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Operator: Good morning, ladies and gentlemen, and welcome to the DiaMedica Therapeutics Full Year 2025 Earnings Conference Call. An audio recording of this webcast will be available shortly after the call today on DiaMedica's website at www.diamedica.com in the Investor Relations section. Before the company proceeds with its remarks, please note that the company will be making forward-looking statements on today's call. These statements are subject to risks and uncertainties that could cause the actual results to differ materially from those projected in these statements. More information, including factors that could cause actual results to differ from projected results appear in the section entitled Cautionary Statement Note regarding Forward-Looking Statements in the company's press release issued yesterday and under the heading Risk Factors in DiaMedica's most recent annual report on Form 10-K. DiaMedica's SEC filings are available at www.sec.gov and on its website. Please also note that any comments made on today's call speak only as of today, March 31, 2026, and may no longer be accurate at the time of any replay or transcript rereading. DiaMedica disclaims any duty to update its forward-looking statements. Following the prepared remarks, we will open the phone lines for questions. I would now like to introduce your host for today's call, Rick Pauls, DiaMedica's President and Chief Executive Officer. Mr. Pauls, you may begin. Dietrich Pauls: Thank you, Morgan, and thank you all for joining us for our fiscal year 2025 earnings call. With me this morning are Dr. Julie Krop, our Chief Medical Officer; and Scott Kellen, our Chief Financial Officer. Looking back for a moment, 2025 is a year in which we made significant progress across our pipeline, achieving a number of key milestones. As most of you know, our lead candidate, DM199, is a recombinant form of the naturally occurring KLK1 protein, a serum protease that acts through the bradykinin 2 receptors in the walls or endothelium of our blood vessels to increase the level of nitric oxide, prostacyclin and endothelial-derived hyperpolarizing factor. The combination of these factors has the potential to more effectively enhance blood flow and vascular health than any other factor given by itself. We believe that this mechanism is why DM199 is so well suited to improve patient outcomes for preeclampsia, fetal growth restriction, acute ischemic stroke and other indications associated with vascular pathology. I'll now turn the call over to Julie to provide an update on our preeclampsia and stroke programs. Julie Krop: Thanks, Rick, and good morning, everyone. Starting with our preeclampsia program, 2025 marked a very strong year of progress. In July, we announced positive interim results from Part 1a, the ascending dose portion of our investigator-sponsored Phase II trial being conducted in South Africa. These results showed that DM199 produced statistically significant reductions in blood pressure and in the uterine artery pulsatility index, consistent with reductions in vascular resistance that suggest a potential improvement in blood flow to the placenta. Importantly, the interim data demonstrated that DM199 did not cross the placental barrier. These interim results were observed in hypertensive women expected to deliver within the next 72 hours. We believe these results demonstrate an on-target mechanistic response, which supports DM199's potential to be a first-in-class disease-modifying therapy for preeclampsia. Key findings from the interim analysis of Part 1a, specifically from Cohorts 6 through 9 in pregnant women with preeclampsia planned for delivery within 72 hours include the following: First, blood pressure data demonstrated clear dose-dependent and statistically significant sustained reductions in both systolic and diastolic blood pressure, underscoring DM199's potential to control maternal hypertension associated with preeclampsia. Second, DM199 significantly reduced the uterine artery pulsatility index, a Doppler-based measure of arterial resistance that suggests improved uteroplacental perfusion. Third and most importantly, DM199 did not cross the placental barrier, placing it in a unique position with respect to safety and reduced fetal risk in this highly vulnerable patient population. Through additional analysis, we have also demonstrated that DM199 does not pass to babies through breast milk, further reinforcing its confinement to the maternal circulation. This advantageous safety profile combined with DM199's novel mechanism of action may enable earlier initiation and longer treatment duration, which has the potential to drive meaningful prolongation of pregnancy without added safety burden. We believe the observed improvements in vascular resistance reflect restoration of normal endothelial function, consistent with an on-target mechanistic response to DM199 therapy. By improving endothelial health, DM199 has the potential to address the underlying vascular dysfunction driving the disease that should result in stabilization of maternal vascular pathology and prolonged pregnancy as opposed to current therapies that simply manage symptoms. Taken together, the ability to reduce blood pressure, improve uterine placental perfusion and restore endothelial function reinforces our belief in DM199's potential to be a first-in-class disease-modifying therapy for this life-threatening condition for which there are currently no approved treatment options. During the fourth quarter, under the leadership of Professor Cluver, enrollment continued in the Part 1a expansion cohort, which will include up to 12 additional patients to provide us with a more comprehensive data set. We anticipate completion of this cohort in the first half of 2026. Protocol amendments are being finalized for Part 1b and 2 of the study. Part 1b will enroll up to 30 hypertensive women with late-stage preeclampsia expected to deliver within 72 hours to further confirm the Part 1a results. These participants will receive continuous IV administration of DM199 that will be titrated to maintain blood pressure in the targeted range. Part 2 will enroll up to 30 women with early onset preeclampsia, who are candidates for expected management where the therapeutic goal is to prolong the pregnancy as long as possible while also providing increased blood flow to promote larger, healthier babies. These protocol amendments represent refinements to the previous treatment regimens based upon learnings from Part 1a. The fetal growth restriction cohort will be enrolling patients without preeclampsia, but with impaired placental function, further expanding the potential application of DM199 across placental vascular disorders. The first patient in that cohort is anticipated to be dosed in Q2 2026. Importantly, we have also recently received regulatory clearance from Health Canada to initiate a global Phase II clinical trial of DM199 in early onset preeclampsia. This is an important regulatory milestone for our PE program. We are currently finalizing plans to commence site activation in the second half of the year. We intend this trial to be a global Phase II study. It is an open-label dose-finding trial designed to enroll approximately 30 participants with early onset preeclampsia between 24 and 32 weeks of gestation. This expected management population represents patients with the greatest unmet medical need where safely prolonging pregnancy can have the most meaningful maternal and neonatal impact. The study will evaluate the safety, tolerability and preliminary efficacy of DM199 with dosing anticipated to continue until delivery. We are assessing 3 dose levels to inform dose selection of the optimal regimen for Phase III. Primary study endpoints include maternal pharmacokinetics and further confirmation that DM199 does not cross the placental barrier, an important safety consideration for both regulatory review and patient acceptance. In addition, we will evaluate clinical and biomarker outcomes, including prolongation of pregnancy, blood pressure control, uterine artery blood flow, circulating pathogenic biomarkers and renal function. We are also preparing to seek approval to expand the study to include sites in the U.K. And with respect to the additional reproductive tox study in rabbits requested by the FDA, preliminary results from a dose range finding study in rabbits suggests that rabbits may not be a suitable animal model for reproductive toxicology studies with DM199. This is likely due to an unusual immune response to the recombinant human protein unique to rabbits that has not been seen in rats, monkeys or humans thus far. Most importantly, from our perspective, there were no teratogenic effects observed in the approximately 200 pups or baby rabbits produced in a prior study. This included no external visceral or skeletal malformations. We are currently evaluating an alternative animal model to address the FDA's request, and we will work with FDA to find a solution in parallel to initiating the Phase II trial in Canada and other potential jurisdictions. Turning to our ReMEDy2 trial. 2025 was also a good year for our stroke program. Over the past several months, we have intensified our engagement with study sites to share best practices and build friendly competition. We've also added additional resources to support sites through the enrollment and follow-up process, and we continue to work on additional ways to support our study sites. These activities, along with increased site activations globally have resulted in encouraging enrollment momentum over the last few months. At present, I'm very pleased to report that with these additional efforts in the United States and Canada, along with expansion into the U.K. and Europe, we have achieved almost 70% of the required enrollment of 200 participants for the interim analysis. We currently have close to 61 active sites, including 4 in the U.K. and an additional 12 across Europe, and approximately 25 more sites are expected to activate in the coming quarter. With our recent progress, we are reiterating our guidance to complete the interim analysis by the second half of 2026. Since the last earnings call, an independent Data Safety Monitoring Board meeting was conducted after the enrollment of 100 patients. Following review of the safety data from these participants, the independent DSMB unanimously recommended that enrollment continue without modification. I will now turn the call back to Rick. Dietrich Pauls: Thanks, Julie. We're also pleased to note the paper titled Endothelial Triple Pathway Basal Relaxation as an adjuvant strategy in resistant hypertension was recently published in the Journal of Hypertension. The article authors included Dr. Luke Laffin, a recognized key opinion leader in the treatment of resistant hypertension. This publication underscores the need for new treatment approaches to lower blood pressure in patients with chronic kidney disease. It also highlights findings from our prior Phase II REDUX trial, which demonstrated DM199's ability to significantly reduce blood pressure in patients with elevated levels over a 3-month treatment period. DM199 was also observed to lower serum potassium levels in patients whose potassium levels were elevated, placing these patients at risk of developing hyperkalemia. We look forward to sharing more on the potential use of DM199 to control blood pressure in patients with chronic kidney disease in the future. I would like to now ask Scott to review the financial results for the quarter. Scott Kellen: Thank you, Rick, and good morning, everyone. We announced our full year financial results for 2025 and filed our annual report on Form 10-K yesterday. As of December 31, 2025, our cash, cash equivalents and short-term investments were $59.9 million. Current liabilities were $5.1 million and working capital of $55.5 million compared to cash and investments of $44.1 million, current liabilities of $5.4 million and working capital of $39.2 million as of December 31, 2024. The increase in cash and short-term investments is due to the net proceeds received from the sale of common shares in the company's July 2025 private placement and under its at-the-market offering program. We feel confident about our cash position and anticipate it will fund our planned clinical studies and corporate operations through the end of 2027. Net cash used in operating activities for the full year 2025 was $29.1 million compared to $22.1 million for the full year of 2024. This increase is primarily a result of the increase in net loss for the full year of 2025 as compared to the prior year period. Turning to the income statement. Our research and development expenses increased to $24.6 million for the year ended December 31, 2025, up from $19.1 million for the prior year. This $5.5 million increase is driven by a combination of factors, including the continuation of our ReMEDy2 clinical trial and its global expansion, the expansion of our clinical team in both the prior and current year periods and increased noncash share-based compensation costs. These increases were partially offset by cost reductions related to manufacturing process development work performed and completed in the prior year period. Our general and administrative expenses were $9.8 million for the full year 2025, up from $7.6 million for the full year 2024. G&A expenses increased by $2.2 million due to a number of factors, including increased noncash share-based compensation expense, increased personnel costs, increased investor relations expenses and increased patent prosecution costs. With that, let me ask the operator to open the lines for questions. Operator: [Operator Instructions] Your first question comes from Stacy Ku with TD Cowen. Stacy Ku: So we have a couple. If we could just stay with preeclampsia for now. The first question is on kind of your update with the rabbit preclinical trials for the U.S. IND approval. So just help us understand what are your early thoughts on the alternative species with the FDA? Are there -- what other preclinical models are best for reproductive tox studies? So that's the first question. If you could maybe further elaborate there. And then as we think about the ISP and clearly, a lot of great signals that we're going to get -- continue to get there, what key learnings are you hoping to carry into the early onset preeclampsia kind of cohort? As we think about Part 2 and Part 3 so fetal growth as well. Is there any potential that we can get an update later this year? So just help us understand where you all are in potential timing there? And then, of course, ahead of the U.S. trial, Julia, we kind of heard all the high level of preparation ahead of moving forward in the U.S., but just help us understand how our conversations progressing? What criteria is the team focused on when it comes to enrolling the right preeclampsia study investigators. And then if I could sneak in a tiny question on CKD. Clearly, a big opportunity. When could we expect a detailed plan or a more detailed plan for pursuing DM199 in treatment-resistant hypertension in CKD patients? Dietrich Pauls: So I'll start off maybe with the CKD, the fourth question is that we're very excited about the opportunity for our drug to lower blood pressure. We've clearly seen it in numerous trials. I think there's a huge clinical need, in particular in patients with chronic kidney disease as many of these patients have elevated levels of potassium that puts these patients at risk of hyperkalemia. So I think first, we can treat these patients, control their blood pressure when they frankly don't have a lot of options and what we did see in our previous trial, the ability to lower potassium levels, which could be a very exciting opportunity. Right now, really the focus though is on our preeclampsia and stroke program. And at the appropriate time, we'll look at potentially advancing into CKD. But right now, we want to make sure we're really focused here near term on our other 2 programs. And then maybe I'll hand it off to Julie. Julie Krop: Yes. Stacy, all very good questions. I think it's premature right now to tell -- to say exactly which species that we're going to focus on. We want to first be able to -- we submitted a package to the FDA, and we're having a discussion with them further on appropriate models. There are several appropriate models we're considering. But again, we'll hold back until we will give an update once we have that discussion. And then with regards to your question around what have we learned from previous cohorts, I think I think we understand the PK better after running the initial studies. And one -- one of the learnings we're taking forward is for our early onset studies using the subcutaneous only and probably reserving the IV for the later onset as we've been doing previously. So that was one element. I think as far as site selection, we are highly focused on selecting sites that have both experience with preeclampsia studies as well as a practice that's well suited for early onset expectant management, which is something -- some sites are very adept at and other sites are more conservative about when to deliver patients. So again, it's that tight rope between treating -- between the mother's health and the baby's health and making sure that we select centers that are comfortable keeping the mother even though there's some severe -- there's potentially severe complications going on, it feels like they can stabilize them enough to prolong the pregnancy. So those are kind of the considerations that we're focused on. Operator: Your next question comes from Josh Schimmer with Cantor. Joshua Schimmer: Two quick ones. For the evaluation of DM199 in earlier onset preeclampsia, how do you think about the potential risk of the protein crossing the placental barrier at that stage? And what evidence do you have to suggest that it in that setting as well will not cross in any meaningful extent to the placenta? And then for the interim analysis for the Phase II/III stroke program, what are the potential outcomes there? Are there stopping criteria either positive or negative or resizing criteria? Maybe you can share a little bit more about what you expect the interim to inform? Dietrich Pauls: Sure. Thanks, Josh. So starting off with the early onset and crossing of the placenta. We don't think it will happen. I mean we've done now over 35-plus patients with more late onset preeclampsia where we didn't see this crossing. To cross the placental barrier is about -- the size to cross will be about 500 daltons, where our protein is about 26 kilodaltos, so 50x larger. So it would be very shocking if it did occur. We also did an earlier study in the rat model, we also did not see it. So it's just -- I think we're at this point here, another check the box, but we feel very good the fact that in the South African patient population, we didn't see it. With regards to your second question, the ongoing Phase II/III stroke program, for the interim analysis, first off, if we're not seeing a drug effect, we will terminate the study for lack of efficacy. Otherwise, there'll be a resample size and the sample size will range from 300 to 728. How we designed this trial, and we believe a base case that if we're seeing a drug effect that's comparable to our Phase II, which is comparable to the many studies that have been shown with the human urinary form of the study in China. Looking at the modified ranking score of 0 to 1 as the primary endpoint, we're anticipating that if we see, again, a drug effect comparable, we'll be looking at something ideally in the 300 to 350 range. If we need to go above 500 patients, we'll have to really evaluate the next steps for the program in light of the high prospects we think as well for the preeclampsia program. Operator: Your next question comes from Thomas Flaten with Lake Street. Thomas Flaten: Just a question on the Part 1a expansion cohort. It strikes me that it's taking a bit longer than I might have thought in my mind given how many patients Dr. Cluver sees on a weekly basis. Is this a slow and deliberate approach she's taking? Or has something else been going on there? Just some additional color on that expansion cohort would be great? Dietrich Pauls: Sure. Yes, it's a good question. It really has been a result of some staffing challenges that Cathy Cluver has had at her site. We've recently provided some additional financial support. And with the hiring of a couple of new nurses just in the last few weeks, we anticipate that enrollment is going to pick up again. Thomas Flaten: And then following on from that, if I understood the press release and your commentary correctly, are Parts 2 and 3 -- are Parts 1b and 2, sorry, dependent on the completion of the expansion cohort? Or will they initiate prior to the full completion of that cohort? Dietrich Pauls: Those -- so we've made a few protocol amendments that are going through shortly. And so we're anticipating later in Q2 that those 2 cohorts should initiate. Part 1a expansion study is ongoing and will be completed as well in Q2. Thomas Flaten: Got it. Understood. And then just a quick one on ReMEDy2. You mentioned some acceleration or some momentum building. I was wondering if you could just give us a sense of in the first quarter of this year, how many patients did you enroll compared to what you did in the fourth quarter of last year, just to give us some kind of scope and scale of that momentum? Dietrich Pauls: Yes. I would just say at a high level, the enrollment increase really has been more so it's been this year. So even going into the end of 2025, it was still relatively slow, but it really has picked up substantially in the last month, last 2 months. But really, the more recent months is where we've seen the really uptick. And that also correlates to where we've had the increase in sites and all the work that Julia and her team have been doing has been wonderful. And I think we're now starting to see the benefits of all that work. Operator: Your next question comes from Matthew Caufield with H.C. Wainwright. Matthew Caufield: For the ReMEDy2 trial, there had been some prior discussion of some challenges with stroke enrollment formally being slower in the U.S. due to initial triage in the community hospitals. Kind of thinking bigger picture, do you ultimately foresee any limitations for real-world access if or when DM199 could ultimately be approved for the AIS indication? Dietrich Pauls: Yes. Good question. So I think there's a difference between the challenges that we had been seeing with enrolling at more of these hub-and-spoke hospitals. But ultimately, for commercialization, the wonderful thing about our drug is the safety profile should be great in being able to be used very broadly at small community hospitals and big academic centers. So I think that the previous challenge we're having is really more with enrolling patients at the large academic centers. But in terms of -- again, at the commercial side, I think it will be a wonderful drug because of that safety profile. Operator: Your next question comes from Chase Knickerbocker with Craig-Hallum. Chase Knickerbocker: I was just hoping to work one more in on the nonclinical side here. Can you just maybe walk us through kind of the differences in your prior nonclinical rabbit study that you had kind of mentioned where you didn't see any toxicity in this one? Was there kind of a different species used here? Or maybe just kind of your biological rationale as to why this antibody response arose? Dietrich Pauls: Yes, Julie, can you take that one? Julie Krop: Yes. So that's a very good question. The first study was a different gestational age time period for the pre- and postnatal rabbit study. We studied an earlier -- I mean, a slightly later gestational age as well as a slightly different duration of treatment, different doses. So it's hard to explain. We did see maternal toxicity in that study as well. It wasn't quite as significant. But I think the difference here and the issue really with the FDA is not related to concern on the part of the fetus -- I mean, sorry, the pups, if you will. The pups really did not show any increase in malformations or teratogenicity from the control group in either study. But I think the concern with the FDA is finding a NOAEL effect dose where they don't see any adverse effects and the maternal toxicity that we saw, which we believe is due to immunogenicity, which is not uncommon to see in rabbits and immune responses very quickly to human proteins. So I think really, it was in both studies, we weren't -- we had maternal toxicity. So I don't think they were really that different other than gestational ages being different and the FDA wanting us to dose primarily after the first trimester after the development -- the early development of the fetus because that's closer to the way we're going to dose humans. So it just turns out, I think the rabbits just are not a good species, and we're going to just have to do it in a different species. Chase Knickerbocker: Got it. And then just maybe a little bit on time lines as far as when you'd expect to get that feedback that you need to continue with the different species or just kind of color from FDA on what they would like to move forward. Do you have a meeting scheduled in Q2? Maybe just walk us through time lines there. Julie Krop: So we are going to -- we'll provide an update as soon as we have something to update. I don't think we're giving a forecast yet until we understand and get alignment from the FDA on the path forward. Chase Knickerbocker: Understood. And then just last for me, Rick, on the stroke timing, could you just give us a little bit more color as to kind of what you're seeing from an enrollment rate perspective? I mean, is it kind of being driven by kind of breadth increasing? Or is that depth really kind of increasing as we thought it would to kind of drive this acceleration in enrollment in the stroke study? Dietrich Pauls: Yes. And it's a combination of, in particular, over the last few months, an increase in the enrollment rate per site and also for a greater number of sites. And then with being at 61 sites now and having sites having a chance to be in the trial and understand some of the challenges and opportunities of running the trial. And then I think also having a number of sites that are also on the verge of coming on board here in the coming weeks, we feel good about reiterating our guidance for this year. Operator: That concludes our question-and-answer session. I would like to now turn the conference back over to Rick Pauls, DiaMedica's President and Chief Executive Officer, for closing remarks. Dietrich Pauls: Well, thank you all for joining us today. We greatly appreciate your interest in DiaMedica and hope you enjoy the rest of the day. This concludes our call. Thank you. Operator: This concludes today's call. Thank you so much for attending. You may now disconnect, and have a wonderful rest of your day.
