加载中...
共找到 13,883 条相关资讯
Big tech's massive investments in artificial intelligence propelled stocks to record after record last year. They may not need another year of big spending to keep climbing in 2026.
Operator: Good day, and thank you for standing by. Welcome to the Global Mofy AI Limited Fiscal Year 2025 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Celine Meng. Please go ahead. Celine Meng: Thank you, operator. Welcome, everyone, to Global Mofy's Fiscal 2025 Financial Results Conference Call. Covering the period between September 30, 2024 and September 30, 2025. Thank you all for joining us on such short notice. My name is Celine, and I am the company's Securities Affairs representative. Today, I'll be presenting our prepared comments and then followed by a Q&A session with our CTO, Ms. Wenjun Jiang; and CFO, Mr. Chen Chen. Fiscal year 2025 marks a pivotal year of strategic transformation for Global Mofy. Beyond strong financial performance, this year represents our transition from AI-driven tools to AI native production workflows, laying the foundation for scalable, defensible and margin accretive growth. During today's call, we will review our financial results, strategic milestones, core technologies and growth outlook. Before we begin, I would like to remind everyone that today's discussion contains forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially from those indicated. These forward-looking statements are subject to risks described in our filings with the U.S. Securities and Exchange Commission. We encourage you to review our Form 20-F and other SEC filings for additional information. Today's conference call is being recorded, and a replay will be made available on the company's website. Fiscal year 2025 delivered record financial performance while also marking a strategic inflection point for Global Mofy. Highlights include total revenue of $55.9 million, representing 35.3% year-over-year growth, a gross profit of $22.5 million [Technical Difficulty] entered into a digital cultural tourism cooperation framework with Lianyungang’s Haizhou High-Tech District. We completed a total of $10.3 million in strategic private placement financings, established Gauss AI Lab and end-to-end AI-powered content framework, expanded our global AI data and training capabilities through Eaglepoint AI Inc. These milestones reflect not incremental optimization but fundamental transformation and how digital content is produced. For those who are new to Global Mofy, let me briefly introduce the company. Global Mofy is an AI-driven technology solutions provider focused on virtual content production and 3D digital asset development for partners across the digital content and value chain. Advanced AI and 3D reconstruction technologies, we create high-precision digital representations of characters, scenes and props, enabling deployments across film, television, gaming, XR and emerging AI native workflows. We operate across Beijing and Zhejiang China. And since our NASDAQ listing in October 10, 2023, under the ticker GMM.US. We've continued to scale both our technology platform and asset base. According to the Frost & Sullivan report, Global Mofy is now recognized as one of China's leading digital asset banks with more than 150,000 high-precision 3D digital assets. This slide highlights Global Mofy's evolution from a traditional digital content provider into an AI native production platform. Key milestones include early leadership in virtual production and software IP accumulation, strategic partnerships with Alibaba DAMO Academy and leading industry players, NASDAQ listing in 2023 and establishment of our Zhejiang headquarters, launch of [indiscernible] flagship AIGC platform built on NVIDIA Omniverse, expansion into global AI training and data engineering through Eaglepoint AI. Our road map reflects a deliberate multiyear transition towards AI-native infrastructure rather than short-term experimentation. [Technical Difficulty] leadership in technology and innovation. Highlights include National High-tech Enterprise designation, multiple most valuable investment Chinese Concept stop and Innovation Awards, membership and leadership roles in MIIT, Metaverse and digital economy organizations, recognization as a specialized and new SME in Beijing. These honors reinforce our credibility with enterprise customers, government partners and institutional investors. Innovation remains at the core of Global Mofy's long-term strategy. In FY 2025, R&D spending reached $7.5 million, representing 14.1% of revenue. Our R&D to revenue ratio significantly exceeds industry average of 5% to 8%. We hold 45 independent intellectual properties with over 10 new IPs added annually. Beginning in fiscal year 2025, we intensified development of generative AI production tools, AI native workflows, AI agent-driven data governance frameworks. We believe that our scale advantage in 3D digital assets, combined with deep production expertise, positions us uniquely for the next generation of AI-driven content creation. Now let's turn to our mission, vision and values, which define who we are as a company and guide us in everything we do. Starting with our mission, we aim to empower creativity through the innovative use of AI and digital technology. This mission drives our efforts to push boundaries and redefine what's possible in the digital content industry. Our vision is clear: to drive technological advancements while cultivating a culturally rich corporate environment. Our values, first, foster innovation, encouraging both ideas and groundbreaking solutions. Second, we prioritize and exceed customer expectations, delivering value that goes beyond the ordinary. Ultimately, our ambition is to build the world's leading digital asset bank, serving as a foundational infrastructure for AI native content industries. The Gausspeed platform is a flagship AIGC platform designed for industrial-grade cinematic production. Built on NVIDIA Omniverse, Gausspeed enables professional-grade visual generation. Gausspeed creates stunning realistic visuals with advanced AI technology, ensuring top quality results for virtual projects. Storyboard and shot design. It provides intuitive tools for detailed storyboard and shot design, allowing creators to visualize and plan each theme precisely, reducing the need for costly revision. A precise preproduction planning. Gausspeed offers advanced [indiscernible] capabilities for accurate preproduction planning, helping clients define service needs and minimizing trial costs. Editable assets, the video scenes and 3D digital assets generated by Gausspeed can be reedited to meet more customized demands, providing flexibility and adaptability for various project needs. We are confident in Gausspeed's ability to transform the filmmaking industry by providing a powerful AI-driven tool that enhances creativity and efficiency. Our 150,000-plus high-precision 4K 3D digital assets form the backbone of our AI capabilities. These assets span characters, scenes and props, natural environments, science depiction, historical errors and architecture. This asset bank enables faster production cycles, higher visual fidelity, scalable AI training and inference. It is a foundational competitive moat for Global Mofy. Mofy Lab integrates over 40 proprietary software systems into a one-stop content generation platform. Key capabilities include high-precision 3D reconstruction technology, digital content editing middleware, low-code and no-code production tools after reuse invocation and workflow optimization. Global Mofy allows us to deliver systematic, repeatable and scalable production outcomes. This slide summarizes several defining moments of Global Mofy in the past few years. NASDAQ listing and increased global visibility, launch of our Zhenjiang headquarters, entry into the AIGC field through strategic partnerships, completion of a major strategic transformation. Each milestone reflects progress towards an AI native operating model. Our management team brings deep expertise across technology, finance and operations, led by our CEO, Mr. Haogang Yang; and supported by CFO, Mr. Chen Chen; CTO, Ms. WenJun Jiang; and CMO, Mr. Nan Zhang, the team continues to execute our strategy with discipline and a long-term focus. Financial data-wise, now let me talk -- walk you through our financial performance for the fiscal year ended September 30, 2025, and provide some additional context around the key drivers behind these results. As of September 30, 2025, the company's total assets increased to $78 million compared to $59.2 million as of September 30, 2024, representing a 31.9% year-over-year increase. This growth was primarily driven by our continued investment in intangible assets, particularly those related to 3D digital assets and AI-related technologies. These investments reflect our deliberate strategy to strengthen Global Mofy's long-term technology foundation, expand our digital asset bank and support the transition towards AI native production workflows. Revenue for fiscal year 2025 increased to $55.9 million, representing a 35.3% increase from $41.4 million in fiscal year-end 2024. This growth was driven by sustained demand for virtual content production and 3D digital assets licensing business across multiple end markets, including film, television, advertising, game and digital tourism and et cetera. Demand remained resilient throughout the year, reflecting both the recovery of content production activity and increasing adoption of digital and AI-enabled production solutions. In addition, during fiscal year 2025, the company proactively responded to the active expansion of the short-form drama market by adopting an innovative cooperation model to participate in short-form drama investments and production projects. While still at a very early stage, we believe the continued expansion of this business line will further diversify our revenue streams and provide incremental revenue support over time, complementing our core virtual technology services. Gross profit and gross margin. Gross profit for fiscal year 2025 was at $22.5 million compared to $20.8 million in fiscal year 2024. Gross margin was 40.2% for the year. The year-over-year margin profile reflects a period of intentional investment as we continue to scale our AI native production infrastructure, expanded R&D initiatives and deployed AI