make. So if our business is good, we're pulling these guys along, and that should help us. So what you're seeing here, I'm more optimistic and Gary said, I think that 35% is the normal substrate business. If we can pull those guys along, that should help us even further. Gary Fischer: Yes. Yes. Our internal goal is higher, Matt, but -- so that we don't overstate expectations from -- for your community, we want to be a little bit cautious. So we're very optimistic. So it's pretty exciting. Matthew Bryson: And just one quick follow-up. The shift to 4-inch and 6-inch, does that change the parameters on a gross margin perspective? Morris Young: I think normally the larger the size we go, the better the margin we will get. On the other hand, I'll be more cautious about 6 inches. We are still a little bit in development stage. So I think initially, looking at lower margin, but looking for ways to compensate that, right, Tim? Timothy Bettles: Right. And product mix is still very much geared towards 3-inch and 4-inch at the moment. And as Morris says, we're running 6-inch up. It is still a bit of a development project at the moment. It will be growing through this year. But again, remember, as we do that, 3-inch and 4-inch are still a big percentage of our business. Operator: And that concludes our Q&A session. I will now turn the conference back over to Leslie Green for closing remarks. Leslie Green: Thank you, Audra, and thank you all for participating in our conference call. We will be participating virtually in the Loop Capital Conference in March and hope to see many of you there. As always, feel free to contact us if you would like to set up a call, and we look forward to speaking with you soon. Thanks. Operator: And this concludes today's conference call. Thank you for your participation. You may now disconnect.
Operator: Good day, and thank you for standing by. Welcome to the Tandem Diabetes Care Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Susan Morrison, Executive Vice President and Chief Administrative Officer. Please go ahead. Susan Morrison: Hello, and welcome to Tandem's Fourth Quarter and Year-end 2025 Earnings Call. Today's discussion will include forward-looking statements. These statements reflect management's expectations about future events, our product pipeline, development time lines and financial performance and operating plans and speak only as of today's date. There are risks and uncertainties that could cause actual results to differ materially from those anticipated or projected in our forward-looking statements, which are described in our press release issued earlier today and under the Risk Factors portion of our most recent annual report on Form 10-K. Today's discussion will also include references to both GAAP and non-GAAP financial measures. Please refer to our earnings release issued today and available on the Investor Center portion of our website for a reconciliation of these measures to their most directly comparable GAAP financial measure and other information regarding our use of non-GAAP financial measures. John Sheridan, Tandem's President and CEO, will be leading today's call, and he'll be joined by Leigh Vosseller, Executive Vice President and Chief Financial Officer. Following their prepared remarks, the operator will open the call up for questions. Thanks in advance for limiting yourself to one question before getting back into the queue. I'll now turn the call over to John. John Sheridan: Thanks, Susan, and welcome, everyone. 2025 was a defining year for Tandem, where we surpassed the milestone of $1 billion in sales while delivering on our mission to provide new innovations, improved outcomes and a revolutionary experience to nearly 0.5 million customers worldwide. Momentum built across the year and culminated in Q4 results where we set multiple records while delivering double-digit growth and improved profitability. Seeing the dedicated efforts and strategic focus of our entire team makes me both proud of what we've accomplished and excited for what lies ahead. In addition to our financial performance, I'm equally proud of our execution against the 3 key initiatives we prioritized at the beginning of the year, which were modernizing our commercial operations, delivering new technology and shaping our business model. Together, these changes are transformational for our company and set a strong foundation for Tandem to drive sustainable growth and profitability in 2026 and beyond. In my prepared remarks today, I'll be speaking to each of these key initiatives, starting with the modernization of our commercial organization, which positions us for strengthened execution worldwide. In the United States, we expanded our sales team and updated our sales processes. We also began implementing new systems during 2025 that will provide significant efficiencies and benefits to our sales team in 2026. In addition, we began expanding our dedicated commercial efforts for people living with type 2 diabetes. Turning to our international business. We delivered a strong performance in 2025, setting record sales once again. This accomplishment is even more impressive as we did so while preparing for direct commercial operations in the U.K., Switzerland and Austria. The transition activities went exceptionally well as our team hired talent in these countries while smoothly coordinating the distributor separations and implementing the necessary back-end infrastructure. As a result, I am proud to share that we are now live and beginning to serve customers through our direct operations in Europe. Our learnings from going direct in these countries will serve as a playbook to further expand our direct operations internationally in '26 and '27, which provides us the opportunity to deepen relationships with the diabetes community while improving both price and margins. Complementing our commercial efforts was the second key initiative for 2025, delivering new technology across our portfolio. Early in the year, we launched Control-IQ+, our next-generation automated insulin delivery algorithm that is indicated for people living with type 1 diabetes down to age 2 and for adults with type 2 diabetes, which doubles our addressable market. It's designed for easy onboarding and use. We also generated clinical evidence that allows us to use training to simplify the carb counting experience. We ended 2025 launching 2 highly sought-after pump features in the U.S., which was the launch of FreeStyle Libre 3 Plus for t:slim and Android Control for Mobi. Early response to both of these offerings has been positive and contributed to our growth in the fourth quarter. We plan to build on this momentum in 2026 and have multiple new products either imminently launching, awaiting regulatory clearance or reaching key milestones in the development path. We'll have 3 new product launches in the second quarter, which include a scaled launch of Mobi internationally, a launch of Mobi integration with the FreeStyle Libre 3 Plus beginning in the U.S. and Dexcom's 15-day sensor integration on both pumps and platforms globally. We also recently submitted a 510(k) with the FDA for a pregnancy indication for Control-IQ+ technology. Tandem is a company founded on innovation. And in 2026, we plan to uphold the ongoing commitment to redefining pump wearability with the launch of Mobi Tubeless. This will be Tandem's first patch pump offering and the world's first patch pump with extended wear technology. As a reminder, Mobi Tubeless is our novel infusion site option with the existing Mobi pump that transforms it into a tubeless patch device, allowing for interchangeability between tube and tubeless wear on one platform. We plan to file our 510(k) submission in the second quarter and are preparing for its launch in the second half of the year. In addition, our pipeline also includes SteadiSet, our extended wear infusion set technology, our next-generation Mobi featuring further miniaturization from our Sigi technology, software features such as dual glucose ketone sensor integration and our pursuit of offering the world's most robust fully closed-loop AID system. Tandem's leadership in AID has been evident since we first launched Control-IQ in 2020. We are committed to maintaining this position and plan to begin a pivotal trial for the fully closed-loop algorithm later this year in support of FDA filing in 2027. As you can see, our innovations across Tandem's pump systems, applications and insights continue to define why our pipeline is the most exciting in diabetes. Finally, our third main initiative in 2025 centered on reshaping our business model, which is expected to be one of the most impactful levers to deliver both market growth and profitability. We took significant steps to advance our pharmacy strategy across United States. Pharmacy access is widely associated with the significant advantages to offering customers with lower average out-of-pocket cost and easier onboarding. It also provides benefits to health care providers through a streamlined prescription process and a benefit to payers by providing access to technology that improves member outcomes with enhanced data visibility. As a result, manufacturers like Tandem typically receive greater economic reimbursement when serving customers through the pharmacy channel. Our first year of experience with pharmacy access proved these assumptions to be true. Therefore, in 2026, we are accelerating our efforts to increase pharmacy coverage for both t:slim X2 and Mobi platforms and plan to drive utilization of the pharmacy benefit for all our customers. A key aspect of this acceleration is our decision to adopt a pay-as-you-go reimbursement structure, which creates a near-term offset to sales while significantly strengthening our business model over time. Our business is distinctly advantaged in making this sort of a transition as we have more than 300,000 existing customers, regular ordering supplies in the U.S. By transitioning these customers to pharmacy, it provides them the channel benefits faster while helping mitigate Tandem's near-term impact to revenue. We considered a PayGo business model when we first launched into the pharmacy channel in 2025. And based on the experience we gained in payer interactions throughout the year, have decided it is strategically the right move for our business now to drive market expansion and profitability. With the addition of PayGo, Tandem will be best-in-class in all ways with products, outcomes, service, affordability and accessibility. I'd now like to ask Leigh to provide additional detail on the 2025 results and expectations for the year ahead. Leigh? Leigh Vosseller: Thanks, John. 2025 was a record year for Tandem, which is highlighted by our milestone achievement of more than $1 billion in worldwide sales and multiple records in Q4, including our highest sales, gross margin and pump shipments. In 2025, worldwide sales grew 12%, our second year in a row of double-digit sales growth based on a 10% increase in the U.S. to $707 million and 15% internationally to $308 million. Focusing on the fourth quarter, our record worldwide sales of $290 million represented 15% year-over-year growth. This is the strongest sales quarter in our company's history and is of particular significance as it was achieved during a period of commercial transformation. In the U.S., our Q4 sales increased 14% to $210 million. This growth was driven by more than 27,000 pump shipments, our highest quarterly achievement. Renewals from our loyal customers made up more than half of the shipments and MDI conversions represented approximately 2/3 of customers new to Tandem, consistent with trends across the year. We also benefited from a greater portion of our supply sales through the pharmacy channel. In all, sales through the pharmacy channel nearly doubled from Q3, growing to $16 million or 7% of total U.S. sales this quarter. Only a few percent of our total installed base ordered supplies through pharmacy in Q4, creating a meaningful opportunity as we expand awareness and accessibility for our large existing base of over 300,000 customers. Internationally, we grew 17% year-over-year in the fourth quarter, delivering $80 million in sales and 11,000 pump shipments. This marks our strongest Q4 performance to date, driven by growth in both pump and supply shipments. We also realized benefit from favorable FX, offset by $4 million associated with our transition to direct operations, primarily impacting pump sales. For the full year, the total distributor destocking and inventory buyback impact was approximately $7 million, slightly lower than the $10 million we had estimated due to a partial delay in timing from 2025 to the first quarter of 2026. Turning to margins. We delivered on our commitment to improving profitability in a meaningful way. We expanded gross margin by 3 percentage points to 54% for the full year and reported our highest quarterly margin ever at 58%. This achievement stems from success in reducing product costs, driving manufacturing efficiency and executing on our pricing and channel initiatives. We managed our Q4 operating expenses well as they were essentially flat year-over-year and sequentially. This reflected investments in SG&A to support our commercial initiatives, offset by planned efficiencies throughout the organization. As a result, adjusted EBITDA was 11% of sales in the fourth quarter, a 10 percentage point improvement over the prior year. Additionally, we generated our first positive operating margin since 2021 at 3% of sales in Q4, which is an improvement of 15 percentage points over the prior year. One key contributor to this leverage was a reduction in noncash stock-based compensation to a reduced quarterly run rate of approximately $20 million. We exited the year with nearly $300 million in total cash and investments, generating free cash flow in both Q3 and Q4. We have great conviction that the combination of our differentiated portfolio of products and business model changes provide us the ability to achieve our long-term objectives of accelerated sales growth with a gross margin of at least 65% and an operating margin of 25%. Demonstration of this momentum was evident as we exited 2025. As John discussed, we are entering 2026 in the U.S. with a new value proposition as we transition to a pay-as-you-go reimbursement model in the pharmacy channel. PayGo can be a key driver for accelerated pump adoption as it eliminates the upfront payment at time of pump purchase, which has historically been one of the top barriers for adoption. A PayGo business model also lends to a more predictable revenue stream as customers purchase supplies over time, unconstrained by renewal cycles. In transition from a model where revenue is typically recognized upfront, 2026 sales growth may be more moderated. We have the added benefit that can come from shifting our sizable existing installed base into pharmacy to lessen the near-term impact to sales. In all, this transition positions us well for meaningful long-term value creation. Our new PayGo contracts are expected to be effective beginning late in the first quarter. Importantly, in 2026, pump shipments will be the key indicator of our progress in growing the market while expanding margins. Pump shipments in the U.S. are expected to increase 10% to 11% year-over-year, returning to new pump growth led by MDI conversions. Renewal pumps are expected to comprise more than half of total shipments. The catalysts enabling this growth are new technology in expanded markets and pharmacy channel access, building off last quarter's momentum and scaling across the year. Contribution from Mobi Tubeless is not included at this time as its benefit will depend on FDA clearance and launch timing. We will be providing additional metrics this year for greater visibility into the pay-as-you-go transition, which we will discuss at a high level on today's call. More details on our assumptions are provided in the earnings call slide deck posted in the Investor Center portion of our website. Starting with pumps. We anticipate that pump orders through the DME channel will still make up approximately 80% of our shipments in 2026, while we scale pharmacy access. Over the course of 2 to 3 years, we expect the ratio between the channels to flip and the majority of our shipments will be through pharmacy. When serving a customer through pharmacy, there will be no upfront reimbursement for the pump. Sales will be recognized consistent with recurring supply purchases, which are anticipated to be reimbursed at a premium of more than 4x DME, pricing in line with what is seen in the market today. The sales impact of this transition between the channels is anticipated to be the most pronounced in 2026 while we build up the percent of our installed base ordering supplies through pharmacy. Exiting 2025, our U.S. installed base was approximately 325,000 with a low single-digit percent ordering supplies through pharmacy. As a result, our 2026 U.S. sales are expected to be in the range of $730 million to $745 million based on growth in pump shipments of 10% to 11% year-over-year. This incorporates $70 million to $80 million of pricing headwinds, reflecting our adoption of a pay-as-you-go model. Pharmacy sales are expected to be approximately 15% of total U.S. sales in 2026, up from 4% in 2025. In the long term, sales through pharmacy are expected to make up more than 70%. When thinking about the cadence of U.S. sales across 2026, total pump shipments are expected to follow a seasonal curve similar to 2025. For example, in Q1 of 2025, we saw a nearly 30% decline from Q4 of 2024 due to DME deductible resets on January 1. The pharmacy penetration rate is expected to start low in the first quarter, similar to levels we saw exiting 2025 and scale linearly across the year. Turning to our international business. We began direct commercial operations in Switzerland, U.K. and Austria in the first quarter of 2026. Sales productivity in these countries is expected to scale across the year. In the fourth quarter, we plan to transition to a direct model in additional key European markets. In the direct model, ASP premiums will vary by geography, expected to be at least 30% higher than our current pricing in the individual markets. These ASP gains will partially offset an anticipated $15 million associated with distributor destocking and inventory buybacks. As a result, our 2026 international sales are expected to be in the range of $335 million to $340 million for the year. Direct sales represented approximately 5% of total international sales in 2025 and are expected to be similar in the first quarter of 2026 as we scale our direct launches. For the full year of 2026, we expect direct sales will be approximately 15% of total international sales. Overall, worldwide sales for 2026 are expected to be in the range of $1.065 billion to $1.085 billion. This incorporates $85 million to $95 million in total sales headwinds associated with our strategic business model changes. Worldwide sales are expected to be in the range of $236 million to $240 million in the first quarter. This includes approximately $10 million of headwinds split between the U.S. and international. Our clearest indicator of success in 2026 will be market expansion as measured by pump shipments and will not be evident in our sales growth expectations as we progress towards a more predictable and profitable revenue stream. We also maintain our commitment to delivering meaningful margin expansion, reflecting benefit from our pricing strategies, a focus on product cost reduction and continued spending rigor. Gross margin is expected to step up to a range of 56% to 57%, scaling from nearly 54% in the first quarter to 60% in the fourth quarter. Adjusted EBITDA is also expected to demonstrate leverage in the range of 5% to 6% for the full year of 2026. We anticipate adjusted EBITDA to be negative 2% to negative 1% of sales in Q1 due primarily to U.S. seasonality returning to positive in Q2. In summary, we now have multiple levers that can grow the business independent of new product cycles. In combination with our expansive product portfolio, we believe these business model initiatives provide the opportunity for us to deliver accelerated growth in 2027 and beyond. John Sheridan: Thanks, Leigh. As you can see, 2025 was a year full of tremendous accomplishments that position Tandem for increasing success. Our ongoing dedication to innovation and improving our customers' lives continues to motivate us to reach new milestones. I want to thank every member of the Tandem team for your steadfast pursuit of excellence, collaboration and adherence to our shared mission. Your contributions have driven our success and will propel us to another year of meaningful progress, impact and growth. This is an important and exciting time in Tandem's journey. We are well positioned to deliver best-in-class technology to our customers in a more streamlined and cost-effective way while advancing our global business model and creating meaningful long-term value for our shareholders. Thank you, everyone, for joining us today, and I look forward to updating you as the company continues to progress. Operator: [Operator Instructions] Our first question comes from the line of Matt Miksic from Barclays. Matthew Miksic: Congrats on a really strong finish here, both top line and on the EBITDA line. So I think you're going to get a lot of questions here around the new model. I appreciate all the information in the slide deck, kind of spelling it out and laying it out. And it's certainly not -- it's certainly something that folks have talked about and thought about just in diabetes generally that's moving in this direction, particularly for automated insulin delivery systems. One question, I guess, is you gave pretty good guidance on Q1, which was clear for the full year in the U.S. The OUS growth with the $15 million headwind is sort of like a 9% to 10% underlying -- is the right way to think about that kind of in the mid-teens. And so I guess you have like low double-digit U.S. shipments, mid-teens OUS kind of underlying growth to get to sort of like a low double-digit underlying sort of performance metric for next year, absent the PayGo changes? John Sheridan: I think that's correct, Matt. I think if you look at the overall revenue growth or shipment growth for the year, it's going to be in the line of 10% to 11%. So it's going to be double-digit growth in shipments. And we also expect to see a return to growth in new shipments. I would say that, that is the best indication of our performance next year, including the profitability because when you look at the revenue numbers, the revenue numbers are impacted by the headwinds from the pricing that comes along with PayGo. So this is a very impactful change in the business. We're very excited about it. I think when you look at it, I mean, basically, we double or more than double the revenue, the lifetime revenue from a patient, and that's a substantial change while at the same time, we are going to substantially reduce their out-of-pocket and improve the experience. So that's a real win in both sides. And like I said, we're very excited about this. It's going to be impactful. And I think when you look at the impact on the P&L, I mean, certainly, there's a revenue hit from the pricing headwind. But when you look at the gross margin, you look at adjusted EBITDA, we do show solid performance there. And as I said, shipment growth is the real numbers to look at in 2026 for us. Operator: Our next question comes from the line of Mathew Blackman from TD Cowen. Mathew Blackman: Great. A lot to chew on a lot to ask. I guess I'll ask the expectation of 20% -- roughly 20% of pumps in 2026 going through the pharmacy. Can you give us some context on where you are from today on a coverage and contracting standpoint and where you'd expect to be exiting the year? Just trying to reconcile the 20% mix versus maybe where you are on the contracting side, what progress you've made there? Leigh Vosseller: Sure. Happy to. So I would say there are 2 ways to think about coverage for us. I mean we do have contracts with all of the major PBMs, the top 3, which gets you about 80% of covered lives under contract. But what we're really focused on is the formulary access where we have roughly 1/3 of lives covered today. And think about that as just the beginning as we're launching into this -- the pharmacy with the pay-as-you-go model, which those contracts will be effective late in the first quarter. So at the very beginning here, I would expect low volume, but it will continue to scale up across the year to average to that 20% point that we -- that you mentioned in terms of pump shipments going out the door with a $0 upfront payment. That's a little bit separate or different from the amount of our installed base that we expect to be ordering through the channel. So think about this as a complement, while we have that headwind on the upfront piece, we have the ability to mitigate some of those headwinds by transitioning or shifting more of our current DME customers into the pharmacy channel. And similarly, that percentage will start low. We came out of the fourth quarter with less than 5% ordering through the pharmacy channel, and we expect that to scale up across the year as well. So on average for the year, you can think about that as roughly 10% of our customers across the year that will be ordering their supplies through the pharmacy channel. Operator: Our next question comes from the line of Larry Biegelsen from Wells Fargo. Larry Biegelsen: Congrats on a nice quarter here and on the bold move here. And as Matt Miksic said upfront, this has been, I guess, talked about for a long time, John, this pay-as-you-go model. So my questions are really why now? Why is this the right time? And the long-term pharmacy goals, why is 80% the right number in 2 to 3 years? I assume that excludes Medicare fee-for-service. And how are you thinking about attrition changing with the pay-as-you-go model? John Sheridan: Well, we have been thinking about this for a while. And I think in the fourth quarter, we gained a lot of experience just in our pharmacy business. We've had conversations with a number of payers. And we think it's very doable. We've been looking at -- we've talked about pharmacy for a while now. And I think it's absolutely the right time to make this transition. We've got a number of other things that are very positive when it comes to the business. So as I said, this is a very impactful decision for us, but it's the right one, and we're very excited about it. Leigh Vosseller: I'll take the question about the goals and your question on attrition. So as we think about the goals, this is just the beginning, and we're working to build up additional formulary access and as well as within the formularies that we have to build up attachment from the downstream payer plans. And so what we see is over the 2 to 3 years is what it will take for us to build up to optimal coverage, if you want to call it that, where at that point, we probably will have at least 70% of our sales going through the pharmacy channel. So that's a complete flip of our business model, obviously, from where it is today. And attrition is a question that we're often asked as we think about pharmacy channel at all, where people don't necessarily have what you would call lock-in periods like they have in DME. And what we've seen in our experience in the DME channel is that even though people stay with us for 4 years because of that warranty period, we see people staying well beyond the 4 years, whether it's through another pump purchase or just staying on the pump outside of warranty because high quality of the pump, it just keeps working, so there's no need to transition. And so we feel comfortable that when people try out our technology, they stick with it. And even in this model where maybe they won't have the same sort of dynamics in terms of restrictions from switching from one to another, we think they'll stick with us. Operator: Our next question comes from the line of Chris Pasquale from Nephron Research. Christopher Pasquale: I appreciate all the additional info and the different metrics this quarter is going to be helpful to track these initiatives as they go forward. John, I wanted to ask about the international transition. When you first sort of talked about this, it seemed like it was largely going to be a 2025 headwind. But now it sounds like it's going to