Sara Cheung: Good day, everyone. Thank you for joining the online briefing to discuss the First Pacific 2025 Full Year Financial and Operating Results. The results presentation is available on First Pacific's website, www.firstpacific.com under the Investor Relations section Presentation page. This results briefing is being recorded, and the replay will be available on First Pacific website this evening in the Investor Relations section. For participants from the media, please note the Q&A session is open for investors and analysts only. If you would like to ask questions, please contact us when the briefing is finished. Today, we have with us our Executive Director, Mr. Chris Young; our CFO, Mr. Joseph Ng; Associate Director, Mr. John Ryan and Mr. Stanley Yang and other senior executives from the head office of First Pacific. Over to you, John, for the presentation, please. John Ryan: Thank you, Sara. I'll just go through very quickly the First Pacific part of this presentation, then we'll move to the Q&A for you folks. Now let's begin on Page 3 with a quick reminder of some of our major investments, all of which have done pretty well in the course of 2025, and we'll discuss this later on. Now on Page 4, we've got the shape of our gross asset value on December 31, 2025. The gap was about $5.3 billion, Indofood just over 1/3. MPIC valued there at $1.3 billion, the U.S. dollar value of the pesos we paid for it when it was privatized back in the autumn of 2023. We own now about 49.9% of MPIC. You might see there that PLP's valuation has increased to $398 million, and that's because we've put some money into it to help finance the building of a new power plant, which our financial controller, Richard Chan might discuss later if that's of interest to you folks. And then, of course, there's PLDT, our 25% or so owned telephone company. And then there's the Philex Group of companies, which make up just over 10% of our gross asset value. Now let's move on to the earnings for 2025 on Page 5. Turnover was up 2%, a little over $10 billion, higher revenue at Indofood and MPIC. Decline at PLP, PacificLight Power. Contribution from operations reached a record high. I believe like the recurring profit, it's been about 7 years in a row, we've had increases in the previous 5 have been records. Indofood, PLDT, MPIC highest-ever revenues and MPIC delivered their highest-ever earnings as well. Now recurring profit, as I say, it's up a good double-digit, 10% to $740 million, up from about $673 million in 2024. Net profit was up a similar number, 10% to another record high, $661 million. Now to a matter that is dear to the heart of many shareholders. The directors approved a final distribution of HKD 0.14 a share. You folks will vote on that at the AGM. And that brings the full year distribution to HKD 0.27 a share, and that's the highest ever on a per share basis that we have ever paid out. And that, of course, fits under our progressive dividend policy where we're committed to increasing the per share amount of money we distribute to shareholders every year apart from special circumstances. As you can see on the middle chart here on the right-hand side, the increase in recurring profit was driven mostly by MPIC and Indofood, and there were little declines at PLDT and PLP. Head office cash flow, as you can see, we had about HKD $311 million of dividend income, and there are the distributions gone out to you folks. That's the biggest amount of money sent out. And then the net cash interest expense follows. And if you look deeper into this book or want to discuss it later, you'll see that our interest bill is declining along with the interest amount that we're paying. Over on Page 6, a little bit more detail on our cash flow and balance sheet. As you can see here, at the present day, we have no borrowings falling due until September 2027 when our only bond, $350 million becomes due. A $200 million that was due in 2026, as you can see, has been shifted over by 5 years to 2031. Our interest cost is around about 4.6% for the year, and the average maturity is about 3.2 years. And I would guess over the course of the next 12 to 18 months, that 3.2 is going to become a bigger number. Our CFO, Joseph Ng, will discuss that in the Q&A, if you like. Dividend income there on the bottom left shows that we've been consistently over $300 million in recent years. And very important to us is the interest coverage ratio, as you can see, was 4.5x in 2025. That's up from 4x the previous year, and that is well above our comfort level. Though it must be said, we don't have any plans for that number changing anytime soon on account of additional borrowing by us. Now I'll wind up the narrative part of this meeting with a quick look at the reason that many people are invested in First Pacific. As you can see from 2018 to 2025, we've had over a doubling of our profit at First Pacific. I think in 2018, it was around $290 million in recurring profit, and we're up to $740 million in 2025. As you can see, the exchange rates of the rupiah and the peso were down about 11% and 14%, respectively, over that time. And what this does is it illustrates quite vividly the hard currency security of putting your money in First Pacific so that you can secure the gains to be had from the fastest-growing economies in the world, which are described by the IMF over in that bottom right-hand chart, where you can see there's a doubling over the 10 years to 2030 from 2020. Let me actually very quickly go through the main companies. Indofood had record sales, as I said. Core profit was up just 1% to a highest-ever level. Many of you may have attended their investor briefing earlier today. If you haven't, we can discuss some more about their description of their earnings and predictions for the future, many of which we have put into the outlook for 2026. To speak briefly about that, there's an inference you can make that 2026 will be rather better than 2025. But of course, we have that devil in the Middle East conflict, which we don't know how it will affect any of us going forward. We can discuss this later on, if you like, but there's pretty high confidence over at Indofood. Now we're going to flip a few more pages to Metro Pacific, looking at Page 14. Record high earnings, as said before, core profit up 15%. And as you can see in the pie chart, most of it was contributed by the power company, Meralco, which is beginning to see a huge contribution from its still fairly new power generation business. They bought into a very large LNG terminal accompanied by 2 natural gas-fired power plants in Project Chromite. Stanley Yang, who worked on that transaction, can help discuss that later on. It just addresses that generation is going to be a big part of earnings growth at Meralco going forward. The newly listed water company, Meralco, also was a very big contributor to the earnings there. And then the toll roads, their contribution, as you can see, didn't grow so much as illustrated on the bottom left. And that's because we owned -- in part, it's because we owned a little bit less of it than we did earlier. Now let's dash ahead to PLDT, which is the biggest telecommunications firm in the Philippines. Service revenues, record high. EBITDA at a record high and the EBITDA margin still very strong at 52%. Core profit rose 1%, actually a similar number to Indofoods. And it was helped for the first time ever by Maya, which is the 38% owned fintech, which has -- it's the only digital bank in the Philippines, which is both owned by a telecommunications firm and has a banking license. It's a very interesting little company, and it moved into profit for the first time during the course of 2025. And the falling column chart on the bottom right there shows you the usual story. It's data that has been driving earnings growth and fixed line voice, too, in a kind of funny way. There's a big international element there. Now we'll skip past Maya and over to PLP, which had earnings slightly down. Sales were a little bit down as well. Market share is steady at 9.6%. And as you can see, the monthly average electricity prices are down quite a bit from those powerful period of earnings we had in 2023, and that's really the main driver of how their earnings have gone over the past couple of years. Net debt is absolutely negligible at less than SGD 40 million. Now over to Page 27, where Philex Mining, which has been operating Padcal for 6 decades, I think, and it's still going strong for another few years until 2028, I believe. You can see that after 6 decades, the grades of gold and copper there in the blue box, they're rather lower than you might want to see. But if you want to see better turn the page to the Silangan project, which is accelerating towards the opening of commercial operations over the next weeks and months. And you can see that the grades there in the middle box are much, much higher than what we've got going on at Padcal. We're very excited about the prospects for Silangan, and we think it's going to be a good solid contributor to First Pacific going forward and to its parent, Philex. Now I'm going to end the introduction with a quick dash to Page 52, where I would like us all to pay attention to the second line, China Securities Depository and Clearing. They're probably up at this day, close towards 150 million shares. We have now a third brokerage about to start equity research coverage of First Pacific for Mainland investors. And this has been almost entirely due to the efforts of my colleagues, Sara Cheung, who's here 2 seats away. And these new Mainland investors provide much valued liquidity to the share trading in First Pacific, and we welcome them with open arms. That's it for the opening narrative. We can move over to Q&A. Sara Cheung: [Operator Instructions] John Ryan: Jeff, could you unmute and ask your question, please? Ming Jie Kiang: Maybe starting with 2 from me. So it is all about dividends first. So I just want to check, the regular final dividends increased 3% year-on-year, which seems to be a little bit muted compared with what we saw in the past. But separately, you also pay a special dividend with respect to Maynilad's subscription shares. So just trying to check whether the regular dividend growth this time is whether a sign of caution on the outlook or whether we are trying to smooth out the total DPS growth down in the next few years, including the specials. So that's the first one. The second one would be about Indofood payout. I understand the dividend will be decided in the AGM in the next couple of weeks. So just trying to figure out, from your perspective, are you seeing any particular resistance for INDF to raise the dividend payout ratio in the future? John Ryan: Jeff, you know our CFO, Joseph Ng, he'll deal with the first question, and I'll ask our Executive Director, Chris Young, to deal with the second. Hon Pong Ng: Jeff, it's Joseph here. I think your 3% is only focused on the final, if I'm guessing your question correctly because last year's final is 13.5 and this year's final is 14. But in aggregate, if you aggregate the interim and final last year was $0.255 and this year, it's altogether $0.27 because we paid $0.13 for the interim. So there's a 6% growth, which is not the 3%, so it's not insignificant. But if you add back the so-called special distribution we make as a result of the Maynilad IPO, we pay another [ $0.15 ]. So as indicated, I think we have almost 10% growth against last year's 25.5%. So that's broadly in line with the growth in so-called recurring earnings line from last year's $673 million to this year's $740 million. So it's 10% growth in the recurring, which is a key KPI indicator for us. So broadly in line, regular growth -- regular dividend growth or distribution growth is 6%, but all in, it's 10% growth. Now with that $0.27 altogether, I think we are paying altogether about $150 million plus. And that also needs to tie to what we disclosed in the cash flow that for 2025, we have $311 million dividend income. So you can see that it's more than half of the so-called gross dividend line that we are returning to the shareholders even without including the so-called special distribution. And then you have the head office overhead and the like. And remember, Jeff, also starting from 2025 and more heavily in 2026, we need to kind of reinvest some of the money that we have from the dividend from the units and then we invest those money back to PLP to fund its equity requirement for the new gas plant there. So we try to kind of strike the balance as to what we return to shareholders, which is not a small ratio, which is quite a high ratio. If you take out the head office expenses and interest, we are returning more than 70% of free cash to the shareholders and keep a little bit for our reinvestment into the PLP gas plant. So I think that's the kind of macro thinking behind kind of fixing the final dividend at $0.14 per share and making a total of $0.27 regular and then about 10% growth in aggregate, including a special dividend we paid to the shareholders as part of the Maynilad IPO. So that's on the dividend side. On the Indofood dividends, maybe Chris could chip in and give us a bit color on that. Christopher Young: Jeff, I think the -- normally, as I think you're aware, it's a discussion with the management there at Indofood. And generally, it's a fairly constructive discussion. I think we would take into account 2 elements in considering that dividend. So I think if you look at John's presentation or you've seen the Indofood results, the recurring profit growth last year for Indofood was 1%. And the outlook at the moment looks reasonable without too much disruption from what's going on in the Middle East. But obviously, there is a bit of uncertainty. So that would be the context to the discussion, what was the underlying growth last year and what is the outlook. But as you yourself noted, that discussion will happen over the next couple of months. John Ryan: Okay. Now we'll ask Timothy Chau to unmute and ask what he's got to ask. Tak-Hei Chau: I have a couple about Middle East first. First, on Indofood. I understand just now management talked about like how the Middle East impact seems to be minimal on Indofood. But I'm just wondering if there will be any implications on the raw material cost because I think over the past year, there reportedly some kind of a raw material price hike that affected the margin. So I'm just wondering if the Middle East, if extended kind of -- being extended event, would that aggravate? And the second question also about Middle East will be on PLP because if I remember correctly, the electricity price in Singapore could actually be moved as long as the gas price is up. So I'm just wondering if there will be any positive read-through from Middle East on PLP here. Yes. And my last question is on the PLP project. So just wondering if there is a finalized budget on the potential CapEx spend on the project yet. And just now you mentioned about like how we have already been spending some -- investing some in PLP already on that particular project. Just wondering the time line of the entire CapEx and how it will be in the coming 2 to 3 years. John Ryan: Timothy, I'll take a stab at the first one and then Stan will help you with PLP. Indofood told us in their briefing this morning that as far as wheat goes, they've got 3 or 4 months of supply on hand, and they see that it looks like there's globally going to be a good crop of wheat better than the previous year in 2026. So they're not too worried about that. CPO prices are up a bit after rising 10% in 2025 to about IDR 14,100. They're around at the end of the first quarter, IDR 15,000. They are in some not feeling any particular pressure from raw material prices. And as far as the Pinehill businesses in Middle East and North Africa, they have been able to secure their supplies up to now. And there is, as of yet, no particular concern. PLP, Stan? Stanley Yang: Sure. Timothy, just to address your questions on Pacific Light, first on the electricity prices and the impact of the Middle East fuel. And for PLP, it's gas comes from a global supplier, in this case, Shell. And there is some impact in terms of some of the flow in terms of the LNG that's supplied into Singapore, some of the disruption. It's a relatively small portion, a minority. And I would say that at least for the next month plus, there's sufficient supply. But when you get beyond it, there will be some impact in terms of the supply coming in that would typically come from the Middle East. Alternate arrangements are being made. The company as well as other generators who are affected in the market are also in discussions on solutions that would help, including having some of the gas supplied by EMA and being able to run, but also others in terms of the existing contractual arrangements that they can procure in terms of their global supply. And so we think in terms of certainly the near term, there will be less impact. But as the months go by and if this crisis continues, then some of these alternatives on how the balance of gas will be filled in light of the retail contracts for the company will need to be covered. When it comes to the project itself, the project itself is looking at starting in 2029. And so the heavy lifting in terms of the construction and so forth is still to come. And so within this year, there would be an expectation of the notice to proceed, which basically kicks off the formal development and projects. And from there, the piling works and then subsequently over the next couple of years, the balance of the plant. And so that CapEx as we would look at it would be spread across the next few years up until the planned operation date in 2029. Tak-Hei Chau: On PLP, the rise in gas price, if I remember correctly, I think back in 2023, when the gas price is up, we actually have a higher profit because of the nonfuel margin being higher. So I'm just wondering if this case, given -- I mean, given the case is not as bad as like the lack of supply in gas in the end. So I'm just wondering if there will be any positive read-through for PLP in this case or we are still cautious about our outlook? Stanley Yang: I think it's too early to make a call. I think the next couple of months will be critical. I think because the company has a strong position with respect to its retail customers for this year, then there is definitely visibility, but the impact of any supply disruption, not just for our company, PLP, but also for the entire market in Singapore. The question will be the balance of any gas that comes from the affected markets, for instance, Qatar and how that would impact the entire supply. As I mentioned before, that's not the majority of the supply. It's a minority small -- relatively small percentage, but it is one that we are monitoring because that clearly, the supply in aggregate into the market has to balance with what the generation demands will be for running the plants. John Ryan: Any more questions, Jeff? I think Jeff has another question. Jeff, please unmute and ask your question. Ming Jie Kiang: So maybe switching gear a little bit to MPI, just trying to figure out how should we think about maybe the water Maynilad that business in 2026. So just trying to -- if there's any tariff adjustment, can you remind us over there, but if not, I just want to hear your maybe general assessment on MPI's 2026. That's my first question. The second would be just talking about the FP Natural Resources, which we usually do not really focus on. Just trying to understand why the loss contribution diminished in 2025? And is there any one-off events there? John Ryan: Stan? Stanley Yang: Sure. On the question of the -- you're talking mostly on the water, was it? John Ryan: Yes. If we can expect some tariff increases in 2026 following the 10% last year. Stanley Yang: This year, it's going to be more muted than the last year in terms of the tariff impact. There have been following the revision -- the revised concession agreement, a series of adjustments over a few years. Those have had the benefit in terms of the flow into Maynilad and the system. This year, it would be 4% though, is the expectation in terms of the tariff adjustment. And the business itself will continue to grow. The supply of water and the management's efforts to improve that. I think they focused heavily on the non-revenue water, which is the losses in the system and bringing that down to levels that the company has not seen ever since our existence in owning the business. And so for us, that's a big savings that helps improve the cost of the water supply and efficiency in the system. And then the management themselves are focused on continuing to improve that along with the continuation of tariffs as part of their CapEx program, which was agreed as part of the concession agreement that they revised. Those would be the key imperatives to continue to build on that business. John Ryan: Okay. Thank you. And second question. Jeff, you remind us, please? Ming Jie Kiang: Yes, the FP Natural Resources, just trying to figure out what -- why did the loss diminished in 2025 compared with 2024 and just trying to check if there's any one-off events driving the narrow losses or anything happened there? That would be helpful. John Ryan: Chris? Hon Pong Ng: Actually, maybe I could take that. It's Joseph here. Yes, I mean, that operation -- the sugar operation has -- basically has stopped. And then basically, we are laying off all stock and trying to basically sell the residual assets owned by the operation. I mean, previously, the alcohol operation and then we are in discussion of selling this kind of final set of operating asset, refinery asset with certain investors, certain buyer. So with that, actually, the scale of the operation basically stopped. So that's the reason why you see the recurring profit line, there's actually no -- without any significant amount there. But we do make some impairment provision as a result of selling those refinery assets that I mentioned because now we have identified buyer, we're in final discussion with the buyer. So we know that the final selling price of the refinery part is lower than the book value. So there's certain impairment provision mix below the line under the nonrecurring item. But above the line, there's basically no operation anymore, no significant operation. That's why you see there is very little impact to the recurring profit line. Ming Jie Kiang: Just -- I would just want to take the chance to just have one more quick follow-up or just other question. So just I want to hear our plan for refinancing the head office borrowings. So John mentioned we have refinanced the repayable loan in 2026. And just trying to figure out how do we think about the current maybe the head office net debt, cash interest coverage ratio and also our maturities schedule down the next maybe 2 years. Hon Pong Ng: Yes. As mentioned by John, we finished the refinancing of the January 2026 bank loan. We actually signed up the commitment before the end of last year. So we just draw the facility and paid off the bank loan in early January. So that's all done as far as 2026 liability management initiative is concerned. So the next one coming up from this bar chart is the bond, $350 million bond due in September 2027. Now we still have, as of today, maybe 18 months to go. So it's still early, but as part of our usual prudent financial management, we are actively looking into that and talking to a number of banks. We are getting proposals on, say, refinancing the bond with another bond. So we have received quite a number of proposals with different quotes. Now we are not in a rush to say because the whole market is so volatile. You probably understand from the market that actually both the bond investor side and many issuers are actually waiting on the sideline to see how all these Middle East crisis will turn out and how that would affect the interest rate environment in the next 6 to 9 months. And for us, I think the plan is that we have 18 months to go, but we should get ourselves ready probably when we get into the second half of this year. We will probably kind of accelerate a little bit on the preparation process and see what will be the revised kind of terms and pricing that we could get from the different banks. And in parallel, of course, we will try to explore other alternatives like syndicate bank loan if we think that those terms and pricing are more attractive. But of course, I mean bank loans will not give you the tenor that we could get from the bond market, the 7 or 10 years. As you can see from the debt maturity profile here, if you get another 5 years, probably you get into the 2021, 2022 space, which may be a bit clouded. So our preference will be still a bond. For one, the tenor; two is to diversify the credit resources so that we don't 100% rely on the bank financing. So that's the initial thinking because we always try to strike a better balance between the bank credit resources and the bond credit resources. So the preference is to go for a bond if the market is there and if the terms and pricing are palatable to us, but we never say never. We just wait until the whole market comes down a bit and the whole bond market becomes active again. Ming Jie Kiang: Maybe can I have a real quick follow-up? I promise, this is my real quick. So just as of the end of 2025, I think you disclosed 54% of the debt is on a fixed rate basis at the head office level. So is this split some sort of optimal in your opinion? Or should we be targeting more fixed rate borrowings as we think for the next maybe 3 to 5 years, given the volatile interest rate environment, sometimes we rate cut, sometimes the expectations just bounce around. So just trying to figure out the thinking here. Hon Pong Ng: Yes, Jeff, these are difficult questions because the interest rate environment is actually shifting back and talk and sometimes they say, I mean there will be one interest rate cut this year and followed by 2 next year and now they are maybe shifting a little bit, given the fact we will be shifting the position, maybe not 2 rate cuts in 2027, maybe 1. I mean all these are subject to changes since the whole market is so volatile. So with that sort of volatile situation, it's really difficult to say that we should increase the hedge ratio to a higher level or we reduce it. As of now, I think we are quite comfortable with what we have. We're probably 50% thereabout because you can't win all and you will not lose all as of now. That's what I can say for now. John Ryan: Okay. And I believe, Timothy, please unmute and ask your question. Tak-Hei Chau: Yes, sorry. Management, it's me again. Just a really quick one on potential corporate events. I think this year, a lot of different conglomerates have been -- the theme has been capital recycling, unlocking asset values. I'm just wondering, given our very diverse and broad portfolio, are we -- do you have similar stuff that the management is looking to maybe divest some kind of non-core or at least partially divest like an IPO, for example, like a Maynilad kind of thinking to really unlock the asset value and maybe pocket some kind of funds as well. Especially, I think I've read somewhere in the news about potential IPO or list or private placement for Maya. And like back in the days, I think there were also some market chatters about the private placement for MPTC back then to help relieve the financial issues for the total assets. So I'm just wondering is there anything regarding corporate events that the company is thinking about now? Stanley Yang: Certainly, as a holding company, we look at a span of initiatives, both on the M&A side, which you've seen over the last few years and also in terms of capital markets, we raised the example of the Maynilad's IPO. When it comes to, as you pointed out, Maya, it's a business that has improved quite a bit. The growth of both the wallet and then subsequently after that, taking the leadership, both in the merchant acquiring and now in the digital banking side has really pivoted that platform from what was quite small a few years ago to now the leader and continuing to grow rapidly. Whether this is the year that at this time, a listing could be done, I think we would -- management and the shareholders are always reviewing the strategic options. I think actually an interesting similar case was there was the Japanese fintech recently PayPay that just listed earlier this month. And despite the challenges of the market, Iran and so forth, actually, the price held up quite well. So I think it's fair to say that we will continue to monitor if there is an opportunity. Of course, Maya is much smaller than the one that listed in Japan, but its growth and its trajectory are moving in a very positive direction. And so we would see this as a potential as it continues to grow. Really, the question is in terms of timing. And I would say with respect to other portfolio companies and across the group, I think we continue to evaluate how we can improve the positions of them in their respective sectors. And as and when decisions are undertaken to pursue things more formally, then, of course, we will provide more guidance at that point in time. John Ryan: MPTC? Stanley Yang: I think MPTC, at the moment, the business is continue to focus on delivering this year its projects. They have quite a number of projects within the Philippines that are looking to complete. And so that's really been the focus. Also some of the deleveraging efforts of management because of the acquisitions that they've undertaken in the last few years, those are the principal initiatives looking at partners and some capital into the business to help in terms of the debt reduction of the overall roads. And then with that, we continue to also consider whatever strategic opportunities are to further enhance our position as a platform and the shareholders of our roads business. John Ryan: Thank you very much, Stan. As there are no more questions and time is getting on, we'll wind up now beginning with a reminder that we will be visiting fund managers in Europe and North America after Easter holidays. If you would like to see us, please get in touch with me or Sara or my colleague, [ fionachiu@firstpacific.com ]. These meetings have historically been quite worthwhile for the fund managers who see us because we cannot hide our feelings on our face. You'll see us coming in and we'll be feeling really, really good, and that will be important to your perspective towards our company. And now to summarize how we feel and where we think we're going, I turn now to Chris Young, Executive Director. Christopher Young: Okay. Thank you, John, and thank you for joining us on the call today. The results, as you've seen for 2025 were good and a continuation of the trend that we've seen over the last 7 years or so. However, clearly, the outlook in the short to the medium term is somewhat uncertain. However, I think we remain cautiously optimistic that given the nature of our businesses, which I think are quite defensive given the consumer-facing nature of them, that we will be able to shelter the group really from these uncertainties over the next few months or so. So we look forward to updating you again on the half year results, which I think are at the end of August 28. So until then, we will keep you informed on a regular basis. And as John and Stan will be visiting Europe and the U.S., hopefully, you will get a chance to meet with them face-to-face before that. So turn you back to Sara. Sara Cheung: Thanks, Chris. Thanks again for joining today's online briefing, and you may disconnect now. Thank you. John Ryan: Bye-bye.