agent-based workflows designed to support long-term automation and efficiency. While these investments weighed modestly on near-term margins, we believe they are critical to unlocking structural margin expansion in future periods, particularly as AI workflow mature and production efficiency continues to improve. Research and development expenses for the fiscal year of 2025 totaled to around $7.9 million compared to $7.4 million in fiscal year 2024, representing a 6.7% year-over-year increase. These investments were primarily focused on expanding and enhancing our 3D digital asset library to support growing AI-driven demand, advancing the development of AI-based generative tools and initiating AI-native production workflow research through the launch of Gauss AI Lab. We believe that these R&D efforts are essential to support long-term efficiency, scalability and intelligence production capabilities and position Global Mofy for sustained growth as AI native adoption accelerates across the digital content industry. Global Mofy is transitioning from using AI tools to embedding AI natively across production, data and workflows. Our growth strategy focused on international market expansion, especially in June 2025, Global Mofy made a strategic investment in Wetruck AI, a digital freight platform headquartered in Ethiopia, marking the company's first direct market entry into Africa and represents an important step in expanding the application of our AI capabilities beyond digital content into real-world infrastructure and logistics scenarios in emerging markets. Building on this foundation, in January 2026, the company recently established Eaglepoint AI, Inc., a Delaware-based AI infrastructure company, majority owned through our wholly owned U.S. subsidiary, GMM Discovery, LLC. Eaglepoint AI focused on AI data engineering, data governance and AI model training support, serving as a critical component of our global AI infrastructure plan out. Additional growth strategies also include strategic alliance and selective acquisitions, brand positioning as an AI-native content infrastructure provider, continued R&D investment in AIGC and asset expansion, enhanced customer experience through intelligent workflows, these strategies together underpin our long-term margin expansion and scalability. Thank you for your attention. And before we open the floor for questions, please note that the management team will be answering in Chinese for any discrepancies between the translated responses and the original answers. The original answers should be considered accurate. Please feel free to ask any questions you may have about our financial performance, strategic initiatives, our market outlook. Operator, please open the line now for questions. Operator: [Operator Instructions] We going to proceed with our first question. Question come from the line of [ Dona Young ] from Red Dragon. Unknown Analyst: Okay. Here's my first question. Could you explain how the company maintains a stable and strong revenue growth trajectory? Chen Chen: [Foreign Language] Unknown Executive: [Interpreted] Okay. So I will now translate the question for our CFO, Mr. Chen Chen, for answer. I will now translate the answers from Mr. Chen Chen. In fiscal year 2025, the company achieved a revenue of USD 55.94 million, representing a 35.3% year-over-year increase and marking a record high in our history. Mr. Chen Chen emphasized that this growth was primarily driven by 3 factors: First, continued demand growth for 3D digital assets and models across multiple application areas, including film, vision, advertising and virtual cultural tourism. Second, the overall expansion of the film, TV and short drama market, which increased demand for high-quality virtual content production services. Third, in response to the rapid growing short drama market, the company adopted innovative cooperation models to enter short drama investment and production, further diversifying our revenue sources. Mr. Chen Chen emphasized that we believe the continued development of the short drama business will provide additional revenue support and diversification going forward. Unknown Analyst: I have the second question -- can you provide an outlook of future performance? Chen Chen: [Foreign Language] Thank you for your question. And I will now translate the question for Mr. Chen answer. Unknown Executive: [Interpreted] Thank you, Mr. Chen Chen, and I will now translate Mr. Chen Chen's answer for your question. Mr. Chen Chen answered that building on the stable growth of our existing core business lines, the company expanded into short drama production in fiscal year 2025 as part of our virtual technology services and continue to advance our strategic planning in the AI agent space, which together strengthen our growth foundation. Looking ahead to fiscal year 2026, we expect to maintain strong growth momentum and further expand our market presence across key application areas through ongoing technological innovation, supporting sustainable and steady revenue growth over the long term. Operator: [Operator Instructions] [Technical Difficulty] I am showing no further questions. So I'll now turn back to Celine Meng for closing remarks. Unknown Analyst: Operator, can you repeat one more time the directions to join the call. Operator: [Operator Instructions] The next questions come from the line of Jason Liu from [indiscernible]. Unknown Analyst: Can you hear me? Operator: Yes, we can hear you. Unknown Analyst: I've got two questions. And the first one is over the next 3 to 5 years, will the company prioritize technical or ecosystem expansion? And how will resource be allocated? Wenjun Jiang: [Foreign Language] And then I will now translate the question for our CTO, Ms. Wenjun Jiang, for answers. Unknown Executive: [Interpreted] Thank you, Ms. Wenjun Jiang and I will now translate the answers from Ms. Wenjun Jiang. As CTO, Ms. Wenjun Jiang have just answered that we believe the technological depth and ecosystem expansion are complementary other than conflicting. Deepening our technology enables us to respond effectively to evolution market dynamics. While ecosystem expansion allows us to leverage existing technological strengths to attract more digital content, cultural tourism and entertainment projects, our resource allocation philosophy can be summarized as technology first and service-driven. Technology priority includes continued investment in AIGC and 3D reconstruction technologies, both of which form our core competitive advantages, serve expansion, including leveraging these technologies to broaden application scenarios and deliver more comprehensive solutions to clients. The company, Global Mofy will remain technology-driven while steadily expanding its ecosystem to achieve balanced growth and innovation. Thank you. We hope we have answered your question well. And if you have further questions, you may ask now. Unknown Analyst: Yes. I got one more question. The second one is, is short drama investment a long-term strategy or short-term monetization approach. Wenjun Jiang: [Foreign Language] Unknown Executive: [Interpreted] And I will now translate the question for our CTO, Ms. Wenjun Jiang for answers. Thank you, Ms. Wenjun Jiang, and I will now translate your answers in English. First of all, short drama investment is not merely a short-term monetization tool, but rather than an integral part of the company's long-term strategic planning. Driven by technology ecosystem expansion, as mentioned before, and user experience optimization, short dramas enhance brand visibility while serving as a strategic entry point for a broader market and technology application. We build the segment as a platform for aligning technical capabilities with sustainable commercial value. Thank you. We hope that we have answered your questions. And if you have any more questions, you may raise them now. If not, you may hang up. Operator: I am showing no further questions at this time. So I'll turn the call back to management for closing remarks. Celine Meng: Thank you. Thank you all for your insightful questions and for joining us today. On behalf of the entire Global Mofy team, we thank you for your continued support and interest in our journey. We look forward to reconnecting with you again soon. If you have any further questions, please do not hesitate to reach out to our Investor Relations team through e-mail. Have a great day. Operator: This does conclude the program. You may now disconnect. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]
Operator: Thank you for standing by. This is the conference operator. Welcome to the AGI Third Quarter 2025 Results Conference Call and Webcast. [Operator Instructions] The conference is being recorded. [Operator Instructions] Before we begin, we caution listeners that this call contains forward-looking information and that actual results could differ materially from such forecasts or projections. Further, in preparing the forward-looking information, certain material factors and assumptions were used by management. Additional information about the material factors that could cause actual results to differ materially from the forecast or projections and the material factors and assumptions used by management in preparing the forward-looking information are contained in our third quarter MD&A and press release, which are available on the AGI website. I would now like to turn the conference over to Paul Householder, President and CEO of AGI. Please go ahead, sir. Paul Householder: Good morning, and thank you for joining AGI's Third Quarter 2025 Results Call. Today, I'll review our Q3 performance and how the execution of our strategy is driving results. After my remarks, I'll turn the call over to Jim for additional commentary on the quarter. I'll begin with safety, which remains a top priority at AGI. Our recordable incident rate decreased 15% year-over-year to a new all-time low. In addition, more than half of our production facilities have now surpassed 1 year without a lost time accident. Clear evidence of our progress on safety and the benefits of embracing a zero-harm culture. We continue to invest in proactive measures, including enhanced training, digital monitoring and near-miss reporting. Safety isn't a stand-alone metric. It's embedded in how we plan, operate and make decisions each and every day across the entire company from our