have a significant impact on 2026 and possibly even beyond depending on sort of what other countries you're getting into late this year. Can you talk about why it's such a protracted process? And how do we think about the point at which you completed this transition to direct? John Sheridan: Well, I think that, first of all, I think our team did an amazing job this year. When you think about it, we made the transition from the distributors. We actually began to hire sales force in the new markets that we're going into. And then we built and installed the infrastructure that will enable us to actually ship a product and bill for it. All of those are major tasks. And I think that it's -- we're biting off a significant amount of operations when we go into these new countries this year. Of course, we're going to 3 this year. And I think that trying to do it all at once would be just too risky. And so I think that putting it into a 2-year period is the right way to do it. As we did progress this year, we essentially got all of that done. We are now live in those 3 countries and we installed all of the infrastructure to do that. We're basically using that as a playbook now, and we're going to do the exact same thing this year for the next countries that come in 2027. So I think that we feel good about it. I think it's staged properly. And I think that when we get to 2027, I think that that's the majority of the transition that we plan to make. I think sort of in the long term, we intend to have a hybrid model where we do have direct business, and we intend to continue to work with many of the fantastic distributors that we have in the international markets. But it's gone very well, and I think it's going to go just as smoothly in '26 and '27. Operator: Our next question comes from the line of Danielle Antalffy from UBS. Danielle Antalffy: Really congrats on a good quarter and for making this move here. I guess, Leigh, just on the leverage, that was really nice to see in the quarter. Good to see in the guidance and the commitment to that. I'm just curious what the different levers are here. Obviously, ultimately, pricing in the pharmacy and the significantly higher ASP there is helping. But maybe talk a little bit about the levers going forward in '26 but also as you think over the next few years. Leigh Vosseller: Sure. Thanks for the question, Danielle. You named probably one of the biggest levers we have right now, which is pricing. As we look at the value that can come from this transition that we're making in the pay-as-you-go model, that will continue to bear great fruit for us in the next couple of years in terms of a growth perspective on revenue and profitability. But also so important to remind that we do have a number of product cost reduction initiatives in place. One of them really comes from Mobi as we continue to build and scale that part of the business. In the long term, Mobi, and we're getting very close with the pumps to being at scale. The manufacturing cost of a Mobi versus the t:slim is 10% to 15% lower. So that's one piece of it. And then as we continue to build up the cartridges and think about that contribution, that will be 20% or lower or higher, I should say, reduction in cost versus the t:slim. So as Mobi continues to grow in scale, that will continue to drive gross margin benefit, too. And then you can just take that forward and think about any new product that we launch. Part of our design principles in the R&D process are to consider that new products need to have a better margin profile than the products that we have in the market today and continue to improve upon the products that we have in the market today. And so I would say between pricing and our initiatives within the manufacturing and R&D areas, that's really what's going to drive that leverage in gross margin. And then they get a little further down the P&L to the operating margin. Similarly, we continue to look at our infrastructure and think about what's the best way, how to be most efficient. And we're constantly looking for opportunities and ways to reduce the need to hire more people in the future and just better serve our customers with a lower headcount base going forward. Operator: Our next question comes from the line of Mathew O'Brien from Piper Sandler. Matthew O'Brien: I'd love to talk about the acceleration that you're expecting on the new pump shipment side here in '26. It's one of the better numbers we've seen over the last several years. And I know you have Mobi coming out with Libre 3 Plus and then the 15-day, but you're not assuming any benefit from Tubeless here in '26. So why the confidence in the ability to do that without especially that patch kind of product here in '26 and maybe deconstruct how you get there to see that kind of acceleration? John Sheridan: I would say that while we don't have Mobi in the revenue plan, that's typically the way we've done it in the past, a little bit more conservative when it comes to uncertainty. I would say that we have high confidence we're going to get this thing approved this year. And when you consider Mobi, we'll now have -- it will have multiple sensors integration. It will have Android and it will have iOS and then it will also have a Tubeless implementation. There's nothing else like that on the market. I think as you look at the buildup, just to get to the Tubeless product, we are adding a great deal of functionality to these products. We're also expanding Mobi into the OUS markets, and we're expanding FreeStyle Libre 3 into the OUS markets as well, which has been a point of competition. I think when both those products are there, it's going to be a completely different picture. And so I think the pipeline is certainly a big piece of it. I would say that a lot of the work that we've done with the sales force in terms of improving their productivity, as we mentioned, we have a brand-new system coming online here next month, basically. That's going to substantially improve their efficiency and productivity. So we expect to see that contribute to the new starts. And then finally, I think that pharmacy, pharmacy is something that we think is going to have an impact on our business this year. So I think when you look at that, really, it's the new technology, it's the sales organization, the improvements that happened there last year. And then it's also pharmacy. I think the combination of those will drive the growth that we're going to see in 2026. Operator: Our next question comes from the line of Mike Kratky from Leerink Partners. Michael Kratky: Congrats on the great quarter. Maybe to start, just wanted to circle back on some of the Tubeless Mobi commentary. Did I have that right, you said planning on submitting the 510(k) submission in the second quarter of this year is the first part? John Sheridan: That's correct. Yes, we plan on submitting in the second quarter. We have had a great deal of very responsive support from the FDA. And so we do feel highly confident that we'll get it approved in the second half of the year. Operator: Our next question comes from the line of Matt Taylor from Jefferies. Matthew Taylor: I get your comments on pharmacy shift and going to flip in a few years. Can you talk about at a high level, how that's going to impact the P&L and sales growth in '27 and '28 in more detail. It's a little bit confusing as you're going to continue to have that shift through the next few years. Leigh Vosseller: Sure. Happy to. So when you think about -- we're talking about the headwinds this year. This year is where we expect that to be more pronounced as we're just launching into it. And we don't yet have what I would call the cover for it coming from the supply sales or the reimbursement on supplies. So you can see, first of all, for every PayGo customer we get into the model, we're going to be getting reimbursement on supplies more than 4x what we get in DME today. So as you build up that base of customers who benefit from getting a pump with no cost upfront, that's going to be a tailwind on revenue in the coming -- in the next couple of years. And then add to it that we do have over 300,000 t:slim Mobi customers today in our existing installed base and the opportunity to shift those people from the DME to the pharmacy channel will also create a tailwind, and that's immediate benefit from one day when they're ordering in DME to the next day when they're ordering in pharmacy, you would immediately see that appreciation. And so I think what's really important this year is even though this is a near-term headwind and it does have a moderation effect on revenue growth, we're still demonstrating margin expansion at the same time. So it's showing the power of what this shift can look like in this first year and just you can imagine how much better it gets in the coming years. Operator: Our next question comes from the line of Shagun Singh from RBC Capital Markets. Shagun Singh Chadha: I was wondering if you can shed some light on cadence through the year. So the $70 million to $80 million revenue headwind, how do we see it through the year? I think you indicated that this will be effective, I believe you said in late Q1 '26. So anything you can share on cadence on sales and margins, that would be helpful. Leigh Vosseller: Sure. So I think the way to think about it is, obviously, in this first quarter, it's going to be a very low percent of our shipment volumes that will have this effect from the PayGo reimbursement. So the bulk of those headwinds are probably going to be hitting more in the last couple of quarters of the year. And so think about it as low single-digit percentage scaling up to a number that averages to 20% for the year. And margins also, so as we have the same opportunity to transition our supply customers, similar to what we've seen in years past, margins will start lowest in the first quarter. So call it, nearly 54%, getting up to about 60% in the fourth quarter of the year. So you can think about that scaling pretty linearly across the quarters this year. I should add that in the first quarter, in particular, we factored in about $10 million of headwinds worldwide. And you can think about that as roughly split between our international operations and the transition to going direct and between the headwinds that we could see in the first quarter for the PayGo transition. Operator: Our next question comes from the line of John Block from Stifel. Jonathan Block: I'll pivot to international. And maybe, Leigh, you can talk to some of those moving parts. It seems like you've got, call it 3% revenue growth from the extra 30% price on an incremental 10% of volumes. I'm guessing your FX tailwind, I don't know, is 4%, 5%. Then you got this headwind from the move to direct. So maybe you can just flesh it out what's the underlying growth. It seems like it might be 7%, 8%, high single digits and compare that to how you exited the year, which seems on a really, really good trajectory of mid- to high teens. Leigh Vosseller: Thanks for the question, John. You're right. There are a lot of moving parts. I think at the highest level, I'll just start with the fact that we are actually very strong in the international markets and continuing to expand the market. Majority of our shipments today still come from new customers, and we're just beginning to see a more meaningful contribution from the renewal opportunities there. And then you take some of these structural pieces and you think about it. So as you come into 2026, we have the benefit from those markets that are going direct already that are going to provide that price appreciation. And so this year, you're not going to see the full effect of that 30% that you mentioned. That's the way to think about long term. Any market that goes direct, we should see a premium of approximately 30% in any given year. The pricing, when you blend it this year, direct to distribution, it's probably mid-single to high single-digit price increase building up across the year as we transition into those markets. That is, if you will, it's funding the headwinds that we're going to see in the additional markets that are going to go direct this year. So as we think about that headwind, we've sized that at about $15 million and thinking about, as I just mentioned, roughly $5 million-ish in the first quarter. And the rest of it, majority will be hitting in the back part of the year, probably the fourth quarter. But underlying all of this, we're very confident and excited about the opportunity we have in the market. Part of the reason for going direct in these markets is this puts us closer to the customer, better able to sell and the benefits of our technology and bring more people over to Tandem. Operator: Our next question comes from the line of Travis Steed from Bank of America Securities. Travis Steed: I wanted to ask about the quote in the press release you're talking about accelerating sales growth in 2027 and beyond. It's been a while since I've seen you guys talk about a year ahead. I just want to see what kind of is driving that visibility and confidence, how much of that is pay-as-you-go versus Mobi and as you kind of look forward and plan ahead? John Sheridan: I think the most impactful element is going to be the ongoing implementation of pay-as-you-go. We do have the headwinds this year, but we are going to be making substantial progress. And as we move and get more and more of our installed base, more and more of our new customers into the pay-as-you-go model, the revenue impact of that is substantial. And so that's going to grow in time. And so I think most impactful is certainly going to be the transition to pay-as-you-go -- and as Leigh mentioned, in addition to the pumps and the supplies that come along with the new pumps, there's also the opportunity to convert the 325,000 people who are existing customers to pharmacy as well. Both of those are meaningful. We also have a very exciting pipeline. We have a lot of technology coming to the market this year. We will have the first extended wear patch in the market, and that's going to be meaningful. I think that right now, there's nobody competing with our patch competitor. And so we will have a device that has the same form factor. It will be in the pharmacy channel and has a better algorithm. So we expect that to do quite well. So -- and then beyond that, we've got a very exciting pipeline that's going to continue to come, including our move to a fully closed loop system with -- hopefully, we see that in the market in 2027 or 2028. So I think all of these things add up to our confidence as a management team that we will see growth going forward in '27 and beyond. Operator: Our next question comes from the line of Jeff Johnson from Baird. Jeffrey Johnson: I am on a train. So if I break up here, I'll just jump back in queue. But Leigh, you mentioned that the pharmacy pricing is going to be consistent with what others are out there on a tubed pump side in the pharmacy channel. Just to put a number on that for modeling purposes, $450 a month, is that a reasonable price to dump into our model as we try to build this out? And you talked about some of your installed base maybe starting to get their supplies in the pharmacy channel. I think from your comments, it sounded like they get that same price for their supplies, but ostensibly that higher supply price is also supposed to include some amortization of the pump. So if I'm a current user that jumps into the pharmacy channel, am I also going to get that $450 a month or whatever the right number is there? Just help out. Leigh Vosseller: Yes. A lot of good commentary and questions there, Jeff. So the way I'm asking people to think about it this year is we're just getting going with this, right? So we're launching into the market with these new contracts effective here late in the first quarter. And there's a mix of contract terms, I would say, within the contracts that we have. And so think about the dynamics could be whether we have preferred or nonpreferred access, which influences what the rebate looks like, how much co-pay assistance we use. So long story short, what I'm suggesting to start with this year, at least from a modeling perspective is to think about it as about $350 per month per customer. And that's going to give us the starting point as we take the time to monitor the trends to see what is the real utilization and mix across the contracts that we have and further inform you in the future for how to think about where that average state could be. But I would say that's a really good starting point. And that alone is a really great benefit versus the DME pricing that we see today. And so -- and when you think about this, asking about what does this mean for people who already bought a pump versus people who are getting a pump for the first time, it's almost like a reset, if you will. And so basically, going forward, the whole business will be structured, I would say, agnostic to whether they're getting a pump today or not, and it will be consistent pricing across the customers, if that makes sense. And so again, I would start with about $350 per month as a modeling point, and we'll continue to inform you along the way as we get more information. Operator: Our next question comes from the line of Jayson Bedford from Raymond James & Associates. Elaine Cui: This is Elaine on for Jason. I wanted to ask a question on type 2. So could you please give us some color on the progress there? There was also an update to the ADA guidelines recently on C-peptide testing. How does this new guideline help with your discussions with CMS? And can this lead to an inflection in type 2 new starts? John Sheridan: Right. So I mean, we're excited about the type 2 market. It doubles the size of our addressable market in both the U.S. and OUS. In 2025, we obviously got the indication. We ran the pilot, and we went to full commercial availability in the fourth quarter. We learned a great deal in the pilot, and we actually saw a pretty significant bump in starts between the third and fourth quarter, the quarter that we actually had the full organization working on this. As we look at 2026, it's basically a core that we intend to focus on type 2 and invest in marketing and also some research relative to PCP and OUS markets. I think we've got tailwinds as we enter the market with FreeStyle Libre 3 and Mobi implementation. Obviously, Mobi Tubeless and pharmacy channel is also going to drive uptick. And relative to the C-peptide decision, it's also a potential positive for us as the Senate has asked CMS to review the NCD and make a decision in August of '26, which is not that far away. And certainly, having that go away will substantially improve Medicare's access. So we have 1 quarter with the data, and it's very positive. And I think that we're looking forward to seeing good growth in 2026 based on everything that we've got going on. Operator: Our next question comes from the line of Richard Newitter from Truist. Felipe Lamar: This is Felipe on for Rich. Just in the context of renewal pump shipments, we get a lot of questions about a potential drop-off in 2027, considering the prior 4-year drop-off in new patient starts. I'm just wondering if you could help give us some context on how you're thinking about, I guess, out-year pump shipments and how that fits into your strategy with pharmacy and maybe any potential offset you can get in pharmacy if there is a potential drop-off in pump shipments in 2027? Leigh Vosseller: Sure. It's a great thing that I'd like to highlight. So as you do think about it, I think people have looked at our model and see that when you look back 4 years ago, the number of opportunities will decline here in the coming years a little bit from what we've seen before where we were on an uptick. And so this year, in particular, we still expect renewal shipments based on the normal model and the normal -- the waterfall that comes with it, that renewal shipments will still grow double digits year-over-year. So we have that tail of opportunities even though new opportunities in 2026 are flat versus what came to market in 2025. But I think it's a great tie-in to pharmacy. As we look ahead and think about this model, it greatly reduces the reliance on renewals as a driver for the business. It's important that we retain our customers, and we have really great retention rates, but we don't have to worry about going out every 4 years. And if a patient is comfortable with the pump they're on and it's working just fine, trying to convince them that they should buy their next pump or worrying about insurance cycles that come with it. And so I think for us, it's really important to transition these folks into the pharmacy channel where for them, it's a lower out-of-pocket. It's easier for physicians to prescribe and there's none of this worry about when I get my next pump. And so as we look ahead, where the opportunities in the U.S. at least will start to decline, that won't be a concern about our ability to grow the business. You didn't ask about international. It has nothing to do with pharmacy, but I just want to underscore our renewal opportunity outside the U.S. is growing and becoming a more meaningful contributor there, and there's a lot of room to benefit from that in the coming years. Operator: Our next question comes from the line of David Roman from Goldman Sachs. Philip Coover: This is -- it's Phil on for David. Probably directed at Leigh, I wanted to double-click on the gross margin trajectory, a lot of emphasis and fairly so on sales and sales cadence moving forward. But logically, there's a headwind to gross margin this year with the sales transition. Can you talk about sort of the trajectory or the exit rate from maybe this year or when things normalize in '27 for underlying gross margins and help quantify what the headwind is maybe this year that's going to lift next year or beyond? Leigh Vosseller: Sure. So maybe I'll just start with the fact that in 2025, before we even had a meaningful pharmacy opportunity, we already stepped up gross margins substantially year-over-year by 3 points on an annual basis. And in 2026, I think important to understand that even with this moderated sales growth rate, we can still expand margins another 2 to 3 points. And so we expect to exit this year at about a 60% rate. And you make a good point about the headwinds, putting a little bit of pressure on margins. So that just means that it gives us more opportunity to expand those faster in the future. And so we're very focused on driving that. I mean it's a very important part of our business with everyone. We've always been focused on sales growth, but what we want to show is that we have the ability to drive margins like you see at competitive levels across the market. Operator: Our next question comes from the line of Joanne Wuensch from Citi. Joanne Wuensch: There's a lot going on in 2026, both in the U.S. and outside the United States. You've sort of addressed sort of how to think about the first quarter, but can you help me understand revenue and, I guess, gross margins, the progression throughout the year? I mean, not to give specific second, third or fourth quarter guidance, but maybe ratios or something just to sort of lay the groundwork so we set the models up correctly. Leigh Vosseller: Sure. I'm happy to help with that. So I'll start with the U.S. I think that's where you see probably where you're trying to untangle all the parts and pieces and how they might influence the year. From the perspective of U.S. shipments, let's start with that. And remembering that still 80% of our shipments will be through DME this year. I would expect the same seasonal curve on pump shipments. So you think about the lowest point in Q1, the highest point in Q4. And that has a heavy influence on gross margins. And I would say the way our margins have been structured historically. And so where we've always seen that pumps have the highest gross margin and supplies are or meaningfully lower than that. And so that's why you can expect a similar trajectory of gross margin across the year, starting at about 54%, scaling up to 60%. And when I say scaling up, I mean measurably stepping up across each quarter of the year because even though we have these headwinds, if you will, on the pump price with the pump going out the door at $0, we have that opportunity to continue to fuel margin expansion with the pricing benefit that will come from the supplies and the supplies we shift into the pharmacy channel. We also have the OUS business to help there. So we're going to be scaling up our direct business across the year, and that is also positive and beneficial to gross margins despite those headwinds that we expect to see there. And so I would say when you think about the revenue models and the margin models, this year, not yet too dissimilar from what you've seen from years past. But we do expect, as we look ahead, as pharmacy becomes a bigger piece of our business, it will start to level out those seasonal curves to some extent. But for now, I think I would start with similar assumptions to what you've seen before. Operator: Our next question comes from the line of William Plovanic from Canaccord Genuity. William Plovanic: So I was just -- if you can help us out with this transition on the PayGo model, how many months to breakeven on that in your models? And then I don't think you talked about free cash flow in 2026. Do you expect free cash flow positive in '26? How should we think of the quarter cadence of the cash burn? Typically, Q1 is a heavy cash burn quarter. So just so there's no surprises. Can you help us with that? Leigh Vosseller: Absolutely. I'll start with the breakeven question. There actually a number of ways to answer that question, but maybe one way that I can help you think about the impact on the business is when you think about a PayGo customer, there's a breakeven point for an individual customer as we offer the $0 pump, and it takes a number of months in order to cover that with the supply sales for that customer. But because we have this opportunity to shift our existing customer base, you can think about it as one PayGo customer plus 2 existing customers, you break even within -- pays back within a handful of months. And so it doesn't take too long in order to pay back or to cover this headwind that we would see. And that also dovetails a little bit into the cash question. We did exit 2025 free cash flow positive. And to your point, we usually see a dip in the first quarter of the year as we pay out annual incentives, compensation and that sort of thing. This year, on an annual basis, taking all this into consideration as we make the transition, we expect to be free cash flow neutral this year. And by the end of the year, starting to ramp up back to a positive position as we move forward into 2027. We're, obviously, as we make this transition going to be very mindful of our cash balance, but I think that's a good way to think about it across the year. John Sheridan: Leigh, I wanted to make another point about the move to PayGo that it may not be as clear as I've spoken about it a moment ago. But as we move to PayGo, we eliminate a significant number of the barriers that we have with DME. And I think if you think about DME today, it's a problem for the physician to prescribe it. This [indiscernible] has to go and jump through hoops to provide information to justify the purchase. It's troublesome for the patient because they've got to go back and forth, provide information. It takes time. The other thing, too, is one of the most significant challenges, I think, for people these days in the DME channel is it's a large out-of-pocket. And so starting now, I mean, some people might have to pay their full deductible. And that can be $1,000 or more. And so the benefit of the pharmacy channel is that it eliminates the friction. It's easy. It's easy for the patient, and it's also very easy for the physician and their staff. And it eliminates that large upfront payment. And so the monthly payments are also -- they can be lower. And so it's a -- again, it really does address the problems that we have in DME. And I think that it does explain, I think, why we expect to see the pharmacy drive uptick in new patients, and that's going to benefit the business. Operator: Our next question comes from the line of Suraj Kalia from Oppenheimer & Company. Shaymus Contorno: This is Shaymus on for Suraj. Can you just talk about what you need to do to move patients from the DME to