Operator: Good morning, everyone, and welcome to the Xtant Medical Fourth Quarter and Full Year 2025 Financial Results. [Operator Instructions] Please note that this conference is being recorded. I will now turn the conference over to your host, Kevin Gardner of LifeSci Advisors. Kevin, please go ahead. Kevin Gardner: Thank you, operator, and welcome to Xtant Medical's Fourth Quarter and Full Year 2025 Financial Results Call. Joining me today are Sean Browne, President and Chief Executive Officer; and Scott Neils, Chief Financial Officer. Today's call is being webcast and will be posted on the company's website for playback. During the course of this call, management may make certain forward-looking statements regarding future events and the company's expected future performance. These forward-looking statements reflect Xtant's current perspective on existing trends and information and can be identified by such words as expect, plan, will, may, anticipate, believe, should, intends and other words with similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the Risk Factors section of the company's annual report on Form 10-K filed with the SEC and in subsequent SEC reports and press releases. Actual results may differ materially. The company's financial results press release and today's discussion include certain non-GAAP financial measures. Please refer to the non-GAAP to GAAP reconciliations, which appear in our press release and are otherwise available on our website. Note that the Form 8-Ks that we file with our financial results press releases provide detailed narratives that describe our use of such measures. For the benefit of those who may be listening to a replay, this call was held and recorded on March 31, 2026, at approximately 8:30 a.m. Eastern Time. The company declines any obligation to update its forward-looking statements, except as required by applicable law. Now I'd like to turn the call over to Sean Browne, CEO. Sean? Sean Browne: Thank you, Kevin, and good morning, everyone. Thank you for joining our fourth quarter update call. As has been our practice, I will begin with a few prepared remarks about our operations, and then Scott will provide a deeper dive into the financials. We will then open the call to your questions. Okay. We again turned in solid financial performance during the fourth quarter, highlighted by $32.4 million of revenue, representing growth of 3% over the fourth quarter of 2024. Now I want -- I would note that the Companion Spine transaction closed in early December, roughly a month ahead of our original assumption, which cost us about $2 million of revenue in the quarter. Scott will provide the details, but I want to flag it upfront so the headline number is properly contextualized. Importantly, we again generated positive cash flow, adjusted EBITDA and net income, a continuation of the favorable trends we have seen over the past several quarters. Before covering the quarter in more detail, I want to briefly recap our recent sale of our noncore Coflex interlaminar stabilization assets and the international Paradigm Spine entities to Companion Spine, which closed in early December. The final purchase price was approximately $21.4 million, and I'm pleased to report that the transaction is now fully closed and settled. We use those proceeds to reduce our borrowings and strengthen our cash position, and we do not anticipate any need to raise additional outside capital in the foreseeable future. More strategically, this transaction was transformational for our company. It further sharpened our focus on our core high-margin biologics business, which is where our competitive differentiation lies and where we intend to grow. So for the full year of 2025, we generated total revenue of $133.9 million toward the upper end of our previously stated guidance of $131 million to $135 million. Again, remember, that guidance also included a full month of Coflex and Paradigm Spine revenues. And this represented a growth of over 14% for the full year of 2024. Adjusted EBITDA for the full year was $16.3 million compared to a loss of $1.9 million in 2024, a result we are very proud of and one that reflects the sustained operational discipline our team has demonstrated over the past 2 years. Our biologics product family, which is the greatest potential for growth, both from a revenue and cash generation perspective, was essentially flat for the fourth quarter of last year. We have been direct with investors that our recent emphasis on self-sustainability, positive cash flows, tighter operating discipline, in-house manufacturing was intentional, and those goals are now achieved. The strategic initiatives we implemented, our sharpened focus on higher-margin biologics, our emphasis on in-house manufacturing to improve quality and control costs and our more disciplined approach to operating expenses were all pursued with self-sustainability in mind. We are pleased to have delivered on each of them. With that foundation now firmly in place, we are turning our full attention to driving top line growth, leveraging the strength of our biologics product family. On the commercial side, we have been making measured but meaningful investments to expand our reach. In 2025 and into 2026, we have doubled the number of regional sales reps in the field. Those reps are now deployed, ramping up and calling on accounts. This year, we plan to add significant resources to our national accounts team, which will expand our ability to drive institutional adoption at scale across hospital systems and large practice groups. Together, we believe these additions will have an accelerating impact on our biologics revenue as the year progresses. We continue to invest in R&D to bring innovations to surgeons and their patients, and we remain committed to the cadence of new product introductions that has characterized these past several years. So let's talk a little bit about new product launches. Innovation remains central to our strategy, and we continue to build out our portfolio during the quarter. In December, we announced the commercial launch of nanOss Strata, our next-generation synthetic bone graft manufactured from hydroxycarbonapatite, a material with higher solubility than traditional hydroxyapatite, which is the most commonly used synthetic material. Increased solubility enhances the bioactivity of the graft, allowing for better integration and remodeling with surrounding bone tissue during the healing process. Early surgeon feedback has been excellent, and we are encouraged by nanOss Strata's prospects. We also launched CollagenX, our bovine collagen particulate for surgical wound closure designed to promote healing, prevent distance and help mitigate surgical site infection risk. What makes CollagenX particularly compelling commercially is that it is a potential add-on to virtually every case type in our existing biologics portfolio, creating meaningful attach rate opportunity across our current procedure base as well as an entry point into adjacent surgical disciplines we do not currently serve. The size of that addressable market opportunity is significant, and we are very excited about what this product represents for both patients and for our business. As we have said before, but it bears repeating, we now offer and internally produce solutions across all 5 major orthobiologic categories, which includes Demineralized Bone Matrix, cellular allografts, synthetics, structural allografts and growth factors. Additionally, with our [ Amnio ] and collagen product lines, we are also well positioned to grow in the surgical repair and wound care markets. This breadth positions us as the partner of choice in regenerative medicine, a position that has been further reinforced by the very positive feedback we continue to receive from surgeons on these recent innovations. Turning now to guidance. Our 2026 revenue outlook reflects the impact of the Companion Spine divestiture and the expiration of license revenue from our Q-code and amniotic membrane agreements, both nonrecurring items that Scott will address in detail. Offsetting these headwinds is continued anticipated organic growth in our core biologics business, which we expect to accelerate as our expanded commercial team is fully deployed and our newest products gain traction in the field. With that context, we anticipate full year 2026 revenue in the range of $95 million to $99 million. On a pro forma basis, this represents solid organic growth in our core business. We are committed to maintaining positive free cash flow at these revenue levels. And as I noted, we do not anticipate any need for any outside additional capital. Story heading into 2026 is straightforward, a focus on our core business and expanding commercial footprint, an innovative and comprehensive product portfolio and a clean balance sheet. We believe we have the right strategy, the right team and the right foundation to deliver. Now with that, I will turn the call over to Scott for a more detailed review of our financial results. Scott? Scott Neils: Thank you, Sean, and good morning, everyone. I'll start first with our financial results and then conclude by sharing some specific amounts related to our recent divestitures and license revenue for the benefit of looking ahead to 2026. Total revenue for the fourth quarter of 2025 was $32.4 million compared to $31.5 million for the same period in 2024. The slight increase is attributed mainly to higher license revenue during the fourth quarter of 2025 that Sean alluded to earlier, partially offset by declines in biologics and hardware. As Sean mentioned a moment ago, we expect that the measured investments that we're making in our field sales force on both a regional and national basis should drive accelerating biologics growth in 2026 and beyond. Gross margin for the fourth quarter of 2025 was 54.9% compared to 58% or 50.8% for the same period in 2024. The increase is primarily attributable to favorable sales mix and greater scale, partially offset by a $1.3 million inventory charge associated with the launch of the Cortera Fixation System. Fourth quarter 2025 operating expenses were $18.7 million compared to $17.9 million in the same period a year ago. General and administrative expenses were $7.3 million for the 3 months ended December 31, 2025, compared to $5.7 million for the same period in 2024. The increase is primarily related to a $1.4 million of additional expense related to various compensation plans. Sales and marketing expenses were $10.9 million for the 3 months ended December 31, 2025, compared to $11.7 million for the same quarter last year. The decrease resulted primarily from a $0.9 million reduction in commissions. Research and development expenses were $459,000 for the 3 months ended December 31, 2025, a decrease from $522,000 in the fourth quarter of 2024. Net income in the fourth quarter of 2025 was $57,000 or $0.00 per share on a fully diluted basis compared to a net loss of $3.2 million or $0.02 per share in the comparable 2024 period. Adjusted EBITDA for the fourth quarter of 2025 was $1.9 million compared to adjusted EBITDA of approximately $0.4 million for the same period in 2024. Turning now to full year results. For the full year 2025, total revenue was $133.9 million, representing growth of 14% over $117.3 million for the full year 2024. Again, our revenue for the fourth quarter and the full year 2025 were negatively impacted by the closing of the sale of our Coflex assets and international hardware business to Companion Spine in early December, which is about a month sooner than we were anticipating. The assets of the businesses that were included in the transaction were generating about $2 million of revenue per month. Gross margin for the full year 2025 was 62.9% compared to 58.2% for the full year 2024. Of this increase, 530 basis points were due to sales mix and greater scale, partially offset by a decrease of 260 basis points due to increased charges for excess and obsolete inventory. General and administrative expenses were $29.5 million for the full year 2025 compared to $28.7 million for the same period in 2024. This increase is primarily attributable to $2.4 million of additional expense related to various compensation plans, partially offset by a $1.2 million reduction in expense for stock-based compensation. Sales and marketing expenses were $45.5 million for the full year 2025 compared to $49.2 million for the full year 2024. This decrease is primarily due to reduced commission expense, $3.9 million resulting from revenue mix and $2.1 million of reduced compensation expense related to headcount, partially offset by $2.9 million of additional consulting fees. Research and development expenses were $2.1 million for the full year 2025, a modest decrease from $2.4 million for the full year 2024. Full year 2025 total operating expenses were $77 million compared to $80.3 million for the full year 2024. Net income for the full year 2025 was $5 million or $0.03 per share on a fully diluted basis compared to a net loss of $16.5 million or $0.12 per share for the full year 2024. Adjusted EBITDA for the full year 2025 was $16.3 million compared to an adjusted EBITDA loss of approximately $2.3 million for the full year 2024. As of December 31, 2025, we had $17.3 million of cash, cash equivalents and restricted cash compared to $6.2 million as of December 31, 2024. As Sean alluded to earlier, our cash balance as of December 31, 2025, excludes the $10.7 million that we subsequently received from Companion Spine and satisfaction of the unsecured promissory note of $8.2 million issued to Xtant by Companion Spine related to the Coflex transaction, plus accrued interest and related working capital and other purchase price adjustments. Net accounts receivable was $17.8 million, inventory was $30.3 million, and we had $3.8 million available under our revolving credit facility as of the end of the year. Turning now to nonrecurring revenue and related expenses for 2026. Total revenue for the business sold to Companion Spine was $20.3 million for 11 months ended November 30, 2025. We will include disclosure of the 2025 quarterly revenue amounts on Xtant's investor website. Cost of sales and operating expenses for those disposed businesses were $6.6 million and $15.4 million, respectively, for the same period. Also, with respect to the $18.7 million of license revenue recognized during 2025, please note that the related sales and marketing expense was $3.7 million. That concludes the financial overview. Operator, you may now open the line for questions. Operator: [Operator Instructions] Your first question is coming from Ryan Zimmerman with BTIG. Iseult McMahon: Scott, this is Izzy on for Ryan. So I just wanted to start out on the outlook for 2026. I know guidance excludes Coflex, Cofix and the OUS business. But I was curious if you could kind of unpack what your thoughts are for underlying organic growth, especially in the core biologics business. . Sean Browne: Scott, I'll let you dive in, and I'll add any color. Scott Neils: Sure. I think as we look out through 2026, we're going to be looking for sequential quarter-over-quarter growth, which will reflect the growing contributions of the new product offering Sean mentioned as well as the expanding impact from additions to our commercial organization. I will note, though, that seasonality will still be present. So thinking of Q3, for instance, we're likely to see less sequential growth there than in other quarters. I think maybe setting Q1 as a baseline, for example, starting biologics or with biologics to your point, I expect biologics in the first quarter to be down low double digits compared to Q1 of 2025 in response to headwinds related mainly to lost Amnio product and for hardware to be down approximately mid-teens after adjusting for the revenue associated with the divestiture in 2025. Does that help, Izzy. Iseult McMahon: Yes, that's really helpful. And then you kind of touched on it already with the low double-digit decline for first quarter. But how much of a headwind are you expecting in 2026 from the loss of the license revenue relating to the Q codes? Sean Browne: I think it's more -- okay, so first of all, all of that, the Q code revenue all goes away. However, what we are waiting to see and is still shaking out is what is the base of that business now going to be because we still manufacture a really terrific product line that will be used in advanced wound care by distributors and others. Now what's going to be different is that as this continues to shake out, more of those distributors will be using our contracts, and it will be actually [ Xtant ] brand. So we expect as the year progresses, we'll see that business begin to ramp up, and we feel good about some of the discussions we've had with many of the groups that are out there today looking for a product to sell into hospitals because, as you know, in the advanced wound care world, we're going to see a lot more patients being shifted from the non-acute facilities to acute. And so we see an upside that's going to be coming our way really starting probably -- well, I guess, guys who are in this market a little more than we are, would tell you it's probably going to be looking more like sometime in the late second quarter to the second half of the year where we'll start to see the pickup on that. But in the first quarter, we [ OEMed ] a fair amount of product for guys last for manufacturer, I should say, distributors last year under their brands. And so that business has gone away. But now the business that will come back will most likely be product that will sell under our brand, and it will be into hospitals. Does that answer your question? Iseult McMahon: Yes, that's really helpful. And then just the last one for me. I was curious how quickly you guys are expecting to see a decline in the hardware business throughout 2026. Sean Browne: I think the best way of looking at hardware is we will see a slow decline throughout the year. So yes, so I'll just leave it at that. Scott, do you want to add any color to that? Scott Neils: Yes. I'd simply say that we've already seen a decline in the hardware that remains post divestiture, and we expect that, that decline will continue at a reasonably steady rate approaching high teens in 2026. Operator: Your next question is coming from Chase Knickerbocker with Craig-Hallum. Chase Knickerbocker: Maybe I just wanted to start on kind of that cadence of biologics growth that's kind of implicit in all that commentary that you just gave. It calls for, call it, kind of last 3 quarters kind of acceleration and kind of organic year-over-year biologics growth. Sean, can you maybe just walk us through kind of which products in particular you kind of expect to support that kind of the -- just help us, I guess, bridge to their kind of by product as far as what you see accelerating growth? And then kind of same question as far as how much of that comes from your distribution network versus kind of white label contracts, white label business that you have visibility on? Sean Browne: Sure. So starting off with the different products. So all of the advanced biologics products that we're now manufacturing. So when you think about our OsteoVive Plus, which is the stem cell product, our OsteoFactor Pro which is our growth factor product, the CollagenX product we just rolled out our Trivium product, which is an advanced demineralized bone matrix product. Those are the ones that I see, quite frankly, all of them expect to grow, but those are the ones that are going to be the big drivers. And those are the ones that if you look at our funnel today, which I'm really excited about because this is something with the added sales people new opportunities that we're looking at these days is substantially greater than what we've had really, quite frankly, ever. And with this advanced portfolio, we're touching on a lot more -- a lot of areas in and around spine. So when we start looking at the number of trauma, foot and ankle and other opportunities that have come our way, it's become substantially greater. So those would be the product lines that I would say that will be driving what we see as our growth. Chase Knickerbocker: And then just as far as channel, Sean, white label versus your own distribution network? Sean Browne: So yes. So when we think again about the biologics business, we'll look at our channel or our OEM channel about 20%. Scott, is that right? About 20% of our growth this year or 5% of our overall biologics business will be in the OEM channels that maybe a little higher, like 22%. Is that about right, Scott? Scott Neils: Yes, that is about right, Sean. Sean Browne: Yes. Chase Knickerbocker: And then a couple as we think kind of longer term, Sean, as we think about kind of direct -- your distribution network, white label, potentially kind of some larger contracts with institutions, like where do you see over the medium term, your business kind of showing the most growth? Is it these white label contracts? Is it continuing to be in your distribution network? Just some thoughts there as far as kind of where you're really leaning in. Sean Browne: Yes, especially given the fact that we had -- it will definitely be the Xtant branded product working through our independent agent networks, mostly because, quite frankly, that's where we had the most significant reduction over the 2024, 2025 years in way of we lose a person didn't replace them. And so we had -- and that was strategically a choice we made. Strategy is about choices. And our strategy was we need to get to self-sustainability and that meant building products internally, being able to have our own products that we feel really good about that are advanced, give us the much higher ASPs and better margins. And so these are decisions we made. Now we've replaced and then added basically doubled the size of the sales force. And that sales force is focused on our Xtant branded products. And so when you see the growth that will be coming out, it will be coming from really what I see has been a down to flat independent agent network. We have a real opportunity to really start growing that world again. And so we're feeling really good about where that's going. Chase Knickerbocker: And then two, just to finish for me on -- maybe on hardware. That business is obviously a lot smaller than it has been for you in the past. You expect it to decline. What are your kind of plans there over the medium to long term? Is that a little bit of a melting ice cube for the business that's obviously kind of drawing down growth on the overall top line? Just kind of give us your strategic thoughts there. And then just with kind of all the movement in the portfolio, can you give us a little bit more kind of color on gross margin in 2026? And sorry if I missed that during your prepared remarks, Scott. Sean Browne: I'll let Scott address the 2026. I'll address the hardware issues. So hardware for us, where we are good in hardware, we're really good. Like we have this new Cortera line, which is outstanding. We have a cervical offering that is as good as -- it's actually better than almost anything else that's out there. So we do adult degenerative spine really well. The question is, at what point in time does this become something that becomes a strategic distraction. And at this point in time, it's still helping to set the table for some of our biologics business. So I guess the point is at what point do we kind of look at this and say, when doesn't it? And does the, I guess, the drag on growth become more than it's worth. And so we're not there right now. And -- but it is something we're looking at. So I'll -- without getting too deep into that, but that is clearly high on our strategic list of things to choose or decide. And so that's something that we'll be working on over the course of the next year or so. Scott, do you want to answer the gross profit margin question? Scott Neils: Sure. I think over the course of 2026, we're probably going to be running low 60s in terms of gross margin. As far as the puts and takes within that, -- the new product launches, these higher-margin biologics launches that we've done have had the desired effect in terms of what they've done to our overall biologics product margins. However, what we've seen out of hardware is that really the nonproduct costs, say, excess and obsolete charges, for example, have offset to some extent, the positive contributions from those new biologics product offerings. So net-net, I think we're probably running low 60s in way of gross margin during the course of 2026. Operator: Thank you, everyone. This does conclude our Q&A session at this time. This also concludes our conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation. Sean Browne: Thank you.