facilities to our corporate offices. To begin our prepared remarks this quarter, I would like to first address the delay in filing our results. This quarter, we experienced a delay in our third quarter filings, and we're unable to meet the prescribed timelines for releasing financial results and related disclosures. We concluded that further time was required to confirm and finalize the accounting treatment of operations in Brazil, as we have become aware through our internal channels of various financial reporting and internal control matters that required additional time to evaluate. Additionally, over a relatively short period of time, we created and launched a new business model, secured several large and comprehensive projects and formed an investment fund to support current and future projects. These measures, while delivering favorable profitable growth, added significant complexity to our business, which contributed to our auditors needing to fully review. Additionally, our audit committee performed an independent and comprehensive review of various matters relating to our financial reporting and internal controls with respect to operations in Brazil. Through this comprehensive review, we identified specific opportunities to improve our financial reporting processes and internal controls related to Brazil. These findings were determined to constitute a material weakness in our internal control over financial reporting. We are actively addressing this material weakness and have initiated remediation measures, which are further detailed in the disclosure controls and procedures and internal control over financial reporting section of the MD&A. Turning to a recap of our Q3 results, as well as a broader discussion on our key corporate strategies. AGI delivered a solid quarter with growth in both revenue and adjusted EBITDA despite a challenging market segment backdrop. Consolidated revenue reached $389 million, which represents 9% growth year-over-year. Importantly, this is consistent with our prior commentary on realizing second half revenue growth. Adjusted EBITDA came in at $71 million, up 4% versus prior year. Our third quarter results reflect both the strength of our strategy and the realities of our markets. While the North America farm market navigates challenging Ag equipment dynamics, our Commercial segment, in particular, within the international regions of our business are quite strong and continue to demonstrate a steady growth profile. Our third quarter results are perhaps the clearest example yet of the benefits we're realizing from the successful execution of the key strategies and tactics put into place over the last few years. AGI is now better positioned to capitalize on market opportunities across diverse geographies. As a reminder, we've organized our corporate strategies into 3 areas: profitable organic growth, operational excellence and balance sheet discipline. As we get into our third quarter results, I'd like to use this framework to provide updates across all 3 of these areas, including where these strategies have been implemented over recent years and how they are delivering value and supporting growth potential. I'll begin with profitable organic growth. Recall this strategy included 3 areas: product transfers, emerging markets and growth platforms. An inherent strength of our strategy is that each of these areas are interrelated, which serves to reinforce their effectiveness. I will address each in order. Undoubtedly, product transfers have been a growth driver for AGI. As a reminder, product transfers involve taking highly successful products from one region within AGI and running an internal transfer program to migrate the sales through to manufacturing capabilities to other attractive regional markets. Product transfers often include some local market product customization to ensure it will fit the requirements of a new customer base within that new region. Similar to the first half of the year, International Commercial segments benefited from our efforts on executing product transfers. Customer demand for complete solutions is high in Brazil, and our team is actively advancing several major projects secured in both 2024 and 2025 across food, feed and fertilizer in addition to our long-standing presence in the grain market. All these elements have come together to deliver strong customer engagement and a high pace of activity. Our comprehensive offering is a competitive advantage, which has enabled us to rapidly grow market share in one of the most strategically important and high-growth agriculture markets in the world. We are encouraged by the highly active pipeline and note that significant opportunities remain as we move into 2026. Product transfers have also been a key part of our success in areas outside of Brazil. In India, our storage bins, permanent material handling and portable material handling solutions have added important capabilities, which are providing top line stability and serving as a catalyst to access large and rapidly growing markets within India and across Asia Pacific. As a relatively early entrant into this emerging market, we remain optimistic about the potential of these new in-country capabilities to provide long-term profitable growth. Food, feed and fertilizer product transfers are the next areas of focus for India as we look towards 2026 and beyond, building on our success in Brazil. The second pillar of our profitable organic growth strategy is a focus on emerging markets, particularly within our EMEA business. A strategic deployment of business development resources into the Middle East has yielded several large project wins. Activity has also been steady in Africa and Southeast Asia with a consistent stream of new project wins. Preliminary visibility into potential new projects in Ukraine has begun to emerge. In aggregate, we have expanded our presence in many areas of the world, which supports the overall diversification and resilience of our business. Finally, the third pillar of our profitable organic growth strategy is our growth platforms. These include food and feed equipment businesses, as well as our digital products. These businesses have a focus on enhancing processing capabilities, which naturally complement our core storage and handling expertise. In addition, these areas all participate in very large and growing addressable markets. So far, our efforts have been mostly on enhancing and developing solution offerings. Leveraging capabilities within AGI and pulling them together into comprehensive stand-alone global business units. With that process largely complete, we are now gaining momentum and making positive contributions to our financial results. The feed business has a large pipeline with numerous opportunities in advanced quoting stages. The food platform is benefiting from concentrated efforts to develop new customer relationships and diversify across global end markets. And finally, the digital business, which has primarily been a North America offering is now being taken to new regions around the world, most notably into Brazil. Overall, these 3 strategies implemented just a few years ago have generated favorable financial and strategic results for AGI. These strategies are collectively driving the above-market growth we are delivering in the Commercial segment. As conditions in the farm market eventually stabilize, our strategy provides upside potential to our results, which fundamentally did not exist just a few years ago. A few further comments on the other 2 core elements of our corporate strategy, operational excellence and balance sheet discipline. Our operational excellence program continues to progress and is designed to optimize the business and deliver margin-enhancing efficiencies. Two significant facility consolidations within North America are nearing completion, enabling us to streamline production and remove costs, helping to create a more agile manufacturing network that can quickly and efficiently respond to market shifts and customer needs. In addition, towards the end of 2025, we also divested one of our smaller non-core Canadian facilities to a new owner, further streamlining our footprint within North America. Building on these consolidations, we've advanced several initiatives to optimize manufacturing throughput and streamline our supply chain. Our teams have implemented process improvements across key sites, rationalized product lines and enhanced logistics coordination. These efforts are already delivering benefits in cost structure and working capital efficiency and set the stage for improved profitability as volatile market conditions stabilize and demand rebounds in the North America farm market. Finally, our ERP implementation remains a cornerstone of our overall transformation. This enterprise-wide initiative is now progressing through a series of deployment phases. Once fully implemented, our new ERP platform will unify our systems, accelerate quoting and engineering workflows, and unlock significant efficiencies across finance, operations and supply chain, among other areas, which all ultimately serve to enhance the customer experience. This expanded organizational capability will deliver cost savings in addition to the potential for additional revenue through a more effective and integrated information system. While we are encouraged by the progress we've made in managing what is in our control by streamlining costs and finding more efficient ways to operate the business, as we look towards 2026, we expect to take additional steps to improve our operating efficiency across North America. These actions are designed to both optimize our operating cost structure while enhancing the customer experience. The measure of success of these actions will be to strengthen our North America operating margins across 2026. Finally, an update on our balance sheet discipline strategy. We continue to make meaningful progress on working capital, advancing the deployment of upgraded and consistent processes, tools and capabilities to each of our facilities and improving overall working capital visibility and control across the organization. In September, we launched a new commercial investment fund in Brazil, complementing the existing farm structure. This innovative investment vehicle allows us to bring differentiated offerings to the market, while monetizing AGI's long-term