the pharmacy? Anything that you can do to, I guess, make that faster -- move that faster through that channel to that channel? And then with pay-as-you-go, as you move towards pharma, do you have to account for anything as a percent of bad debt or uncollectible as you switch to those contracts? Leigh Vosseller: Thanks for the question. So I'll answer the last one. Nothing particular to think about in terms of unusual accounting treatment, I would say, in that regard. Think about it as a normal revenue stream as supplies are purchased over time. And the question about how to move patients. So the first thing we do is we share with them how much better the benefit can be for them from an out-of-pocket perspective. And so when you compare to DME supplies, they often have to be deductibles at the beginning of the year. So it can be a heavier out-of-pocket then. Maybe it's best at the beginning of the year. But on pharmacy, it can be more consistent and we actually have the ability ourselves to help buy down or subsidize, if you will, that co-pay. And so the main thing is helping them to understand the benefit and how much better it can be for them financially. We also -- people tell us about how much they love our customer service and they fear this change might take away that relationship they have with us, and we're reassuring them that this is good, good for you financially, and we will still maintain the same level of customer service that we have today. The only other, I would call, a small friction piece, if you will, is it does take another prescription from the physician. So we do need to get the physicians involved to write a new prescription for that patient within the pharmacy channel. None of these are insurmountable in terms of moving people over. They're just work and so that's why it's not an overnight change. It's something we have to work on over time. But we feel very confident in our ability to be able to ship those customers. And especially as we build more and more access, it can be a broader offering across the whole market. Operator: Our next question comes from the line of Mike Kratky from Leerink Partners. John Sheridan: Mike sorry, you got cut off the last time. Michael Kratky: No, no worries. I should have asked both upfront. So that's on me. But thank you for circling back. So I wanted to ask about the U.S. renewal opportunities. I think in 2025, it was up around 18% just for the opportunities, if I have my numbers right, and renewal shipments was up closer to around 10%. So if renewal opportunities is effectively flat for 2026, what's giving you confidence that you can really grow that double digits this year? And is there any kind of risk around that? Leigh Vosseller: Great question. So first, I'll just maybe give a little more direction on the shipments in 2025. They were up well above 10%. So we did see a higher growth rate on renewal shipments. And when you think about 2026, the number of opportunities are flat compared to 2025. So that's one calculation. The growth comes from the fact that we have a tail of customers from years past. And so remembering how our renewal model works, when warranties expire over the course of about 18 months, we get to a 70% or better capture rate of people buying that next pump outside of warranty. And so what we have are still a fair amount of people from 2025, especially if you think about the people in the fourth quarter whose warranties expire that we've hardly even talked to yet. So there's still a fair number of -- a nice sizable opportunity base coming from '25 and some even left over from '24. So that's going to fuel the growth so we can still grow renewal shipments double digits in 2026. And then just wrapping it up with that concept again about pharmacy and the ability to shift people or transition them to pharmacy supplies, it will take away that reliance on driving those renewal purchases of a pump, and we can just keep them on their supplies as long as they would like without having to worry about that timing of when renewals come to market. So we're very excited, if you haven't taken that away from today about this pharmacy opportunity for us as a business. This year is going to be a great year of transition for it, and I think you're going to really see some really exciting outcomes in the coming years. And so we look forward to demonstrating those in the coming quarters. Operator: Thank you. At this time, I am showing no further questions. This concludes today's conference call. Thank you for participating. You may now disconnect.
Operator: Ladies and gentlemen, welcome to the Umicore Full Year Results 2025 Conference Call. Your speaker for this call will be Bart Sap, CEO; and Wannes Peferoen, CFO. [Operator Instructions] I will now hand the conference over to the speakers. Please go ahead. Bart Sap: Good morning, everyone, and welcome to the full year results 2025 of Umicore. And as you can see here, of course, we have taken this picture, a beautiful gold nugget. And I think for the ones following us will understand why we have put that picture forward. And of course, I'll be coming back on that later when I look back on 2025. Now if you read our set of numbers, I would like to highlight again that we have adjusted during the CMD a new reporting structure, different segmentations in our business group. So please do have another good look at this slide because we will be reporting and commenting the numbers in the new structure. So Wannes is sitting here on the left with me, and he will also comment, of course, on the finance and some of the business trends as well as usual. And let's have a short look at the agenda. So nothing particular here. First of all, we go on the core strategy, the key numbers. We're going to go over the outlook ultimately for 2026 and then hopefully have an engaging Q&A at the end of the session. Yes, our core strategy. Now we launched our core strategy in March 2025, where we indeed had a different approach and not just chasing growth at any cost, much more towards that value recovery and battery materials, but also more value extraction in our foundation businesses. And roughly around the time that we were announcing our CMD, our new strategy, the world started to move violently, I would say. And the geopolitical landscape has been changing fundamentally. And therefore, also the markets as well as supply chains have been reshaped and continue to be influenced by new policies coming out. So the world is structurally different versus roughly a year ago. Volatility is, for the time being, the new normal, and we will continue to navigate and, of course, react and adjust according to the volatility that we see. Now if I zoom out and see what's happening in the world, it's clear that we have a much more fragmented world and that the world is waking up that if you want to be a technology leader, if you want to have a strong economy going forward, you need these critical raw materials. You need to have your own supply chains, and that's where Umicore's circular business model, which is multi-metal on the one hand, on the recycling refining side, but also on the materials that activate the world downstream, the applications downstream is more relevant than ever. So having a secure and sustainable supply chain in different parts of the world becomes a key element for society. And this is right up the alley of our strategy, and we [indiscernible] our business model with 4 key pillars: capital, performance, people and culture and partnerships. And let me now highlight some of the achievements that we had in these different segments over the years and some of the actions that we took. First of all, on the capital, and that was the first picture of the presentation. Obviously, we sold and had a subsequent lease-in of our permanent gold inventories. This has unlocked significant value. This also has helped further to deleverage the company, but also it transitions the price risk, the long-term prices of these inventories outside of Umicore. Now we also said at that time that lease rates for gold are typically stable. It's an alternative versus cash or pure money in the end. And even in that volatility and that frenzy, let's say, around PGMs at this point in time, also lease rates have -- for gold have remained stable at 0.5% to the 1% mark, well below typical financing rates that you would expect for normal debt. Now next to the gold, we also have been very disciplined on our CapEx. Remember, we guided at the start of the year more to EUR 400 million. In the end, we came in at EUR 310 million by making deliberate choices, but also being very strict on the execution of the projects that we are having. If I go to the performance pillar, there the full year results is in line with our latest upgraded guidance. So we said between EUR 790 million and EUR 840 million during the summer. We came out slightly above that EUR 840 million. So we're very satisfied with this set of numbers, a strong performance, I would say. And this was really, really also supported by the efficiencies, targets and the mindset that we are cultivating more and more within Umicore. And we promised EUR 100 million. We achieved that target, and Wannes will explain later on, of course, that has helped to offset the inflation, but also some FX headwinds that we had in2025. So I mentioned it already, we're driving the company much more to a performance culture where we take our accountability. We really focus on what is the essence. We do what we need to do in a very disciplined way, and this is showing results, and we will continue to push forward in that direction. On the partnerships, we also not have been sitting still, I would say. We had quite some action there as well. And we closed a partnership around our silicon anode materials with a Korean company, HS Hyosung Advanced Materials. And together with them, we will industrialize this really an interesting and exciting technology, and we found a way actually to bring that technology to the market without having to allocate excessive cash or very sizable amounts of cash for Umicore. Next to that, critical raw materials. We have been working on that trend, of course, already for quite a while. And we announced our partnership with STL, Societe du Terril de Lubumbashi. So basically, we have shared technologies, have upgraded installations in the DRC in order to recover germanium from old mining tailings. And this was really a support for the business going in '25 and beyond. Now let me go to the key figures. Wannes will go in more detail, so I'll stay pretty high level here. I would say we really had a strong performance in our foundation business. It was supported by group-wide operational excellence efforts and a favorable metal price environment. EBITDA up 11% to EUR 847 million, 24% EBITDA margin, a good free cash flow supported by the gold inventory sales of EUR 524 million and leverage of 1.6. I think we can all agree this is a very solid set of numbers in the current environment that we live in. So happy with that. Let me now go to the different business groups. Let's start off with Battery Materials Solutions. So for your reference, Battery Material Solutions now represents, on the one hand, Battery Cathode Materials and the battery recycling business. And before I go in the details of the different business units, I would like to have another glance at the Battery Cathode Materials and EV markets out there at this point in time. So at the CMD in March 2025, we said that this market is still taking shape and has inherent volatility. Well, that's what we have seen in 2025 and also what we continue to see in 2026. EV penetration around the globe is progressing, but at quite different speeds, China leading decisively. Europe is following more moderate and U.S., well, there, actually, we are quite behind. And of course, the policy change of the U.S. -- the new U.S. administration is not helping that. The CO2 tolerance is much higher than in previous administrations. That is clear. And that's why the policy is shifting and pivoting away, I even would have to say, from EVs to internal combustion engines, right? This clearly has an impact, and you have seen announcements that even battery makers in the U.S. are now focusing more on energy storage than pure EVs. And of course, quite a number of OEMs have had to make difficult announcements. If I look to Europe and China, that's really a -- and it's depicted here as well with an arrow. That's really an area where there's an interdependency. Today, we see that China still has overcapacity that a lot of OEMs are relying on China to import their batteries into Europe. Also for cathode material, we still see cathode material flowing into Europe at this point in time. So competition is fierce. I think that is fair to say. Now at the same time, we also see that there's a heightened risk of trade tensions of potential restrictions on exports of certain technologies by the Chinese government on the one hand, but also in Europe, a much stronger talk about these local Brazilian supply chains and local content requirements. So the next days, the EU is expected to come out with some policies. These will be important to monitor those and could really make a substantial difference in the European landscape. So in general, summarizing, the recent industry announcements are emphasizing that the growth in Europe is somewhat challenging, but it also highlights the increased importance of our take-or-pay contracts, and I'll get back to that. Now going to the numbers. So if we look in 2025 for Battery Cathode Materials, we did see a revenue growth, a revenue growth of roughly 11% versus 2024. Volumes -- actual deliveries were up versus last year. We did collect take-or-pay compensation for contractual volume shortfall. And there was a partial offset by lower refining income because of a weaker, more challenging cobalt environment on the pure refining side. And also, of course, the nickel price environment was not necessarily beneficial. Now the adjusted EBITDA as per our expectation came in around breakeven, which is a clear improvement versus last year, where the breakeven result was still containing a substantial one-off, a positive one-off in 2024. Now if you look at Battery Recycling Solutions, during the CMD, we said we would be roughly at minus EUR 25 million. We came in at minus EUR 21 million. Really also here, we continue to focus on optimizing our process and recycling technology. At the same time, we're also very diligent here on the execution and cost management. Overall, you can see a clear also improvement on the EBITDA level, '24 versus '25 despite that we did not have that one-off in there. All right. Let's go to the next business group, and that's Catalysis. In good tradition, we also always start with an overview of the internal combustion passenger car production numbers. And here, we see that '25 is slightly lower than '24. It's not a substantial drop actually. It's minus 0.7%. Europe was more down. At the same time, South America and China, these regions even further progressed. If I then look at the HDD segment, Europe, a slight decline, but a positive evolution in China of 7.1% growth, of course, starting from a relatively low base as the previous quarters -- or actually the last quarters in 2024 were not strong. Now looking at the numbers, a solid set of numbers. We see a sustained demand for our products throughout the business group in a volatile market, I would say, so in an overall challenging economic backdrop. At the same time, we also continue to focus on our operational excellence as we have been doing for the last years, and we're getting increasingly better at this year after year. Now if I look to the Auto Cat, our volumes in Auto Cat were strong. We outperformed the ICE, so the internal combustion engine light-duty vehicle market, which reflects our strong position. But also the focus, as I mentioned, of operational excellence and efficiency is really part of the DNA. We continue further footprint consolidation, amongst others in Asia, where we have taken decisions around our Japanese operations. Precious Metals Chemistry, that follows to a certain degree, of course, the Automotive Catalysts business with the inorganic chemicals. They're the supplier of the inorganic solutions to the Automotive Catalysts business. So also a strong performance there. A good set, of course, PGM price support helping this business also forward. Now our homogeneous catalyst business, which is selling typically in the broader chemical industry, we saw some softness in line with the overall chemical industry pain that we're all going through. Fuel Cell and Stationary Catalysts, the earnings clearly improved. We had higher deliveries for our fuel cell catalyst solutions. We also are on track with our proton exchange membrane fuel cell plant in China, expected to start production in the course of 2026. On the stationary catalyst side of things, we do see a strong demand for backup power solutions and exhaust for these backup power solutions, specifically for data centers in the context of the high demand of the AI companies, AI application. So Catalysis EBITDA margin, 27%. Recycling. Well, you cannot talk about recycling about -- unless you talk about the metal prices. And here, you can, of course, see that metal prices in 2025 are significantly higher than 2024. You know that Umicore that we decided to hedge quite a number of our -- quite an amount of our exposure forward. Why? It creates visibility. It stabilizes earnings profile and it also protects against downside risk. That means if the price environment rallies beyond the average hedge price, indeed, you have some opportunity loss. But still today, we're very happy with these hedges. Now on the remaining open exposure, of course, there's a positive upside of stronger PGM prices to the overall earnings of the business group segment. Now if we look at the overall set of numbers for the business group, we see an advancement in the revenues. At the same time, a stable EBITDA performance with a 39% EBITDA margin. So in Precious Metals Refining, our revenues were in line with previous years. The metal price environment was supportive. We had good volumes. There were -- of course, we had some average hedge rates decreasing year-on-year, which was a backdrop or actually a drag, let's say, on the results as such. The overall mix was somewhat less favorable, still a very strong set of numbers for Precious Metals Refining. We had some slight temporary process inefficiencies, which will no longer be there in 2026, but we were able to offset these by solid contributions from our operational excellence and cost-saving efforts also in this business unit. Jewellery and Industrial Metals, I mean, the central theme here is gold, gold recycling, gold processing. I mean, really a very strong market, strong revenue growth and also a good margin expansion. So this business is also doing really well on basically also the gold evolution and the gold focus, which is there in the market. Precious Metals Management, well, we've talked about already volatility in precious metals prices is an excellent market environment to trade and make trading gains. So this business unit also performed really strong. Next business group would be Specialty Materials. And Specialty Materials is maybe a business group which is sometimes a bit yes, underrepresented or underappreciated maybe by the markets or -- and maybe we should also further strengthen our communication on this business group because it has a couple of beautiful gems in there. If I look at the business group here, a 16% EBITDA growth in 2025, EBITDA margin approaching 20%. Cobalt and Specialty Materials, there was a support of a cobalt trend where we saw a better momentum for cobalt premium products, right? And also here, again, efficiency. You've understood by now that efficiency is really part of our overall performance, and that's why we continue to stress it. If I look at Electro-Optic Materials, there we have seen that China has taken a stronger stance on exports and not a lot of germanium has left China in the course of 2025. We have this joint venture with, for instance, Societe -- so with STL basically, which I highlighted earlier. And this allowed us also to continue to supply our customers in a very strong germanium price market, added by our closed-loop refining and recycling services that we have. So Electro-Optic Materials sees strong top line growth at the end of the year, and we continue -- we expect to continue to see that growth also in 2026. So one to watch going forward. Metal Deposition Solutions, I would say, overall, a good stable performance with a different mix between the business groups. But yes, also pretty good there. So I think this is where I would like to leave it at this point in time and hand the word to Wannes. Wannes Peferoen: Thank you, Bart, and good morning, everyone. Today, I will start with EBITDA before moving on to cash flow, net debt, the P&L and balance sheet. Adjusted EBITDA was up 11%, reaching EUR 847 million, driven by volume growth across all businesses and efficiency savings. This broad-based growth resulted in EUR 125 million of EBITDA contribution. We also delivered EUR 100 million of efficiency benefits, which more than offset inflation of EUR 68 million. Metal result declined by EUR 17 million due to favorable hedges rolling off. This was partially offset by increased prices for precious and platinum group metals as well as minor metals for the remaining open or unhedged position. There was a headwind from foreign exchange of around EUR 45 million, largely due to translational effects as the euro strengthened. Adjusted EBITDA margin improved from 22% to 24%, in line with our Capital Markets Day target of more than 23%. Now zooming in on our efficiency program. We delivered EUR 100 million of efficiency benefits, in line with our target. 25% came from top line growth, 20% was due to a reduction in cost of goods sold and 55% came from a reduction in SG&A and research and development, in particular, in Battery Material Solutions, Catalysis and Corporate. Headcount in the group reduced 3%. Turning to cash flow. Cash flow from operations before changes in working capital amounted to EUR 1.1 billion. This was supported by cash proceeds of EUR 525 million from the sale and subsequent lease-in of the permanent gold inventory in recycling. We finalized this transaction in October last year. It enabled us to unlock significant value, strengthen our balance sheet and reduce finance costs. Net working capital increased by EUR 298 million, mainly as a result of higher activity and to some extent, increased metal prices. The significant reduction in CapEx down to EUR 310 million demonstrates our capital discipline. This reduction is most prominent in Battery Cathode Materials, where we are leveraging footprint flexibility and phasing our spending. Free cash flow from operations was EUR 524 million. Moving to the net cash flow bridge and net debt. The free operating cash flow largely covered the EUR 250 million equity injection into our joint venture, IONWAY in January '25 as well as taxes, interest and dividends paid. In January this year, after the year-end, Umicore and PowerCo each contributed an additional EUR 175 million to the IONWAY joint venture. Net debt reduced slightly to EUR 1.4 billion, resulting in a leverage of 1.6x adjusted EBITDA, down from 1.9x at the end of '24. This is well below the anticipated peak of 2.5x as we focus on capital discipline and maintaining a solid balance sheet. Looking at the consolidated P&L. Adjusted EBIT improved by 21% to EUR 579 million. Adjusted net finance costs of EUR 173 million were up EUR 65 million, mostly due to lower interest income on cash as rates came down and a negative impact from foreign exchange. Adjusted tax charges were in line with the prior year. Pretax income was slightly up, but the adjusted effective tax rate came down from 29% to 26%. Adjusted net income of EUR 288 million was up EUR 33 million. And adjusted earnings per share were up 13% at EUR 1.2. We are proposing a dividend of EUR 0.50 per share, in line with last year and with our policy of a stable or rising dividend. And this represents a payout ratio of 42%. Adjustments to EBITDA amounted to EUR 365 million. As I said earlier, we optimized our business model in recycling by selling the permanent gold inventory and replacing it by revolving leases. This generates a pretax gain of EUR 486 million. This was partly offset by an impairment of our joint venture participation in Element 6 and provisions related to specific restructuring programs. Adjustments to net result include a derecognition of a previously recognized deferred tax asset and the tax impact of the gold inventory sale. Net income was EUR 385 million compared to minus EUR 1.5 billion in the prior year when there was an impairment charge for Battery Cathode Materials. There was a big improvement in return on capital employed from 12.3% to 15.7%. Now turning to the consolidated balance sheet. Our liquidity remains robust with cash of EUR 1.6 billion after repaying a EUR 500 million convertible bond in June. And as I said earlier, net debt was stable at EUR 1.4 billion, and the leverage ratio came down from 1.9 to 1.6 by the end of the year. Group equity improved to EUR 2.3 billion, corresponding to a net gearing ratio of 37%. We have hedged a substantial portion of our metal exposure for '26, '27 and '28, and we continue to look for opportunities to hedge further, in particular, for '29 and 2030, taking into account market interest and forward rates. So to sum up, we delivered a strong performance in '25 as a result of volume growth across the board and EUR 100 million of efficiency benefits. Adjusted EBITDA improved in every business, except recycling, where it was stable and CapEx was well below the prior year. Selling the permanent gold inventory has given us additional headroom while reducing future finance costs. And we continue to focus on driving cost efficiencies, controlling working capital and disciplined capital allocation in '26. I will now hand it back to Bart. Thank you. Bart Sap: Thank you, Wannes, for that overview. Very clear. Let's maybe have a look at the outlook for 2026. So the essence basically is that we entered the year on a stronger footing. And if I look at the different business groups, on Catalysis, we continue to have a very strong performance in this business group. We see that continue into 2026, and we are happy with the state in which it is, and that will continue going forward. And Recycling, I think the essence is that in the current favorable metal price environment that we'll be able to offset the negative impact of the average lower hedged metal prices as well as the shutdown, which is foreseen in 2026. So also moving on well there. Specialty Materials, continued strong performance. We do expect we continue -- we believe we continue to see the top line growth, amongst others, in the germanium products, but also a supportive cobalt price environment will help to further support the results. And in Battery Materials, we continue to pursue the midterm plan to recover value, while at the same time, we, of course, have to navigate a volatile and competitive market. So we continue to focus on rigorous capital allocation. We're going to continue to lever our customer contracts with our take-or-pay commitments on which we clearly say that the importance of the take-or-pay mechanisms is increasing given the volume development that we see. And in Battery Materials Solutions, we're going to continue to be disciplined in our spending broadly in line with 2025. On corporate costs, we expect a slight increase because we continue to invest in AI-driven solutions to further enhance and support our operational excellence. For capital expenditures, we are expected to increase versus 2025. And this is mainly driven by a selective growth initiatives in Recycling. So engineering that we do for the decision we need to take around the expansion in Hoboken in our precious metals recycling business that we will take in 2026, but also selective high-quality growth investments in Specialty Materials. So on CapEx, we do expect to be in a range between this year and last year guidance of EUR 400 million with, again, a very good focus on disciplined execution. So if I sum that up, I would say that we will not be providing a concrete guidance today and this is because the market is