Operator: Good morning, and welcome to the Genel Energy plc investor presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to Paul Weir, CEO. Good morning, sir. Paul Weir: Good morning. Good morning, everybody. My name is Paul Weir, as you've just heard, I'm the CEO of Genel Energy, and I'm joined as usual by our CFO, Luke Clements. Welcome to our 2025 results presentation. We published our annual report and our full year results last week. And in my statements, then we broadly reiterated the key messages and guidance provided in our January trading statement. Obviously, the big change since January is the security situation in the Middle East, which has resulted in our production effort being temporarily suspended on a precautionary basis since hostilities began almost 4 weeks ago. Understandably, the operator's priority since then has been the safety of its personnel. Steps have been taken, however, to maintain a state of readiness for a prompt restart, but the security situation in the region remains very dynamic and very uncertain. The focus of this presentation then is not to provide you with the Middle East security update, which wouldn't likely add to the understanding you've already had from mainstream media. Instead, we will take you through the key elements of the performance of the company in the last year, the current position of the business and the catalysts and priorities for '26. Luke and I will work through these slides. I think there's 10 or 11 basically. We'll work through those fairly briskly, and then we will be very happy to take any questions that you submit during the course of the presentation. We start with an overview of the business, and this slide pulls together some key metrics to outline the building blocks we now have in place. We ended the year with a daily average working interest production rate of around 17,500 barrels per day. Net 2P reserves of 64 million barrels and a net cash position of $134 million. EBITDAX was $43 million. Our barrels are low cost with a low emissions rate, well -- industry average target rate for 2025, which was 17 kilos per barrel and with world-class operating costs at around $4 a barrel. Even in a year that included significant production disruption at Tawke and continued domestic market pricing, the business has remained resilient, cash generative and well funded and with the potential for very significant value uplift. The key building blocks for that significant value uplift are listed at the foot of this slide. The Tawke PSC, our world-class production asset generating material free cash flow even at domestic sales prices, a significant cash holding of more than $220 million at year-end and about the same right now, ready for deployment and a portfolio with significant organic upside potential from exports resuming, Tawke drilling resuming, Oman appraisal and Somaliland drilling, all of which supports our ultimate objective of getting back to a regular dividend in time. Once we've established some geographical diversity and the further resilience that follows that diversification and repeatable cash. On to the next slide, please. This slide sets out our strategy and strategic objectives in the way that we think about them every day. The 3 familiar boxes on this slide represent our objectives in simple terms, and I've spoken about many times before, so I won't dwell on them too much. Firstly, maintaining a strong balance sheet; secondly, maximizing cash generation from the assets we have, which means investment in Tawke and resuming exports from Kurdistan. And finally, adding some new sources of cash flow in a disciplined and value-accretive manner. That order matters, but we need to do a good job in all 3 of those areas if our eventual aim to return value directly to shareholders in a regular way. Let's move into the detail on the platform now. The world-class characteristics of Tawke are well known, but 2025 again demonstrated the resilience of the combination of the assets and its operator, DNO. If you look at the production graph on the right-hand side of the slide, you can see quite clearly the effect of the drone attacks in Q3 of last year. And thereafter, you can see just how quickly production was restored to a production rate at the [indiscernible] of the year of around 80,000 barrels a day. It's also worth noting that production in the months not impacted by the drone event was actually higher than the 2024 average despite no new wells contributing to that production rate. Drilling restarted then in Q4 of '25. First Tawke well was spudded in December and immediately started delivering results. A second good production well followed in the same month, but the 2026 drilling campaign for which 2 more rigs have been mobilized to site has now been suspended given the security situation. So today, we're in a position where both production operations and the drilling campaign are temporarily suspended, and we remain on standby until such times as the operator determines that it's safe to reestablish a full presence at site and resume activity. We remain close to and very supportive of the operator on that. All that aside, when we talk about Tawke as a world-class asset, we mean 254 million barrels of gross 2P reserves, very low operating costs, low emissions, long reserve life and clear upside from drilling. Right, I'm going to pass you on to Luke now for the next couple of slides. Luke Clements: Thank you, Paul. Good morning. This slide provides the buildup of what we call production business netback. Production business netback is revenue less production asset spend. That's both OpEx and CapEx, less G&A. It tells us what funding our business is generating and making available for capital allocation outside of the Tawke PSC. And you can see that it has been double-digit millions for 2 years in a row now, having been negative in 2023 despite similar levels of revenue. So you can see that we've been working hard on our spend. So what was the income side of that double-digit production business netback made up of last year? Firstly, while Brent averaged $69 a barrel in 2025, our realized price sold was $32 a barrel with all production sold domestically. If we were exporting, we'd expect that realized price to be close to Brent. Secondly, working interest production averaged 17,500 barrels a day, lower year-on-year only because of the drone-related interruption in Q3 that Paul just mentioned. And finally, EBITDAX of $43 million. You can see our underlying EBITDAX is back to more normal levels for domestic sales at around $35 million for the past 3 years now. This underlying number excludes movement on arbitration cost accruals, which negatively impacted '24 and positively impacted '25. So the key point here is that the production business is now delivering consistent double-digit netback even at domestic sales pricing, while still funding all production activity and investment on the Tawke license and so building our balance sheet cash position and available funding. That is the product of Tawke resilience and the discipline we've applied to the business since 2022 in simplifying the portfolio, stopping non-value accretive spend, exiting licenses and reducing cash G&A. Next slide, please. This slide illustrates our balance sheet strength. We finished the year with $224 million of cash, the net cash of $134 million and gross debt of $92 million. Our cash is about the same today as it was at the end of the year, so it's around $225 million. In April last year, we issued a new 5-year bond maturing in 2030, replacing the bond that had been due to mature in October 2025. That issuance was oversubscribed, and we continue to see good support and appetite for our bonds. That issuance has reduced funding risk around delivery on our strategic objectives. This remains a very underleveraged balance sheet with significant headroom to fund investment. That matters because the cash and capacity for further debt provide us with significant optionality. We can fund the appropriate Tawke program, progress our organic growth assets and pursue value-accretive acquisitions without being forced into decisions by capital structure pressure. Next slide, please. This slide shows our primary capital allocation options when we consider the best way to deliver shareholder value. Our first consideration is to maintain the strength of our balance sheet. Then the best place to invest our capital, providing the instant significant returns is the Tawke PSC. Then we think about how best to diversify our cash generation. All 3 building blocks have to be properly managed to establish a sustainable dividend. That means not every potential project will automatically be funded and not every acquisition opportunity will be pursued. Every value creation opportunity has to compete with others within our strategic framework. The Board reviews capital allocation on an ongoing basis, and we take care to remain disciplined. I'll hand back to Paul now to talk about our acquisition strategy. Paul Weir: Thank you, Luke. So look, we want to add resilient cash-generative production or near production assets that reduce our reliance on one asset in one geography. We want something that complements what we already have and supports long-term shareholder value. During 2025, we were very active. We originated, developed and actually bid on a number of opportunities. We were involved in bilateral discussions and in broader processes, too. We've looked at opportunities within our current region and further afield. And to be entirely frank, although it's early days still, 2026 is already shaping up to be as active as 2025 was. Having said all of that, there isn't an abundance of suitable opportunities, and there's a great deal of competition for the good ones that are available. So we continue to diligently scan the deal horizon. We're trying to avoid being distracted by the current unsettling events. Patience and discipline are key. Finally, on this, and again, as we've made clear in previous presentations, we will resist overpaying to get short-term positive market reaction only to find over time that the assets that we buy are unable to deliver the value that we need. We remain very confident that we will secure the right opportunity in time. On to Oman then. On Block 54, the initial activity set did exactly what it needed to do. The reentry and testing of the legacy Batha West-1 discovery well was completed safely ahead of time and under budget. That was a low cost and very useful first step in understanding the block better. Our block is adjacent to the prolific Mukhaizna field, and we are targeting reservoirs that are proven in that neighboring field on another adjacent block, Block 4 and on legacy well logs from Block 54 itself. The immediate focus now is not to rush to a drilling location decision. Instead, we will use the data from Batha West properly to reprocess existing seismic and to acquire new 3D seismic in the most efficient and cost-effective way that we can, so that the joint venture can identify the best locations for the 2 commitment wells that we will now drill on the block. That's the right technical sequence, and it's also the right capital allocation sequence. And based on current planning, we expect those commitment wells to be drilled early in 2027. So Block 54 is exactly the kind of exactly the kind of organic opportunity that we like, modest initial capital outlay, a clear work program, data-led decision-making and meaningful upside if the subsurface case continues to strengthen. And on Somaliland on the next slide. In Somaliland, the opportunity remains for a material discovered resource addition from our existing portfolio, and we've seen steady progress towards drilling the highly prospective Toosan-1 well. Toosan-1 targets best estimate prospective resources of about 650 million barrels across multiple stacked reservoir objectives. As the first mover, the commercial terms are also very attractive, meaning that even a modest discovery would likely be commercial. Of course, wherever we find logistically will benefit from proximity to the Berbera Deep Water Port on the Gulf of Aden. In terms of drilling preparedness, the majority of the civil engineering work is complete and most long lead items are already held in inventory, but we will remain quite measured in how we talk about this. There's still work to do. That work is ongoing, and there is still a need for operational, commercial and geopolitical elements to all come together. The key takeaway for today is one of continued progress towards drilling, while we continue to invest in the well-being of our host communities there to further strengthen our social license to operate. On the next slide, we'll -- we can see -- we can sort of give you a flavor of the work that we carried out last year and through into the first quarter of '26. We've been proactive in the areas of mother child health care, educational facilities and conservation projects. And we've been reactive. Very importantly, we've been reactive in response to the very severe drought conditions that the region is now suffering. Genel has recently distributed around 9 million liters of fresh clean water in the area of our SL10B13 license. Okay. So I think we can wrap up now. This closing slide returns to our 3 strategic pillars. Firstly, maintaining a strong platform. That means protecting the balance sheet, keeping the business efficient and being careful about how we spend our money. Secondly, maximizing cash generation. That means cost consciousness, executing the Tawke drilling program well, pursuing the net amounts that are owed to us and positioning ourselves to participate in exports when the conditions are in place -- when the right conditions are in place. And finally, diversifying production and free cash flow. That means finalizing and executing the right plan for Block 54 and continuing to progress Toosan-1 and Somaliland. Most importantly, it means continuing the disciplined pursuit of value-accretive acquisitions. Those are the building blocks. They're fairly straightforward. They are mutually reinforcing and they remain the right framework for Genel's value delivery. If we execute well, we continue the journey towards a business with resilient cash flows that can support a regular dividend for our shareholders. That's our clear objective, and we are determined to get there. So thank you. That was a relatively brief run through the slides, but I want to thank you for your time this morning. Luke and I will now be happy to take any questions that you might have. Operator: Paul, Luke, thank you both very much for your presentation. [Operator Instructions] Guys, as you can see we received a number of questions throughout today's presentation. Could I please hand back to Luke to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end. Luke Clements: Thank you. So there's a few questions on security in Kurdistan, Paul, and how quickly we can restart production. I think as you said at the start, we're not really going to comment on security in the Middle East and Kurdistan because it kind of changes all the time. There is a question about once you do restart production, how quickly can you get back to pre-conflict production levels? I think it is worth you answering, Paul. Paul Weir: Well, I think we can get back to preproduction -- pre-conflict production levels very quickly indeed. I mean it's worth pointing out, and there is a little bit of an overlay here into the security question. We've shut down as a precautionary measure. We haven't been targeted, and we haven't suffered any damage during the course of the current conflict, although obviously, there's been quite a lot of ordinance heading into Kurdistan. It's not been headed at us. The point being that when we do sense that the time is right to restart all the equipment there and functional. The operator has been working cleverly to make sure that we maintain a state of readiness. And as soon as we can get boots back on the ground, we can get production away quite quickly. So I'm confident that we can resume production levels pretty quickly within a week or 2 of giving ourselves a green line. Luke Clements: Okay. So staying Kurdistan on exports. We understand that the Tripartite deal has been extended to the end of June. Has Genel approached MNR to join the deal? Paul Weir: The answer to that is no, we have not approached MNR to join the deal. I think we've made our position on the current export arrangements quite clear, but I'll repeat them just now. A number of our peers elected to participate in that arrangement. We chose not to do so. We wanted to make sure that all of the conditions within the deal were on fully before we felt able to commit to that. Primarily amongst those conditions, of course, is the top-up payments that would actually render the participants hold with respect to the PSC. So we would want to see that before we elected to try and join the current arrangements. In the meantime, we would continue to sell our product locally. Luke Clements: And there's a kind of related question, which you've kind of answered, how are other operators being paid through the pipeline. I mean, for me, Paul, that's really for others to comment on. It looks like the first part of that is working okay. But as you alluded to, we -- the top-up payment hasn't been expected yet and hasn't been paid yet, I think, is the right way to think about it. Paul Weir: Agreed. Luke Clements: Are you still a member of APIKUR? Paul Weir: Yes, we are still a member of APIKUR. Obviously, when some of the APIKUR members elected to participate in the export or the arrangements that were in place up until the facility stopped. When some of the APIKUR members elected to participate in that arrangement and others chose not to, APIKUR essentially divided into 2 counts, but APIKUR remains the trade association. It remains the forum where all of the IOCs within Kurdistan can talk together. And we have a directorship there, and we remain a part of APIKUR. Luke Clements: Okay. Moving outside of -- sorry, one more on Kurdistan. Any update on court case costs? Paul Weir: No, there isn't. And next month, our appeal against the award of the other side's costs goes to court, and we're waiting to see the outcome of that appeal before we engage with the authorities on that matter. Luke Clements: Okay. So now as on Kurdistan. How quickly can new assets? And I don't know if that means the organic portfolio or newly acquired assets, but how quickly can new assets meaningfully reduce reliance on Kurdistan? Paul Weir: Well, those new assets, if we're able to secure the kind of asset that we're looking for, those new assets can immediately reduce our reliance in Kurdistan because it's a production asset, then we benefit from a new income stream immediately. So certainly, first prize for us is securing an arrangement that gives us an alternative cash flow as soon as the transaction is completed. As far as the other -- as far as near production assets are concerned, if we were to go down that route, then it would be entirely dependent on the nature of the deal we were considering. I couldn't give a time line on that. Luke Clements: Yes. I'd just add, we've always said we want to do a bigger deal rather than a smaller deal. And you can see the cash pile we have on the balance sheet. And you can assume that an asset we acquire would have debt capacity on it as well. So you can see if you're spending that kind of money, you should be able to achieve some meaningful diversification of your cash generation. I think you probably already answered it, but can you provide an update on Toosan-1 in Somaliland? Any specific milestones before spud? Any specific time line that we want to set out? Paul Weir: No. I think I appreciate there'll be a great deal of curiosity around our progress in Toosan-1 because we talk about it and from an outside-in point of view, it may at times be difficult to see progress, but work does continue, and we are quite active on that front. Engineering work continues and procurement work continues. We've been looking at the market to -- we have most of the long lead items in place, but we've been putting together a project execution plan. We've been putting together a project plan. We've been trying to determine who are the best people to come in and help us manage that drilling campaign. And all of that continues as we speak, and we have people in-house dedicated to that task. And as with all projects of that nature, we have a stage gate process in place. So we will convene with the executive every time we reach a stage gate, and we will convene with the Board every time we reach a stage gate. And we will take a conscious decision to embark on the next stage of the process and be prepared to spend the money that's associated with that particular stage. We can't commit to a particular time line at the moment. As I said in the presentation, a number of commercial, operational and geopolitical pieces of the jigsaw need to fall into place together before we can actually define with certainty when things are going to happen. But work does continue, and we are committed to the cost. Luke Clements: Okay. Back to Oman. What is your estimate of drilling costs concerning the 2 wells in Oman? Paul Weir: Well, the wells are relatively shallow wells, and we're in an area that's well serviced by the oil industry. So services are readily available. We're competitive and they're relatively low cost. I wouldn't want to put a figure right at this moment for the well cost because, of course, that's determined to some extent by precisely where we want to drill, and we haven't determined precisely where we want to drill yet. But what I can repeat is what the cost of this entire project is going to be, and that's around $15 million over a 3-year period to Genel. That obviously started last year. So all the work that's taken place so far has been extremely well planned and very clearly executed and it's below budget. But we're expecting to spend a total of around $15 million over a 3-year period starting last year. Luke Clements: Okay. It looks like we are through the questions. Operator: Thank you both for answering those questions you have from investors. And of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet Company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company. Paul, could I please just ask you for a few closing comments? Paul Weir: Yes. I mean I'll close, first of all, by thanking everybody for taking -- continuing to take an interest in Genel and for taking the time to listen to us talk about our business today. I just want to close basically by reiterating the 3 main points that we wanted to land during the course of this presentation and in fact, in all our recent presentations. The first is that we have a very resilient business, and our strategic priority is to maintain that degree of resilience, protect the balance sheet. The second is to emphasize the extent to which we have potential within the organic portfolio. Oman and Somaliland, both represent very exciting potential value builders for the business, and we continue to push forward with those. But of course, the biggest story and the biggest strategic thrust at the moment is making use of our cash pile. We've been sitting on that quite patient and are waiting for the right deal. But we continue to be very, very active in the M&A space, and we continue to be extremely confident that in time, we are going to find the right deal that's going to allow us to deploy that cash. So thanks, everyone, for your time. Thanks very much for the questions, and we look forward to talking to you with more good news. Operator: Paul, Luke, thank you once again for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure it will be greatly valued by the company. On behalf of the management team of Genel Energy plc, we would like to thank you for attending today's presentation, and good morning to you all.