financing receivables tied to large commercial projects. With the fund now in place, future cycles of project financing and receivables monetization will be more streamlined, creating structural competitive advantages for our Brazil business. The first monetization of financing receivables occurred shortly after Q3. We expect additional inflows in early 2026, providing both liquidity and support for debt reduction. Finally, through a partnership with a leading Canadian financing institution, we have initiated a payables optimization program aimed at improving terms and increasing our average length of payables with certain high-volume suppliers. This will help maximize cash flow and incrementally further reduce overall working capital. Moving on to our order book. Our current order book remains healthy, supported by momentum in the Commercial segment. At the end of the quarter, our order book stood at approximately $667 million, up slightly year-over-year. Consistent with the first half of the year, the order book is heavily weighted towards commercial, given ongoing industry-wide challenges in the Farm Ag equipment segment. With over 90% of the order book allocated to Commercial, our order book is more impacted by the timing of successfully winning large commercial projects. The overall composition of our order book reflects a strategic shift towards higher-value projects with longer execution time lines. This approach enhances revenue visibility, strengthens customer relationships, while partially mitigating the impact from the slow Farm segment activity. A few comments on tariffs and recent developments. Tariff dynamics remain fluid and our internal teams are actively monitoring developments across key markets. New regulations and increased tariff rates were introduced in the third quarter. Our teams continue to explore available avenues to mitigate the effect of tariffs, including modifying and redesigning our supply chain. Overall, our agile organization, global sourcing strategies and flexible supply chain enable us to manage these uncertainties effectively, minimizing disruption and margin impacts. We will continue to closely monitor the situation for new developments. Progressing through the fourth quarter, activity and quoting pipeline across our international commercial segment remained steady. However, soft sentiment across the North American agriculture sector, particularly in our Canadian farm business continues to weigh on our overall performance with unclear timing for our meaningful for market recovery. The near-term focus for our North America farm business is order intake and a successful execution of our early order program. In addition, business activity in India and North America Commercial historically strong market for AGI began to slow through the end of the year with expectations to remain subdued into early 2026. Despite these headwinds, the strength of our order book within certain areas of the Commercial segment highlight the resiliency of our diversified business model, helping to partially offset the challenges across certain markets. Overall, Q4 expectations are for lower adjusted EBITDA sequentially and versus prior year, largely from challenging market conditions, negative mix and notably higher SG&A costs from a comparatively lower prior year. We remain excited about the potential of the company with the compounding impact of our strategy, delivering international commercial momentum combined with an eventual rebound in the North America Ag Equipment segment. I'll now turn the call over to Jim. James Rudyk: Thank you, Paul, and good morning, everyone. Today, I'll touch on a few areas that includes an overview of our third quarter results, an update on key balance sheet metrics, some comments on cash flow and a quick recap of our capital allocation priorities. Total revenue for Q3 was $389 million, up 9% year-over-year while adjusted EBITDA reached $71 million, an increase of 4%. Adjusted EBITDA margin came in at 18.2%, down about 100 basis points from last year, primarily reflecting the mix shift toward commercial projects. Our Commercial segment continues to deliver strong year-over-year revenue growth. This performance reflects our execution of large-scale projects across multiple international markets. Brazil remains a standout contributor. Customer demand for comprehensive solutions is high, and our team is actively advancing several major projects secured in both 2024 and 2025. Thanks to our product transfer program, technical support from strategic third-party partners and customized financing options, we are able to maintain a high pace of activity. Elsewhere, our EMEA region continues to make meaningful contributions driven by the execution of several major projects in the Middle East and Africa. Strong third quarter revenue growth was coupled with excellent cost control initiatives to enable an outsized capture of incremental adjusted EBITDA contribution from this region. As a result of execution of large-scale projects, increased volume and disciplined cost containment, our Commercial segment's adjusted EBITDA margin expanded to 19.5%, up from 17.9% year-over-year. It's worth clarifying that we did have some commercial revenue, which was anticipated in Q4, moved into Q3 based on project timing and accelerated achievement of certain milestones. Though this doesn't impact our overall outlook for second half revenue growth on a fully consolidated basis, which also includes expectations for a strong Q4 result for our Commercial segment. Turning to our Farm segment, while overall revenue declined this quarter, performance varied across regions. Brazil showed improvement with revenue and order book up quarter-over-quarter, the U.S. saw only a slight revenue decline and early signs of order book stabilization and Canada softened after a strong 2024, with conditions now broadly in line with the U.S. Low commodity prices continued to pressure farmer income and while dealer inventory for portable equipment declined through Q3, it's still above historic levels. As a result, our Farm segment adjusted EBITDA margin remains compressed due to lower volumes and an unfavorable product mix. We recently launched our annual early order program for portable grain handling equipment, a category hit hard by current market conditions. Adjustments have been made to better align with today's environment, but early feedback suggests purchasing trends may mirror last year's weak performance. While the program offers insight into sentiment, it's too early to call a trough in the overall market. Conditions remain challenging, and we're focused on cost control and preparing for a recovery. The simple reality is that industry conditions within our farm market have not changed. Crop prices are still low, dealer inventories are still high, and tariffs and subsidy support remain uncertain. We expect the near-term uncertainty in the North American farm market to persist into early 2026. One final comment on some of the details of our adjusted EBITDA in the quarter, it's worth calling out the transactional transitional and other line item in our adjusted EBITDA reconciliation. We have diligently worked to reduce this figure, as we have now progressed through several onetime expenses and projects related to streamlining the business. As a percentage of total adjusted EBITDA, this line item is largely immaterial this quarter. While certain transient projects and onetime expenses can come up on occasion, we believe we are now in a place where this line item should be smaller and less variable than prior quarters, enhancing our overall earnings quality. Moving on to our balance sheet and cash flow. Our net debt leverage ratio held steady at 3.9x on a quarter-over-quarter basis. This was primarily due to the sizable, but temporary working capital investments required to support large-scale projects, particularly in Brazil. Importantly, operating cash flow in the quarter remained strong, demonstrating the underlying strength of our business, though free cash flow was impacted by the requirement for some additional project financing in Brazil. We anticipate this cash flow dynamic will shift in the coming months and quarters as the previously announced investment fund setup in Brazil steadily monetizes these long-term receivables. This increases our cash flow, while decreasing our overall working capital investment. The process of monetizing these receivables through the investment fund has already started with AGI collecting some initial inflows in Q4. As we proceed into 2026, further monetization actions are expected. Strategically, with the investment fund in place, further projects and related transactions will be able to more rapidly move through our balance sheet and produce cash inflows, a unique advantage for AGI in the Brazilian market. And finally, a few comments about our capital spending plans for 2025. We remain on pace for total CapEx of approximately $30 million for the full year 2025 with about $21 million incurred through the third quarter. The expenses for our ERP implementation are not included in these figures. We're continuing to evaluate larger, more strategic capital investment opportunities and are advancing planning efforts in parallel. In closing, I would like to reiterate the importance of AGI delivering a solid Q3 amid varied market conditions. This is a tangible signal that our strategic initiatives are working and delivering real value to the business. Thank you for your continued support, and we look forward to updating you on our progress in the quarters ahead. Now back over to you, operator, to open up the call for questions. Operator: [Operator Instructions] The first question today comes from Gary Ho with Desjardins. Gary Ho: Just maybe just start off with respect to the reporting delay. There's a lot of accounting and legal jargon in the release. So maybe just can you walk us through kind of what the weakness in internal controls were related to? Was that uncertainty with revenue recognition, segregation of duties, maybe just high level, like what did the accountants get comfort with? And I'm assuming that's all been resolved and working through the remediation, we shouldn't experience any delays looking out. James Rudyk: Gary, thanks for the question. Yes, and so we did -- a lot of business opportunities in Brazil happened throughout the