still very dynamic. And we will have to continue to navigate that environment. Yet based on what we see today, we would expect adjusted EBITDA to further progress into 2026. Now shortly wrapping up before we go into the Q&A. So -- and this is also a shout out to the teams. I think 2025 was really a pivotal year. And Umicore and the teams have shown great resilience. They have shown great discipline also to focus on what our core is and taking courageous actions to basically be able to deliver this strong set of numbers. It's fully in line with our core strategy execution. We're well on track. We're entering 2026 on a much stronger footing, and we will continue to build on the momentum of 2025 going into 2026. So really positive 2025 and with confidence we go into 2026. And with that, we go to the Q&A. Operator: [Operator Instructions] The first question that we have is coming from Wim Hoste from KBC Securities. Wim Hoste: Do you hear me? Bart Sap: Yes. Wim Hoste: I have 2, please. On metal price hedging, you indicated that hedge levels in '26 will be below '25. Can you maybe elaborate a little bit on the outlook of your hedge book? Is it fair to assume that the hedging price levels will increase probably materially as from '27 onwards? Can you maybe elaborate on that? And then also linked to metal price hedges, what are the limitations to hedging more and further into the future? I think you indicated that you're looking to increase the hedging for '29 and 2030. What is prohibitive in this case? Is it just availability of counterparties? Is it financing costs, which get increasingly expensive, extending the hedges into time? Can you maybe elaborate also a little bit on that? Those are the questions. Wannes Peferoen: Wim, Wannes here. I'll take those questions. So looking at the metal price levels of the hedges, that is something we don't communicate. But at the same time, we can also share that, I mean, moving from '25 into '26, there will be less support from the average hedge prices that we have looking at '26. At the same time, looking at the average hedges that have been locked in or the volume of hedges that we have locked in, looking at '26 and '27, this is where 70% on average of the exposure that has been locked in. So I think looking at the metal price exposure, this is where in the current favorable environment, there's still potential. There's still upward potential, but it's limited to that open exposure of, let's say, roughly 30%. Now we are looking into hedging further looking at '29, 2030, again, on the back of creating that visibility, creating that predictability of the earnings. But this is where looking at the market environment, on the one hand, we see a heavy backwardation, looking in particular at the PGM prices, but also limited market interest from counterparties to lock in those prices, hence, also the heavy backwardation. So this is something that we are monitoring closely in order to secure basically at the right time, the right price levels for those years, '29 and 2030. Operator: The next question is coming from Sebastian Bray from Berenberg. Wannes Peferoen: Sebastian, we don't hear you. Sebastian Bray: I have a few, please. The first is on the financing costs. Are there any one-off [Technical Difficulty] Operator: Sebastian, we lost you for a second. I will open your line again. Sebastian Bray: I think there's a lag on the mic, so I'm just going to speak. What would you provide as guidance for '26 financing costs? My second question is on the [Technical Difficulty] Bart Sap: Sorry, Sebastian, we really can't hear your questions. Sebastian Bray: What exactly -- why can't we go back by '28, '29 to a level of recycling earnings akin to what we had in '21, i.e. [Technical Difficulty] Bart Sap: So maybe let's see what we think we understood. So I think there's a question on the one hand around financing evolution... Sebastian Bray: And final one on the VW JV. Is there any chance [Technical Difficulty] Bart Sap: Maybe we go to... Caroline Kerremans: I think we have an issue with the line on your side, Sebastian. So I think it's difficult to receive your questions. If there is any opportunity to send them over the chat, that would maybe be helpful, and then we can move on for now to the next analyst, I believe, because it's difficult to take these as such. Gaia, can you move on to the next analyst, please? Operator: Yes. The next question is coming from Chetan Udeshi from JPMorgan. Chetan Udeshi: Can you hear me okay? Bart Sap: Yes, yes. Loud and clear, Chetan. Chetan Udeshi: Okay. Cool. So I had a few questions. First one, I appreciate you're not giving the guidance, even though you gave same point last year, some guidance for 2024, but I also remember Umicore historically never gave guidance at the start of the year. So I don't know if you are just going back to the old practice. But just based on all of the things that you mentioned, qualitative assessment, what you've seen so far, what is your feeling on the consensus that we have from [indiscernible] for 2026? Do you have a view on where the consensus is? And is that in the right ballpark? The second question, I was just curious on your take-or-pay contribution in the Battery Materials. I mean it's pretty clear right now that some of your customers like ACC, they publicly announced that they are scaling back the ramp-up plans. So I'm just curious, are you getting compensated 1:1 for the lost volumes? Or is it more a negotiation where you are still trying to be flexible if your customer can't take the volumes? And the third question, on Recycling, you mentioned some process inefficiencies. Can you quantify that? Is that a material drag last year, which shouldn't recur this year? Bart Sap: Okay. Wannes, you go on the guidance or I can go on the guidance, doesn't matter? Wannes Peferoen: Well, I think on the guidance, again, we highlighted it's too early to be very concrete. At the same time, looking at EBITDA, this is where we say, yes, we are confident on the year '26, and we expect to make some progress in '26. Looking at other elements of guidance. CapEx, we highlighted, we expect the CapEx to come in between EUR 300 million and EUR 400 million. We will continue to be diligent and disciplined. If you look at Battery Cathode Materials, we reduced the spend in '25 versus what we anticipated, and we anticipate to do the same for '26. At the same time, looking at the foundation business, this is where in Precious Metals Refining, we are working. We're engineering on that expansion of the flow sheet that will result in some step-up in CapEx. And in Specialty Materials, we see some very specific growth opportunities, which we want to support. So hence, the range of EUR 300 million to EUR 400 million. Now the favorable metal price environment is obviously -- can be supportive to the EBITDA, but it can also put pressure on the working capital. And this is something where we will diligently work on in order to make sure that we can offset to a maximum extent any upside pressure on working capital. I think those are key elements, I think we can guide on today. Bart Sap: Yes, that's right, Wannes. And last year, we decided to guide because of the specific circumstances around all the trade uncertainty and the tariffs, right? So we wanted to be clear also there where group was heading and to give you clarity because it was probably the biggest uncertainty out there in the market at that point in time. Now on your second question, the take-or-pay and the further progress. Well, first of all, I mean, I think we have been pretty transparent and clear that in 2025, there is indeed a portion of take-or-pay in the results for which we are financially covered. The ramp-up across contracts. I will not talk about specific contracts. I will never do that. But we see that across -- if I talk more broadly on the ramp-up, it is slower than what we would have wanted to see or what our best view was at the CMD in March. So the weight of take-or-pay in that trajectory that we shared is increasing. right? And this is something that I would like to highlight. At the same time, we continue to have strong confidence in the contracts, and we will continue to leverage these contracts as we have done in '25 and will go -- will also be doing going forward. On the Recycling, I forgot what exactly the question... Chetan Udeshi: The process inefficiencies. Bart Sap: The process inefficiencies. Yes. Wannes, if you want to. Wannes Peferoen: Yes. So I mean, looking at recycling, we highlighted that the volumes were up -- the volumes processed were up. At the same time, looking at the downstream, this is where we had some technical hiccups resulting in some additional costs, some additional rework, but not too material, but at the same time, we also wanted to highlight as it does impact the results. Bart Sap: That's right. And as I highlighted in my presentation, we did offset those with further efficiencies in other parts of the plant. We just want to be transparent and open around this. Again, for 2026, there's not going to be any effect of these operational inefficiencies, so not to be taken into account for you for 2026. Caroline Kerremans: Sorry, before we move on, we can maybe take the questions of Sebastian Bray that have come in through the chat. Bart Sap: Yes. Thank you, Chetan. Caroline Kerremans: So the first question is the financing costs in 2026. Could this be down versus 2025? The second question is, could Recycling return to levels of full year 2021? And then the final question is on the JV, the IONWAY JV. Could this be recut or renegotiated as Volkswagen is cutting back on that? Bart Sap: Maybe you take the first one. I'll take the 2 other ones. Wannes Peferoen: Yes. So looking at finance costs, obviously, very difficult to guide because there's 2 components which we don't have fully in control. One is basically the cash deposits and the interest rates we get on those cash deposits. And this is also where there has been a steep decline in '25 and hence, also less contribution to the finance income, I would say. The other element is the forward points, looking at the financing transactions in foreign currencies. This is where we also carry the forward points and again, hard to predict, I would say. At the same time, I think '25 seems rather exceptionally high looking at the financing costs. I think I would anticipate to have that lower going into '26. But again, hard to give guidance on. Bart Sap: Yes. And then on Recycling, well, I think it's true. I mean, it's a fact that actually your hedged exposure or unhedged exposure, let's say, in '29, 2030, the more we move out in that period, I think we're substantially less hedged in that time frame. Suppose that the current favorable metal environment remains for all the main metals such as platinum, palladium, rhodium and of course, some others as well. Clearly, there could be a substantial upside versus the EBITDA that we are reporting today. Hence, at the same time, these prices are not guaranteed. So it's impossible for us to guide on that. But in theory, there would be, of course, a higher upside possible. On the Volkswagen question, you understand I will not comment on that. We have clear contracts in place. We are going to continue to enforce these contracts. And at this point, I have nothing material to share with you on that point. Operator: [Operator Instructions] We have our final question at the moment coming from Mazahir Mammadli from Rothschild & Co Redburn. Mazahir Mammadli: One from me. So assuming that we have a favorable metals price environment going forward in the next couple of years, what would your priorities be in terms of allocating the excess free cash flow that you generate? Bart Sap: Yes. So basically, if I understood well, it's actually a cash flow allocation question, Wannes. But I mean, let me start off here as well. I think our focus today is still really on further being cash disciplined. It's really on that value recovery. And once the balance sheet continues to remain strong and solid, we will, of course, then decide what to do with the excess funds and will be coming out to the market. So we don't have a clear view on that at this point in time because we're still -- our focus is still on solidifying in a structural way, the balance sheet. So Wannes, I don't know if you would have any... Wannes Peferoen: No, completely right. I mean, looking at what we said in the CMD is that we look at landing at a leverage -- structural leverage between 1.5 and 2, let's say. And once we have that in place, once we see that recurring, that's the next topic that we will need to discuss. Operator: We will now take our final question from Stijn Demeester. Caroline Kerremans: I have received a message from Stijn. Sorry, I will read the message. Okay, you're in. Stijn Demeester: Yes, some difficulties here. So first one is on the SK On contract and the probability of renewal in '26. Second one, on the margins for take-or-pay versus actual volumes, can you say something there in terms of where they sit? And then the last one on the shutdown in Recycling, any view on when this will happen? These are my questions. Wannes Peferoen: Sorry, Stijn, can you repeat the last question? Caroline Kerremans: When the shutdown will happen. Stijn Demeester: On the shutdown in Recycling and when we should plan it in. Bart Sap: Yes. So okay. Thank you, Stijn. Very clear. On SK On, indeed, we said that there was a probability to extend the contract, and that did happen. So we continue to supply SK On in 2026. So that is definitely a positive. On the margin of the take-or-pay, there, I think what I said, I mean, the idea of the take-or-pay margins is to protect the investments that we have done. And as you have seen also when we were guiding for 2028, we had seen different scenarios of take-or-pay and actual volume delivery, and you saw that, that range, EUR 275 million, EUR 325 million, right, was rather muted. So you could, from that, of course, deduct that the margins indeed are sufficiently strong to cover volume shortfall margins. Now on the shutdown from Hoboken PMR, I mean, this is happening in -- yes, in the second half or later this month, actually. So we are preparing or entering, as we speak, the shutdown. Stijn Demeester: If I may... Caroline Kerremans: And then before we close -- go ahead, Stijn. Stijn Demeester: So is it a correct assumption that if you would fully lean on take-or-pay that you hit the EUR 275 million? Or is that a too positive take? Bart Sap: I mean, we have said during the CMD that indeed different scenarios of take-or-pay as well as volume -- real volume offtake would give that range of EUR 275 million, EUR 325 million. So the answer is yes. Stijn Demeester: Correct. Caroline Kerremans: Before we close it off, I still have an e-mail of Georgina from Goldman Sachs. I also want to highlight that we will look into the difficulty that people are having to connect to this call that this will not happen going forward. But so let me then phrase Georgina's questions here. How much CapEx investment needs still outstanding for Battery Materials? The next question is, is it increasingly in conflict with potential growth opportunities in recycling specialty materials in management's views? It feels to me like the opportunity cost is getting larger. Bart Sap: Okay. Very clear. Wannes, maybe you take 1, I'll take 2. Wannes Peferoen: Yes. So looking at Battery Cathode Materials, as I said, in '25, we reduced the CapEx spend as we are optimizing the -- or using basically the footprint flexibility in order to reduce and phase the CapEx. So looking at Battery Cathode Materials, what we shared with the market during the CMD is that on the one hand, we have the fully owned capacity where we would need to invest about EUR 350 million. This is where we expect to be able to reduce it with EUR 100 million looking at '25 and '26. Then what we also highlighted in the Capital Markets Day is that we have the capital injection into IONWAY, where we anticipated still to invest EUR 500 million between '25 and '26. This is where we invested in 2025, EUR 250 million and where at the start of this year, invested EUR 175 million. So bringing that to a total of EUR 425 million. We expect to stay within that budget of EUR 500 million in order to finalize basically IONWAY. Bart Sap: Yes. So I think that's correct, Wannes. So in other words, I mean, we're phasing our CapEx and function of the real underlying demand that we see, and we said that we would be disciplined. And for the time being, we're not spending those CapEx. As discussed earlier, the importance of take-or-pay is growing and that immediate need is not there. And that's transit in that question on the conflict versus Recycling. Well, I mean, I would say, first of all, we have a set of businesses that we have today, right, a very strong core foundation business in which we're going to continue to invest in selective growth initiatives. I've been highlighting in the germanium in the field of Electro-Optic Materials. We will decide on the investment in Hoboken in 2026. And I think the current evolution in Battery Materials is not holding us back to do that if we wanted to do that from a financial point of view. So no, there's not an immediate conflict. Of course, if you would think about really bold moves, then, of course, value recovery in Battery Materials would definitely be, yes, an important milestone to achieve. So no, I don't see that immediate conflict on the CapEx as we are keeping it to the lowest amount possible, and we continue to lean on our take-or-pay contracts. Caroline Kerremans: Okay. Then we still have questions from UBS as well. A small reminder that normally, we stick to one question per analyst but given the situation that we are in, I'm making some exceptions. So for UBS, the first question is, can you tell us what percentage of Battery Materials Solutions sales came from take-or-pay payments? The second question is, does the guidance for the CapEx includes the IONWAY payments? If not, what should we anticipate for? And then in the cost savings, could you give an indication for the cost savings in 2026? And then we still have a question on what do you expect you to do to protect the EV supply chain? And then a final one has Umicore been asked to join projects? Bart Sap: Well, it's growing the list. Caroline Kerremans: We will slowly start to close the call, but of course, IR will remain available to respond to your questions. And I'm now handing the floor back to Bart and Wannes to answer these final questions. Bart Sap: Yes. Thank you, Geoff, for the questions. Wannes, you take 1 and 2 or... Wannes Peferoen: Yes, so looking at take-or-pay in '26, I mean, as you have seen, looking at the revenues, top line and bottom line, we saw a step-up. I mean, looking at revenue, it's 11% up. Looking at the bottom line and excluding the one-off of '24, we also saw a significant step-up. This is driven by effective volume shipments, but also by take-or-pay. And that's also why we highlighted because it is a material contribution to the top line and bottom line. Now looking at CapEx guidance. So the guidance we gave, the EUR 300 million to EUR 400 million is excluding contributions to IONWAY. And this is where, as I highlighted earlier, in '26, we contributed already EUR 175 million, and we will stay within the budget that we shared in the Capital Markets Day. So meaning that for '26, we will not exceed EUR 250 million for IONWAY equity contributions. Then looking at the cost saving objective for 2026, this is where -- in line with what we shared with the market in March last year is where we are targeting to offset inflation, and we anticipate inflation to be EUR 50 million to EUR 75 million. So that's a target that we have put forward to the teams to at least generate savings in order to offset that anticipated inflation. Bart Sap: Yes. And then on the question on the EU EV supply chain. Well, I think I can only base myself, of course, on the information which is out there in the press and that you might also have seen, but which somehow also confirms the feeling that I had earlier is that the commission might be looking at indeed onshoring more battery production as well as battery materials production in the EU, right? The word on the street is that if you would want to get support from the EU in terms of CapEx or OpEx going forward that you would need to have a strong amount of local content, including for batteries and therefore, also cathode materials. So as mentioned in that one slide that I had, that could significantly change, of course, the equation of the European battery investments for battery materials investments, which are out there. So probably I'm as keen as you to learn what ultimately the commission will decide. On Project Vault, I mean, I would say that in general, we're talking to several regional, let's say, leaderships, not only in the EU, but of course, also in the U.S. In the meanwhile, I think the biggest impact of Project Vault, of course, is that the overall price environment for these metals is supportive. So whether a direct or an indirect fact that you have is basically that such stockpiling, which they are talking about is typically supportive for price trends at least in the shorter term. So with that, Caroline, I think we -- I don't know if there's any other questions outstanding. Caroline Kerremans: No, I think with this, we can indeed wrap it up and close the Q&A for today. Bart Sap: Well, first of all, I was looking for an engaging Q&A. The quality of the questions was definitely good. The quality of the line, definitely not. But I mean, we can rematch with most of you next week in London and really looking forward to that. Now in a summary, it will not be a surprise. We're really satisfied on how things evolved in 2025. It was a pivotal year. Where '24 was a year of crisis management, '24 -- '25 was a year of a clear new direction for the company with disciplined execution on which we delivered strongly. Our culture and the organization is moving in the right direction. We are focused on our goals, and we will continue to do so for 2026. So with that, I would like to thank you for your attendance and the ones that I see next week, looking forward to that and talk to you soon. Have a wonderful day. Operator: Thanks for participating to the call. You may now disconnect.
Operator: Hello, everyone, and thank you for joining the Megaport First Half FY '26 Results Webinar and Investor Briefing. We will begin with a presentation by Michael Reid, Chief Executive Officer; and Leticia Dorman, Chief Financial Officer, followed by a short Q&A session. [Operator Instructions] We have 60 minutes for today's call, so please keep questions short and to the point. Now I will hand over to the Megaport Chief Executive Officer, Michael Reid. Michael Reid: Well, thank you so much for the introduction, and welcome team. We've got an action-packed half year results for you. We've done a lot. So we're going to charge through it. This is the FY '26 half year results for Megaport. Now we're just going to open, we have not run this before, but we've got a bit of a slide key here. Obviously, in the half, we made 2 acquisitions. And as we present through the slide deck, what you'll see is each one of these will represent at the top right, you look at the top right of the screen, and you'll see if that's Megaport Network only, Latitude only, obviously, Megaport plus plus, et cetera, and this is the total group. So just remind all folks, look at the top right, think of this, and hopefully, it's pretty self-explanatory. So we'll be going through company highlights. financial results. Leticia is sitting next to me. We've got an acquisition and strategic update. We've combined the 2 of those, and we're actually going to spend a bit more time than what you normally would expect for a half year, given the 2 acquisitions that we've made. And we're also going to walk through how that aligns to the strategic view of the business moving forward and why we made those acquisitions. We're also going to spend a bit of time on guidance. Guidance has been a little bit trickier. Obviously, we've had movements in FX, but we've also got 2 other companies coming into the business. So we're going to give you a comparison of what we had with -- assuming there was no acquisition, and then we're going to break it down and finish the year with the acquisitions included for full transparency. If we look at the top right, what you'll see, just I won't keep drawing on about this, but in the top right you'll see that key. So this represents Megaport Latitude and Extreme, the 2 acquisitions inside the business. This is the Megaport Group annual recurring revenue. So we are a $338 million business, $263 million from Megaport, $68 million from Latitude and roughly $7 million in AUD ARR inside the business. We've broken 2 highlight pages, one being the Megaport Group highlights and the next will be the Megaport stand-alone, so we're giving you full transparency of the underlying business, and we have had an incredible run in that first half. Let's start with the group business. We said before, $338 million in annual recurring revenue. That's up 49%, $112 million year-on-year. And we closed, as you know, 2 acquisitions. We acquired -- we announced and closed in the half as we came to market in November, did the raise and actually announced both acquisitions. Latitude.sh, which is the $68 million of ARR, 22 locations, GPU, CPU-as-a-Service business and actually adding more and more innovation that I'm going to show you through a demo soon. We actually announced the acquisition of 40 -- a company in India that we didn't share the name, which was 40 data centers in India. That was for regulatory purposes. We acquired Extreme IX, which is the largest Internet exchange platform in India, something that we do in many, many countries. That gave us 40 different data centers with network, and we're going to talk through that further on, comes with $7 million in ARR and 400 customers. If we look at guidance, so let's -- there's a lot of -- we've spent a lot on 2 guidance slides, and we've also got a detailed guidance in the appendix, specifically covering FX and also the breakdown of each of the companies in there and how it's made up so that I think all analysts and investors can get their head around it. So Megaport Network original revenue guidance has been revised upwards. So the guidance that we gave at the start of the year, assuming no acquisition, we have revised the bottom end and tightened that range based on the success that we've seen through the business, and we're going to walk through that. And the Latitude.sh revenue guidance that we gave in November, we are reaffirming. So let's look at the highlights from a Megaport Network perspective. So this is, as you see, top right, the Megaport logo sitting there, $263.4 million in ARR. That's up 19% on a constant currency basis, $36.8 million year-on-year. There has been an FX headwind as the move between $0.65 to $0.70, which is why it showcases at 16%. The importance is that the underlying business has grown at 19% in constant currency, an incredible result from the team. And how about this? Net revenue retention by logo, 111%, up 3 percentage points year-on-year. Our net retention continues to grow. I'm going to talk about why we've seen that growth inside the business as we get through the deck. And also, let's talk about this customer lifetime. As we've changed the product mix and the types of services we offer customers, what we're seeing is customers taking longer-term commitments. And instead of just buying cloud connectivity, long-haul data center interconnect, complicated global WAN structures and you name it, and they're actually bringing all these new products, including Internet together. And our lifetime for the customer, this is a big deal. And this is -- for those who aren't aware, it's basically one divided by churn, has increased by 3 years. In effect, the churn is lower, and so our customer lifetime has increased. It's 13 years, which is outstanding. Now when you flow that number forward and you look at your lifetime value, your total lifetime value, which is a mixture of the lifetime and the average spend per customer and your margin wrapped into that, we're up 57%. That's a $2.5 billion total lifetime value, and we've got a slide to sort of share that, and we'll talk more about it. You can see our annual recurring revenue