Operator: Welcome to the earnings call of Aumann AG regarding the full year figures for 2025. The company's CEO, Sebastian Roll; and CFO, Jan-Henrik Pollitt, will guide you through the presentation and the figures shortly, followed by a Q&A session via audio line and chat box. Having said this, I'm handing over to you, Sebastian. Sebastian Roll: Good afternoon, everyone, and thank you for the kind introduction. I'm pleased to have you with us today. And for those I haven't met yet, my name is Sebastian Roll, and I'm the CEO of Aumann. So joining me in the call today is our CFO, Jan-Henrik Pollitt. So we really appreciate your time and your interest in Aumann. In the next few minutes, we will guide you through a brief overview of Aumann, the latest developments in our E-mobility and Next Automation business and of course, our financial performance in 2025, where we delivered strong results in a challenging market environment. So let's start with a quick look at our business model. So we design and build high-end fully automated production lines tailored precisely to the needs of our international customers. With decades of experience in automation, industry leaders around the world trust Aumann to deliver innovative solutions. One of our competitive advantages is staying ahead, especially in fast-growing markets, enabling us to quickly provide customized solutions. This is why the automotive market, especially the E-mobility sector remains so attractive to Aumann. In addition, the robotics and automation market is growing rapidly, driven by demographic change, labor shortages and cost pressure. These trends also drive our Next Automation segment, allowing us to use our automation expertise in many industries beyond automotive. So let's take a quick look at Aumann's solutions. So our portfolio ranges from modular solutions and complex process solutions to fully integrated large-scale production solutions. At the modular end, we provide standardized cell systems. They enable our customers to adapt quickly and cost efficiently to changing market demands. Building on this, Aumann designs production lines for more complex processes, including technologies such as winding, coating and testing. The aim is to implement special process steps in the most efficient way. Moreover, Aumann offers fully customized large-scale solutions built to maximum output while ensuring high quality. Thanks to Aumann's wide range of solutions, we can fully support different production strategies of our customers. So this slide here shows how Aumann became a technology leader in E-mobility. Starting from the traditional automotive business, E-mobility was identified as a growth market. Through targeted M&A, Aumann took the first step into E-motor technologies. Building on our know-how, we developed different solutions for the rotor, quickly followed by solutions for the stator and finally, full E-motor assembly. After the E-motor, we leveraged our expertise to develop large-scale production solutions for battery modules and packs. In addition, we introduced our own modular systems, for example, in inverter assembly, but also very useful in the field of Next Automation. Furthermore, we have expanded into converting technology, enabling us to offer, in addition, production solutions for electrode manufacturing. Aumann is a leading provider of turnkey solutions in E-mobility. This illustration here shows the drivetrain of a fully electric car and most of these components can be produced on Aumann production lines. From the outset, we have focused strongly on the E-drive unit. Even today, our customers still use different approaches to stator and rotor design. As a turnkey provider, we offer the latest production solutions for both. Beyond that, we have expanded our portfolio with modular production systems, for example, for electronic components such as sensors or, for example, such as inverters. This enables us to offer flexible and scalable solutions perfectly tailored to each customer's needs. Let me now turn to our battery portfolio. Here, Aumann benefits from its strong position in energy storage. We cover the full range from battery modules and packs to cell-to-X solutions. This expertise allows us to meet customer needs and develop new solutions for next-generation battery technologies. Let's look at the E-mobility market today and in the future. BEV, or battery electric vehicle sales continues to gain traction. In 2025, more than 13.7 million were sold worldwide. So this means a plus of 30% in comparison to 2024. China stays in the lead with 9 million units, but Europe follows with strong growth, reaching more than 2.2 million units with 26% increase compared to 2024, including Germany with an impressive 43% growth. The U.S. market, which currently shows the lowest volume in comparison, remains at least stable at 1.2 million units. By 2030, BEVs are expected to make up 40% of sales by 2035, even 2/3. So overall, rising BEV sales and a more stable geopolitical situation are expected to drive new investments in the near future. So let us now turn to our key commercial focus in 2025. As mentioned earlier, we are expanding beyond the automotive sector and focusing more on industries that need greater efficiency, higher productivity and less manual work. At the same time, rising labor costs and the shortage of skilled workers are accelerating the shift towards automation. In this context, we have moved, as you know, our Next Automation segment from an opportunistic to a strategic approach. This segment focuses on growth industries beyond automotive, such as defense, aerospace and life science. So let's take a closer look. In our Next Automation segment, we have defined 3 strategic growth areas. Aerospace, as you know, is gaining momentum. Demand in civil aviation is rising. Boeing and Airbus are forecasting more than 40,000 new aircraft over the next 20 years. Against this backdrop, Aumann is preparing its reentry into aviation, offering solutions to support production ramp-ups with initial orders already secured in early 2026. At the same time, defense budgets are boosting. Drones combines exactly what we do best: electric motor, battery packs and full system integration, including end-of-line testing just like in E-mobility, same technology, new applications. Therefore, we easily developed integrated drone assembly lines and secured our first orders in 2024 (sic) [ 2025 ]. Besides aerospace and defense, clean tech is also good. Here, Aumann has acquired a double-digit million order in energy infrastructure, delivering flexible assembly and test lines for medium voltage circuit breakers. Finally, life science. So this sector benefits from long-term trends such as an aging population, strong investment levels and attractive margins. In 2025, Aumann entered the pharma market with solutions for producing skin delivered patches and oral thin films. Now I would like to hand over to Jan. Jan-Henrik Pollitt: Yes. Thank you, Sebastian, and also a warm welcome from my side. I would now like to share with you the financial figures of the year 2025. Let me start with a brief overview. We entered the year aware that revenue would face a decline, primarily due to a softer order intake in 2024. At the same time, we remain fully committed to implementing every possible measure to protect our margins and sustain strong profitability. It is also important to highlight, particularly in the automotive sector, that investment behavior continues to be very cautious. This trend is visible across the full spectrum of OEMs and suppliers. Against this backdrop, in 2025, revenue reached EUR 204 million, 35% below the previous year. Profitability remained strong with a double-digit EBITDA margin of 13.8%. Order intake totaled EUR 147 million, down 26% year-over-year. Order backlog decreased from EUR 184 million to EUR 122 million at year-end 2025. And our balance sheet remains robust with a net cash of EUR 148 million. With this foundation, let us now dive into the details. Across segments, we achieved a revenue of EUR 204 million, representing a year-over-year decrease of 35%. The main driver of this decline was the E-mobility segment, where revenue decreased by 37%. Revenue in the Next Automation segment also declined from EUR 53.8 million to EUR 40.2 million, mainly because the prior year included a larger contribution from a major photovoltaic project. For 2025, we had initially expected revenue of approximately EUR 210 million to EUR 230 million. Based on early projections in January, this estimate was refined to EUR 205 million. With the audited figures now available, we ended the year 2025 at EUR 204 million, closely matching this guidance. Looking ahead, we will now turn to the profitability and earnings performance to provide a complete picture of the financial results. Despite the decline in revenue, our profitability remained robust, demonstrating the resilience of our business model. EBITDA came in at EUR 28.2 million, down 21% year-over-year. EBITDA margin increased from 11.5% to 13.8%. This reflects the strong execution, especially in our E-mobility segment. Key drivers of this solid performance include a high-quality and well-diversified order backlog, strict cost discipline across all projects, capacity adjustments aligned with the subdued market environment, and an above-expectation Q4 with some larger E-mobility orders completed ahead of plan. Based on these dynamics, we raised our initial EBITDA margin guidance of 8% to 10% in January to 14%. With the final margin at 13.8%, we outperformed last year by 2.3 percentage points, underlining the operational strength of our segments. With profitability well established, let's now turn to order intake. As already mentioned, the overall investment climate remains challenging. Our business relies on our customers' CapEx, and especially for large-scale projects, long-term forward-looking decisions are essential. Many industries, particularly automotive, are currently not making these kinds of commitments, which affect our markets. However, we are not standing still. Internally, we continue to optimize costs and adjust capacities. Externally, we are actively developing new sales opportunities and pursuing M&A leads. We see clear opportunities to grow, and we are confident these initiatives will deliver value. In 2025, total order intake declined 26% year-over-year to EUR 147.5 million. The Next Automation segment is showing strong progress. Order intake increased 54% year-over-year to EUR 56.5 million. Our sales pipeline is also growing, demonstrating the potential of the Next Automation initiatives to drive future revenue. As a result, total order backlog declined from EUR 184 million at year-end 2024 to EUR 122.2 million at year-end 2025. However, the Next Automation segment continues to gain momentum with its order backlog increasing 39% to EUR 47.9 million. While the overall backlog is below our desired level, both volume and quality of the backlog are solid. And we have, of course, continued to account for this backlog conservatively in our financial statements. Let me now move to the next slide and walk you through the segment figures, starting with the E-mobility segment. In the E-mobility segment, order intake of EUR 91 million is 44% and under the previous year due to the mentioned market conditions. As a result, order backlog decreased by 50% to EUR 74.3 million. At the same time, revenue decreased by 37% to EUR 163.8 million. EBITDA is declining at a slower rate than revenue by minus 21% to EUR 26.6 million, which means a strong margin of 16.2%. In the Next Automation segment, order intake increased year-over-year to EUR 56.5 million as the new positioning is opening new markets. End of 2025, order backlog amounted EUR 47.9 million. Revenue decreased 25% year-over-year to EUR 40.2 million. And the EBITDA margin increased by 2 percentage points to 12.8%, which leads to a total EBITDA of EUR 5.1 million. Before we take a closer look at the balance sheet, let me provide a brief overview of our group cash flow in 2025. Cash flow from operating activities reached EUR 38.4 million, reflecting the strong results for the year and the EUR 50 million reduction in working capital compared to 2024. Importantly, we returned EUR 23.3 million to our shareholders through dividends and the share buyback program, underlining our commitment to delivering value to investors. As a result, cash and cash equivalents, including securities, remain at a record high level of EUR 152.8 million. By the end of December 2025, our balance sheet continues to be in a good shape with an equity ratio of 66.7% and EUR 153 million cash, of which EUR 148 million are net cash. Our financial foundation will continue to allow us to respond flexibly to market opportunities, to drive the expansion of the Next Automation segment, both organically and through M&A activities, and to ensure further shareholder participation through share buybacks and dividends. Following the successful year 2025, we will propose a dividend payment of EUR 0.25 at the AGM, which is a further modest dividend increase compared to the previous years. And of course, we currently have an existing authorization to acquire treasury shares up to 10% of share capital. This provides the company with flexibility to act opportunistically in the market, and at the same time, it ensures that we can continue to participate our shareholders in the company's success. To conclude, we would like to provide our guidance for 2026. We expect a mixed, but well balanced development across our segments. E-mobility revenue is likely to decline due to a lower starting order backlog. In Next Automation, we see continued positive momentum. Overall, the group enters 2026 with an order backlog of EUR 122.2 million. We expect total revenue of around EUR 160 million with an EBITDA margin of 6% to 8%. Our diversified business model provides stability and supports a resilient and profitable year. Let me now hand over to Sebastian again. Sebastian Roll: Yes. Thanks, Jan. So let me briefly summarize. 2025 was a challenging year for Aumann. Revenue dropped to EUR 204 million as investments across the European automotive sector remained weak. So despite these headwinds, we delivered a strong operating performance. We reduced capacity, further increased the flexibility of our cost structure and achieved additional cost savings in project execution. As a result, we reached EUR 28 million EBITDA, achieving an EBITDA margin of 13.8%, a strong indication of improved efficiency and profitability despite lower volumes. Thanks to these, we proposed a dividend of EUR 0.25 per share, continuing to provide an attractive return to our shareholders. Looking ahead to 2026, we are facing a decline in revenues again. Nevertheless, we are targeting a profitable EBITDA margin of 6% to 8%. So also in 2026, as Jan mentioned, our financial position is strong with high liquidity. That clearly sets us apart from most of our competitors and gives us the freedom to shape 2026. Last year, Next Automation developed strongly. This confirms that our diversification is working. Our clear goal is to accelerate this growth, both organically and through M&A. So thank you very much for your attention. We are happy now to take your questions. Operator: [Operator Instructions] What will be recurring revenue after sales services next year and in year 2025? Jan-Henrik Pollitt: Yes. The recurring revenue from after sales and services is approximately 10%. What we see in investment reluctance phases like 2025 and maybe also in '26 that some customers have higher volumes of retrofits of production lines, and this could, as long as the general CapEx is low, give maybe an additional increase on the aftersales side. Operator: How do you view Aumann's competitive position in the European EV ecosystem? And to what extent our increasingly aggressive Chinese entrants reshaping pricing, technology and market share dynamics? Sebastian Roll: Maybe starting the question with the question of competition out of China. So I mean maybe in comparison to other sectors, so we are dealing with China competition, I would say, the last 10 years. So there's nothing new. I also would add that there are not any changes concerning the competition out of China. Our business model is to be the front runner for the first very important, let's say, 1 or 3 lines, especially start of production of new EV is very important, for example, like it was in the new class for BMW. And I mean, in this area, the customer still is buying, let's say, more or less confidence, and this is our business model. So for the fourth, fifth, sixth line, there might be competition out of China. But then normally in normal market conditions, we are already ahead in new projects. Operator: And could you please give us more details on M&A environment and activities in Americas, which can give us inorganic growth? Sebastian Roll: Yes. So M&A, as you know, is an important pillar of our strategy, that's for sure. That's not new. So as we said also in other calls before, so we switched a little bit the direction. So we are now looking especially for targets in the area of Next Automation. That's where we would like to expand our portfolio, and that's clear our target for 2026 to acquire a company in this area. Operator: And the next question is slightly similar. Could you please elaborate further on the target focus, the size, geography and technology? Sebastian Roll: Yes. So geographically, it is still, for sure, the United States. So that's something we would like to enter. Therefore, we need a hub which is close to our technology, maybe a little bit similar. Within the European area, we are more searching, as I said, for additional technology and for additional customer relationships within the Next Automation. So looking in, as we said before, aviation, defense or, for example, life science as well. Operator: And with our large M&A, your capital structure looks rather inefficient and the share price level low. Any further buybacks to be expected? Jan-Henrik Pollitt: So there is no current decision on further buybacks. But as we have shown in the presentation, we have authorization for another 10% buyback of our share capital and we will decide if necessary on that topic. Operator: What is the potential revenue that can be achieved with the current personnel and corporate structure? Jan-Henrik Pollitt: Yes. So we adjusted capacities during 2024 and 2025. We didn't adjust directly on the EUR 160 million revenue guidance, which we have for '26. We still have a bit more capacity in-house so that we can hope for the rebound in order intake and scale up fast again. So if we don't see a positive effect, then of course, we will also use 2026 to further adjust capacities. We will also have the one or other topic in '26 where we see a few adjustments necessary but not larger ones. And as soon as the market rebounds again, that we are able to do like EUR 160 million to maybe EUR 240 million, EUR 250 million revenues again. Operator: You already answered one of the next questions. Have you continued to reduce the number of employees year-to-date? Jan-Henrik Pollitt: Yes. As said, we had some smaller adjustments, not like bigger topics, but small adjustments here and there. So we continue to make some homework, but no big issues. Operator: And there are 2 questions left. Any new strategic industries, markets, or processes that Aumann is looking on? And can you say something about order intake in Q1 and the sales pipeline? Sebastian Roll: Yes. I think what we tried to show in the presentation in a little bit more detail to give to give some ideas in Next Automation. So Next Automation for us is important. For us, it was important, especially that we had this growing market or that we had really acquired one big project, but also some minor projects in the fourth quarter of 2025. So I think you have seen that I think in the middle of the year, we are roughly 20% higher in order intake in Next Automation. After the third quarter, it was roughly 35% higher. And now after the last quarter, overall, we are 55% higher. So that means that the sales pipeline, especially in Next Automation is rising. This takes a little bit of time step by step. But as I said, for us, really important was to have, for example, this big project within the infrastructure area, yes? So in our point of view, a really nice project in the infrastructure, but also in clean tech and also in aviation. So in all these areas, now we have the first projects. In infrastructure, we even have this big project. So this is important for us. And you have to have in mind that, unfortunately, this order intake in Next Automation takes more time than in E-mobility because, as I said, the industry is new. We have the customers that are new or the products are new. And this will take a little bit of time also in 2026. So we will not see the big recovery in the first quarter, but we will see step-by-step a very increasing Next Automation. Operator: Thank you very much. And with an eye on the time, we have the last questions. There are 3 questions in a row, and I will take them one by one. The first is, Aumann reports EUR 12.2 million in securities apparently in the form of bonds. What specific type of bonds are these? Jan-Henrik Pollitt: These are government bonds and corporate bonds, but each with good credit ratings. Operator: And can you provide any information regarding order intake in the first quarter of 2026 broken down by segment? Jan-Henrik Pollitt: Honestly speaking, not yet. Operator: We expect significant working capital effects in cash flow in 2026? Jan-Henrik Pollitt: Yes. We finished the last 2 or 3 years at relatively low working capital levels. So each year, we expected a little bit working capital increases, but managed to hold the working capital at that low level. For '26, from today's perspective, I would see some working capital increases maybe back to a level of 15% to 20% of revenue. Operator: And the last question, can Next Automation reach similar EBITDA margin levels at the currently higher ones of 16% E-mobility? Sebastian Roll: Yes, in general, of course. So we had this high EBITDA margins, especially in E-mobility in 2026 (sic) [ 2025 ]. As said, we finished a project better than expected, which boosted the EBITDA margin end of the year, especially in Q4. For 2026, both segments will be a little bit lower in margins due to the decline in revenue. But in general, we are trying to maintain a good and profitable margin level in both segments. And as we said in the other segments like -- or the other industries like aviation or life sciences, there are also good margins to reach and achieve. Operator: Thank you very much. Ladies and gentlemen, we have come to the end of today's earnings call. Thank you very much for your interest in the Aumann AG. A big thank you also to you Sebastian and Jan-Henrik for your presentation and your time. Should you have any further questions, ladies and gentlemen, you are always very welcome to place them to Investor Relations. I wish you all a successful day around the world, and handing back over to Sebastian for some final remarks. Sebastian Roll: Yes, I hope that we have shown that Aumann will stay strong also in 2026, in unfortunately another challenging year for our industry, but we are focusing on what we can control. So that means internally, we are continuously optimizing our cost structure, we are building our sales opportunities in Next Automation. And for sure, we have an eye on M&A activities. So thank you very much for your interest.