year, large projects, complex projects, new stuff to us. And we felt it necessary to do a deeper dive in our operations in Brazil. And really, it was great to do, make sure that we establish the right foundation and structure because these opportunities are quite large, and we expect them to continue for quite some time. So we took the time, and you could probably appreciate new businesses, new things going on and studied how we were doing anything. And the areas of focus that came out of it centered around a few areas related to things that you probably expect, segregation of duties. So in new businesses, typically, you have fewer people involved running with them and doing things. And so we have an opportunity to have more people involved, spread that responsibilities around, improve our segregation of duties. From a technical accounting perspective, these deals are and the legal agreements are quite complex. And so there's an opportunity there. I mean, we rely on third parties, but there's an opportunity there to enhance our specific accounting knowledge in these complicated areas and help with training people, providing more information for people and having more people internally be involved in the process. And then the last thing, too, that we've -- we're establishing is really just extra review processes and making sure that all the right sets of eyes are involved, scrub it and make sure that everyone is comfortable going forward. I think this is something that happens inevitably whenever a business gets involved in a new area, and so fortunately, we were able to do all the work and it's quite exhaustive work and come out of it with a very good remediation plan. Paul Householder: Yes. And maybe, Gary, just building on that to the second half of your question, building on Jim's comments, yes, that remediation plan, which is outlined in the MD&A, we've obviously internally built that out into a pretty comprehensive plan that our teams are focused on executing and implementing. And then the whole intention there, obviously, Gary, is to better position us to handle these projects in the future and avoid any type of delays in the future, again, to the second half of your question. Gary Ho: Great. Okay. And then my second question, just on the -- maybe for Jim, just on the long-term receivables that moved up $127 million in Q2, $169 million in Q3, I know you talked a little bit about the Brazil financing vehicle. Maybe just walk us through how quickly you can monetize these receivables and bring cash in and deleverage throughout 2026. James Rudyk: Yes. So we talked -- we did an announcement a little while ago about we put the fund in place. The fund is quite sizable and allows us to fund. It's now increased actually, but we announced a $1.2 billion [indiscernible] of availability. That structure is put in place. It's a unique solution. So part of the challenges of taking some time is this isn't an off-the-shelf solution. We've been working with our partners to get that put in place properly. It's in place. We have the investors lined up, the money is committed. And so now it's a matter of administratively for each of our deals, making sure all the steps are followed. And so that's what's taking a bit of time. That the administrative process for some of these tasks in Brazil is onerous and so we expect to have those completed through the early part of 2026. And no risk on the funding, no risk on things being done. It's really more procedural administrative. You've got a lot of -- from a legal perspective, part of the great feature of what we put in place is that we have lower cost of funding. And the reason for that is because we've got -- we're not just selling receivables, there's still collateral involved, and that collateral needs to be registered and that requirement is just administratively takes a bit longer in Brazil. Gary Ho: Okay. Maybe just a finer point. As we end next year, how -- like from now until end of '26, how much would do you think you can monetize through that or a range? James Rudyk: Well, it depends on the opportunities that we continue to take on. So we expect of the current opportunities that we have, we would monetize a good percentage of it. So we've talked about in the past, monetizing 60% to 80% of the amount of the sales at a minimum. And so we expect to continue to -- that would be our expectation of the percentage. We do keep some of the financing ourselves, but our intention, the way we're setting this up, Gary, is to make sure that all of our costs are funded through this monetization vehicle so that effectively, we're not dipping into our working capital or to our own cash to fund these deals or the cost of these deals. Operator: The next question comes from Steve Hansen with Raymond James. Steven Hansen: Yes. Look, real mixed emotions over this filing delay and the outcome, frankly. I mean, I don't know. I don't think anything about it was normal, really from an external standpoint. I think it's best to be said. I can appreciate the need for all the deep dives that sends the reason, but the delay was nothing normal course. But maybe just a question about it all. Were you surprised by the outcome at all? And why does it take so long ultimately is the question. And again, the complexity I can understand, but the timing and the delay, I don't think I really understand. So just, maybe when you got into this -- was it a surprise to you that it would take so long to go through all this review with the auditors? Or maybe just give us a sense for how the outcome reflected your initial expectations. Paul Householder: Yes. Thanks, Steve. Appreciate the question. And certainly appreciate the sentiment as well, one shared by us. As Jim commented, the activity that we undertook in Brazil was quite complex. It was -- the complexity was related to both the projects as well as the fund that was set up that Jim just outlined. As we started to understand that it was going to take more time to complete the audit and complete the internal reviews compounded by some concerns and questions that were raised internally. Steve, the focus quickly went to making sure that we got this right. So we were patient. We worked through it diligently. We wanted to make sure that we got it right. We wanted to make sure that we flushed out all of the opportunities for improvement so that we were better set up to handle this type of activity in the future. Net-net, it did take a while. That was certainly unfortunate. It was compounded a bit by some of the holiday seasons that we ran into. But to get to your question on the outcome, as Jim outlined and as written in the MD&A, some very valuable opportunities for us to enhance the structure of our finance and accounting procedures related to these, which again, as we implement those changes will better position us in the future. Steven Hansen: Okay. Appreciate that. Just turning back to the fundamentals then for a minute. Can you maybe just describe where you think we're at on the inventory side for portable in North America? I know you described it as above average, but it has been coming down, I think, by most accounts. The question is, when do we start to get to sort of that -- sort of basement level or normalization level where we can start to move off the floor because it's all -- integrates back into your own production profile, of course. Where do you think we're at? Are we 10% above average, 50% above average? Just give us a sense for that. And then how you think the front half of the selling season is going to play out here? And can we get back into sort of a higher operating rate in the back half? Paul Householder: Yes. Terrific question, Steve. And obviously, our portable product line fundamental to our farm business, very important across North America, as well certain pockets internationally. As you rightfully point out and as we've been commenting on the past, one of the headwinds that we have had with our portable equipment is a high level of inventory that's been maintained at our dealers that inventory levels really spiked at the tail end of 2024. The teams have really done a nice job partnering with our dealers across North America to implement various incentives to work that dealer inventory down. I would say, Steve, across the first half of 2025, those inventory levels were a bit slow to move that certainly accelerated across the second half of the year, we end 2025 in a much better inventory position than we started. As you noted, it's still above historical levels, but we're getting much closer. There's not a holistic answer to that question. And what I mean by that, Steve, is in the U.S., our inventory levels are actually in a bit of a better position. That's likely because the challenges that we saw in the market started first in the U.S. And so that cycle is just a little bit more progressed and you see that in our portable inventory levels being in a little bit of a better shape. We're confident that we're going to see the same result up in Canada, certainly across the first half of 2026. Jim did comment that our early order program continues to progress. At this point in time, we see it slightly ahead of where we were last year. And again, that's predominantly on the strength in the U.S. and that improved dealer inventory levels. Operator: The next question comes from Andrew Wong with RBC Capital Markets. Andrew Wong: So maybe let's just start with -- in the Commercial segment. The large-scale projects in Brazil. They've been a big success in terms of driving revenue. And they account for a lot of that year-over-year revenue growth in 2025. So maybe just 2 questions. One is, how long do you anticipate these projects run for? And is there enough momentum to kind of sustain that, that level of revenue or even grow that level of revenue in the coming years? Or should we expect maybe some more variability in the contribution year-to-year, just given how large these projects are? And then secondly, could other competitors also implement a similar receivables monetization type of solution like you have? Paul Householder: Andrew, terrific question. Thanks for that. We are encouraged. We are excited about these large-scale projects that we've done. The team has done an excellent job. Really building very valuable customer relationships in this area that position us very well to look at future projects. Our pipeline