breakdown. Again, this is Megaport's stand-alone business or the Network business, excluding acquisitions. You can see we continue to grow that annual recurring revenue fast. You can see the breakdown of Americas, Asia Pacific and EMEA as always. Let me state this, the Americas and specifically the United States really is on fire. They're growing at 24% inside that business, and that's where we've been investing for a lot of growth. We're seeing an incredible opportunity for us there, and it's continuing to grow, and we're not even scratching the surface. And if you look here on the right, what we've shared is the net or the incremental ARR additions. And you can see this is the largest ever year-on-year ARR increase. This is astounding. You can see this just pushing up and up and up and to the right. So we are incredibly happy with how the team has performed, and we're going to go through more of those details. It's not just about expanding the existing base, and that it's super critical that you do that. But if you're not adding net new logos, you've fallen out of product market fit. And this is where we've seen that in sort of the full year, you saw that massive jump in new logos. We have actually had a 100% increase in new logo growth compared to the prior comparative period. That's important because seasonality rolls throughout the year, and this is a representation of the fact that this wasn't some lucky sort of H2. We're actually growing and continuing and year-on-year, we're up 100%. That is an incredible result from the go-to-market team, but it's a mixture of 2 things, products that actually resonate with the market and the go-to-market team that we've invested to take that out to market. And that crosses all areas, channel, frontline sales, STRs, customer success, you name it. So congratulations to the Megaport team there. This is a slide we've shared in the full year deck, and it's actually just continues to astound. It's actually, I think, what we've been hoping to see, but it highlights the fact that the investment in engineering talent and all of those products that you've heard us sort of constantly refer to bringing out in that period of time sort of FY '24 period, all of that has come to fruition and 30% of our ARR growth is now attributed to what is new products. The underlying business is still growing fast. But on top of that, you get this growth from new products, which just highlights the importance of continuing to invest in new products to add to the space. And I've got a slide in the strategy section that will sort of drum this one home, but you can see what a dramatic increase that has had in H1. So outstanding result from the engineering and product team and great job again from the sales team for taking that out. Total lifetime value, we shared that prior, and we highlighted the fact that customer lifetime has gone from 10 to 13 years. You can see that, that is a marketed shift upward. That is -- if you look at it, we made quite significant changes in the business in terms of how we offer contracted services, the types of services we take to market. We did some significant investments in the network and sort of -- I'll show you on the next slide, but we've sort of been going on about the investments that we've made in 400-gig backbones, 400-gig networks, so we can offer 100 gig just about everywhere on the planet as well as rolling out massive, massive speed in Internet. All of these things bring through significantly longer contracted business and also much higher ARR lands. And so that's why you've seen our ARR per customer of the 3,000 customers inside the Megaport business, this is excluding the acquisitions, is up 6% year-on-year. You couple that with that lifetime increasing and then you actually have this $2.5 billion increase. So again, testament to the health of the business in every metric you can think of going incredibly well. This is a bit of an eye chart. It's always astounding to sort of think that this isn't a full year. This is only 6 months of execution, but worth pointing out that we continue to execute against the strategy, which we will talk through further, but we break that down into build, innovate and invest. These provide the pillars to increase TAM and go-to-market. If you look at build, 51 data centers added. We're now -- we crossed in this half, actually, we forget because we celebrated in August, but we crossed 1,000 data centers globally. We're now at 1,034. We added 5 new IX locations. We've actually on-ramped in effect, 11 direct connects into Latitude to the compute platform that we now have. We've got 11 new cloud on-ramps to 344. It really is cooking with gas there. We added 2 Internet markets, Italy and Sweden. That's all the regulatory components coming off. We've got pretty much the majority now. We lifted Internet to 100 gig in 16 metros. In fact, when we first rolled out Internet, we weren't sure how successful it would be. It's been so successful, and we thought it would only ever be at sort of 10 gig levels. But for the last year or so, we've been rolling out big 400-gig machines. And so you can get 100 gig in 16 metros. And it's astounding to see how many enterprise customers are taking that up. So we're not stopping. We're continuing to build that out globally. 100 gig connectivity. So this is -- when I first joined Megaport, the fastest we could deliver was 10 gig anywhere. And then we had -- now if you look at it from 802 data centers, we can deliver 100 gig in 60 seconds, quite astounding. There really is nothing else like it. Let's talk about Innovate. Cam and the team have been working incredibly hard to deliver some pretty impressive enterprise-grade security features. We rolled out IPSec, which is encrypted tunnels on the MCR. Packet Filtering, which is like control list on that platform. We're going to continue to expand our investments into security, and you'll see that in the second half. We added console access for MVE. We added probably one of the most requested MVE images, which is Meraki. We've got Juniper and Anapaya, 36 countries, 7 languages. We added 400-gig ports, which is really interesting. If you remember, when we launched, we were always 10 gig and 1 gig. We added 400 gig ports and actually had immediate customer adoption. So the amount of utilization out there is quite astounding, and we'll talk through that even when we look at sort of what AI is providing from a tailwind, but just quite astounding now. What's important is that we continue to build to support that. Acquired 2 companies, we're going to go through that. we continue to invest in go-to-market. We're actually doing some pretty cool stuff with DWDM, which is like if you get your propeller and want to hear that spinning, we're looking at rolling out DWM for the first metro and then doing that across many. Cam tells me this is a really big deal. And then we've upgraded the backbone capacity to 400 gig to 8 countries. Now what does that mean? We're getting subsea connectivity at 100 gig. And this is where we get massive ARR for single VXCs, and that's really, really -- it's exciting. And the last thing, and I'll point this out just more broadly is people, I think, carry on that AI is changing all their business, and it's hard to know what I think some businesses is real and what is not. In our case, we're not someone that sort of just [ spruce ] this out there. We are seeing tremendous assistance like most companies for AI in the development space. So when you look at adding [ Claude ] into this, the efficiency of the development teams is phenomenal. But also what we're seeing, and this is more for everyone's kids out there, if you want to study something, I'd call it prompt engineering, AI prompt engineering. Folks that don't even know really what they're doing, but they know how to prompt the AI, we're seeing these folks come in and just do some incredible speed and change so many things inside the business very, very rapidly, particularly on the engineering front. All right. I'm going to pass it over to Tish, our fearless CFO, she's going to slide in here, and we'll go through the financial results. Leticia Dorman: Thank you, Michael. So financial results for the half. So I said it happening. We had 2 acquisitions as well as the underlying business of Megaport. So what we've highlighted here within the EBITDA is largely Megaport and the Latitude acquisition. Now Latitude, we acquired -- we announced, did a capital raise early November. On the 26th of November, we closed it. So you will see 1 month of results in here as well. So I did want to highlight that. Revenue, I know Michael has talked about that. However, it does come through in the numbers clearly. You've got the strong expansion with NRR with the continuing investment within the existing customer base. We've got the growth in new logo acquisitions, and those 2 combined results in strong revenue plus the inclusion of the compute revenue from Latitude. Partner commissions continues to stay relatively consistent at 11%. Direct network costs, now we've got IFRS 16 in there, which I know some of those on the call do enjoy talking to me about, so I'm always happy to talk about accounting standards with anyone. However, what we look at is across kind of a net-net basis of that regardless of accounting treatment because the focus of the business over the last 18 months has been that global backbone rollout to 400 gig, which has been led by North America in particular. So if you exclude IFRS 16 from both this half and last half, it's consistent. Employee costs, we've been -- I think we've hired quite a few folks. And so you will see in here that is continuing to be planned. You can see that rolling through in the numbers. And that is to support the accelerated revenue growth and then the related spend associated with those new folks coming on board. In terms of other operating expenses, you've got your sales and marketing event activities, which you can clearly see in there as well as travel and some IT costs associated. Now EBITDA is one thing to notice, great Tish, you've got an EBITDA margin of 26%. That does include the Latitude 1 month. And I just wanted to highlight that the exit margin for Megaport Network business of 21% is in line with guidance and really reflects that timing of our planned investment, which we'll talk about further in the guidance slide and happy to take any questions. However, I did want to highlight that as well. Now the cash flow, a lot of things happening in here. So I've tried to break it down clearly within the text, but I'll just go through it quickly. The operating cash inflows have increased. That is purely due to the higher customer revenues during the period and the 1 month of the compute or Latitude.sh results. The investing activities, you've got some acquisition payments and you've got also the CapEx payments, which are related to the planned delivery of equipment. Within the appendix, we've provided the breakdown for CapEx for the group. So you can clearly see what that has been on, and you will see that it is to do with the supporting the expansion plans and including the planned delivery. Financing activity inflows, you can clearly see that, that's largely driven by the capital raise that we provided earlier in the year -- late last year. One thing to highlight is the net cash flow was an outflow if you ignore all of the capital raising and acquisition activities, was an outflow of $10 million or under $10 million. Now that reflects the planned expansion, hiring of the go-to-market as well as the CapEx spend and the investment in the front ending of the ordering of equipment. So that is one thing I do want to highlight to the group. We've talked around headcount previously, particularly at the last year-end time that we came to talk to you. We've got here the sales and marketing continues to be a clear activity that we invest in, and that's moving upwards, continues to. Product and engineering is a big focus area, particularly with Cam hiring across the world, hiring the right talent. And G&A continues to stay steady as a percentage of revenue. So this is how we look at the investment of the business for headcount. And this is just Megaport stand-alone at this point. I'm going to hand back to Michael. I've done a quick snapshot of financials, but over to you. Michael Reid: Beautiful. Good job. Thank you, Tish. All right. So we're going to go through the acquisition and strategic update. So this is where we're going to look at some of the strategy around the business and also talk through a bit more detail on the acquisition. We're going to run a bit longer than normal just because there's a lot to go through. The first slide is something that I probably didn't expect to be adding to the deck, but this is a lot of inbound questions. These 2 questions have been coming certainly with the way markets have moved and sort of everyone is trying to wrap their head around, I think, are you a company that benefits from AI and are you a company that can be disrupted rapidly by AI. I just want to sort of draw this for all shareholders and anyone that's either new to Megaport or even knows us well. First question, I'm going to sort of just point this out, is AI benefiting Megaport? The answer is yes. And that is why you've seen such outstanding results in that first half, particularly driven in the United States. AI is very, very strong there and the rest of the world is sort of starting to catch up. But really in the U.S., it's cooking with gas. It is providing what is a very strong tailwind for us. So AI is driving significant movement of data. So if you think about it, there's huge amounts of data movements as you start to either send your data to AI, to models, whatever it may be. And the other piece is it requires large amounts of processing by compute and GPU. So the 2 parts of our business, both network and the compute and GPU businesses benefit strongly from AI. I think that's obvious, but it's just worthwhile sharing it. The other piece I want to share is that Megaport is a software-defined physical network and compute. We use software to automate physical things that live inside data centers all around the planet. The last one on this is you don't have to pick a winner. Megaport is never looking to pick the winner, and there's lots and lots of changes that we see all the time in terms of deals. We are the picks and shovels for AI. As often people would say, you're like the overnight success, but 13 years in the making. And so we've been building this platform for the past 13 years to land literally in the exact right place with the right platform at the right time, there's almost no one else in the planet that can do what we do and certainly no one that offers what we do on a global scale. So we are absolutely a beneficiary of that space. We built the cloud component and the AI piece, is actually playing out in a very similar way. So the second question, which is, well, hang on, can AI disrupt Megaport like these software-only providers. Now for a few years now, I've always said it would be always tough being a software-only CEO with all the disruption happening in AI. And it's why I'm a huge believer in Megaport's business because it is the beautiful mix of both software and hardware distributed at scale. So the answer is no, we won't be disrupted by AI because of one important fact, and that is we are physical. It's a bit of a sort of a lot of physical words here, but just to sort of drum that message home, we move data via networks and we process data via CPU and GPU. Both of those are physical. And to put that in perspective, we have a software layer that runs across this physical IT infrastructure, which can't be replaced by AI. AI is not so good with atoms, not yet anyway. And so if you look at it, we've got 320,000-plus routes of physical fiber, 320,000 physical routes. We have 3,000-plus physical network devices. They live in 1,000-plus different data centers. We now have 7,700-plus and growing fast physical compute servers and GPUs, and we deploy them in 30 physical countries, not just deployed by some SaaS platform that lives on AWS, but actually in the country. And then on top of that, we have all the telco regulations and licenses, which is not easy. All right, I think I've drawn that message home. I've shared this slide a lot. I won't labor it too much, but we -- I want to keep this -- keep reminding folks -- we make all strategic initiatives based upon these guiding principles. That includes innovation and product and acquisitions. We obviously made 2 acquisitions, but I'll just remind folks, this is the secret sauce that makes Megaport strong and so too with Latitude and any other business or product that we want to look at. And the answer is, let's start with automation. Automation is the key, and it's not easy to do. And that's the software automating physical infrastructure. You can automate it, you can make it instantaneous. If you can put it at a global scale, you can actually deliver a global service to customers. If you make it the most resilient and then on top of that, make it flexible. You can buy it monthly, hourly, whatever it may be, 60 months, you name it. If you then can make it self-service, but with a really cool GUI and make it really easy and then you provide the best support, the pricing is disruptive, and somehow you do all of that, you make it profitable, you have got an incredible company. And that is what Megaport is, and it's also exactly what Latitude is from an acquisition standpoint. The strategy from Megaport's perspective remains the same, and we constantly share these, I guess, the rings of total addressable market. So for those who have not seen this slide before, on the left, if you look at these rings, each ring represents a product set and a total addressable market that we can go after. And we started with cloud connectivity. We added Virtual Edge, then we added Global WAN, Data Center Interconnect, [ DC Ethernet ], NAT Gateway, security. That slide I showed you before about the growth in new products. These are the new products that are driving that. We just added 2 new rings. This unlocks significant TAM for all Compute-as-a-Service and GPU-as-a-Service, and we're going to continue to add rings in the second half as we announce new products and new innovations that we're going to bring. On the right, if you look at the pillars for growth, we talk about build, innovate and invest. Building is expanding a ring. It doesn't necessarily mean that we're adding a ring. So a great example is new data centers. Every time we add a new data center, we increase the TAM of all of those products. Every time we add a new market like India, it's the same component or when we added Brazil. And then we've got expand capacity by going, as I said before, from 10 to 100 gig to 400 gig and now we offer those services. That expands the TAM inside those rings. And then we're going to continue to expand compute and GPU offerings, so different types of SKUs and obviously, significantly more and distributed in all those different locations. Then we look at Innovate. We are going to constantly build and you saw the hiring that Tish shared around the innovation team inside both network. And I've shared also security being a big play for us. Those 2 sort of become hand-in-hand. And then if you look at the CPU and GPU innovation, in the demo coming up, I'm going to show you some of the really cool stuff that's already coming out, particularly in the AI innovation space. And then we look at Invest. We are expanding product and engineering. As I mentioned, we're investing in that space. We will continue to expand go-to-market, particularly as we service and take these products to market, which is why you're seeing so much great results in that side of the business. And we'll always explore strategic acquisitions. But always, those strategic acquisitions will line back up to what we shared on the previous slide, which is the strategy that we look at around the investments. So we're going to quickly go into the Latitude.sh acquisition. We shared this in November, but it was a quick session when we did the capital raise, very successful capital raise, and thank you for all your contributions. I think we had 30 minutes from memory to sort of bounce through this. So Latitude.sh is a Compute-as-a-Service business. It provides high-performance CPU and GPU in key markets worldwide. It's very simple to use. It's very API-driven, just like Megaport, incredibly predictable billing unlike what you would have in the cloud and flexibility to deploy workloads literally on demand, super important. Massive global scale, totally automated, rapidly growing and then have actually been very strong from a product-led perspective. All of this lands inside those -- the strategy that we had from a business perspective. If you look at the ARR, well, what does it look like? Where were they based and how does that play out? 10 countries and 20 locations when we acquired, I think they're at 22 today. We'll continue to grow. The U.S. represents the vast majority at 50%, Europe at 20%, Asia Pac at 17%, LatAm at 13%. It's at $45 million ARR as at 31st December '25. Okay, who does it service and what do these customer use cases look like? There's 2 parts of the business today. And actually, I'm going to show you how that will change in the future as well. But there's compute and then there's GPU. If you think of compute, what you need for a bare metal platform such as what Latitude has produced, high-performance compute is not something you get delivered inside a cloud, and it's hard to run and build yourself. So in the middle, we have these incredibly high-performance compute and very large network stacks, which deliver blockchain Web3 as an example. These are financial service rails as an example, using blockchain to transmit via Solana as an example, say foreign exchange for enterprises. And they use up huge amounts of compute and network, and it needs to be distributed globally. Enterprise applications that are not optimized for cloud cost a fortune in the cloud or don't perform how you need them to perform. And so what you have is an ability to run incredibly high-performative applications that don't sting you with all of the API calls and so forth in the cloud. And so then you've got SaaS applications that need high performance at the edge. If anyone has a kid who loves Fortnite or gaming, you'll know what latency is and the importance of having edge compute that process fast with very low latency for gaming. We've got some incredibly interesting gaming companies that actually spin up actual compute platforms for the gamer themselves, really interesting. And ad tech is, if you thought gaming required speed, ad tech is even faster. It needs to show the ad as fast as Michael Reid is looking at this website, he's interested in a new surfboard or whatever it may be. I'm not that good surfing to be clear, but let's just say a really long surfboard because he's not that good at surfing and they need to show that as quickly as possible. That's ad tech. And then we go into the streaming element as well. So that is some of the use cases that are really, really big in the CPU-as-a-Service. GPU is a big market. And so if we look at inference being how we access the AI, and that is like ChatGPT. When you access it, that is inference. When you train ChatGPT, that is the giant data centers that you're seeing build out to sort of the hyperscale and then you've got this fine-tuning element where you take a model and you fine-tune it for enterprise. I'm going to show you in the demo something really interesting. Let's jump into that because it's like, well, Latitude's had this history of product-led growth. And I shared that not only is the platform incredible, but you've got to be able to access it and make it simple. So we're going to play to the demo guides and so forth and just see if I can switch this machine over. And I'll see if I can -- all right. Steve is telling me to keep the demo short because he just -- he knows that I love it. Can this be seen? All right. First thing, you're welcome to the Megaport portal. You're used to this. You can see all these different locations in the U.S. Everyone represents a data center that we're in. This is cool. So we've now landed in India with that acquisition, so 40 different data centers live and you can start ordering there. Now if you jump out of that piece and you look at the top left of our portal, we can click on this particular piece. And now you can see the option between network and then compute. So Latitude.sh, we can click that component. And now we're in the Latitude.sh platform. And here is one I have prepared earlier. We look at projects. This is the portal that we look at. Here's a live demo to shareholders. So we'll go and click on to that project. And just like Megaport, it says quick click to create a server, and we've got some really interesting things down here. So we can create a server. Now when we acquired the business, there was bare metal, bare metal GPU and GPU VMs. But very recently, and I don't know if you've noticed, but we now have CPU VMs. This is virtual machines running across the infrastructure, a super important innovation inside the product. So you can actually click on the CPU VMs and bring down -- we only have a few locations today, and we'll roll these out to more. But you can choose a very tiny virtual machine at $0.07 per hour, which spins up a virtual machine with Ubuntu, run it for hourly at $0.07 and you can click deploy. And that is as hard as it is to run a virtual machine is staying to schedule there. I'll move back to the bare metal component and make it quick because Steve's on me. And this is my fun bit. So we'll go to the bare metal component. If we look at North America, South America, Europe and Asia Pac, these are all the different locations. We'll choose Ashburn where the clouds live. We have physically installed compute infrastructure that sits in all of these locations. They are available to deploy. There are different levels. There are entry-level core optimized, memory optimized, storage optimized, you name it. Let's choose a big guy. Roll down. What's amazing is the platform is constantly looking at what infrastructure is there and what is the likelihood of using a certain operating system. Remember, this is bare metal. So it is actually your entire server, and it will preload an operating system into the ones that are available or some, and then you can choose to deploy that. So we'll choose $3.52 per hour, no RAID, pick a name, blah, blah, blah. You click deploy, and it will roll up on the top right here, and you can start to see that being deployed. So that one is getting deployed. Now if we go back down here, you can see that's now on. So that's your 5 seconds of deployment. Last thing I want to show you. So what we've done is we've deployed a bare metal machine physical. We've deployed a virtual machine, which is now running over there. And we're going to go to this thing, which is so new that no one even knows it exists, and this is AI inference, but I did want to show the team what this thing looks like. So this is where we're actually deploying model as a service. And so if we click through to the different playgrounds and API -- create an API key in here. So what we want to do is create an API key. We then grab a model, an AI model, our own open source model, and we deploy it in our own physical infrastructure, so you've got total control over that. So you can go and create a key, we call it a test, grab that key. Which one was that? Okay. Now I've got a copy of this. It doesn't matter if you copy it from a security perspective, I'll be deleting it after for those worried. We go under the playground. And now what you can see is at the top left here, you choose the AI model you would like to run, your own private model that you control the data that's going into it and the compute that it runs on, so it cannot be taken. So let's choose [ LAMA ], for those of you familiar with that. We paste the API key in the top right. And you are all familiar with this. This is where we now write our question, write a launch e-mail for our new inference endpoint. You click enter and it will start generating. So what it's doing is it's asking this question to a LAMA agent that is -- so think of an -- look, it's already done. It's amazing. Think of an enterprise that wants to control the use of all your data and you want to