Operator: Welcome, ladies and gentlemen, to the earnings call of Friedrich Vorwerk Group SA regarding the full year figures of 2025. The company's CEO, Torben Kleinfeldt; and CFO, Tim Hameister, will guide you through the presentation and the figures shortly, followed by a Q&A session via audio line and chat box. Having said this, Torben, the stage is yours. Torben Kleinfeldt: Yes. Thank you very much, and also a warm welcome from my side. Welcome to the Friedrich Vorwerk Earnings Call 2025. I will, for everybody who is not in detail familiar with Friedrich Vorwerk, run you very quickly through the main topics of our company and then give you a short market update about the latest developments in our main markets. Then I will hand over to Tim for, of course, the financial figures, which are key to this meeting here. And then I will give you a business update about our current projects we are running at the moment, at least the large ones. So yes, Friedrich Vorwerk has been active since founding in 1962. So with more than 60 years of experience in the business of engineering and constructing energy infrastructure here in Germany, mainly. We can look back at numerous very successful projects in our highly attractive main market, which is natural gas transition, electricity transition, clean hydrogen transition, and of course, adjacent opportunities where we sum up our activities in district heating, CO2 treatment and transport and treatment of biomethane. Today, we are operating from 14 locations within the north, mainly in the north of Germany with more than 2,200 well-trained employees. And yes, due to the energy transition, which is still going on here in Germany, we can look back at a very strong order intake already also in 2025. So we were able to acquire projects in a total volume of almost EUR 1 billion in 2025, which is an increase of 27% compared to the figures of the year 2024. Yes, where do these order intake come from? Main customers here in our 3 markets are, of course, the large TSOs operating the energy transport grids, not only in Germany, but also in the middle of Europe. So it could be in terms of electricity transition companies called TenneT and Amprion in looking at the market in clean hydrogen transition and natural gas transition, we have customers like Open Grid Europe, Gasunie and others. But of course, you can also find petrochemical companies and cable manufacturers within our customers. Yes. So what's the latest market update. First, I want to focus on the development of -- since German government has agreed with the EU Commission to set up new power plants in Germany. These very flexible power plants are necessary to support the production of renewable energy, mainly driven by wind and solar farms. And at times, you don't have wind and solar available. You need to have an energy source, which can be ramped up very quickly. So Germany is planning to install roughly 10 gigawatts of capacity in terms of gas-driven power plants. And that, of course, is an opportunity also for Friedrich Vorwerk Group, both in pipeline construction to run new natural gas pipelines and later on also hydrogen pipelines towards these gas-fired power stations. But also, we have a division in our plant construction department, which can supply the necessary fuel gas systems to supply those turbines delivered by companies like Siemens, GE or others. Other latest developments since we have all heard that the hydrogen economy has been struggling a bit over the last month. German Parliament has passed a so-called Hydrogen Acceleration Act. Main part of that is, of course, to install the so-called core grid for hydrogen transport in Germany, which could be the nucleus to develop the hydrogen industry in Germany because it will cut off costs for transport of hydrogen when the core grid is available and consumers and also producers of hydrogen can be easily connected to this grid. But also they want to secure and make investments in hydrogen production here locally in Germany easier and more reliable for the investors. And of course, all our other businesses like natural gas transition is also still ongoing since new LNG terminals are still developed on the coast of Germany. So the Bundesnetzagentur has just published the first draft of the new grid development plan, combining the investments in natural gas grid development and hydrogen grid development. And this plan looks out to the year 2035 with still investments in the natural gas grid of roughly EUR 3 billion. And they also found out that probably developing the core grid for hydrogen will be more costly than predicted 2 years ago. So the revised plan for setting up the hydrogen core grid roughly sketches out investments of EUR 25 billion instead of EUR 20 billion, which was estimated before. So also here, in the market of natural gas and hydrogen, huge potential for our company's group. And therefore, I would like to hand over to Tim for last year's financial figures. Tim Hameister: Thanks a lot, Torben. And also a warm welcome, everyone, from my side to today's earnings call. Overall, 2025 was a fantastic year for Friedrich Vorwerk. We achieved record-breaking results across all KPIs, successfully completed 2 acquisitions, secured numerous new major projects. And last but not least, we launched our proprietary welding robot in collaboration with our subsidiary, 5C Tech. Therefore, I'm very pleased to now present these strong results in detail. In terms of revenue, we've steadily increased over the course of the financial year and delivered a fantastic final quarter, which despite the seasonal nature of the business, nearly matched the strong performance of Q3. Overall, we benefited from favorable weather conditions in fiscal year 2025, not only in Q4, but especially in the first quarter when we were able to resume work after a short winter break on many projects as early as mid-January. This point, I would also like to briefly note that the first quarter does not always benefit from good weather conditions. This year, for example, in 2026, we've seen a harsher winter again after a long time with plenty of ice and snow, particularly in Northern Germany, resulting in a question of production stoppages even in February. However, depending on weather conditions in the next quarters that are more relevant in terms of revenue and earnings, we expect to be able to offset at least parts of this effect over the course of the year. For the full year 2025, we generated revenue of EUR 704 million, representing a remarkable 41% increase over the previous year. This was primarily due to our continued success in recruiting new employees, which led to a 15% increase in the average number of employees as well as an increase in productive hours per employee, higher equipment utilization and, of course, some pricing effects. The electricity segment's share of revenue has contributed -- has continued to rise, now standing at 52%, making it the primary driver of growth in 2025. While this is largely attributable to A-Nord, we are simultaneously working on several medium-sized projects in this segment, such as BorWin6, the Baltrum HDD project and several converter stations as well. 2/3 of the current order backlog is attributable to this segment. So continued growth is expected here. At the same time, we anticipate a significant growth momentum from the Clean Hydrogen segment as larger subprojects on the hydrogen core grid are also expected to be put out to tender in the foreseeable future. Furthermore, we expect additional growth in the adjacent opportunity segments in 2027 and the following years due to the German government special fund. The development of profitability was particularly impressive in the fourth quarter with an EBITDA margin of almost 29% and EBIT margin of almost 25%, even taking into account the dilutive effect of the cost plus fee contract in our major A-Nord project. In addition to the favorable weather conditions already mentioned in Q4, our success in claim negotiations, which typically take place in the fourth quarter was a key factor in the exceptionally high margin, along with higher earnings from joint ventures, which increased by nearly EUR 10 million compared to the same quarter of previous year. Accordingly, we also concluded the 2025 financial year as a whole, thanks to our high-quality order backlog and a flawless project execution were successful. We increased the EBITDA margin by 7 percentage points from 16.2% to 23.2% and more than doubled EBIT from EUR 59 million to EUR 137 million. Despite the tremendous 40% growth, we still managed to further reduce trade working capital, which along with the higher profitability, played a significant role in improving the net cash position. As a result, we were able to increase net cash by more than EUR 100 million compared to previous year, bringing it to EUR 262 million at year's end. It should be noted, however, that the trade working capital is always at its lowest level at the end of the year and rises as the construction season progresses. These swings between summer and winter can amount up to EUR 80 million or even EUR 90 million. With regards to capital allocation, our top priority remains investing in organic growth, specifically in the purchase of new pipe layers, drilling rigs, cranes and excavators and of course, our welding robots. We've budgeted approximately EUR 50 million for this in 2026. Furthermore, we will certainly be open to pursuing a larger M&A deal again provided we find the right target and of course, at a reasonable price. And finally, we would like to share the company's success with shareholders in form of a significantly higher dividend payout, consisting of EUR 0.70 base dividend and a EUR 0.40 special dividend. Let's now take a look at the development of order intake. In addition to the conventional order intake figure, we've already introduced a new KPI last year, the total project volume acquired. This new KPI also includes a proportionate project volume from the joint ventures in which Vorwerk is involved. And therefore, in our opinion, provides a more transparent view of the actual order situation regardless of the structure of the contract. The total project volume acquired rose by 29% to EUR 991 million in 2025, while conventional order intake at EUR 538 million is around 20% below previous year. The main reasons for this are, on the one hand, a shift in the order structure towards more joint ventures, especially in H1 2025. And on the other hand, our already well-filled order book, combined with a limited capacity of our resources. The order backlog, which corresponds to the conventional order intake figure declined, therefore, slightly to EUR 1 billion for the reasons stated before. We've learned from several investors that the communication regarding order intake and the contract structure is not yet clear enough. Therefore, we are currently working on reporting an order backlog KPI that includes our share of joint venture projects as well, starting with the Q1 report. And I expect that this additional metric will provide a transparent picture for all shareholders by then at the latest. Yes, and then based on our consistently high-quality order backlog, we expect our growth trajectory to continue in 2026 with revenues in the range of EUR 730 million to EUR 780 million. It should be noted that following 2 years of very high employee growth, we intend to slow down the expansion of our workforce somewhat in 2026 to give the organization and the administrative functions the opportunity to grow at the same pace while simultaneously focusing our recruiting efforts on attracting senior construction and project managers. At the same time, revenue growth is somewhat slower in 2026 due to the higher proportion of joint ventures. And this change in the project mix also means that we are now forecasting absolute EBITDA instead of EBITDA margin, specifically in the range of EUR 160 million to EUR 180 million for 2026 as this number is unaffected by the order structure. This guidance also takes into account the slightly softer Q1 2026 due to the adverse weather conditions. With that, I'd like to hand back to Torben for the business update. Torben Kleinfeldt: Yes, Tim, thank you very much. And of course, we did pick for this meeting our most outstanding projects at the moment. Please remember that during the year, we are operating on more than 500 smaller, midsized and also large projects. So we can, in this meeting, only give you a glance of the most outstanding projects. And I would like to start with the natural gas business here. It's a project we've already been working on last year. It's the so-called EWA pipeline, which is a 48-inch pipeline running from the caverns of Etzel towards compressor station of Wardenburg. This pipeline will continue in size of 40-inch towards the station of Drohne, which is more to the Rhine-Ruhr area, so in the south of the area. We have already finished the construction on EWA last year with a pressure test and the handover to the customer. So there's already gas on this pipeline. And the WAD pipeline is construction progress at the moment. We have already started in January with the first wells on site using our new welding robot, PX2 developed by our subsidiary, 5C Tech. We have completed roughly 400 wells on the project this year. And again, with very, very low mistakes in the wells. So it's -- the repair rate is definitely under 2%, which is very good in terms of fully automatic welding. Yes, changing actually over to the next natural gas pipeline project, which is, at the moment, our still largest project executed in a joint venture between the Habau Group and the Friedrich Vorwerk Group, compromises of 2 pipelines. First, the ETL 182 with a diameter of 56-inch and the ETL 179.200, which is a 36-inch pipeline. Altogether, a mid-3-digit million euro project and both pipelines are being executed by the same joint venture combination. As you can see in the picture below, we have already started some civil works to erect the pipe yards that has been done already in 2025, and we have already received most of the project pipes, which are purchased by our customer Gasunie. And we've actually started in the latest weeks to make preparations for the first loading procedures, so for the tunnel crossings and for the horizontal directional drilling, operations are already in place and will be executed in due course of this year. And then maybe next slide, we are not only active in pipeline cable laying, but our plant division construction is also very busy with a new project at a gas metering station called Groß Koris. This is the main metering and supply station for the company, ONTRAS. Here, we have a project to renew the full installation at Groß Koris with a volume of mid-2 million-digit range. And we have to deliver the full scope of engineering and also construction activities and will then commission the new plant as is foreseen at the moment in 2028. And the system will already be constructed in a hydrogen-ready way. So later on, once the usage of natural gas in the system is over, it can be easily converted to use for clean hydrogen and meter and also regulate the hydrogen being transferred in the grid. Next project is also a hydrogen project, which we have already been working for 1.5 years. This is the so-called HH-WIN project. So the city of Hamburg is trying to set up a hydrogen grid in the Port of Hamburg. Key figures here is an electrolyzer plant, which is located at the former power -- electrical power station of Moorburg, where about 100 megawatts equality of hydrogen is being produced and then fed into the Habau Grid, so the HH-WIN grid. And Friedrich Vorwerk has already executed 3 lots of this newly established hydrogen grid. And we have been recently awarded with 2 new lots to set up this hydrogen grid. The first lot involves actually a micro tunnel of almost 200 meters where we later on install the piping DN 300 for the transfer of hydrogen. And the following lot compromises of roughly 1,500 meters of new build hydrogen pipeline. But besides those existing projects where we've already started execution, we are, of course, still busy in our estimation department working on new estimates for new projects. Just to give you a small idea what could be coming up over the next years. In terms of pure natural gas transition, we are at the moment, working on estimation for the so-called Spessart-Odenwald-Leitung, which is also DN 1000 pipeline, about 115 kilometers long for Terranets and also other projects coming up from Open Grid Europe, setting up the core grid for hydrogen here in Germany. And also for Gasunie, new projects like ETL 187, which is directly in conjunction with the current project ETL 182, is at the moment in tendering phase and execution and commissioning would then be in '27, '28. But also still very attractive is the electrical market, where we are now facing the so-called second wave of large-scale electricity highways, projects like NordOstLink Section 2, SuedOstLink and SuedOstLink+ are being tendered out over probably end of this year and beginning of next year. And these projects will be commissioned in the mid-2034s -- in the mid-2030s. So also here, a huge potential also after 2030 for our company's group. And under adjacent opportunities, we were able to already win lot of the Rheinwater transport pipeline. This is a very large diameter pipeline, 2.2 meters in diameter that will later on transfer water from the river Rhine to flood the coal mines of RWE. And at the moment, we are working on the next lot to establish this water transfer pipeline. And also a very new business to our company, the transport of CO2 is ongoing. So the first tender we have received is the CO2 link from Lagerdorf, where Holcim is operating a cement factory towards the port of Brunsbuttel is on the table at the moment. Commissioning is foreseen for 2029 and tendering phase ongoing and probably construction phase will be '28 to '29. So this, of course, can only be done if we can establish to grow our headcount and our number of employees where we were very successful last year. So today, we can look at a workforce of more than 2,200 employees. Of course, the labor market within Germany, especially due to the low capacity in building construction, we were able to employ a lot of new blue-collar workers we could integrate in our projects. And probably during this year, we will definitely have a focus on growing our engineering staff and our overhead staff on the construction site. So challenge will be also to look for well-educated project managers and construction managers to manage all the blue-collar employees we were able to attract over the last month. Yes, that's it from our side. We are happy to receive your questions either by phone or by chatbot, and happy to answer them. Operator: [Operator Instructions] And the first hand is up from Lasse Stueben. Lasse Stueben: I wanted to ask just on the Q1. Is there any more color you can give roughly in terms of what we should expect in a year-on-year comparison just to avoid any sort of nasty surprises. The second question would be, what should we expect for headcount growth broadly in '26? And then the third question is, you mentioned sort of slowing down headcount growth, but then you also said that you would be willing to do a larger M&A or potentially do a larger M&A transaction. So how do we kind of square those 2 kind of comments? Because I guess a larger M&A deal would also involve many new employees. So just any color there would be great. Tim Hameister: Well, we've seen compared to the year before, some weeks of weather-related production stoppages in February, combined with the growth of the headcount could be possible to see a rather flat Q1 in 2026 in terms of revenue growth. And as I said, which could potentially partly be offset by stronger quarters in Q2 and Q3 as the overall share of Q1 on the full year revenue isn't that relevant. Regarding the headcount growth, when we talk about slowing down recruiting efforts, this is only in terms of organic growth, meaning directly hiring people, not including any M&A. From organic growth side, we expect to grow headcount by 5% to 8% in 2026 and any M&A would be add-on, on that. And of course, usually, we also acquire project managers and the respective engineering and administrative functions when doing a larger M&A deal. Operator: And additionally and slightly regarding question in the chat. Friedrich Vorwerk is guiding for a slightly lower margin in 2026 compared to a strong 2025, midpoint of 2026 guidance at 22.5% versus 23.1% in 2025 despite continued revenue growth. Could you provide a margin bridge for 2026 versus 2025 and outline the key driving factors? Tim Hameister: Well, we've always communicated that we see the margin potential in the mid- to long term at our company between 20% and 22%. However, in particularly strong years as in 2025, it's also possible to achieve an even better margin, more than 23% due to basically a flawless project execution, good weather conditions and so on. But on the long run, we feel pretty confident with 21%, 22%. Operator: And the follow-up from the person. Could you please provide more details on the Nord-A project, specifically regarding the recent delays and their potential impact on bonus malus payments. Additionally, is there any bonus or malus effect already factored into the 2026 guidance? Tim Hameister: Yes. As we already communicated last year, A-Nord project is expected to be slightly delayed with completion now anticipated in summer 2027 instead of end of 2026 due to missing permits. We are still in discussions regarding adjustments to the bonus-related milestones. And these discussions have been ongoing for some time. We do not yet have a definite outcome on these discussions, but we remain still confident and hope to sign their respective contract amendment in the course of the second quarter 2026. And based on this information, at least a portion of the contract liability we've already included into the books since and accrued over the project duration. Part of that could be reversed once this amendment is signed in the second quarter. However, we did not factor in any positive impacts from that amendment as it is not signed yet. Operator: And for now, we have no further questions. Ladies and gentlemen, I will hold the room for another moment in case someone might be typing right now. And there is a hand up from Lasse Stueben, again. Lasse Stueben: Great. Just a follow-up on sort of -- you mentioned kind of the JV share of projects is obviously going up. Should we expect that kind of level of the JV income you saw in '25 to be roughly the same in 2026? Or how should we think about that? Tim Hameister: All the new JVs we entered into last year, we expect to -- that the net earnings of the JVs will even increase compared to 2025. Operator: And another hand up from Leon Muhlenbruch. Leon Muhlenbruch: I have a quick question regarding to the current geopolitical situation. With the energy crisis already on the way and inflation likely to rise similarly to 2022, which had a significant impact on Friedrich Vorwerk, how are you prepared for such a scenario? Torben Kleinfeldt: Well, first of all, we were able to have a better negotiation position in most of the contracts that are in the order backlog at the moment. So most of the contracts have included price escalation clauses. So we can -- on the most bigger projects, we can forward the price escalations to our customers, although, of course, not to 100% because they are mainly bound to indexes which are more general, for example, the steel index or the crude oil index, which is not always 100% equivalent to the products we are actually using in our projects. But in the end, we can at least -- we are at least in a way better position this year than in 2022. Also in 2022, most impact was from a plant construction project where we had to bring a lot of material to the project. If we look at the current large-scale projects we are operating on, it's mainly the pipeline projects where the bare pipe is supplied by our customers. So we are mainly supplying equipment and personnel, so services, which are, at the moment, not that much affected as back in 2022. Operator: Another hand up from [ Lueder Schumacher ]. Unknown Analyst: I've got a few questions on margins. One is, are there any kind of older projects which have lower margins in them that which are running out and should be supportive to the group margin outlook once they do? And what about the margins implied in the order intake? Can we assume that they should be at a premium to the margins you've seen in 2025? Or should it more be in the region of the long-term potential of 20% to 22% you've been hinting at? Tim Hameister: Well, there are currently no such legacy projects in the current order backlog, although we still have the dilutive effect from our major project A-Nord, which will run until summer 2027, where the base margin is definitely lower than the group average. Apart from that, there are no legacy projects with low margins. And well, I mean, we have already seen such strong margins in 2025. We do not expect that we can further increase this margin profile. And therefore, rather to suggest that you can assume the long-term potential at around 21%, 22% for the next years. Unknown Analyst: In your order intake you had in 2025, we should already assume this? Or is this still at the margins you've seen in '25? Tim Hameister: Well, the margin profile calculated in those projects is roughly on the same level as we've seen the year before. However, on the one hand side is the calculated margin. On the other hand side, is the actual project execution on the fields. And this has also a major impact on the earnings in the end. Operator: And we're moving on to 2 questions in our chat. Are you planning any buybacks? What are the key impacts for the Iran war for you? And what are you doing to hedge against it? For example, natural gas inflation, diesel? Tim Hameister: At the moment, there are no plans for any share buybacks. We've decided to instead increase the dividend and to also pay out the special dividend of EUR 0.40 per share. Adding on the answer from Torben regarding Iran, the major impact for us at the moment is, of course, the higher cost for fuel, especially diesel. To give you some color on that, the total cost of diesel last year was around EUR 12 million. So it's not the largest position in our P&L statement. And we've, of course, already hedged some of the amounts needed already before the war in Iran. So there will be, of course, some effect, but not a significant one. Torben Kleinfeldt: But on the other hand, the crisis also has a positive impact on the market because at the moment, customers are really pushing the projects and trying to get more LNG receiving capacity in Germany, which then, of course, also means constructing new pipelines and constructing new plants, which is then also good on the market side for us. Operator: Can you discuss your appetite to revisit medium- to long-term guidance? And what milestones would trigger an upgrade? Tim Hameister: Well, that's definitely a thing to consider this year as we are pretty well on track on the older mid- to long-term outlook. So maybe we can expect to see a new outlook in the second half of this year. Operator: Ladies and gentlemen, we still have a minute for your questions left. And if there should be no further ones, you can always get in contact with Investor Relations. And this is it. With no further questions, we come to the end of today's earnings call. Thank you very much for your interest in Friedrich Vorwerk Group SE. A big thank you also to you, Torben and Tim, for your presentation and your time. I wish you a successful day around the world and giving the last words to Torben again. Torben Kleinfeldt: Yes. Thank you very much for listening. I think especially this year, we can look at some very, very interesting projects we can execute for our customers. And please stay with us and hear the latest news from our projects in the future. Have a good time around the world. Bye-bye. Tim Hameister: Bye.