here is attractive. It is -- the opportunities do exist going forward. We'll continue evaluating those opportunities, looking to make the best decisions to deliver value to the company. So the opportunities do exist. We enter 2026 with some projects still in our order book that we will execute across 2026. So those will contribute to our 2026 results. In addition to that, there are opportunities for us to sign new deals within the year that could also further contribute. But again, we'll look to evaluate each of those on a case-by-case basis. You do, Andrew, raised a very valid point in terms of the variability because these are large projects, right? The signing of them comes in chunks. So if and as you sign one or two projects in a certain quarter, you see the impact initially in the order book and then translates later into our revenue. So you are right, this does create a bit of a lumpiness and variability in our order book. Obviously, the revenue recognition and the percentage of completion helps steady that out a bit from a financial results standpoint. Your final point there, Andrew, from a competition element, I mean, it's certainly possible for competitors to implement similar programs as we have. That being said, it's a heavy lift, and we would say that we have a significant head start that would form a level of differentiation for some time yet before any competitor is in a position to mirror what we've been able to put in place, both from a financial structure standpoint as well as partnership execution capabilities in other areas. Andrew Wong: Okay. Great. And then maybe just on other parts of the Commercial segment. It sounds -- obviously, Brazil has been strong, but it sounds like there maybe was some headwinds or a little bit of slowdown in India and North America. Can you just maybe comment on that and provide a little bit more details? And then just looking at the order book, it's up about 1% in Q3, is that a reasonable growth expectation for 2026? Like I'm just trying to help -- maybe just help us frame like how to think about Commercial in 2026, just given how much of a big revenue driver it was in 2025. Paul Householder: Yes. terrific, Andrew. All good points there, all good questions. Let me take them individually. We'll start out in India. We really like our India business, our India position that's been focused traditionally on rice milling for the past 4, 5 years, really up to 2025, we experienced tremendous growth, very strong market conditions. We have seen those market conditions shift across 2025, particularly in the second half of the year, we expect those market conditions to remain soft entering 2026. Andrew, at a very high level, it's a similar dynamic as we're seeing in North America, but at a different magnitude, obviously, not at the same magnitude. But basically, it's supply demand. The supply of rice is quite high. The demand is lower. That puts pressure on pricing, it puts pressure on the overall supply chain and ultimately leads to a softening of demand and we expect it to take a couple of quarters for that to work through. So that's our position on India, specifically on the rice milling. Fortunately, we've been very successful in product transfers. In our grain handling and storage area, the bins, the material handling, that gives us another avenue to explore market growth, which we expect can partially offset some of that headwind in India. To your next part of your question, North America Commercial, yes, we have seen some softening of that market activity really coming on here in just the latter part of 2025, we expect that softening conditions to continue in 2026, would suggest that this is consistent with some of the difficult farm ag market conditions that we have been experiencing over the past 18 to 24 months now translating a bit over to the Commercial segment impacting investment decisions. So the same kind of dynamics, lower commodity prices, trade uncertainty, volatility in tariffs likely impacting investment decisions around the commercial business in North America. Another dynamic is we have seen that investment by a large grain trader shipped from North America into -- out to the international and into emerging markets, where they see a lot of growth potential. Fortunately, our business positions in these markets enable us to capitalize on that. Finally, the order book, yes, we're pleased with where the order book is right now. We still have Q4 to work through, Andrew, before we have visibility into 2026. As we've commented, we remain cautious on the outlook for 2026. We are now saying that the trough in North America was not 2025. We expect those trough conditions to persist into 2026. We also anticipate, because our order book is weighted so heavily to commercial, that the timing of signing large commercial projects will impact our order book. If we don't sign a large project in 1 quarter and then we do a next, obviously, you'll get swings in the order book. So we're looking forward to 2026, the challenges of 2026. We do anticipate that the challenging market conditions will persist. Operator: The next question comes from Michael Tupholme with TD Cowen. Michael Tupholme: Just regarding the filing delay and the review that was completed by the Audit Committee, I guess I'm just wondering if you can talk a little bit about whether or not this was -- I mean, it seems clearly like it was focused on Brazil, but was there any consideration given to possibly needing to look at any other areas? And then as it relates to the remediation plan, can you sort of lay out a bit of a road map as to how that's going to unfold and at what point you would expect for all of the measures to be implemented? Paul Householder: Yes. Thanks, Michael. But 2 good questions there. And again, I think we've been -- we've covered a good bit of this in our MD&A. But just a further, yes, the focus of the audit was specifically on Brazil. We did not have any reasons nor do we have any concerns to look into any of our other regions. So yes, just to be clear on that, the focus of it was specifically on Brazil. In terms of the remediation plan that is outlined in the MD&A, obviously, we have built that out into further details here internally. We are signing accountabilities on the specific actions, we're putting a project plan in place that has specific timing around it. This is obviously a top priority for us and we will work through it diligently. Our plan is to get this implemented as quickly as possible. We don't yet have a specific timing in which all of these items will be completed. It will probably vary. Some of the things will get done and put in order pretty quickly. Others when you talk about training, knowledge transfer and learning across the organization, that could take a little bit more time. But nonetheless, this is a top priority for us, and we'll get it done quite quickly. Michael Tupholme: Okay. That's helpful. And good to understand. Regarding the commentary you provided around the fourth quarter specifically, you're talking about a sequential decline in adjusted EBITDA. I'm wondering if you can provide any more detail on that outlook, particularly given the fact that we're in early January here? And also maybe to what extent this is reflected in sort of dynamics in Farm versus Commercial? I mean, I think we -- it's clear that commercials were even seen most of the strength and farm more challenged. But any kind of commentary at the segmented level? And then I'm also curious about the SG&A cost that you're suggesting are going to be higher in the fourth quarter. Is that specifically related to some of this review process? Or is there something else going on? And will these remain elevated? Or is this more of a Q4 specific dynamic that ceases to be sort of higher cost when you get beyond Q4? Paul Householder: Yes. It's terrific, Michael. I'll address the first half of your question, and then I'm going to turn it over to Jim on the SG&A side. But you're absolutely right. We do expect Q4, as we commented on, to be down sequentially and down versus prior year. A good portion of this is market related and some of the challenges that we're seeing both in North America, specifically Canada Farm and a bit North America Commercial as well as in India. Those are 2 business drivers -- market drivers that are a headwind to our Q4 results and are impacting EBITDA consistent with what we've outlined in our prepared remarks. SG&A Is also a variable when you look to prior year, and I'll let Jim comment on that. James Rudyk: Yes. So Michael, SG&A is more of a Q4 dynamic. Last year, as we entered Q4 and then got caught a bit off guard with the lower-than-expected U.S. farm or farm results. That required us to do an adjustment to our bonuses primarily across the company. That adjustment was done in Q4 last year. So SG&A last year was slightly lower. This year, we've been on top of the bonus recordings and expectations throughout the year. So you don't have that adjustment as you did in Q4. So really just a onetime dynamic for Q4. Paul Householder: Yes. So just to pick up on, Michael, we wouldn't expect this to be something that continues going forward. SG&A remains a focus for us. We understand the importance of ensuring that our cost structures align with our market and revenue reality. Operator: The next question comes from Tim Monachello with ATB Capital Markets. Tim Monachello: Most of my questions have been answered. But could you just remind us, I guess, how much was monetized under the [indiscernible] structure in Q4? James Rudyk: Well, so we did monetize some in Q4, a smaller amount. So we'll get into those details as we report our Q4 results. So that's good. So the first -- one of the first deals went through the fund. So the fund structure works. We know how that all flows through. And now we're focused on monetizing the other ones as quickly as possible, which will be done in early 2026. Tim Monachello: Okay. And then in terms of some of the efficiency initiatives that you're implementing in 2026, so I'm wondering if you could provide a little bit more detail on the facility closures and facility consolidations that are ongoing and the impact that you see to margins due to these initiatives and potentially any operational impacts that you see? Paul Householder: Yes. Tim, thanks. Terrific questions. I mean, obviously, as we've noted, the