upload that into a private instance that's sovereign that you have total control over and actually no one can steal that data. All right. Steve is telling me that's enough. There you go. I think that's really cool. I just want to show you one last piece. Ignore that. I'm going to delete these servers because this is the important part. We're deleting the server, you copy and paste is back in here. And what has it done? It goes through a process of wiping that server and making it available back in the pool for someone else to use, 100% autonomous, totally delivered via code and delivered via a portal like that. Very cool. All right. You can see we're excited about it. Now I'm going to get back to the presentation. And we're back. All right. So people are saying, why did this make sense? This is the next logical step for Megaport. We shared this in the presentation. The reality is -- can somebody fix my laser pointer. We were the kings of network and are the kings of network. What -- if you look at IT infrastructure, they're made up of 3 pieces of the puzzle. In fact, every application you have ever used, excluding ChatGPT or AI lives on network, storage and compute. The compute element comes with Latitude.sh. And you can see that we're missing a piece of this puzzle, and you can probably imagine that, that's something we're working hard to go and release as well to finish the trifecta of both -- of all the IT infrastructure. I won't go through the pieces on the right. We shared the 100-day plan. We're a few months into the acquisition as we are today, progressing as expected, and we're really, really thrilled to have the team come on. It's actually probably progressing better given what I've just shown you from an innovation standpoint, 2 major innovation releases between when we acquired and when we landed. So a big shout out to Gui and Eduardo and the entire Latitude team for bringing that. I won't go through this. We'll talk through it if you need on the call. The last piece was we made an acquisition into India, which is the Extreme acquisition. Why? Well, it's the fifth largest economy. It's the most populous country in the world. The real reason is we had massive demand from all of our global enterprise customers, 3,000 different customers asking for us to get into India. It's not easy to land regulatory purposes and actually run the network is difficult which is why we've acquired to land. It comes with $7 million in ARR. It's accretive to the business, 400 active customers, 40 data centers. Now we're rolling out infrastructure to retrofit all those sites with Megaport-grade infrastructure, and then we will offer all those services as soon as possible. We've shared this slide. The strategy has not changed. I won't go into too much detail, but you can see where we've landed. We're in the transform and reset phase. We've been rebuilding go-to-market at the full year, we announced that. We've done incredibly well against that. We're landing within what we've told the market from where Tish shared. You've seen the product. The net revenue retention hasn't stabilized. It actually increased. So we're doing well there. Revenue is up. We'll land at the end of FY '26 and into this accelerate revenue phase where we'll capitalize on that prior investment, continue to expand the TAM. We're going to grow the market share. We're going to continue to invest in revenue with revenue growing faster than costs that remains inside the business, and we're going to accelerate revenue through investment constantly. And then as we get to the future, it's going to be a fairly large. I mean we'll be at significant scale in FY '30 and beyond. We'll be a global leader in infrastructure as a service powered by software with 20% sustainable growth, highly profitable, converting scale into sustained profitability and free cash flow. All right. Guidance. Let's do it as quickly as we possibly can, even though there's -- it's a little bit complicated. What we've given you is 2 slides. This is the first one. As you see at the top right, Megaport Network only. This is the Megaport network updated guidance versus the original. Remember, there's an FX component, and we've also had 2 acquisitions. We've excluded the 2 acquisitions, and we've kept constant currency, so you can see how the underlying business is performing as we predicted. It's at $0.65. We originally had revenue at $260 million to $270 million. We've raised the lower end of revenue by $4 million based upon the success we're seeing inside the business. We've held EBITDA margin unchanged. We've held CapEx unchanged. And so why would we up the bottom end? Well, we've seen outstanding performance in ARR, up 24% in North America. We're seeing net retention up 3 percentage points, and we've got sustained growth when we look at new logos. It's pretty obvious, but that's why we've tightened the bottom end of the range, and we're confident there. As we said, there's 2 material changes being the AUD to USD and the 2 acquisitions. So then you're thinking, well, Michael, what does that mean for us? Great news. We've answered that test, too. And so we've gone, all right, let's give the combined group updated FY '26 guidance. We've got it at $0.70 AUD:USD. We're not saying that that's what it will be for the entire half. We don't know what it will be, but we're certainly telling you what it looks like as we see it right now. And we've also given sensitivities on FX. We've also given great detail, if you want to break down because we've added 2 companies and the 3 companies coming together in the appendix. So $302 million to $317 million in revenue, 21% to 24% of EBITDA -- of revenue -- EBITDA of revenue, $90 million to $100 million of CapEx. That includes the tightening of the raise of the bottom end of Megaport unchanged for compute for Latitude from what we shared in November, so no surprises there. We've added in about $3 million to $4 million for the Internet Exchange business we acquired in India. We've also included the CapEx to go and roll out that hardware. Worth highlighting that the maintenance CapEx on the combined group is actually less than 2%. And so if you look at it, pretty much all the CapEx we're deploying into these is growth CapEx. And lastly, just to point this out, the sensitivities, just to give you perspective, there is detail further on, is we're at $0.70. If you look at a $0.05 movement, that is a $9 million -- so when the U.S. dollar weakens, that is a $9 million reduction in revenue for the business. All right. We made it up to questions. Let's do it. Operator: [Operator Instructions] Our first question comes from Nick Harris. Nick Harris: Congrats. Great to see the core business, in particular, flying. I'm pretty excited to see that NRR continuing to lift. Just trying to unpack that. Could you help us maybe understand what's happening behind the hood or under the hood there. Specifically, are you lapping a really poor quarter 12 months ago? So it's just the mathematical average getting better? Or is the front of the -- like the Q2 FY '26 pulling the average up -- as in -- Michael Reid: Average in what? Nick Harris: It's a trailing 12-month NRR, right? So... Michael Reid: NRR, sorry, I missed that. Nick Harris: Got the keyword, NRR. Michael Reid: Yes, no, I was thinking which metric. It's good. Maybe you said it and I missed it. Okay. So NRR -- so back -- I think we've shared it a few times, but the net retention inside the business is lifting for a number of reasons. One, the U.S. really is on fire. So we've seen massive expansion inside the United States, in particular customers. Globally, we're strong, but the U.S. really is quite impressive. I'd say, again, back to that AI tailwind. We're selling services that are very different. So if you remember the journey we've been on, we used to be this tell story of like we're just a cloud connectivity company. And if you think of selling a connection to a cloud, that could be a $100 connection. We've seen million dollar single VXC connections. Think about that. You can either sell a single connection to a cloud at one connection for $100 or you can sell a single connection, subsea, long-haul Global WAN across the subsea, basically long haul at 100 gig, and you're looking at $1 million in ARR. I'm just giving you a perspective that by changing and adding these products, you will get your net retention expanding because you're selling much higher value services into the existing customer base. And the other piece is there's a tailwind around what companies are doing. So everyone is trying to innovate their businesses and move forward. And so people are making moves to spend things, but they're doing it at such massive scale. And that's why we've said like data center Internet is a really good example, such a simple product, but so important and actually helping us drive that. So what I would say is 2 things. It's the fact that we've now got a serious go-to-market team deployed and mature globally. We went to a -- I mean, we had an off-site in North America for the sales kickoff, there's 150 people that turned up. When I first came, there was 4 people and one customer success person. It's a really big change. And so when you've got that customer success team and new products and a market that makes sense, you get massive expansion. Europe is doing well for us as well. Asia Pac, I think, has been a little slower just because I think they're trying to figure out what's going on with AI, but we've still got growth in those areas. So if you sort of throw that through your lens, then you get the outcome. The U.S. for us will always be the largest growth and the largest opportunity, to be clear, which is why we're investing strong there. Operator: Our next question comes from Eric Choi. Eric Choi: Would it be possible to ask 2 number questions that are kind of related to Tish. Sorry, Michael. Just one on FY '26 and FY '27. Just on FY '26, just trying to unpick what's changed in EBITDA guidance. So can I just confirm if you took your comments in November and if you added 7 months of Latitude, we should have been getting about $73 million of EBITDA. And today, you're guiding to about $70 million. So it's really only a $3 million difference. And then of that, I think you can work out about $2 million is FX, and then there's another $1 million, which is just extra Latitude investment, but Latitude revenues are in line. That's the first one. The next one, Tish, or... Leticia Dorman: Yes. Eric, that's a good question. So we kind of -- we highlighted when we acquired Latitude around the 50% EBITDA margin. Now again, in terms of -- they didn't have a particularly large go-to-market team. And so part of that is investing across both to make sure that we are able and set up ready to sell the compute. That's really critical. So we've built in that. But don't -- the target is to -- particularly into FY '27 is to try to get to that back to -- well, we will get back to that margin. But in the meantime, we've got to invest to be able to grow. So similar story to Megaport. Eric Choi: Good stuff, Tish. Just on '27. Very helpful. Just if we extrapolate current trends for the core business, $111 million NRR, you're doing about 8% land. And then if you take the earnouts that you've got for Latitude, I just want to confirm that kind of suggests a $450 million revenue number, which would be above consensus. And then like in that scenario where you're getting earn-outs, should we assume you keep reinvesting, therefore, we shouldn't assume much margin expansion for each of the divisions into '27 besides Latitude. Leticia Dorman: I think just make sure you're not just taking the top end there, to make sure you're taking a midpoint. We want to. We will continue to drive forward to earn those -- to ensure that the Latitude founders earn out that because we earn that revenue. But just in terms of modeling, I never like to go too -- don't get too ahead of yourself just yet. Operator: Our next question comes from Andrew Gillies. Andrew Gillies: Really solid result. Great job. Just a quick one on Latitude, probably for you, Michael. Like that transaction has been presented ex synergies, but presumably, all of your network customers buy compute, particularly in North America, where you've had a really strong underlying revenue growth or ARR growth number. You've got those existing relationships with the telco service distributors. Like I appreciate you're not disclosing a number, but are there some low friction sales opportunities there that could help expand NRR? And then can you maybe touch on sort of Equinix Metal. I've noticed you've got a new section on the Latitude.sh website. There could be a direct opportunity there as well. Michael Reid: Yes. Great questions. We didn't model the business with synergies. I spent 6 years at Cisco acquiring a bunch of companies and synergies is a dangerous thing to just add into this. Sort of like you solve the equation with miraculous synergies. The way the acquisition with Latitude went down was actually they weren't looking for an acquisition. They were just looking for some investment into the company so that they could actually get some CapEx expenditure. And so they had a business plan that was related to them not being acquired and just running as a stand-alone company. And that business plan is what we've basically acquired them against, without any synergies built in, without -- and giving them a stretch ability if they go and succeed beyond a certain point to earn additional components beyond what their original planning was and then allowing them to get to that component. That is excluding synergies. So the point was, well, you need to build that business as it is today and continue to expand. The reality is it's up to us to go and take those synergies ideally and then leverage that across the business. So it should, in theory, be cream on top, if you think of it from that perspective. But what's important to call out is it takes time. So I'll give you an -- and we've been on this journey. We always say it's an 18 months. You start hiring enterprise sellers today. You start building the platform to deliver more enterprise style services. And then you start selling that, it's a 6- to 8-month -- I don't know, could be a 9-month ramp in terms of compute. We'll be finding that out. And then you end up revenue in it. So if you think about it, it's revenue that's in their targets, not ARR. And so it can be a delayed approach. That said, we've already hired, I think it's 5 or 6 frontline sellers. And if you look at -- if you sort of follow us on LinkedIn, you'll see that these are high-end Equinix bare metal sellers in North America and in Asia Pacific, including solution architects, customer success managers and frontline sellers. We landed those folks in December, which is astounding. So the team's worked incredibly fast. When we announced the platform, the acquisition, we actually had a huge amount of inbound. It turns out that bare metal and compute sellers are passionate about this space. A lot of them reached out and said, well, actually, to the Equinix bare metal when they've turned that off, they love the platform and could see how valuable it was and could see that Megaport was serious about it. And so we've actually got these folks coming in. So that said, they become an overlay sales force to the existing sellers at Megaport. And your point is totally true. The conversation is that Megaport connects folks that are connecting compute between data centers and the cloud. That's what we do today. So the next obvious question is, hey, did you know we had a compute platform, would you like to explore opportunities to either save money or get better performance or whatever it is. That becomes a sales motion, you push that through the machine. So that is the synergies that we would expect. But hard to model that in the short term. We need to build that out, and we're already building. I mean we move fast, if you haven't figured that out. So we -- I'm bullish on that space. Yes, the Equinix Metal piece, I think they've sunset that platform, but it's proving to be a great opportunity for us. So it's a good outcome, particularly with hiring and with customer opportunities. Operator: Our next question comes from Siraj Ahmed. Siraj Ahmed: Just maybe actually a follow-up to Andrew's question right now. Just the Latitude momentum, right? The ARR as of December looks like they only added $2 million in the quarter, so a bit slow, but you are guiding to revenue of $25 million to $30 million for the half. Just keen to hear what gives you confidence? Was it a bit delayed, right? Maybe it's the Equinix piece, et cetera, would love to think of the drivers for the Latitude. Michael Reid: The most important driver for Latitude is having access to compute that is available for customers to consume. That is the key. And Latitude is was -- if you looked at them, very much a start-up style business, capital constrained, went to market in, I think, I want to say, March, looking for capital. Obviously, we went through a transaction, and it takes a long time to get that through. So I would say it delayed their ability to procure infrastructure throughout that time. So it wasn't available during that quarter. So if you don't have product availability, you can't sell anything. So that is a pretty sort of an obvious but critical statement there. And since that, we've been ordering infrastructure to build out across all the sites, and we'll continue to expand sites. So that was easily to see and to understand why purely because of a compute -- hadn't deployed compute in that time. Hopefully that makes sense. Siraj Ahmed: So that's super helpful, Mike. But I think they got about 1,000 servers last month, right? So maybe you're already starting to see that come through. Is that fair? And should we be thinking maybe this half it's more towards the lower end and then it ramps into next year? Michael Reid: Yes. So there's a few factors, and we've shared this. There's a ramping period of time from when the servers are received, installed and then the software layer is added. So they're actually published into the platform. And so just because you've ordered something, it doesn't mean it's available for a customer to use. And just because it's available for a customer to use doesn't mean it's revenue and you need to obviously ramp that. And so that's why I think we shared there's a ramping profile from when infrastructure lands to when it gets deployed when it comes in for a customer to utilize it. And the tricky part is lining up -- when infrastructure is going to land is always tricky. Well, it's become more tricky at the moment just because of supply chain. So there is -- it's not clear to get exact date. So to predict an exact date when you're going to get something and then predict the exact ramp of utilization is tricky. So what we have is a range around that depending upon those factors. Some of those factors are out of -- obviously out of our control. The one thing we can control is what we order and order as soon as possible to get that built out, particularly given supply chain. Hopefully, this just gives you a perspective on it, which is why we have a range. Operator: Our next question comes from Tim Plumbe. Tim Plumbe: My question is just around the go-to-market hiring process. Mike, can you give us a bit of a sense in terms of how far through it you are? And then once those guys are up and running and at a mature level, is there a way for us to think about average ARR contribution per salesperson? Michael Reid: Can you say the first data market -- sorry. Leticia Dorman: Go-to market. Michael Reid: Go-to market. Tim Plumbe: The go-to market, like how are you... Michael Reid: Got it. No, got it. You said the data market, I was thinking what that is. Okay. So we're -- as I mentioned just before, if you follow us on LinkedIn, you'll see that we've just hired, I think, 5 frontline sales or maybe more, pretty strong, very experienced sellers, I think most of them from Equinix Metal. So very, very strong in this space. Understand the products, understand the market and so forth. And we've also got solution architects who are incredibly strong in that space. Now what's different about building a stand-alone business is you would need significantly more folks to take a business like that to market if you didn't have the existing frontline sellers inside Megaport. So what is unique is you have like a -- what you've created is an overlay sales force. So think about it, our existing sellers will be paid on anything that gets sold as compute, but they're going to only know so much about it. And they only need to know enough to be dangerous. And the conversation with the customer is literally, hey, have you considered, did you know we had this product? And they'll say, oh, I don't look after that or maybe it's this person. You said, do you mind introducing me to that person? And then they send in the specialist. So what's so different about those specialists is they're not out there punching the pavement sort of outbound hunting. We have a machine to do that for them, and they become the specialist in that space. So they will probably, over time, have a much higher dollar figure that they would bring per head because they have a machine beneath them, if that makes sense. So I wouldn't compare them to a traditional frontline seller. They are more of an overlay sales function. They have paid totally on compute, just to be clear. So it's not like some free kick, but it's going to be a lot easier to get into the 3,000 enterprise customers that we have versus cold calling. So you would -- we haven't landed on the exact productivity per head expectation from them. Remember, the tricky part here is that a vast majority of the existing business came from product-led growth. And as I said, we aren't disrupting that. And so this is really the cream on top to help build and scale the business. And as I said, there's probably an 18-month journey before that machine is actually working or at least showing through the revenues. We will see it work much sooner just like with Megaport, but in terms of the revenue contribution, it comes later. So it's going to be the core business against the business plan that we acquired them against. And they've got great opportunity to go and be successful on that. And it's a low risk in that. If it's not successful, it's not paid. If it is successful, it's paid. If they're really successful, we pay more. And every which way, it's good for shareholders. Does that make sense? Leticia Dorman: Tim, I think it's fundamentally applying the same principles as Megaport to the compute and then overlaying that with the India acquisition as a collective group. So that's kind of how we're starting to think about it into FY '27. Tim Plumbe: Yes. I mean sorry, Mike. My question was more around the core part of the business. Like you guys have flagged a material uplift in reinvestment back into the business. So how far through are you in terms of finding the headcount that you need for the core part of the business? Michael Reid: Should have stopped me. Tim Plumbe: I'm just a PR guy. Michael Reid: I was carrying on about Latitude. You're allowed to interrupt. Leticia Dorman: Sure, you can, Tim. Michael Reid: All right. Very simply, we hired all of those, I think, before we -- I think we were -- as we were coming at the start of the year, I think we'd shared that most of that sales force was in place, which is why you've seen like our expenditure where it is. Continue to add that the vast majority were added at the start of the year. You're also seeing probably the impacts of those already come through with significant new logo and all the net retention, all the expansion. And I think you're seeing the success of that already, frankly. Leticia Dorman: We'll continue hiring into the second half, though, Tim, kind of in a more steady cadence. But you'll see that that's kind of why we provided guidance on the stand-alone. Michael Reid: Yes. If you think about it, you've got to move fast for a year. The faster you move -- because obviously, if you hire in the last half, you only -- you're not actually making a much impact. So there's no impact almost because by the time you get them ramped, they're making no impact to the business. So we're very, very fast there as we've been incredibly fast with the Latitude folks as well. That's what we do. We hire wicked talent. And it's actually there's a lot of people that love to be at Megaport, and it's not hard to hire because we've got such a big machine of folks that recommend wicked talent to us. It's very rare. By the way, every single go-to-market hire in the end, and pretty much everyone that's coming through is coming from a recommendation from someone inside the business, makes it so much easier. Operator: Our next question comes from Bob Chen. Bob Chen: Just a question, a follow-up to your comment earlier around the biggest constraint being compute for the Latitude business. I mean there's been a lot of noise around shortages as well as price increases for DRAM and servers. Like how easy is it to pass on the price increases to your customers? And then what are you guys doing on the supply chain side to try and mitigate the shortages? Michael Reid: Yes. The good news is we've got choice in terms of the SKUs that we can procure and the vendors we can procure from. There's definitely been -- I mean, for those who don't know, there is a pretty significant memory challenge globally at the moment. I think memory price is up 300 or 400% in the last few months alone. I think it was OpenAI, I think, took out a big line. I think Western Digital has even said that they're not even taking orders. So there's definitely -- that's flowing through the entire industry. I think the scale at which hyperscalers are procuring this style of infrastructure is pretty large. Even though, I guess, it's a sizable CapEx for Megaport, it's still a very small component on the global scheme of things. And so there's plenty of different providers that we can leverage. I think there's 5 or 6 different parts we can procure. And we've been changing depending upon pricing and opportunity and who's willing to work with us and so forth. We also, you have to spend time escalating, unfortunately, when you end up in a position where everyone -- what happens is everyone tries to jump the queue and kind of the noisy wheel gets the oil, so to speak. And we've had that with some of our vendors where we've jumped in. They've sort of pushed out and delayed delivery and then we've jumped back in and they've actually pushed us back forward. So at the moment, we're in a very good position. A lot of ordering and infrastructure was prior to price rise as well, which is helpful. We will see how the pricing plays out in the market, but it's likely that ultimately, someone -- prices will typically get passed on to the consumers over time. You can't withhold those prices, and that will happen across the board. We don't need to do that for the short period where we're at, but at some point we will and all of that will get washed through the business. So it's a very -- you're constantly monitoring pricing in that game and making sure that you're competitive, it's returning a great margin and so forth. So what's probable is that you'll probably see -- it could -- these are the funny things. They're hard and sometimes they play in your favor because the rest of the world can't get access to something that you've got access to. And so you could see things change. But let's just see how it plays over the next 6 months. This space changes almost daily. Bob Chen: Great. And I guess it doesn't change the underlying business case on Latitude at this point in time, at least. Michael Reid: No. And if you think about it, when we went through this, it's kind of discretionary growth. If you grew too fast and you started to burn too much CapEx, you just slow down the CapEx you deploy if you ever got to that position. So it's kind of a discretionary business where you can control the inputs in terms of the CapEx that you're deploying and then you can monitor it with pricing in terms of -- to manage the utilization play. So you've got levers, if that makes sense. So it doesn't run away from you unless you choose for it to do that. Operator: Our next question comes from Roger Samuel. Roger Samuel: Just a quick one on your EBITDA margin. So you mentioned that the exit run rate was 21% for the