Operator: Ladies and gentlemen, welcome to the SoftwareOne Full Year 2025 Results Conference Call and Live Webcast. I'm Valentina, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Kjell Arne Hansen, Head of Investor Relations at SoftwareOne. Please go ahead. Kjell Hansen: [Audio Gap] presentation. My name is Kjell Arne Hansen, and I'm the Head of Investor Relations at SoftwareOne. Joining me today are our Co-COOs, Raphael Erb and Melissa Mulholland; and our CFO, Hanspeter Schraner. In terms of agenda, Melissa and Raphael will start with a summary of the year and the Q4 performance. Hanspeter will then take us through our detailed financial performance. And finally, Melissa will take us through the final section covering our AI opportunities within the business model as well as our financial outlook for 2026. Before handing over, please let me draw your attention to the disclaimer regarding forward-looking statements and non-IFRS measures on Slide 2 and 3. And with that, I will hand it over to Melissa. Melissa Mulholland: Thank you, Kjell Arne. Welcome to our full year 2025 presentation. 2025 was transformational. With the combination of SoftwareOne and Crayon, we have created a global software and cloud leader with unmatched reach and capabilities. Today, combined gross sales amount to CHF 14 billion. We serve over 70,000 clients across more than 70 countries, supported by 13,000 highly skilled colleagues. Our ecosystem is equally strong with more than 10,000 vendors and a network of 12,000 channel partners, providing reach to the SMB segment. This scale matters. It shows how we are one of a kind and a truly global partner for hyperscalers and ISVs. In addition, both Gartner and IDC have recognized us as a leader in software asset management. We are well positioned to capture the structural growth opportunity and customer demand based on our global scale and market position. Overall, we have delivered. We returned to growth with revenue up 1.4% year-over-year on a like-for-like basis, ahead of our initial expectation of broadly flat development. Profitability remained strong with an adjusted EBITDA margin of 20.9%, in line with our commitment to stay above 20%. At the same time, we maintained discipline on adjustments coming in below our guidance on below CHF 30 million, excluding the Crayon-related costs. Lastly, we made good progress on synergies, delivering CHF 43 million of run rate by the end of 2025. As of today, total run rate cost synergies amount to CHF 64 million. This was a year where we delivered on our promises while building the foundation for further improvement. Growth improved steadily throughout 2025, and by Q3, we were back to positive territory. And in Q4, we reached 11% revenue growth. We will continue to build off the foundation laid in 2025. The actions we are taking are working, putting us in a stronger position to drive momentum in 2026. Let me briefly comment on the full year performance. I'll focus on the combined like-for-like numbers as this best reflects the underlying development of the business. As stated earlier, we delivered 1.4% revenue growth for the full year, with a clear acceleration into Q4 where growth reached 11%. At the same time, profitability improved and we delivered an adjusted EBITDA margin of 20.9% for the year, an improvement of 0.5 percentage points compared to 2024. The key message is clear. We are improving our growth momentum, combined with continued strong margins. Hanspeter will explain the detailed IFRS numbers shortly. But as you can see, our business is on a path of continued growth. Looking at our 3 segments, we see a clear pattern of improving momentum across the business. In direct, the full year performance was impacted by the Microsoft incentive changes. However, we saw a clear rebound in Q4, supported by multi-vendor and continued CSP growth. Going forward, we see significant growth opportunities driven by our broad partner ecosystem across global software vendors, including AWS, Google, VMware and Adobe. Furthermore, the push for EU sovereign cloud increases demand for multi-cloud compliant cloud solutions, playing directly to SoftwareOne's strength in navigating complex vendor ecosystems and regulatory requirements. In channel, growth was strong at 18.7% for the full year, driven in particular by APAC, which represents 60% of the total channel revenue. At the end of February 2026, we became the first global authorized distributor for Google Cloud, enabling channel partners to access and resell Google. This is a strategic milestone allowing us to significantly expand our channel business through authorized distribution of Google Cloud services across 10 markets, covering Australia, India, the Nordics, Germany, France and the U.S., with additional countries to follow throughout the year. In services, we see solid momentum, supported by demand in areas like cloud and cybersecurity. Across all business lines, growth reflects our ability to capture new incentive opportunities introduced by Microsoft across CSP and services. While EA-related incentives were reduced, we have partially offset this by leveraging our combined service portfolio and strong CSP offering. Profitability improved across all business lines, driven by stronger growth, impact from cost savings and synergy realization. We see a strong and encouraging development with solid growth in channel and services and a recovering direct business entering 2026. I will now hand it over to Raphael to walk you through the regional performance. Raphael Erb: Thank you very much, Melissa. Welcome to everyone from my side. I will now take you through the regional performance. First, I want to highlight the change in our segment reporting going forward. Following the acquisition of Crayon, our operating segments have been reassessed. Given our significant presence in the Nordics and the CEE, the rest of Europe region has been restructured into 3 new operating regions: Nordics, Western Europe and CEE. In DACH, revenue grew 2.8% in 2025, driven in particular by a strong Q4 growth of 15.4%. Headwinds from Microsoft incentive changes on enterprise agreements negatively impacted revenue during the year, but this was offset by a successful transition to CSP as well as strong multi-vendor and public sector growth. Revenue in Western Europe increased 3.3%, driven by strong growth in multi-vendor sales and services, while also here partly offset by changes in Microsoft incentives. Similar to the performance in DACH, the year ended strong with 12.2% revenue growth in Q4. APAC grew 11.4%, driven by strong results across the region, with India performing particularly well. The largest contributor to growth came from services business as was driving by strong demand with data and AI and cloud services. I'm also pleased to share that during Q1 2026, payments commenced from a public sector customer in the Philippines on Crayon's previously outstanding receivables with USD 22 million collected as of today. The remaining amount is expected to be collected shortly, bringing this long-standing matter to a close. Nordics revenue grew 0.7% in 2025. During the year, growth in the direct business was positive and accelerated to double digit in the fourth quarter as the impact from Microsoft incentives ease. 2025 was a disappointing year in North America with revenue declining 12.6% year-over-year. The 2025 performance reflects the previous GTM-related sales execution challenges as well as impact from Microsoft incentive changes. The previously initiated turnaround measures are gaining traction, with internal sales metrics improving sequentially, supporting a recovery and return to growth in 2026. LATAM declined 4.4%, driven in particular by weakness in the direct business. We see strong growth opportunity across key markets like Brazil, Mexico and Colombia, and are confident in our capability to achieve profitable growth in the region. As part of the portfolio review and to support improved future performance, the company has decided to exit 4 nonstrategic countries in the region: Argentina, Uruguay, El Salvador and Nicaragua. Finally, CEE grew revenue with 14% in 2025 driven by strong double-digit growth across both the direct business and services business. Now I want to present a good example of our Google Cloud capabilities and how we support customers in a cloud migration and modernization project. Barton Peveril, a U.K.-based college with more than 5,000 students partnered with us to migrate to Google Cloud. They were facing a significant increase in on-premise hosting costs, alongside the need to modernize their IT environment and support new AI-driven learning tools. Together with SoftwareOne, they executed the full cloud migration over a relatively short period, followed by a managed service agreement to support ongoing operations. The outcome was solid, where they achieved meaningful cost savings, reduced operational workload and significantly improved the performance and security of their systems. Importantly, this also led to a 5-year managed service agreement where we support and maintain their cloud infrastructure going forward. This is a great example on how we combine cloud migrations with long-term services, creating both immediate customer value and recurring revenue streams for us. With that, I will now hand over to Hanspeter to walk you through the 2025 IFRS financial update. Hanspeter Schraner: Thank you, Raphael, and a warm welcome to everybody joining us today. In this section, we are presenting the IFRS figures in reported currency. As a reminder, the income statement includes 12 months of SoftwareOne and 6 months of Crayon. Year-over-year revenue growth of 22.5% mainly reflects the acquisition of Crayon closed on 2nd of July 2025. Reported EBITDA margin improved -- improvement is driven by benefits of the previously initiated cost reduction program and continuous cost control. The increase in depreciation, amortization and impairments from CHF 72.7 million to CHF 123.7 million is related to the acquisition and includes depreciation on fixed assets, amortization of intangible assets [Audio Gap] of right of use assets and CHF 17.8 million of impairments. The impairments comprise CHF 3.8 million on intangible assets, CHF 8 million on LATAM goodwill and CHF 6 million on right-of-use assets related to office closures due to integration. Net financial expense increased to CHF 54.4 million, significantly higher than prior year. This was mainly due to lower finance income and higher finance expenses. The decrease of finance income is largely reflecting a CHF 12 million lower fair value gain on Crayon shares in 2025 compared to prior year. Finance expenses increased driven by higher interest costs from acquisition financing and higher factoring costs in line with the increased use of factoring. In addition, other finance expense includes a one-off CHF 5 million make-whole payment related to the early redemption of Crayon bonds following the acquisition. Income tax expense is CHF 28.1 million, implying an effective tax rate of 95% compared with the expected average group tax rate of 23%. The main drivers of this gap are nondeductible expenses for tax purposes as well as unrecognized tax losses. Net profit for the period is CHF 1.4 million. In this slide, I will take you to the adjusted to reported EBITDA. Our reported EBITDA ended at CHF 207.6 million in 2025. 2025 adjustments to reported EBITDA of CHF 69.4 million in total were primarily related to Crayon transaction and integration costs totaling CHF 48.3 million. Excluding these costs, adjustments to reported EBITDA were CHF 21.1 million, well below the CHF 30 million target. Overall, we saw a significant reduction in adjustments with 2025 adjustments constituting around 30% of reported EBITDA in comparison to around 90% in previous year. The adjusted EBITDA margin in Q4 2025 was 23.4%, down 1.5 percentage points year-on-year, mainly due to significantly lower EBITDA adjustments compared with Q4 2024. Let me now walk you through the developments in adjusted OpEx on a like-for-like basis. This bridge shows the development on a combined like-for-like basis which we believe is the most relevant way to assess the cost development. Overall, OpEx remained broadly stable year-on-year, declining slightly to CHF 1.2 billion, reflecting strong cost discipline despite inflationary pressure and continued investments in the business. In '25, realized CHF 74 million of cost savings from the legacy SoftwareOne cost-saving program, which was completed in Q2 2025 as well as 16 million of in-year synergies corresponding to CHF 43 million of run rate synergies. Synergies from the Crayon acquisition are primarily driven by the elimination of publications, simplification of the organizational structure and efficiency gains across corporate functions. These effects helped offset underlying cost increases during the year. Compensation increased by CHF 42 million mainly due to salary inflation across the existing global workforce and the catch-up of social security contribution in India following legislative changes. In addition, we continue to invest selectively in sales and delivery capabilities to support future growth. Importantly, these investments are funded by realized synergies, allowing us to strengthen go-to-market and delivery capacity without diluting margins over time. We also saw higher third-party delivery costs in line with increased activity levels as well as some nonrecurring and other costs, and foreign exchange had a positive impact of approximately CHF 4.6 million. Overall, this reflects a balanced cost development with tangible synergy delivery, disciplined cost management and continued investment to support sustainable growth. Turning to the balance sheet. The most significant year-on-year changes reflect the impact of the Crayon acquisition, which is clearly visible across several line items. Cash and cash equivalents increased to CHF 419.1 million, while financial liabilities rose to CHF 788.4 million, mainly reflecting the CHF 575 million term loan, CHF 100 million utilization of the revolving credit facility at year-end and the CHF 100 million bridge loan, which was repaid in January 2026. As a result, net debt amounted to CHF 369.3 million compared to a net cash position in the prior year. Net working capital on 31st December 2025 was negative at CHF 564.4 million, primarily driven by the inclusion of Crayon and the continued use of factoring. The increase in intangible assets is mainly driven by the recognition of acquired technology and customer relationships from the Crayon acquisition as well as an increase in goodwill which primarily reflects the value of the assembled workforce and the expected synergies from combining the operations of Crayon. Equity increased to CHF 981.4 million driven by the acquisition of Crayon. Overall, this balance sheet reflects the step up in scale following the acquisition. Before I walk through the trade receivables 2025, I would like to briefly comment on a matter we decided to disclose proactively in today's press release. Preliminary legal proceedings have been initiated into potential forgery of documents by individuals relating to SoftwareOne's recording of certain overdue trade receivables in the first half of 2024. The proceedings are not directed against SoftwareOne, and they were triggered by allegations raised by a third party. I want to make it very clear. Internal audits performed an extensive retrospective assessment of trade receivables and related provisions of the first half of 2024 and concluded that they were accurately recorded. The assessment also confirmed that provisions were appropriate and consistent with subsequent write-offs and provisions. The slide presents the aging of trade receivables and the corresponding lifetime expected credit loss for 2025 and 2024. The acquisition of Crayon led to a material increase in trade receivables in '25. In accordance with IFRS, acquired trade receivables are recognized at fair value net of expected credit losses. The implied bad debt amounts to CHF 33 million included in the respective fair value and is largely allocated to receivable past due by more than 181 days. For like-for-like comparability, and on a cross presentation of the acquired trade receivables, the expected credit loss in the bigger than 180 days bucket would be approximately 50%, broadly comparable to the previous year. As of December 2025, Crayon's acquired trade receivables included USD 37 million related to a public customer in the Philippines. As Raphael already mentioned, USD 21.5 million of this amount was collected in March 2026. At year-end 2025 and next to the standard closing procedures, internal audit again performed an additional assessment of the trade receivables and related provision recognized at year-end 2025 and again concluded that they were accurately recorded. Further, the statutory audit of the 2025 full year accounts, which included a focused review of revenue recognition and the provisioning of overdue trade receivables provided further independent assurance regarding the appropriateness of the provisions recognized in the 2025 accounts and their compliance with applicable standards. Turning to the net working capital. Net working capital after factoring decreased by CHF 411.6 million year-on-year, mainly reflecting increased use of short-term factoring of approximately CHF 282 million as well as the positive impact from acquiring the negative working capital from Crayon. Given our business model, characterized by high gross sales volume and seasonal volatility, effective working capital management is key. As part of this, we use nonrecourse factoring as a flexible and economically attractive liquidity management tool applied in a disciplined manner. However, it's important to state that our primary focus remains on structurally improving underlying working capital over time. Net working capital before factoring decreased by CHF 129.5 million year-on-year, driven largely by the acquisition and consolidation of Crayon. Crayon entered the group with a strong negative working capital position which contributed positively to the balance sheet and reduced net working capital at the combined company level. On the right-hand side, we outlined key operational levers we are addressing across the end-to-end order-to-cash cycle, including faster and more accurate invoicing, reduction of overdue receivables, strong credit entry billing processes and better alignment of payment terms with vendors and customers. Together, these measures support our ambition to structurally strengthen working capital and, in turn, improve cash flow over time. Now turning to our cash flow statement. Working capital changes gave a cash inflow of CHF 130.6 million. However, as mentioned on the previous slide, this is significantly impacted by the use of factoring. Noncash items of CHF 169.6 million mainly reflect depreciation, amortization and impairments, together with the add back of the net finance results. CapEx came in at CHF 65.5 million, primarily driven by investments in internal IT, systems and platforms. The cash outflow related to the Crayon acquisition amounted to CHF 290.2 million, as presented in the cash flow statement, and shown net of cash acquired. Gross cash consideration totaled to CHF 504.8 million comprising CHF 419.4 million for the acquisition of Crayon shares and CHF 85.4 million for the subsequent squeeze out. This was partially offset by cash acquired of CHF 270.3 million. The remaining CHF 2.7 million relates to earn-out considerations to be paid in cash for Medalsoft and Predica acquisitions back in 2024 and 2022, respectively. Financing contributed a net inflow of CHF 273.4 million, driving by debt funding, partially offset by 2024 dividends of CHF 45.6 million and interest costs. We ended the period with a cash of CHF 419.1 million, giving us a solid liquidity position. Turning to the net debt development. The increase over the year was primarily driven by the cash outflow related to the acquisition of Crayon. The Crayon acquisition reflects net cash outflow of CHF 405 million as well as the impact of the derecognition of the Crayon shares. Excluding the acquisition effect, the underlying cash generation was driven by a positive contribution of CHF 277 million from adjusted EBITDA and the further CHF 130.6 million inflow from changes in working capital. Other cash outflows mainly relate to cash-effective portion of EBITDA adjustments, capital expenditures, interest and tax payments as well as dividends. As a result, net debt stood at CHF 369.3 million at year-end. Leverage measured on as net debt divided by adjusted EBITDA on an IFRS basis remains at a comfortable level of 1.3x. On a like-for-like basis, leverage would amount to 1.2x. Finally, let me turn to the dividend. Our dividend policy targets a payout ratio of 30% to 50% of adjusted net profit for the year. As a reminder, at our H2 '25 earnings release, we refined our policy by excluding transaction and integration costs related to the Crayon acquisition when calculating adjusted net profit used for dividends. This was made to better reflect the underlying earning power and dividend capacity of the business in a year of integration. For 2025, we proposed a dividend of CHF 0.15 per share, corresponding to a total distribution of CHF 33 million and the payout ratio of 37% of reported adjusted net profit. Excluding Crayon-related transaction and integration costs, the implied payout ratio is 71%. This dividend proposal reflects our continued commitment to delivering attractive shareholder returns while maintaining a balanced capital allocation. It also underlines our confidence that the actions implemented to strengthen net working capital and improve operational execution will translate into improved cash generation in 2026. With that, I will hand it back to Melissa, who will provide further insights in how our business model benefits from AI, followed by her closing remarks. Melissa Mulholland: Thank you, Hanspeter. Before I go into our outlook and closing remarks, I would like to address how we are positioned in a market that is now rapidly and fundamentally being changed by AI. AI is increasing software and cloud consumption, but also complexity, driving a much greater need for governance, optimization and services. At the same time, AI adoption is forcing customers to upgrade their software estates and invest in new tools while accelerating cloud migration and usage. This plays directly into our model. We thrive in helping our customers in maximizing return on investment in IT and simplifying complexity. We support customers across the full life cycle from sourcing and procurement to migration and cloud services to optimization and cost management and increasingly into data and AI solutions. And as customers become more AI ready, we see a clear increase in demand for higher-value services. From a hyperscaler perspective, the vendors see us as a clear driver of AI solutions. Given our customer proximity, AI capabilities that have been established since 2017 and our agility to market, we are uniquely positioned to help customers manage the complexity and spend through our AI solutions. AI is not just a technology shift. It is a structural growth driver for our business. Let me finally turn to our outlook for 2026. We expect revenue growth to accelerate to mid-single digits on constant currency on a like-for-like basis. We see growth driven by CSP, multi-vendor expansion, increasing demand for higher value services and continued channel growth. Expanding our AI capabilities alongside the sales force enables us to build and deliver AI-driven customer solutions, further accelerating consumption growth. At the same time, we expect further margin improvement with adjusted EBITDA margin above 23%, driven by operating leverage, synergies and continued cost discipline. On synergies, we remain on track to reach CHF 100 million run rate synergies, building on the strong progress already delivered in 2025. As already mentioned, by the end of March, the total realized cost synergies amounted to CHF 64 million. We enter 2026 with improving momentum, clear drivers for growth and a strong path towards higher profitability. Let me close with a few key takeaways. 2025 has been a transformational year, while the performance also demonstrates the strength of the combined company. We have executed with discipline, successfully integrated the business and delivered ahead of our synergy targets. At the same time, we have delivered on our financial commitments and strengthened our position and customer offering. Finally, we are uniquely positioned to capture the continued growth in software and cloud, supported by our global scale, strong vendor relationships and clear commercial focus. This is a business with improving momentum, a stronger platform and a clear path forward, and I'm looking forward to sharing more about our strategy and priorities on the Capital Market Day in June. Thank you. I'll hand it now back to the operator. Operator: [Operator Instructions]. The first question comes from Mao Ines from BNP Paribas. Ines Mao: Congrats for the strong result today. I have 2 questions. So the first one is the company is guiding for mid-single-digit revenue growth next year. Does this include a recovery of North America region already? My second question is, can you give us more color on why profitability improved so much year-over-year in Q4 in the Services segment? So we expect this margin level as the new normalized level, so to stabilize from here? Or is there more scope for margin expansion in the Services segment? And my final question is... Raphael Erb: Sorry, somehow your voice is not so clear. We can hardly understand. Ines Mao: Can you hear me better? Raphael Erb: Yes, now it's clear. Ines Mao: Okay. I'll restart. So my first question is about next year revenue growth guidance. Does this include the recovery of the North America region in this guidance? My second question is on the profitability level in the Services segment, which has improved quite significantly year-over-year in Q4. Should we expect this margin level as a new normal level, so to stabilize from here or more margin expansion in the Services segment? And my last question is, can you discuss the growth prospects for the Services segment in 2026? And any new offerings that will drive growth? Typically, in Microsoft E7, I understand it will be a readiness assessment conducting by SoftwareOne team. Would you recognize this as the Services revenue going forward? Raphael Erb: Thank you. Maybe I kick off with the first questions around North America. For sure, as we all know, 2025 has been a disappointing performance for us. However, we are making, as mentioned, also step-by-step progress, especially also around our GTM turnaround. Our internal sales metrics and KPIs clearly show that we are making progress. And with that, to answer your question, we are positive that 2026 is going to be more resilient actually and a more predictable year for us in North America, and we are positive that in that region, we will return into revenue growth for the full year 2026. Around the services margin, maybe also, I think if you look into the numbers and the development from 2024 into 2025, it has been a positive progress. So the margin overall has been increasing, and we are positive that this will continue. It will continue as our service portfolio is shifting more and more towards cloud-native capability, also higher value advisory and managed services and support services, which we are having in our offering. I think this will help to further improve and accelerate our overall margins in the services business. Melissa Mulholland: Thanks for your questions. Regarding E7, you're right to call it out. We see this as a strategic opportunity with our Microsoft portfolio as it combines, let's call it, the SKU capability along with AI through Copilot to simplify this for our customers. And we see this to be particularly attractive in the high end of corporate into the enterprise segment. So we're well positioned to capture additional growth opportunities from this. In terms of additional service areas of growth that are implied, certainly, we're going to continue our focus around AI as well as agents and continue to improve the, let's say, the efficiency of the overall services line, which is implied in terms of the overall margin improvement in Q4. Operator: The next question comes from Christian Bader from Zurcher Kantonalbank. Christian Bader: I have 3 questions, please, and I'd like to do them one after the other. First of all, you mentioned several times new business with Google Cloud. And I was wondering what is the revenue potential here? And is this business going to be margin accretive? Melissa Mulholland: Thanks for the question. So with Google and with our channel business in general, this is a new opportunity for us. As we've seen with our AWS channel expansion, it will take time for this to be able to really take effect in terms of the P&L. So we expect this to deliver additional upside in the back half of H2, but more likely in 2027 from a materiality perspective. From a margin standpoint, this is very accretive to our overall channel margins as the channel business is very highly dependent on our platform, Cloud IQ, which gives us more efficiency and scale. So we see this to be particularly attractive across the markets that we are ready to launch with more countries to come. From a margin standpoint, this is very accretive to our overall channel margins as the channel business is very highly dependent on our platform, Cloud-iQ, which gives us more efficiency and scale. So we see this to be particularly attractive across the markets that we are ready to launch with more countries to come. Christian Bader: Okay. My second question has to do with LATAM because you said that you exited 4 countries, Argentina and 3 others. So I was wondering how much of revenue is lost due to the exit of these 4 countries. Raphael Erb: The revenue impact is not significant because those markets are very, very small markets already. There actually the revenue impact from the revenue of 2025 has been very insignificant. Christian Bader: I see. All right. Okay. And then my last question is, is it possible to get some guidance for your investments, both in tangibles and intangibles for 2026? CapEx guidance, any CapEx guidance, please. Hanspeter Schraner: So as we are continuing to invest in our technology, especially in the platforms, the investments will maybe slightly increase, but for sure, have a similar level as in 2025. Operator: The next question comes from Florian Treisch from Kepler Cheuvreux. Florian Treisch: My question is around the Microsoft incentive changes, EA changes. I mean we discussed at length last year being a headwind for SoftwareOne. So the first question would be, have you actually, let's say, delivered better than expected on these kind of headwinds as you have mentioned or flagged that Q4 has clearly been driven by the CSP transition? And then looking into '26, how much of a tailwind can it become? Or would you still assume it's a slight negative impact on the overall business? Melissa Mulholland: Thank you so much for asking. So great question. In terms of Q4 and what we saw for the full year for 2025, yes, we delivered better than expected given the, let's say, negative effect of the EA changes. This was driven by the focus to CSP realization, which I'm pleased to say we delivered. In addition, we also saw the shift to services-based incentives as particularly accretive, and that's also demonstrated in the Q4 profitability improvement overall for services. As we go into 2026, we do not see any headwinds effect with related to the EA incentives. If anything, there will be stabilization of incentives as indicated also by Microsoft. So with that, we will further, let's say, accelerate the growth that we've had around CSP and services as we see that to drive more potential. Operator: The next question comes from Christopher Tong from UBS. Christopher Tong: Maybe 2 from my side. I was just wondering on exceptionals in 2026. What should we expect over here? Obviously, you'll have to take some further cost synergies, but is there anything else we should be mindful of? Hanspeter Schraner: I mean, look, as we already stated, our goal is to narrow the gap between the reported and adjusted EBITDA. So we said it's below CHF 30 million. And of course, you always have certain items to adjust which are non-recurring, but we stick to the below CHF 30 million and with a clear ambition to further decrease. This does not include the Crayon acquisition cost or cost related to the integration, to be clear. Raphael Erb: And maybe to add on, on the cost synergies, as we already mentioned, to date, we are at the CHF 64 million, and we are making further progress on that. We are very committed on our CHF 80 million to CHF 100 million target, which we mentioned. And through that, we should also -- this should also help to make a positive impact also going into H2 on our overall OpEx situation. Christopher Tong: Got it. And I guess maybe on just the outlook and the cadence of revenue growth for the year. You mentioned that profitability would probably be more weighted towards second half. I was just wondering if you think revenue growth would also be sort of second half weighted as well. Melissa Mulholland: Yes. I mean with the seasonality of our business, Q4 is the largest quarter. So you could certainly see that implied growth pick up on towards the back half of the year. Operator: Next question comes from Marc Burgi from Finanz und Wirtschaft. Marc Burgi: I only have one question concerning North America. You already talked about it in length, which is about the growth. Can we expect that in the second half? Or could you maybe be more precise about when that should occur? And just about the general market situation, how is the market -- how is your market position? Hanspeter Schraner: In general, as mentioned, I'm very confident that in North America 2026, we will return into growth overall as a company again, which is very good, given where we are coming from. I also expect in Q1 a better performance than in Q4. So from this perspective, I'm positive that the trajectory is going to improve, and we should see an improvement already in Q1 compared to Q4. Overall, I think the market for us is -- remains to be an attractive market. And again, with the combination of Crayon, I think we have a good chance now with a better overall setup also with the channel business as an additional business line for us. So we continue to be very focused on North America. Operator: The next question comes from Andreas Wolf from Berenberg. Andreas Wolf: Congratulations on the strong Q4. I have several questions. The first one is related to the assessment of the individual regions. Have you already fully assessed the region's performance? Or is there a possibility of impairments also in 2026? The second is related to AI and the adoption of use cases? Do you see opportunities associated with the deployment of on-site engineers to drive use case adoption and ultimately, your business? Question number three. How are AI providers such as OpenAI or Anthropic dealing with resellers? Does this -- does their growth offer business opportunities for you as well? And the last one is related to Microsoft price increases. What do you believe will be the tailwind from those in 2026? Hanspeter Schraner: Let me take the first question regarding the impairments. So what we did in 2025, we do the impairment test on CGU levels, which are the 7 regions. And obviously, there were no impairments based on the current business plans for all regions with the exception of LATAM. LATAM we impaired CHF 8 million. And we believe this is the right number based on what we know today. So based on what we know today, there are no further impairments expected in 2026. Otherwise, you would have impaired already at the end of 2025. Melissa Mulholland: Thanks for your question regarding AI. So I'll start with the first regarding the adoption of use cases. So this is something that we are very much focused on. We always believe that it's important to test internal use cases before we take them to market. And we're also finding ways to drive AI through internal adoption to increase more efficiency and scale also to reduce cost to make us quicker to market to customers. So this is something that, yes, we are focused on, and yes, we are also looking at ways to deploy our internal AI capability to both support customers, but also ourselves. In terms of your question regarding Anthropic, OpenAI, certainly, this is something that is quite exciting to see in the market. Anthropic is certainly an area where we see additional partner opportunity as they need partners like us to be able to deploy and also to help customers manage which AI models should they actually consider. This is where our business model really thrives around complexity. So we help guide our customers around which model makes sense for their data environment, but also how to implement and build those solutions. So we see business opportunity to come out of that. In terms of the Microsoft price increases, I always say Microsoft price increases help our business. So there's certainly a carryforward from that. It also positions us well to be able to support our customers in navigating that price increase as our business has always been focused around cost management overall. Hard to say what the actual implied impact will be, but certainly, we see this to be positive for 2026. Operator: Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Kjell Arne Hansen for any closing remarks. Kjell Hansen: Thank you, and thank you, everyone, for joining the call. And as always, please don't hesitate to reach out to the IR team if you have any further questions. Thank you. Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.