accounting ag equipment market dynamics have continued in North America across 2025. This does give us an opportunity to continue to review what I'll call our integrated supply chain to ensure that we've got the right and the optimized cost structure. And when I say integrated supply chain, you can think of manufacturing in the middle, but obviously, our suppliers, as well as our inventory, working capital, all of those things fall within that integrated supply chain review. So there is opportunity given the softness for us to optimize our cost structure, make sure that we do are running an efficient operations. We actually kicked off this initiative just at the onset of Q4, we expect actions to take place across Q4 as well as Q1, which should put us in a better position to run a more efficient operations across 2026. As we've noted, the measure of our progress in this area will be gross margins. When you look at our gross margins across our farm business, they are depressed in 2025. A number of factors are contributing to that. We obviously had tariffs as a headwind. We had a bit of mix within our farm business as a headwind. And then the third one is the point that you brought out, just the opportunity to improve the efficiency of our operations. So we expect to get that in a pretty good shape at the tail end of Q1, which then should be something that is a bit favorable from a margin standpoint in the second half of 2026. Tim Monachello: Can you say any specifics around which facilities are being consolidated? And any commentary around maybe proceeds from the facility divestiture received in Q4? Paul Householder: Yes. Yes, for sure, Tim. So we had 2 facility consolidations that we initiated throughout 2025. One of those was a facility in North America that we commented on really at the tail end of 2024, as we consolidated our bin manufacturing to our facility in Canada. The second one that we implemented more towards the middle of 2025 was the smaller operations in Canada that we also consolidated within one of our other Canada manufacturing facility. So I'll note both the consolidations increased our activity within Canada, but ultimately improved our manufacturing footprint. In terms of the small facility non-core that we moved to a new owner, that was -- that did not have any significant impact. I would categorize that, Tim, as less than $10 million. Tim Monachello: Okay. And do you expect any onetime costs or increase in transaction, transition and other costs in Q4, Q1 related to some of the initiatives that are being implemented today? James Rudyk: Yes, there will be some additional costs, some legal costs that will run through there, not significant. Not anywhere near the magnitude of what you've seen in the past. A lot of our -- as we commented in the script, a lot of those large unusual items that have happened in the past are behind us. And so going forward, you'll only have a smaller amount of costs that we'll identify out for you to be able to do what you want with in terms of how you view them. But they'll be related to nonoperational, just more restructuring type costs or unusual legal costs. So we did have this work done in Q4. So we'd expect to see a small amount going through there in Q4. Tim Monachello: Okay. And then I just want to talk a little bit about, I guess, signals that you're seeing on the demand side in North American farm. You've talked about sort of historical cadence of demand and sort of the troughs and how long they last. And it would suggest -- or seem that you're probably reaching a sort of new record time line for a dearth of portable demand. And -- while you see inventories declining at the dealer, do you have any commentary or feedback from your dealers related to, I guess, demand that they're seeing coming in their doors? Like is that changing at all? Is it weakening or strengthening in any way? James Rudyk: Yes. Thanks, Tim. Obviously, the North America farm market is one that we're paying extremely close attention to. We're looking at various macro level indicators that could go -- provide us insights into where we are in this cycle as well, Tim, as you've noted, specific feedback from our dealers and insights on market activity. As we sum all of those insights up, it does lead us to the conclusion, consistent with what some of the other players in the market have articulated that 2025 is not expected to be the trough, likely more 2026 is the trough. That's not significantly different from the look back at historical ag market cycles that we've commented previously, where peak to peak can be in a 6-year time frame. So if you put that into context, '26, as a trough is not unreasonable. Getting to the second half of your question, what are we hearing from dealers? What are we hearing about their inventory levels? As we've commented on from the portable equipment, inventory levels are certainly coming down. That is encouraging. We are in a much better place in aggregate than we were entering 2025. That is also encouraging, a little bit more strength in the U.S. than in Canada, likely from a timing standpoint. So our dealers -- I would say, have remained cautious. I think that's probably the best description. Our dealers remain cautious heading into 2026, as do we recognize the importance of that relationship with dealers. We're partnering with them. We're very close to them on navigating this market cycle. And we'll continue to work forward or work with them going forward. Operator: The next question comes from Maxim Sytchev with National Bank Financial. Maxim Sytchev: Maybe the first question for you, if I may. Just circling back to accounts receivables. And maybe qualifying -- sort of like, should we be concerned around the aging of these receivables, sort of -- I mean, that's the first part of the question. And the second part, when you use the fund to monetize what you already have, so can you just utilize these 4 new projects? Or can you use that sort of like in the bucket of overall projects as those are cycling through the percentage of completion dynamic? So can you provide a bit more color there. And I mean, I guess, ultimately, it's also sort of linking to how should we be thinking about the free cash flow generation on a prospective basis. James Rudyk: So okay. So the first part of your question, Max, in terms of concerns on the aging. So our receivables, overall, generally, the aging has not deteriorated. It remains consistent across our company. We've got extremely, extremely low write-offs historically in terms of concerns with customers not paying. So the aging is not a concern. However, for these new deals, and as you get through and go through the financial statements, you'll see commentary. Terms offered for some of these deals are typically 5 years, a large one, though is at 15 years. And so that's -- offering that length of financing is why what's exciting about this fund that we've created helps us with. And so we can monetize and reduce our risk of all those finance -- the length of that financing time and by having these investors provide us with the cash upfront. In your question in terms of -- your second part was about which -- what can I use the fund for? These are, I mean, it's not just for any type of receivables. It's for certain these larger projects -- certain types of customers where the investors like the profile, they like the dynamics of it. They like the areas of the industry that they're focused on. And we have a governance structure set up, whereby there's an approval required at the fund level to determine on which projects will get funded. That said, how we set it up was based on the projects that we have in our pipeline and the customers and what we see coming down the pipe. So we expect to be able to fully utilize the entire amount of that fund over the coming year. Maxim Sytchev: Okay. And I guess, do you mind maybe commenting about the inflection dynamic around free cash flow, how we should be thinking about this? Paul Householder: Yes. So the timing it's the free cash flow for this year. If you look at the LTM in our MD&A, it's a negative, negative $61 million. Initial expectations were for that funding to happen in Q4, which would flip that into a positive that will be stretched out into early part of 2026. And the funding is significant. And when that does happen, we will not be impacted by doing these types of deals from a free cash flow perspective. So said differently, we expect positive free cash flow through in 2026, and we'll be able to continue to take on these larger deals and not have an impact our free cash flow going forward once this fund is up and running and moving very smoothly through the process. Maxim Sytchev: Okay. Understood. And then, Paul, if I may, just 2 quick ones. In terms of -- I mean, obviously, there was speculation that Kepler Weber could be potentially acquired in Brazil? Just I was wondering if you have any initial thoughts on that in terms of the competitive dynamic? And if you can also provide a bit of an update on ERP implementation just in terms of milestones, et cetera? And that's it for me. Paul Householder: Yes. Thanks, Max. We're aware of some of the conversations around Kepler Weber that have surfaced publicly. Obviously, we're not going to speculate on how that could play out. As I've noted in prior commentary, Kepler Weber is a good competitor, long-standing competitor down in Brazil. Traditionally have had the #1 market share. We like the competition. We've learned a lot from Kepler Weber. And we expect, regardless of what transpires down there that they will continue to be a good competitor for us in the market. Regarding ERP, we're now fully in the -- what we would call the deployment phase of ERP. We've completed the global design. We are now deploying it across our facilities. An important milestone. We completed our first deployment at a Canada facility this year. That was a great learning for the team, fantastic participation by that facility. Great work by our ERP implementation team. 2026 will be specifically focused on implementations. Our next one is planned for India, which we are targeting to get done somewhere around the first half of this year. And then after India, expectation is that we will move to North America Farm. We're excited to get into the deployment phase. We're focused on having a very efficient ERP implementation, but also