half. Now given that you reported 26%, is there any possibility that you might go below the 21% to 24% range in the second half? Yes, or is that 21% is the floor for the second half? Leticia Dorman: Roger, I guess for us, it's more highlighting that that's 26%. You've got 1 month of Latitude in there, which is a higher-margin business, heavier CapEx, higher-margin business. The reason I've highlighted that from a Megaport underlying EBITDA exit margin is because we will continue to add costs in the second half. It will be a mix of recurring and nonrecurring spend. And so yes, that's why we provided guidance to the 18% to 20% mark for the... Roger Samuel: Right. Yes, I was just wondering if you may go below the 21% figure in the second half, given that you give a range of 21% to 24%. Leticia Dorman: No. You mean on the group? Yes, no. That's why we've given the range on collective. Yes. Sorry, just ensuring I understand the question. Roger Samuel: Even for the second half as well? Operator: Our next question comes from Siraj Ahmed. Siraj Ahmed: I think it's a good follow-up to Roger's question actually. So, Tish, one for you probably. I mean you did add, what, $10 million costs half-on-half in the core business, right? And the guidance, especially given exit rate is only it's 21%, but to get to 18% to 20%, actually has to go dip to sort of 15% in the second half, right? That's a big step-up in cost in the second half. But Michael just said that you did most of the hiring at the beginning of the half. So just confused... Leticia Dorman: So, don't forget, don't forget they don't start on 1 July. And so you add those costs throughout. So it's kind of -- it's exactly the same thing that we talked about last year, I think almost this time last year. And so it is that collective ramp. And again, that's why I kind of highlight that there is recurring and nonrecurring spend within the business. And that is part of -- you think about Megaport stand-alone, you've added 2 acquisitions. We do need to make sure that we've got collective marketing and activities built into the second half. And so that's why I really want to focus from an EBITDA standpoint on the collective group margin because it is the sum of components. So that's kind of why we've tried to provide some guidance on that at the collective group because I think that's really important. Siraj Ahmed: Okay. That's super helpful. And so just to clarify again, given your comment on recurring and nonrecurring, so maybe we shouldn't be using the second half margins as the -- for full year '27 because that's what I'm getting a lot of questions on because that sort of implies run rate in next year is much lower, right? But you're saying there's nonrecurring spend as well. So all of that doesn't carry into FY '27. Leticia Dorman: It's a mix. It's a mix. And so yes, I think you've got 2 very different margin businesses coming together, so -- and the India expansion. So there's just a sum of all the components. So we'll provide guidance for FY '27 at the full year. So -- but yes, you're kind of on the right track at least. Siraj Ahmed: Yes. And can I just follow up on one thing? The synergies question, which Michael was revenue. But on the cost side, I think what Latitude is now going to use your backbone or your network, right? So does that mean there's a bit of cost synergies for the business as well? I know it's not material, but at least Latitude benefits from that. Michael Reid: There is lots of benefits on that. So there's -- we talked about synergies in terms of just like go-to-market. There's synergies in terms of the platforms as well. Like if you think about it, we're in all these data centers. We've got these relationships in space, much easier to expand and scale. We can actually do some really cool stuff where we land smaller sites with leveraging the Megaport network so that there's a significant reduction -- not material, but enough to be a reduction in cost to land faster in more locations. So you'll probably see us expand the number of locations a lot easier because we can land a lot simpler and then we can scale from there. That's because of the Megaport backbone. A lot of the Megaport components cross in because you've got an ability to say, well, we could put 100-gig VXC, for example, straight into the Latitude business, and we have a choice as to how we can charge that to a customer or not or offer a differentiated service. So a lot of it comes through. There's a lot of differentiation that comes out of it. There's a lot of innovation that we're going to bring from an enterprise perspective. Think VPC, which is basically enterprise networking components into the compute stack, very similar to what you'd see with a cloud provider. We'll build that and integrate that into the platform and offer it. So the 2 businesses are pretty tightly aligned in many ways and benefit each other on both sides. Leticia Dorman: We got one more question. Operator: Our last question comes from Paul Mason. Paul Mason: I just wanted to ask a bit about the NRR and services numbers, like the services numbers have shot the lights out, right, a much bigger set of additions than previous halves. Just wondering if you could give any color on the contribution from the second half '25 cohort to that? Like is what's driving this big step-up like the relatively new customers that you had a big surge last half? Or is like the upselling more coming from just like a broad base at this point? And I suppose where that's leading is because you had a second half in a row of really good customer adds. Is this then going to reaccelerate those numbers like even more significantly because it's all coming from a much bigger set of new customers. Michael Reid: We've been on this journey for a while explaining the impact and drivers around net retention and also the impact for what's important for the company. The answer is both, of course, and that's why we keep sharing that, a, net retention. So we're selling more stuff to the existing customer base. And that's why they're taking up more services. They're much bigger services. There's more revenue associated to them. But also when you have more products, you land more logos because you can meet them at a different sales cycle for each component that you have. So this mission that we've been on, I don't know what it was, 2 years ago, and we said, hey, these are all the levers to fix the net retention. It wasn't just fixing net retention, but it was like adding new products will help you expand more, earn the right to sell more. But what's really interesting, and we kept sharing that is there was a period of time before sort of -- I can't remember what year it was, like '22 to '23, where new logos had declined. And new logos on the back of no sales force and lots of things. We won't go back down that path. But when you have really, really high lands of new logos, you typically follow -- that gives a positive tailwind to net retention as well because they expand faster than an old logo. So when you have -- it's like the perfect storm. We've got all those elements working at the moment. And then you've got a great market in the United States specifically demanding all of these services, and we have the platform that delivers it. So it's not really anyone else that can do what we do. So we're in that really, really great position, which is why you're seeing that come through in all the metrics. Like this is an outstanding performance from the underlying Megaport business. And on top of that, we've acquired some really cool acquisitions. One in particular, is going to take us to a really different company in the future. So yes, I'm glad you noticed it. Paul Mason: If it's all right, if I can sneak in one other quick one. I was just wondering, one of the things that you introduced when you joined as CEO was like the sort of solution selling and Global WAN was like something we hadn't heard out of Megaport before you arrived. Have you got any ideas on like something like that, that would bridge Megaport and Latitude, like actually a cross-platform solution sort of that could be a new go-to-market motion for you guys yet or anything like that? Michael Reid: Yes, yes, absolutely. Whilst they are different technologies, they serve the same function. Like if you think about it, if you ever -- I mean, you know this, but for folks on the call, if you look at IT infrastructure, there are only 3 things. It's network, compute and storage. They either live in a data center, they live in a cloud or they live on someone's on-premise literally. And so by stitching these 3 things together, so I say 3 because we will look to build out a storage business as well. When you stitch those 3 together, you solve the customer problem. The outcome is you want to run an application. And the application wants to be served up in a very high performative, low-cost, predictable manner. And that is what this solution delivers. And then you want to be able to make that resilient across multiple locations, time zones, countries, you name it in the network and all these things stick together. So it really is a beautiful combination of what will be these 3 businesses moving forward, at least the compute now and the network, and then we'll add the storage element to it. That is, couldn't be more like a solution selling discussion. But the cool part is you can always land a customer at any point. You could just land on a GPU that the customer wants to use and then you have the right to cross-sell into the network element, add compute, potentially add storage. We've got this 3,000 enterprise customers on the network side. They've got sort of close to 2,000 on the compute side, and we have this ability to sort of take both to both sides. So it's really exciting. It will take time to build that, but that is what the opportunity is ahead of us. It's really cool. All right. Operator: That brings our Q&A session to a close. I will now hand back to Michael for closing remarks. Michael Reid: I think we're done. That was a little longer. Thanks for those who hung in with us. It was longer because of the 2 acquisitions. This time next year, we'll keep it a lot tighter. We wanted to make sure everyone had an opportunity to understand the businesses, understand the changes around the guidance components, the strategy of why we acquired, what it looks like from a product perspective, give you some insight into some really cool innovation that we're already launching inside both businesses. And thank you for your support. It's an incredible opportunity for us, and we're just going after it. So yes, look forward to catching up on the roadshow. Leticia Dorman: Thank you.
Operator: Ladies and gentlemen, welcome to the Umicore Full Year Results 2025 Conference Call. Your speaker for this call will be Bart Sap, CEO; and Wannes Peferoen, CFO. [Operator Instructions] I will now hand the conference over to the speakers. Please go ahead. Bart Sap: Good morning, everyone, and welcome to the full year results 2025 of Umicore. And as you can see here, of course, we have taken this picture, a beautiful gold nugget. And I think for the ones following us will understand why we have put that picture forward. And of course, I'll be coming back on that later when I look back on 2025. Now if you read our set of numbers, I would like to highlight again that we have adjusted during the CMD a new reporting structure, different segmentations in our business group. So please do have another good look at this slide because we will be reporting and commenting the numbers in the new structure. So Wannes is sitting here on the left with me, and he will also comment, of course, on the finance and some of the business trends as well as usual. And let's have a short look at the agenda. So nothing particular here. First of all, we go on the core strategy, the key numbers. We're going to go over the outlook ultimately for 2026 and then hopefully have an engaging Q&A at the end of the session. Yes, our core strategy. Now we launched our core strategy in March 2025, where we indeed had a different approach and not just chasing growth at any cost, much more towards that value recovery and battery materials, but also more value extraction in our foundation businesses. And roughly around the time that we were announcing our CMD, our new strategy, the world started to move violently, I would say. And the geopolitical landscape has been changing fundamentally. And therefore, also the markets as well as supply chains have been reshaped and continue to be influenced by new policies coming out. So the world is structurally different versus roughly a year ago. Volatility is, for the time being, the new normal, and we will continue to navigate and, of course, react and adjust according to the volatility that we see. Now if I zoom out and see what's happening in the world, it's clear that we have a much more fragmented world and that the world is waking up that if you want to be a technology leader, if you want to have a strong economy going forward, you need these critical raw materials. You need to have your own supply chains, and that's where Umicore's circular business model, which is multi-metal on the one hand, on the recycling refining side, but also on the materials that activate the world downstream, the applications downstream is more relevant than ever. So having a secure and sustainable supply chain in different parts of the world becomes a key element for society. And this is right up the alley of our strategy, and we [indiscernible] our business model with 4 key pillars: capital, performance, people and culture and partnerships. And let me now highlight some of the achievements that we had in these different segments over the years and some of the actions that we took. First of all, on the capital, and that was the first picture of the presentation. Obviously, we sold and had a subsequent lease-in of our permanent gold inventories. This has unlocked significant value. This also has helped further to deleverage the company, but also it transitions the price risk, the long-term prices of these inventories outside of Umicore. Now we also said at that time that lease rates for gold are typically stable. It's an alternative versus cash or pure money in the end. And even in that volatility and that frenzy, let's say, around PGMs at this point in time, also lease rates have -- for gold have remained stable at 0.5% to the 1% mark, well below typical financing rates that you would expect for normal debt. Now next to the gold, we also have been very disciplined on our CapEx. Remember, we guided at the start of the year more to EUR 400 million. In the end, we came in at EUR 310 million by making deliberate choices, but also being very strict on the execution of the projects that we are having. If I go to the performance pillar, there the full year results is in line with our latest upgraded guidance. So we said between EUR 790 million and EUR 840 million during the summer. We came out slightly above that EUR 840 million. So we're very satisfied with this set of numbers, a strong performance, I would say. And this was really, really also supported by the efficiencies, targets and the mindset that we are cultivating more and more within Umicore. And we promised EUR 100 million. We achieved that target, and Wannes will explain later on, of course, that has helped to offset the inflation, but also some FX headwinds that we had in2025. So I mentioned it already, we're driving the company much more to a performance culture where we take our accountability. We really focus on what is the essence. We do what we need to do in a very disciplined way, and this is showing results, and we will continue to push forward in that direction. On the partnerships, we also not have been sitting still, I would say. We had quite some action there as well. And we closed a partnership around our silicon anode materials with a Korean company, HS Hyosung Advanced Materials. And together with them, we will industrialize this really an interesting and exciting technology, and we found a way actually to bring that technology to the market without having to allocate excessive cash or very sizable amounts of cash for Umicore. Next to that, critical raw materials. We have been working on that trend, of course, already for quite a while. And we announced our partnership with STL, Societe du Terril de Lubumbashi. So basically, we have shared technologies, have upgraded installations in the DRC in order to recover germanium from old mining tailings. And this was really a support for the business going in '25 and beyond. Now let me go to the key figures. Wannes will go in more detail, so I'll stay pretty high level here. I would say we really had a strong performance in our foundation business. It was supported by group-wide operational excellence efforts and a favorable metal price environment. EBITDA up 11% to EUR 847 million, 24% EBITDA margin, a good free cash flow supported by the gold inventory sales of EUR 524 million and leverage of 1.6. I think we can all agree this is a very solid set of numbers in the current environment that we live in. So happy with that. Let me now go to the different business groups. Let's start off with Battery Materials Solutions. So for your reference, Battery Material Solutions now represents, on the one hand, Battery Cathode Materials and the battery recycling business. And before I go in the details of the different business units, I would like to have another glance at the Battery Cathode Materials and EV markets out there at this point in time. So at the CMD in March 2025, we said that this market is still taking shape and has inherent volatility. Well, that's what we have seen in 2025 and also what we continue to see in 2026. EV penetration around the globe is progressing, but at quite different speeds, China leading decisively. Europe is following more moderate and U.S., well, there, actually, we are quite behind. And of course, the policy change of the U.S. -- the new U.S. administration is not helping that. The CO2 tolerance is much higher than in previous administrations. That is clear. And that's why the policy is shifting and pivoting away, I even would have to say, from EVs to internal combustion engines, right? This clearly has an impact, and you have seen announcements that even battery makers in the U.S. are now focusing more on energy storage than pure EVs. And of course, quite a number of OEMs have had to make difficult announcements. If I look to Europe and China, that's really a -- and it's depicted here as well with an arrow. That's really an area where there's an interdependency. Today, we see that China still has overcapacity that a lot of OEMs are relying on China to import their batteries into Europe. Also for cathode material, we still see cathode material flowing into Europe at this point in time. So competition is fierce. I think that is fair to say. Now at the same time, we also see that there's a heightened risk of trade tensions of potential restrictions on exports of certain technologies by the Chinese government on the one hand, but also in Europe, a much stronger talk about these local Brazilian supply chains and local content requirements. So the next days, the EU is expected to come out with some policies. These will be important to monitor those and could really make a substantial difference in the European landscape. So in general, summarizing, the recent industry announcements are emphasizing that the growth in Europe is somewhat challenging, but it also highlights the increased importance of our take-or-pay contracts, and I'll get back to that. Now going to the numbers. So if we look in 2025 for Battery Cathode Materials, we did see a revenue growth, a revenue growth of roughly 11% versus 2024. Volumes -- actual deliveries were up versus last year. We did collect take-or-pay compensation for contractual volume shortfall. And there was a partial offset by lower refining income because of a weaker, more challenging cobalt environment on the pure refining side. And also, of course, the nickel price environment was not necessarily beneficial. Now the adjusted EBITDA as per our expectation came in around breakeven, which is a clear improvement versus last year, where the breakeven result was still containing a substantial one-off, a positive one-off in 2024. Now if you look at Battery Recycling Solutions, during the CMD, we said we would be roughly at minus EUR 25 million. We came in at minus EUR 21 million. Really also here, we continue to focus on optimizing our process and recycling technology. At the same time, we're also very diligent here on the execution and cost management. Overall, you can see a clear also improvement on the EBITDA level, '24 versus '25 despite that we did not have that one-off in there. All right. Let's go to the next business group, and that's Catalysis. In good tradition, we also always start with an overview of the internal combustion passenger car production numbers. And here, we see that '25 is slightly lower than '24. It's not a substantial drop actually. It's minus 0.7%. Europe was more down. At the same time, South America and China, these regions even further progressed. If I then look at the HDD segment, Europe, a slight decline, but a positive evolution in China of 7.1% growth, of course, starting from a relatively low base as the previous quarters -- or actually the last quarters in 2024 were not strong. Now looking at the numbers, a solid set of numbers. We see a sustained demand for our products throughout the business group in a volatile market, I would say, so in an overall challenging economic backdrop. At the same time, we also continue to focus on our operational excellence as we have been doing for the last years, and we're getting increasingly better at this year after year. Now if I look to the Auto Cat, our volumes in Auto Cat were strong. We outperformed the ICE, so the internal combustion engine light-duty vehicle market, which reflects our strong position. But also the focus, as I mentioned, of operational excellence and efficiency is really part of the DNA. We continue further footprint consolidation, amongst others in Asia, where we have taken decisions around our Japanese operations. Precious Metals Chemistry, that follows to a certain degree, of course, the Automotive Catalysts business with the inorganic chemicals. They're the supplier of the inorganic solutions to the Automotive Catalysts business. So also a strong performance there. A good set, of course, PGM price support helping this business also forward. Now our homogeneous catalyst business, which is selling typically in the broader chemical industry, we saw some softness in line with the overall chemical industry pain that we're all going through. Fuel Cell and Stationary Catalysts, the earnings clearly improved. We had higher deliveries for our fuel cell catalyst solutions. We also are on track with our proton exchange membrane fuel cell plant in China, expected to start production in the course of 2026. On the stationary catalyst side of things, we do see a strong demand for backup power solutions and exhaust for these backup power solutions, specifically for data centers in the context of the high demand of the AI companies, AI application. So Catalysis EBITDA margin, 27%. Recycling. Well, you cannot talk about recycling about -- unless you talk about the metal prices. And here, you can, of course, see that metal prices in 2025 are significantly higher than 2024. You know that Umicore that we decided to hedge quite a number of our -- quite an amount of our exposure forward. Why? It creates visibility. It stabilizes earnings profile and it also protects against downside risk. That means if the price environment rallies beyond the average hedge price, indeed, you have some opportunity loss. But still today, we're very happy with these hedges. Now on the remaining open exposure, of course, there's a positive upside of stronger PGM prices to the overall earnings of the business group segment. Now if we look at the overall set of numbers for the business group, we see an advancement in the revenues. At the same time, a stable EBITDA performance with a 39% EBITDA margin. So in Precious Metals Refining, our revenues were in line with previous years. The metal price environment was supportive. We had good volumes. There were -- of course, we had some average hedge rates decreasing year-on-year, which was a backdrop or actually a drag, let's say, on the results as such. The overall mix was somewhat less favorable, still a very strong set of numbers for Precious Metals Refining. We had some slight temporary process inefficiencies, which will no longer be there in 2026, but we were able to offset these by solid contributions from our operational excellence and cost-saving efforts also in this business unit. Jewellery and Industrial Metals, I mean, the central theme here is gold, gold recycling, gold processing. I mean, really a very strong market, strong revenue growth and also a good margin expansion. So this business is also doing really well on basically also the gold evolution and the gold focus, which is there in the market. Precious Metals Management, well, we've talked about already volatility in precious metals prices is an excellent market environment to trade and make trading gains. So this business unit also performed really strong. Next business group would be Specialty Materials. And Specialty Materials is maybe a business group which is sometimes a bit yes, underrepresented or underappreciated maybe by the markets or -- and maybe we should also further strengthen our communication on this business group because it has a couple of beautiful gems in there. If I look at the business group here, a 16% EBITDA growth in 2025, EBITDA margin approaching 20%. Cobalt and Specialty Materials, there was a support of a cobalt trend where we saw a better momentum for cobalt premium products, right? And also here, again, efficiency. You've understood by now that efficiency is really part of our overall performance, and that's why we continue to stress it. If I look at Electro-Optic Materials, there we have seen that China has taken a stronger stance on exports and not a lot of germanium has left China in the course of 2025. We have this joint venture with, for instance, Societe -- so with STL basically, which I highlighted earlier. And this allowed us also to continue to supply our customers in a very strong germanium price market, added by our closed-loop refining and recycling services that we have. So Electro-Optic Materials sees strong top line growth at the end of the year, and we continue -- we expect to continue to see that growth also in 2026. So one to watch going forward. Metal Deposition Solutions, I would say, overall, a good stable performance with a different mix between the business groups. But yes, also pretty good there. So I think this is where I would like to leave it at this point in time and hand the word to Wannes. Wannes Peferoen: Thank you, Bart, and good morning, everyone. Today, I will start with EBITDA before moving on to cash flow, net debt, the P&L and balance sheet. Adjusted EBITDA was up 11%, reaching EUR 847 million, driven by volume growth across all businesses and efficiency savings. This broad-based growth resulted in EUR 125 million of EBITDA contribution. We also delivered EUR 100 million of efficiency benefits, which more than offset inflation of EUR 68 million. Metal result declined by EUR 17 million due to favorable hedges rolling off. This was partially offset by increased prices for precious and platinum group metals as well as minor metals for the remaining open or unhedged position. There was a headwind from foreign exchange of around EUR 45 million, largely due to translational effects as the euro strengthened. Adjusted EBITDA margin improved from 22% to 24%, in line with our Capital Markets Day target of more than 23%. Now zooming in on our efficiency program. We delivered EUR 100 million of efficiency benefits, in line with our target. 25% came from top line growth, 20% was due to a reduction in cost of goods sold and 55% came from a reduction in SG&A and research and development, in particular, in Battery Material Solutions, Catalysis and Corporate. Headcount in the group reduced 3%. Turning to cash flow. Cash flow from operations before changes in working capital amounted to EUR 1.1 billion. This was supported by cash proceeds of EUR 525 million from the sale and subsequent lease-in of the permanent gold inventory in recycling. We finalized this transaction in October last year. It enabled us to unlock significant value, strengthen our balance sheet and reduce finance costs. Net working capital increased by EUR 298 million, mainly as a result of higher activity and to some extent, increased metal prices. The significant reduction in CapEx down to EUR 310 million demonstrates our capital discipline. This reduction is most prominent in Battery Cathode Materials, where we are leveraging footprint flexibility and phasing our spending. Free cash flow from operations was EUR 524 million. Moving to the net cash flow bridge and net debt. The free operating cash flow largely covered the EUR 250 million equity injection into our joint venture, IONWAY in January '25 as well as taxes, interest and dividends paid. In January this year, after the year-end, Umicore and PowerCo each contributed an additional EUR 175 million to the IONWAY joint venture. Net debt reduced slightly to EUR 1.4 billion, resulting in a leverage of 1.6x adjusted EBITDA, down from 1.9x at the end of '24. This is well below the anticipated peak of 2.5x as we focus on capital discipline and maintaining a solid balance sheet. Looking at the consolidated P&L. Adjusted EBIT improved by 21% to EUR 579 million. Adjusted net finance costs of EUR 173 million were up EUR 65 million, mostly due to lower interest income on cash as rates came down and a negative impact from foreign exchange. Adjusted tax charges were in line with the prior year. Pretax income was slightly up, but the adjusted effective tax rate came down from 29% to 26%. Adjusted net income of EUR 288 million was up EUR 33 million. And adjusted earnings per share were up 13% at EUR 1.2. We are proposing a dividend of EUR 0.50 per share, in line with last year and with our policy of a stable or rising dividend. And this represents a payout ratio of 42%. Adjustments to EBITDA amounted to EUR 365 million. As I said earlier, we optimized our business model in recycling by selling the permanent gold inventory and replacing it by revolving leases. This generates a pretax gain of EUR 486 million. This was partly offset by an impairment of our joint venture participation in Element 6 and provisions related to specific restructuring programs. Adjustments to net result include a derecognition of a previously recognized deferred tax asset and the tax impact of the gold inventory sale. Net income was EUR 385 million compared to minus EUR 1.5 billion in the prior year when there was an impairment charge for Battery Cathode Materials. There was a big improvement in return on capital employed from 12.3% to 15.7%. Now turning to the consolidated balance sheet. Our liquidity remains robust with cash of EUR 1.6 billion after repaying a EUR 500 million convertible bond in June. And as I said earlier, net debt was stable at EUR 1.4 billion, and the leverage ratio came down from 1.9 to 1.6 by the end of the year. Group equity improved to EUR 2.3 billion, corresponding to a net gearing ratio of 37%. We have hedged a substantial portion of our metal exposure for '26, '27 and '28, and we continue to look for opportunities to hedge further, in particular, for '29 and 2030, taking into account market interest and forward rates. So to sum up, we delivered a strong performance in '25 as a result of volume growth across the board and EUR 100 million of efficiency benefits. Adjusted EBITDA improved in every business, except recycling, where it was stable and CapEx was well below the prior year. Selling the permanent gold inventory has given us additional headroom while reducing future finance costs. And we continue to focus on driving cost efficiencies, controlling working capital and disciplined capital allocation in '26. I will now hand it back to Bart. Thank you. Bart Sap: Thank you, Wannes, for that overview. Very clear. Let's maybe have a look at the outlook for 2026. So the essence basically is that we entered the year on a stronger footing. And if I look at the different business groups, on Catalysis, we continue to have a very strong performance in this business group. We see that continue into 2026, and we are happy with the state in which it is, and that will continue going forward. And Recycling, I think the essence is that in the current favorable metal price environment that we'll be able to offset the negative impact of the average lower hedged metal prices as well as the shutdown, which is foreseen in 2026. So also moving on well there. Specialty Materials, continued strong performance. We do expect we continue -- we believe we continue to see the top line growth, amongst others, in the germanium products, but also a supportive cobalt price environment will help to further support the results. And in Battery Materials, we continue to pursue the midterm plan to recover value, while at the same time, we, of course, have to navigate a volatile and competitive market. So we continue to focus on rigorous capital allocation. We're going to continue to lever our customer contracts with our take-or-pay commitments on which we clearly say that the importance of the take-or-pay mechanisms is increasing given the volume development that we see. And in Battery Materials Solutions, we're going to continue to be disciplined in our spending broadly in line with 2025. On corporate costs, we expect a slight increase because we continue to invest in AI-driven solutions to further enhance and support our operational excellence. For capital expenditures, we are expected to increase versus 2025. And this is mainly driven by a selective growth initiatives in Recycling. So engineering that we do for the decision we need to take around the expansion in Hoboken in our precious metals recycling business that we will take in 2026, but also selective high-quality growth investments in Specialty Materials. So on CapEx, we do expect to be in a range between this year and last year guidance of EUR 400 million with, again, a very good focus on disciplined execution. So if I sum that up, I would say that we will not be providing a concrete guidance today and this is because the market is still very dynamic. And we will have to continue to navigate that environment. Yet based on what we see today, we would expect adjusted EBITDA to further progress into 2026. Now shortly wrapping up before we go into the Q&A. So -- and this is also a shout out to the teams. I think 2025 was really a pivotal year. And Umicore and the teams have shown great resilience. They have shown great discipline also to focus on what our core is and taking courageous actions to basically be able to deliver this strong set of numbers. It's fully in line with our core strategy execution. We're well on track. We're entering 2026 on a much stronger footing, and we will continue to build on the momentum of 2025 going into 2026. So really positive 2025 and with confidence we go into 2026. And with that, we go to the Q&A. Operator: [Operator Instructions] The first question that we have is coming from Wim Hoste from KBC Securities. Wim Hoste: Do you hear me? Bart Sap: Yes. Wim Hoste: I have 2, please. On metal price hedging, you indicated that hedge levels in '26 will be below '25. Can you maybe elaborate a little bit on the outlook of your hedge book? Is it fair to assume that the hedging price levels will increase probably materially as from '27 onwards? Can you maybe elaborate on that? And then also linked to metal price hedges, what are the limitations to hedging more and further into the future? I think you indicated that you're looking to increase the hedging for '29 and 2030. What is prohibitive in this case? Is it just availability of counterparties? Is it financing costs, which get increasingly expensive, extending the hedges into time? Can you maybe elaborate also a little bit on that? Those are the questions. Wannes Peferoen: Wim, Wannes here. I'll take those questions. So looking at the metal price levels of the hedges, that is something we don't communicate. But at the same time, we can also share that, I mean, moving from '25 into '26, there will be less support from the average hedge prices that we have looking at '26. At the same time, looking at the average hedges that have been locked in or the volume of hedges that we have locked in, looking at '26 and '27, this is where 70% on average of the exposure that has been locked in. So I think looking at the metal price exposure, this is where in the current favorable environment, there's still potential. There's still upward potential, but it's limited to that open exposure of, let's say, roughly 30%. Now we are looking into hedging further looking at '29, 2030, again, on the back of creating that visibility, creating that predictability of the earnings. But this is where looking at the market environment, on the one hand, we see a heavy backwardation, looking in particular at the PGM prices, but also limited market interest from counterparties to lock in those prices, hence, also the heavy backwardation. So this is something that we are monitoring closely in order to secure basically at the right time, the right price levels for those years, '29 and 2030. Operator: The next question is coming from Sebastian Bray from Berenberg. Wannes Peferoen: Sebastian, we don't hear you. Sebastian Bray: I have a few, please. The first is on the financing costs. Are there any one-off [Technical Difficulty] Operator: Sebastian, we lost you for a second. I will open your line again. Sebastian Bray: I think there's a lag on the mic, so I'm just going to speak. What would you provide as guidance for '26 financing costs? My second question is on the [Technical Difficulty] Bart Sap: Sorry, Sebastian, we really can't hear your questions. Sebastian Bray: What exactly -- why can't we go back by '28, '29 to a level of recycling earnings akin to what we had in '21, i.e. [Technical Difficulty] Bart Sap: So maybe let's see what we think we understood. So I think there's a question on the one hand around financing evolution... Sebastian Bray: And final one on the VW JV. Is there any chance [Technical Difficulty] Bart Sap: Maybe we go to... Caroline Kerremans: I think we have an issue with the line on your side, Sebastian. So I think it's difficult to receive your questions. If there is any opportunity to send them over the chat, that would maybe be helpful, and then we can move on for now to the next analyst, I believe, because it's difficult to take these as such. Gaia, can you move on to the next analyst, please? Operator: Yes. The next question is coming from Chetan Udeshi from JPMorgan. Chetan Udeshi: Can you hear me okay? Bart Sap: Yes, yes. Loud and clear, Chetan. Chetan Udeshi: Okay. Cool. So I had a few questions. First one, I appreciate you're not giving the guidance, even though you gave same point last year, some guidance for 2024, but I also remember Umicore historically never gave guidance at the start of the year. So I don't know if you are just going back to the old practice. But just based on all of the things that you mentioned, qualitative assessment, what you've seen so far, what is your feeling on the consensus that we have from [indiscernible] for 2026? Do you have a view on where the consensus is? And is that in the right ballpark? The second question, I was just curious on your take-or-pay contribution in the Battery Materials. I mean it's pretty clear right now that some of your customers like ACC, they publicly announced that they are scaling back the ramp-up plans. So I'm just curious, are you getting compensated 1:1 for the lost volumes? Or is it more a negotiation where you are still trying to be flexible if your customer can't take the volumes? And the third question, on Recycling, you mentioned some process inefficiencies. Can you quantify that? Is that a material drag last year, which shouldn't recur this year? Bart Sap: Okay. Wannes, you go on the guidance or I can go on the guidance, doesn't matter? Wannes Peferoen: Well, I think on the guidance, again, we highlighted it's too early to be very concrete. At the same time, looking at EBITDA, this is where we say, yes, we are confident on the year '26, and we expect to make some progress in '26. Looking at other elements of guidance. CapEx, we highlighted, we expect the CapEx to come in between EUR 300 million and EUR 400 million. We will continue to be diligent and disciplined. If you look at Battery Cathode Materials, we reduced the spend in '25 versus what we anticipated, and we anticipate to do the same for '26. At the same time, looking at the foundation business, this is where in Precious Metals Refining, we are working. We're engineering on that expansion of the flow sheet that will result in some step-up in CapEx. And in Specialty Materials, we see some very specific growth opportunities, which we want to support. So hence, the range of EUR 300 million to EUR 400 million. Now the favorable metal price environment is obviously -- can be supportive to the EBITDA, but it can also put pressure on the working capital. And this is something where we will diligently work on in order to make sure that we can offset to a maximum extent any upside pressure on working capital. I think those are key elements, I think we can guide on today. Bart Sap: Yes, that's right, Wannes. And last year, we decided to guide because of the specific circumstances around all the trade uncertainty and the tariffs, right? So we wanted to be clear also there where group was heading and to give you clarity because it was probably the biggest uncertainty out there in the market at that point in time. Now on your second question, the take-or-pay and the further progress. Well, first of all, I mean, I think we have been pretty transparent and clear that in 2025, there is indeed a portion of take-or-pay in the results for which we are financially covered. The ramp-up across contracts. I will not talk about specific contracts. I will never do that. But we see that across -- if I talk more broadly on the ramp-up, it is slower than what we would have wanted to see or what our best view was at the CMD in March. So the weight of take-or-pay in that trajectory that we shared is increasing. right? And this is something that I would like to highlight. At the same time, we continue to have strong confidence in the contracts, and we will continue to leverage these contracts as we have done in '25 and will go -- will also be doing going forward. On the Recycling, I forgot what exactly the question... Chetan Udeshi: The process inefficiencies. Bart Sap: The process inefficiencies. Yes. Wannes, if you want to. Wannes Peferoen: Yes. So I mean, looking at recycling, we highlighted that the volumes were up -- the volumes processed were up. At the same time, looking at the downstream, this is where we had some technical hiccups resulting in some additional costs, some additional rework, but not too material, but at the same time, we also wanted to highlight as it does impact the results. Bart Sap: That's right. And as I highlighted in my presentation, we did offset those with further efficiencies in other parts of the plant. We just want to be transparent and open around this. Again, for 2026, there's not going to be any effect of these operational inefficiencies, so not to be taken into account for you for 2026. Caroline Kerremans: Sorry, before we move on, we can maybe take the questions of Sebastian Bray that have come in through the chat. Bart Sap: Yes. Thank you, Chetan. Caroline Kerremans: So the first question is the financing costs in 2026. Could this be down versus 2025? The second question is, could Recycling return to levels of full year 2021? And then the final question is on the JV, the IONWAY JV. Could this be recut or renegotiated as Volkswagen is cutting back on that? Bart Sap: Maybe you take the first one. I'll take the 2 other ones. Wannes Peferoen: Yes. So looking at finance costs, obviously, very difficult to guide because there's 2 components which we don't have fully in control. One is basically the cash deposits and the interest rates we get on those cash deposits. And this is also where there has been a steep decline in '25 and hence, also less contribution to the finance income, I would say. The other element is the forward points, looking at the financing transactions in foreign currencies. This is where we also carry the forward points and again, hard to predict, I would say. At the same time, I think '25 seems rather exceptionally high looking at the financing costs. I think I would anticipate to have that lower going into '26. But again, hard to give guidance on. Bart Sap: Yes. And then on Recycling, well, I think it's true. I mean, it's a fact that actually your hedged exposure or unhedged exposure, let's say, in '29, 2030, the more we move out in that period, I think we're substantially less hedged in that time frame. Suppose that the current favorable metal environment remains for all the main metals such as platinum, palladium, rhodium and of course, some others as well. Clearly, there could be a substantial upside versus the EBITDA that we are reporting today. Hence, at the same time, these prices are not guaranteed. So it's impossible for us to guide on that. But in theory, there would be, of course, a higher upside possible. On the Volkswagen question, you understand I will not comment on that. We have clear contracts in place. We are going to continue to enforce these contracts. And at this point, I have nothing material to share with you on that point. Operator: [Operator Instructions] We have our final question at the moment coming from Mazahir Mammadli from Rothschild & Co Redburn. Mazahir Mammadli: One from me. So assuming that we have a favorable metals price environment going forward in the next couple of years, what would your priorities be in terms of allocating the excess free cash flow that you generate? Bart Sap: Yes. So basically, if I understood well, it's actually a cash flow allocation question, Wannes. But I mean, let me start off here as well. I think our focus today is still really on further being cash disciplined. It's really on that value recovery. And once the balance sheet continues to remain strong and solid, we will, of course, then decide what to do with the excess funds and will be coming out to the market. So we don't have a clear view on that at this point in time because we're still -- our focus is still on solidifying in a structural way, the balance sheet. So Wannes, I don't know if you would have any... Wannes Peferoen: No, completely right. I mean, looking at what we said in the CMD is that we look at landing at a leverage -- structural leverage between 1.5 and 2, let's say. And once we have that in place, once we see that recurring, that's the next topic that we will need to discuss. Operator: We will now take our final question from Stijn Demeester. Caroline Kerremans: I have received a message from Stijn. Sorry, I will read the message. Okay, you're in. Stijn Demeester: Yes, some difficulties here. So first one is on the SK On contract and the probability of renewal in '26. Second one, on the margins for take-or-pay versus actual volumes, can you say something there in terms of where they sit? And then the last one on the shutdown in Recycling, any view on when this will happen? These are my questions. Wannes Peferoen: Sorry, Stijn, can you repeat the last question? Caroline Kerremans: When the shutdown will happen. Stijn Demeester: On the shutdown in Recycling and when we should plan it in. Bart Sap: Yes. So okay. Thank you, Stijn. Very clear. On SK On, indeed, we said that there was a probability to extend the contract, and that did happen. So we continue to supply SK On in 2026. So that is definitely a positive. On the margin of the take-or-pay, there, I think what I said, I mean, the idea of the take-or-pay margins is to protect the investments that we have done. And as you have seen also when we were guiding for 2028, we had seen different scenarios of take-or-pay and actual volume delivery, and you saw that, that range, EUR 275 million, EUR 325 million, right, was rather muted. So you could, from that, of course, deduct that the margins indeed are sufficiently strong to cover volume shortfall margins. Now on the shutdown from Hoboken PMR, I mean, this is happening in -- yes, in the second half or later this month, actually. So we are preparing or entering, as we speak, the shutdown. Stijn Demeester: If I may... Caroline Kerremans: And then before we close -- go ahead, Stijn. Stijn Demeester: So is it a correct assumption that if you would fully lean on take-or-pay that you hit the EUR 275 million? Or is that a too positive take? Bart Sap: I mean, we have said during the CMD that indeed different scenarios of take-or-pay as well as volume -- real volume offtake would give that range of EUR 275 million, EUR 325 million. So the answer is yes. Stijn Demeester: Correct. Caroline Kerremans: Before we close it off, I still have an e-mail of Georgina from Goldman Sachs. I also want to highlight that we will look into the difficulty that people are having to connect to this call that this will not happen going forward. But so let me then phrase Georgina's questions here. How much CapEx investment needs still outstanding for Battery Materials? The next question is, is it increasingly in conflict with potential growth opportunities in recycling specialty materials in management's views? It feels to me like the opportunity cost is getting larger. Bart Sap: Okay. Very clear. Wannes, maybe you take 1, I'll take 2. Wannes Peferoen: Yes. So looking at Battery Cathode Materials, as I said, in '25, we reduced the CapEx spend as we are optimizing the -- or using basically the footprint flexibility in order to reduce and phase the CapEx. So looking at Battery Cathode Materials, what we shared with the market during the CMD is that on the one hand, we have the fully owned capacity where we would need to invest about EUR 350 million. This is where we expect to be able to reduce it with EUR 100 million looking at '25 and '26. Then what we also highlighted in the Capital Markets Day is that we have the capital injection into IONWAY, where we anticipated still to invest EUR 500 million between '25 and '26. This is where we invested in 2025, EUR 250 million and where at the start of this year, invested EUR 175 million. So bringing that to a total of EUR 425 million. We expect to stay within that budget of EUR 500 million in order to finalize basically IONWAY. Bart Sap: Yes. So I think that's correct, Wannes. So in other words, I mean, we're phasing our CapEx and function of the real underlying demand that we see, and we said that we would be disciplined. And for the time being, we're not spending those CapEx. As discussed earlier, the importance of take-or-pay is growing and that immediate need is not there. And that's transit in that question on the conflict versus Recycling. Well, I mean, I would say, first of all, we have a set of businesses that we have today, right, a very strong core foundation business in which we're going to continue to invest in selective growth initiatives. I've been highlighting in the germanium in the field of Electro-Optic Materials. We will decide on the investment in Hoboken in 2026. And I think the current evolution in Battery Materials is not holding us back to do that if we wanted to do that from a financial point of view. So no, there's not an immediate conflict. Of course, if you would think about really bold moves, then, of course, value recovery in Battery Materials would definitely be, yes, an important milestone to achieve. So no, I don't see that immediate conflict on the CapEx as we are keeping it to the lowest amount possible, and we continue to lean on our take-or-pay contracts. Caroline Kerremans: Okay. Then we still have questions from UBS as well. A small reminder that normally, we stick to one question per analyst but given the situation that we are in, I'm making some exceptions. So for UBS, the first question is, can you tell us what percentage of Battery Materials Solutions sales came from take-or-pay payments? The second question is, does the guidance for the CapEx includes the IONWAY payments? If not, what should we anticipate for? And then in the cost savings, could you give an indication for the cost savings in 2026? And then we still have a question on what do you expect you to do to protect the EV supply chain? And then a final one has Umicore been asked to join projects? Bart Sap: Well, it's growing the list. Caroline Kerremans: We will slowly start to close the call, but of course, IR will remain available to respond to your questions. And I'm now handing the floor back to Bart and Wannes to answer these final questions. Bart Sap: Yes. Thank you, Geoff, for the questions. Wannes, you take 1 and 2 or... Wannes Peferoen: Yes, so looking at take-or-pay in '26, I mean, as you have seen, looking at the revenues, top line and bottom line, we saw a step-up. I mean, looking at revenue, it's 11% up. Looking at the bottom line and excluding the one-off of '24, we also saw a significant step-up. This is driven by effective volume shipments, but also by take-or-pay. And that's also why we highlighted because it is a material contribution to the top line and bottom line. Now looking at CapEx guidance. So the guidance we gave, the EUR 300 million to EUR 400 million is excluding contributions to IONWAY. And this is where, as I highlighted earlier, in '26, we contributed already EUR 175 million, and we will stay within the budget that we shared in the Capital Markets Day. So meaning that for '26, we will not exceed EUR 250 million for IONWAY equity contributions. Then looking at the cost saving objective for 2026, this is where -- in line with what we shared with the market in March last year is where we are targeting to offset inflation, and we anticipate inflation to be EUR 50 million to EUR 75 million. So that's a target that we have put forward to the teams to at least generate savings in order to offset that anticipated inflation. Bart Sap: Yes. And then on the question on the EU EV supply chain. Well, I think I can only base myself, of course, on the information which is out there in the press and that you might also have seen, but which somehow also confirms the feeling that I had earlier is that the commission might be looking at indeed onshoring more battery production as well as battery materials production in the EU, right? The word on the street is that if you would want to get support from the EU in terms of CapEx or OpEx going forward that you would need to have a strong amount of local content, including for batteries and therefore, also cathode materials. So as mentioned in that one slide that I had, that could significantly change, of course, the equation of the European battery investments for battery materials investments, which are out there. So probably I'm as keen as you to learn what ultimately the commission will decide. On Project Vault, I mean, I would say that in general, we're talking to several regional, let's say, leaderships, not only in the EU, but of course, also in the U.S. In the meanwhile, I think the biggest impact of Project Vault, of course, is that the overall price environment for these metals is supportive. So whether a direct or an indirect fact that you have is basically that such stockpiling, which they are talking about is typically supportive for price trends at least in the shorter term. So with that, Caroline, I think we -- I don't know if there's any other questions outstanding. Caroline Kerremans: No, I think with this, we can indeed wrap it up and close the Q&A for today. Bart Sap: Well, first of all, I was looking for an engaging Q&A. The quality of the questions was definitely good. The quality of the line, definitely not. But I mean, we can rematch with most of you next week in London and really looking forward to that. Now in a summary, it will not be a surprise. We're really satisfied on how things evolved in 2025. It was a pivotal year. Where '24 was a year of crisis management, '24 -- '25 was a year of a clear new direction for the company with disciplined execution on which we delivered strongly. Our culture and the organization is moving in the right direction. We are focused on our goals, and we will continue to do so for 2026. So with that, I would like to thank you for your attendance and the ones that I see next week, looking forward to that and talk to you soon. Have a wonderful day. Operator: Thanks for participating to the call. You may now disconnect.