one that we quickly work through so that we can start to realize the benefits that the new ERP system is going to deliver. Operator: The next question comes from Steve Hansen with Raymond James. Steven Hansen: Just one quick follow-up. Just notwithstanding all of the accounting review stuff that we've already talked about. Jim, do you feel like you've got the people and the team in place in Brazil to manage all of these big projects? I'm thinking more on the operational and the engineering side, the upfront side and then even as it dovetails into that into the downstream manufacturing side, like what else you need to do to really capitalize on this opportunity? It sounds like it's not 12 months. It sounds like it's a multiyear. So just trying to understand what else where you need to invest, if at all, to take advantage of the opportunity? Paul Householder: Steve, excellent question, and that is absolutely one of the areas that we're going to look on and address as part of our comprehensive remediation plan. As we've outlined in the MD&A, specific around the training and development of that team as we look at these large complex projects as well as the complexities of the fund transfer that Jim has outlined. We do expect that there could be additional resources that we would look to add to complement the capabilities that we already have in Brazil. As you've noted, Steve, that would be very appropriate given the opportunities that exist in front of us. We want to make sure that we are well set up. We got the capabilities. We've got the knowledge to efficiently handle these. So yes, adding resources, adding capabilities down into Brazil is absolutely something that we're going to take a look at. Operator: The next question comes from Krista Friesen with CIBC. Krista Friesen: I was just wondering if there's any other levers you're able to pull on in 2026, like previously, you've talked about a rebate program to try and help stimulate some demand. I'm just wondering if there's anything else that could be done at this point. Paul Householder: Yes. It's a terrific question, Krista. And just based on your question, as you're referencing levers, I assume that's related to the North America farm market and what we can do to stimulate demand. What I would say is that we're looking across all available levers. So that is a very appropriate question. We have used rebates and we continue to use rebates in very targeted areas, and those rebates are around driving down inventory levels, which certainly helps to stimulate demand. We are also looking at a number of different areas, how we can continue to improve our cost structure for our portable equipment so that we can further improve the competitiveness of our products. We actually launched a number of new products on our portable product line. We introduced those new products, Krista, and some of these large farm shows across 2025. Those new product lines were very well received. We've now introduced those out into the market. That is a significant lever for us to pull to stimulate demand. So our product development, product enhancement initiatives along with cost, along with rebates are all levers that we would look to pull. So it's a spot-on question and the team is doing a lot of great work in that area. Krista Friesen: Okay. Great. And then, maybe just to think about margins on that front. You spoke to a previous question that the length of this downturn maybe isn't too different than previous ones. Using history as a guide, how are you thinking about margins in 2026? Yes, any color there would be great. Paul Householder: Yes, for sure. Krista, we didn't comment on margins. We commented on the opportunity for us to enhance our operational efficiencies in 2026, a measure of which would be improved margins. If you look specifically at North America Farm, our portable team has done an outstanding job in managing the business and maintaining margins. Really, our focus is more on the permanent side as well as complementing into North America commercial. So it's in those areas that we want to make sure that we've got the right cost structure in place. We got the right capabilities built out from a customer service, customer engagement standpoint. And in those areas, we would expect to make improvements in the early part of 2026 that support margins in the second half. Operator: Next question comes from Kyle McPhee with Cormark Securities. Kyle McPhee: I'd like one final clarification on the Brazil accounting issues. The very back of your MD&A does state that the material weakness cannot be considered remediated yet. And you've defined material weakness as leaving potential for finding or incurring reporting misstatements. So is it fair to say that we can't yet rule out the need for a restatement or a change to how you account with the operations in Brazil? Or is that risk fully gone? James Rudyk: Well, the work has stopped in terms of the review, and there was no restatement. So, I mean, that's stayed in the MD&A. In terms of the timing of getting everything remediated, as Paul talked to earlier in his response, some of these things and activity just take time. And that's -- it's really just that simple. It's just a number of initiatives being done to put in place, and there's no expectation of any issues of no material adjustments, as you noted. And so it's really just a few of the activities will take some time to put in place. Kyle McPhee: Okay. And then the last one, just can you provide any color on the terms you expect as you monetize these long-term accounts receivable related to Brazil, like pennies on the dollars you're expecting to get, notably given we now see these are 5- to 10-year receivables, and you do have that first little case study looks like you monetized $8 million in Q4. So any color there, if you can. James Rudyk: So when you say the terms, what do you mean the terms? The amount? Kyle McPhee: You're presumably not selling the receivables at full face value. So I mean anything you can tell us from what you learned about the first $8 million at the very least? And how much of a discount? James Rudyk: So well, so the rate that we're being charged for the monetization is similar to the rates that we're using to discount what we record. One of the unique features about this whole monetization is the way we set it up. The collateral that's provided, the percentage of receivable that we're monetizing is very different than your traditional factoring of receivable approach. So the cost to us is significantly lower and fully reflected in our financials. Paul Householder: Thanks for the question, Kyle. And we really appreciate all the questions and participation that we've had in the call this morning. We look forward to further discussions on the quarter over the next week. So thanks, everybody, for dialing into the call this morning. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
It seems tech can take a breather and stocks can still gain. So far this year, areas like materials and industrials are far outpacing tech names.
Every new year brings the same ritual. Investors clean the slate, dust off their watchlists, and go hunting for what the market has mispriced.
"Bloomberg Real Yield" highlights the market-moving news you need to know. Today's guests: Goldman Sachs Asset Management Head of Multi Sector Fixed Income Investing Lindsay Rosner, RBC Capital Markets Head of US Rates Strategy Blake Gwinn, BNP Paribas Head of US Credit Strategy Meghan Robson, CreditSights Head of US IG and Macro Strategy Zachary Griffiths Chapters: 00:00:00 - Real Yield 00:03:24 - Fed Will Not Be Cutting In January: Rosner 00:04:54 - Gwinn, Rosner on Bond Market 00:07:21 - Gwinn, Rosner on Trump's Mortgage Bond Announcement 00:13:01 - Robson, Griffiths on IG Market 00:17:00 - Robson, Griffiths on Issuance 00:21:14 - Week Ahead -------- More on Bloomberg Television and Markets Like this video?
Bond yields look set to rise this year, despite the possibility of at least two Federal Reserve rate cuts. Even a small increase in yields can be a problem.
CNBC's "The Exchange" team discusses the weaker-than-expected jobs report, what the Fed's next move is and more with Diane Swonk of KPMG and Darrell Cronk of Wells Fargo Investment Management.
CNBC's Eamon Javers reports on the White House's response to President Trump's social media post that indirectly revealed data from Friday's market-moving nonfarm payrolls count, an apparent violation of long-standing federal policy.
Wall Street found firm footing to close the week as solid but unspectacular jobs data eased fears of a sharp labor market slowdown while keeping Federal Reserve rate-cut expectations intact.
A social-media post by President Donald Trump ahead of an important jobs report may have again violated federal guidelines barring officials from commenting on such information before its release.
Nasdaq eyes record high at 24019.99 as weak jobs data boosts Fed rate cut bets. S&P 500 hits new record while Intel surges 9.78% on Trump meeting.
The social-media post showed job-creation totals that indirectly revealed information from December's Bureau of Labor Statistics report.
Mark Lehmann, vice chair at Citizens Commercial Bank, joins ‘Money Movers' to discuss the outlook for dealmaking in 2026, which sectors to focus on, the AI revolution, and more.
The S&P 500 has hit one new all-time high after another for two straight years. History points to a few important details about the stock market and investor behavior.
The Federal Reserve Board on Friday announced the chairs and vice chairs of its 12 regional banks for this year, a list that includes Emerson Electric Co's chief executive Lal Karsanbhai as chair of the St. Louis Fed, and Liberty Mutual Insurance CEO Tim Sweeney as deputy chair of the Boston Fed.
Reddit stock is breaking out past its latest buy point as its earnings growth soared 400% in the latest quarter.
For the past several months, NVIDIA has held the title of the world's largest stock by market cap. Additionally, we would note that AAPL is currently larger than Microsoft, but that gap has also been narrowing.
This year's panelists offered plenty of reasons beyond AI to expect gains in 2026. Plus, 13 investment ideas.
Jared Bernstein, former chair of the Council of Economic Advisors, joins CNBC's 'Money Movers' to discuss the December jobs report, softening of the labor market,