Operator: Welcome, ladies and gentlemen, to the earnings call of Friedrich Vorwerk Group SA regarding the full year figures of 2025. The company's CEO, Torben Kleinfeldt; and CFO, Tim Hameister, will guide you through the presentation and the figures shortly, followed by a Q&A session via audio line and chat box. Having said this, Torben, the stage is yours. Torben Kleinfeldt: Yes. Thank you very much, and also a warm welcome from my side. Welcome to the Friedrich Vorwerk Earnings Call 2025. I will, for everybody who is not in detail familiar with Friedrich Vorwerk, run you very quickly through the main topics of our company and then give you a short market update about the latest developments in our main markets. Then I will hand over to Tim for, of course, the financial figures, which are key to this meeting here. And then I will give you a business update about our current projects we are running at the moment, at least the large ones. So yes, Friedrich Vorwerk has been active since founding in 1962. So with more than 60 years of experience in the business of engineering and constructing energy infrastructure here in Germany, mainly. We can look back at numerous very successful projects in our highly attractive main market, which is natural gas transition, electricity transition, clean hydrogen transition, and of course, adjacent opportunities where we sum up our activities in district heating, CO2 treatment and transport and treatment of biomethane. Today, we are operating from 14 locations within the north, mainly in the north of Germany with more than 2,200 well-trained employees. And yes, due to the energy transition, which is still going on here in Germany, we can look back at a very strong order intake already also in 2025. So we were able to acquire projects in a total volume of almost EUR 1 billion in 2025, which is an increase of 27% compared to the figures of the year 2024. Yes, where do these order intake come from? Main customers here in our 3 markets are, of course, the large TSOs operating the energy transport grids, not only in Germany, but also in the middle of Europe. So it could be in terms of electricity transition companies called TenneT and Amprion in looking at the market in clean hydrogen transition and natural gas transition, we have customers like Open Grid Europe, Gasunie and others. But of course, you can also find petrochemical companies and cable manufacturers within our customers. Yes. So what's the latest market update. First, I want to focus on the development of -- since German government has agreed with the EU Commission to set up new power plants in Germany. These very flexible power plants are necessary to support the production of renewable energy, mainly driven by wind and solar farms. And at times, you don't have wind and solar available. You need to have an energy source, which can be ramped up very quickly. So Germany is planning to install roughly 10 gigawatts of capacity in terms of gas-driven power plants. And that, of course, is an opportunity also for Friedrich Vorwerk Group, both in pipeline construction to run new natural gas pipelines and later on also hydrogen pipelines towards these gas-fired power stations. But also, we have a division in our plant construction department, which can supply the necessary fuel gas systems to supply those turbines delivered by companies like Siemens, GE or others. Other latest developments since we have all heard that the hydrogen economy has been struggling a bit over the last month. German Parliament has passed a so-called Hydrogen Acceleration Act. Main part of that is, of course, to install the so-called core grid for hydrogen transport in Germany, which could be the nucleus to develop the hydrogen industry in Germany because it will cut off costs for transport of hydrogen when the core grid is available and consumers and also producers of hydrogen can be easily connected to this grid. But also they want to secure and make investments in hydrogen production here locally in Germany easier and more reliable for the investors. And of course, all our other businesses like natural gas transition is also still ongoing since new LNG terminals are still developed on the coast of Germany. So the Bundesnetzagentur has just published the first draft of the new grid development plan, combining the investments in natural gas grid development and hydrogen grid development. And this plan looks out to the year 2035 with still investments in the natural gas grid of roughly EUR 3 billion. And they also found out that probably developing the core grid for hydrogen will be more costly than predicted 2 years ago. So the revised plan for setting up the hydrogen core grid roughly sketches out investments of EUR 25 billion instead of EUR 20 billion, which was estimated before. So also here, in the market of natural gas and hydrogen, huge potential for our company's group. And therefore, I would like to hand over to Tim for last year's financial figures. Tim Hameister: Thanks a lot, Torben. And also a warm welcome, everyone, from my side to today's earnings call. Overall, 2025 was a fantastic year for Friedrich Vorwerk. We achieved record-breaking results across all KPIs, successfully completed 2 acquisitions, secured numerous new major projects. And last but not least, we launched our proprietary welding robot in collaboration with our subsidiary, 5C Tech. Therefore, I'm very pleased to now present these strong results in detail. In terms of revenue, we've steadily increased over the course of the financial year and delivered a fantastic final quarter, which despite the seasonal nature of the business, nearly matched the strong performance of Q3. Overall, we benefited from favorable weather conditions in fiscal year 2025, not only in Q4, but especially in the first quarter when we were able to resume work after a short winter break on many projects as early as mid-January. This point, I would also like to briefly note that the first quarter does not always benefit from good weather conditions. This year, for example, in 2026, we've seen a harsher winter again after a long time with plenty of ice and snow, particularly in Northern Germany, resulting in a question of production stoppages even in February. However, depending on weather conditions in the next quarters that are more relevant in terms of revenue and earnings, we expect to be able to offset at least parts of this effect over the course of the year. For the full year 2025, we generated revenue of EUR 704 million, representing a remarkable 41% increase over the previous year. This was primarily due to our continued success in recruiting new employees, which led to a 15% increase in the average number of employees as well as an increase in productive hours per employee, higher equipment utilization and, of course, some pricing effects. The electricity segment's share of revenue has contributed -- has continued to rise, now standing at 52%, making it the primary driver of growth in 2025. While this is largely attributable to A-Nord, we are simultaneously working on several medium-sized projects in this segment, such as BorWin6, the Baltrum HDD project and several converter stations as well. 2/3 of the current order backlog is attributable to this segment. So continued growth is expected here. At the same time, we anticipate a significant growth momentum from the Clean Hydrogen segment as larger subprojects on the hydrogen core grid are also expected to be put out to tender in the foreseeable future. Furthermore, we expect additional growth in the adjacent opportunity segments in 2027 and the following years due to the German government special fund. The development of profitability was particularly impressive in the fourth quarter with an EBITDA margin of almost 29% and EBIT margin of almost 25%, even taking into account the dilutive effect of the cost plus fee contract in our major A-Nord project. In addition to the favorable weather conditions already mentioned in Q4, our success in claim negotiations, which typically take place in the fourth quarter was a key factor in the exceptionally high margin, along with higher earnings from joint ventures, which increased by nearly EUR 10 million compared to the same quarter of previous year. Accordingly, we also concluded the 2025 financial year as a whole, thanks to our high-quality order backlog and a flawless project execution were successful. We increased the EBITDA margin by 7 percentage points from 16.2% to 23.2% and more than doubled EBIT from EUR 59 million to EUR 137 million. Despite the tremendous 40% growth, we still managed to further reduce trade working capital, which along with the higher profitability, played a significant role in improving the net cash position. As a result, we were able to increase net cash by more than EUR 100 million compared to previous year, bringing it to EUR 262 million at year's end. It should be noted, however, that the trade working capital is always at its lowest level at the end of the year and rises as the construction season progresses. These swings between summer and winter can amount up to EUR 80 million or even EUR 90 million. With regards to capital allocation, our top priority remains investing in organic growth, specifically in the purchase of new pipe layers, drilling rigs, cranes and excavators and of course, our welding robots. We've budgeted approximately EUR 50 million for this in 2026. Furthermore, we will certainly be open to pursuing a larger M&A deal again provided we find the right target and of course, at a reasonable price. And finally, we would like to share the company's success with shareholders in form of a significantly higher dividend payout, consisting of EUR 0.70 base dividend and a EUR 0.40 special dividend. Let's now take a look at the development of order intake. In addition to the conventional order intake figure, we've already introduced a new KPI last year, the total project volume acquired. This new KPI also includes a proportionate project volume from the joint ventures in which Vorwerk is involved. And therefore, in our opinion, provides a more transparent view of the actual order situation regardless of the structure of the contract. The total project volume acquired rose by 29% to EUR 991 million in 2025, while conventional order intake at EUR 538 million is around 20% below previous year. The main reasons for this are, on the one hand, a shift in the order structure towards more joint ventures, especially in H1 2025. And on the other hand, our already well-filled order book, combined with a limited capacity of our resources. The order backlog, which corresponds to the conventional order intake figure declined, therefore, slightly to EUR 1 billion for the reasons stated before. We've learned from several investors that the communication regarding order intake and the contract structure is not yet clear enough. Therefore, we are currently working on reporting an order backlog KPI that includes our share of joint venture projects as well, starting with the Q1 report. And I expect that this additional metric will provide a transparent picture for all shareholders by then at the latest. Yes, and then based on our consistently high-quality order backlog, we expect our growth trajectory to continue in 2026 with revenues in the range of EUR 730 million to EUR 780 million. It should be noted that following 2 years of very high employee growth, we intend to slow down the expansion of our workforce somewhat in 2026 to give the organization and the administrative functions the opportunity to grow at the same pace while simultaneously focusing our recruiting efforts on attracting senior construction and project managers. At the same time, revenue growth is somewhat slower in 2026 due to the higher proportion of joint ventures. And this change in the project mix also means that we are now forecasting absolute EBITDA instead of EBITDA margin, specifically in the range of EUR 160 million to EUR 180 million for 2026 as this number is unaffected by the order structure. This guidance also takes into account the slightly softer Q1 2026 due to the adverse weather conditions. With that, I'd like to hand back to Torben for the business update. Torben Kleinfeldt: Yes, Tim, thank you very much. And of course, we did pick for this meeting our most outstanding projects at the moment. Please remember that during the year, we are operating on more than 500 smaller, midsized and also large projects. So we can, in this meeting, only give you a glance of the most outstanding projects. And I would like to start with the natural gas business here. It's a project we've already been working on last year. It's the so-called EWA pipeline, which is a 48-inch pipeline running from the caverns of Etzel towards compressor station of Wardenburg. This pipeline will continue in size of 40-inch towards the station of Drohne, which is more to the Rhine-Ruhr area, so in the south of the area. We have already finished the construction on EWA last year with a pressure test and the handover to the customer. So there's already gas on this pipeline. And the WAD pipeline is construction progress at the moment. We have already started in January with the first wells on site using our new welding robot, PX2 developed by our subsidiary, 5C Tech. We have completed roughly 400 wells on the project this year. And again, with very, very low mistakes in the wells. So it's -- the repair rate is definitely under 2%, which is very good in terms of fully automatic welding. Yes, changing actually over to the next natural gas pipeline project, which is, at the moment, our still largest project executed in a joint venture between the Habau Group and the Friedrich Vorwerk Group, compromises of 2 pipelines. First, the ETL 182 with a diameter of 56-inch and the ETL 179.200, which is a 36-inch pipeline. Altogether, a mid-3-digit million euro project and both pipelines are being executed by the same joint venture combination. As you can see in the picture below, we have already started some civil works to erect the pipe yards that has been done already in 2025, and we have already received most of the project pipes, which are purchased by our customer Gasunie. And we've actually started in the latest weeks to make preparations for the first loading procedures, so for the tunnel crossings and for the horizontal directional drilling, operations are already in place and will be executed in due course of this year. And then maybe next slide, we are not only active in pipeline cable laying, but our plant division construction is also very busy with a new project at a gas metering station called Groß Koris. This is the main metering and supply station for the company, ONTRAS. Here, we have a project to renew the full installation at Groß Koris with a volume of mid-2 million-digit range. And we have to deliver the full scope of engineering and also construction activities and will then commission the new plant as is foreseen at the moment in 2028. And the system will already be constructed in a hydrogen-ready way. So later on, once the usage of natural gas in the system is over, it can be easily converted to use for clean hydrogen and meter and also regulate the hydrogen being transferred in the grid. Next project is also a hydrogen project, which we have already been working for 1.5 years. This is the so-called HH-WIN project. So the city of Hamburg is trying to set up a hydrogen grid in the Port of Hamburg. Key figures here is an electrolyzer plant, which is located at the former power -- electrical power station of Moorburg, where about 100 megawatts equality of hydrogen is being produced and then fed into the Habau Grid, so the HH-WIN grid. And Friedrich Vorwerk has already executed 3 lots of this newly established hydrogen grid. And we have been recently awarded with 2 new lots to set up this hydrogen grid. The first lot involves actually a micro tunnel of almost 200 meters where we later on install the piping DN 300 for the transfer of hydrogen. And the following lot compromises of roughly 1,500 meters of new build hydrogen pipeline. But besides those existing projects where we've already started execution, we are, of course, still busy in our estimation department working on new estimates for new projects. Just to give you a small idea what could be coming up over the next years. In terms of pure natural gas transition, we are at the moment, working on estimation for the so-called Spessart-Odenwald-Leitung, which is also DN 1000 pipeline, about 115 kilometers long for Terranets and also other projects coming up from Open Grid Europe, setting up the core grid for hydrogen here in Germany. And also for Gasunie, new projects like ETL 187, which is directly in conjunction with the current project ETL 182, is at the moment in tendering phase and execution and commissioning would then be in '27, '28. But also still very attractive is the electrical market, where we are now facing the so-called second wave of large-scale electricity highways, projects like NordOstLink Section 2, SuedOstLink and SuedOstLink+ are being tendered out over probably end of this year and beginning of next year. And these projects will be commissioned in the mid-2034s -- in the mid-2030s. So also here, a huge potential also after 2030 for our company's group. And under adjacent opportunities, we were able to already win lot of the Rheinwater transport pipeline. This is a very large diameter pipeline, 2.2 meters in diameter that will later on transfer water from the river Rhine to flood the coal mines of RWE. And at the moment, we are working on the next lot to establish this water transfer pipeline. And also a very new business to our company, the transport of CO2 is ongoing. So the first tender we have received is the CO2 link from Lagerdorf, where Holcim is operating a cement factory towards the port of Brunsbuttel is on the table at the moment. Commissioning is foreseen for 2029 and tendering phase ongoing and probably construction phase will be '28 to '29. So this, of course, can only be done if we can establish to grow our headcount and our number of employees where we were very successful last year. So today, we can look at a workforce of more than 2,200 employees. Of course, the labor market within Germany, especially due to the low capacity in building construction, we were able to employ a lot of new blue-collar workers we could integrate in our projects. And probably during this year, we will definitely have a focus on growing our engineering staff and our overhead staff on the construction site. So challenge will be also to look for well-educated project managers and construction managers to manage all the blue-collar employees we were able to attract over the last month. Yes, that's it from our side. We are happy to receive your questions either by phone or by chatbot, and happy to answer them. Operator: [Operator Instructions] And the first hand is up from Lasse Stueben. Lasse Stueben: I wanted to ask just on the Q1. Is there any more color you can give roughly in terms of what we should expect in a year-on-year comparison just to avoid any sort of nasty surprises. The second question would be, what should we expect for headcount growth broadly in '26? And then the third question is, you mentioned sort of slowing down headcount growth, but then you also said that you would be willing to do a larger M&A or potentially do a larger M&A transaction. So how do we kind of square those 2 kind of comments? Because I guess a larger M&A deal would also involve many new employees. So just any color there would be great. Tim Hameister: Well, we've seen compared to the year before, some weeks of weather-related production stoppages in February, combined with the growth of the headcount could be possible to see a rather flat Q1 in 2026 in terms of revenue growth. And as I said, which could potentially partly be offset by stronger quarters in Q2 and Q3 as the overall share of Q1 on the full year revenue isn't that relevant. Regarding the headcount growth, when we talk about slowing down recruiting efforts, this is only in terms of organic growth, meaning directly hiring people, not including any M&A. From organic growth side, we expect to grow headcount by 5% to 8% in 2026 and any M&A would be add-on, on that. And of course, usually, we also acquire project managers and the respective engineering and administrative functions when doing a larger M&A deal. Operator: And additionally and slightly regarding question in the chat. Friedrich Vorwerk is guiding for a slightly lower margin in 2026 compared to a strong 2025, midpoint of 2026 guidance at 22.5% versus 23.1% in 2025 despite continued revenue growth. Could you provide a margin bridge for 2026 versus 2025 and outline the key driving factors? Tim Hameister: Well, we've always communicated that we see the margin potential in the mid- to long term at our company between 20% and 22%. However, in particularly strong years as in 2025, it's also possible to achieve an even better margin, more than 23% due to basically a flawless project execution, good weather conditions and so on. But on the long run, we feel pretty confident with 21%, 22%. Operator: And the follow-up from the person. Could you please provide more details on the Nord-A project, specifically regarding the recent delays and their potential impact on bonus malus payments. Additionally, is there any bonus or malus effect already factored into the 2026 guidance? Tim Hameister: Yes. As we already communicated last year, A-Nord project is expected to be slightly delayed with completion now anticipated in summer 2027 instead of end of 2026 due to missing permits. We are still in discussions regarding adjustments to the bonus-related milestones. And these discussions have been ongoing for some time. We do not yet have a definite outcome on these discussions, but we remain still confident and hope to sign their respective contract amendment in the course of the second quarter 2026. And based on this information, at least a portion of the contract liability we've already included into the books since and accrued over the project duration. Part of that could be reversed once this amendment is signed in the second quarter. However, we did not factor in any positive impacts from that amendment as it is not signed yet. Operator: And for now, we have no further questions. Ladies and gentlemen, I will hold the room for another moment in case someone might be typing right now. And there is a hand up from Lasse Stueben, again. Lasse Stueben: Great. Just a follow-up on sort of -- you mentioned kind of the JV share of projects is obviously going up. Should we expect that kind of level of the JV income you saw in '25 to be roughly the same in 2026? Or how should we think about that? Tim Hameister: All the new JVs we entered into last year, we expect to -- that the net earnings of the JVs will even increase compared to 2025. Operator: And another hand up from Leon Muhlenbruch. Leon Muhlenbruch: I have a quick question regarding to the current geopolitical situation. With the energy crisis already on the way and inflation likely to rise similarly to 2022, which had a significant impact on Friedrich Vorwerk, how are you prepared for such a scenario? Torben Kleinfeldt: Well, first of all, we were able to have a better negotiation position in most of the contracts that are in the order backlog at the moment. So most of the contracts have included price escalation clauses. So we can -- on the most bigger projects, we can forward the price escalations to our customers, although, of course, not to 100% because they are mainly bound to indexes which are more general, for example, the steel index or the crude oil index, which is not always 100% equivalent to the products we are actually using in our projects. But in the end, we can at least -- we are at least in a way better position this year than in 2022. Also in 2022, most impact was from a plant construction project where we had to bring a lot of material to the project. If we look at the current large-scale projects we are operating on, it's mainly the pipeline projects where the bare pipe is supplied by our customers. So we are mainly supplying equipment and personnel, so services, which are, at the moment, not that much affected as back in 2022. Operator: Another hand up from [ Lueder Schumacher ]. Unknown Analyst: I've got a few questions on margins. One is, are there any kind of older projects which have lower margins in them that which are running out and should be supportive to the group margin outlook once they do? And what about the margins implied in the order intake? Can we assume that they should be at a premium to the margins you've seen in 2025? Or should it more be in the region of the long-term potential of 20% to 22% you've been hinting at? Tim Hameister: Well, there are currently no such legacy projects in the current order backlog, although we still have the dilutive effect from our major project A-Nord, which will run until summer 2027, where the base margin is definitely lower than the group average. Apart from that, there are no legacy projects with low margins. And well, I mean, we have already seen such strong margins in 2025. We do not expect that we can further increase this margin profile. And therefore, rather to suggest that you can assume the long-term potential at around 21%, 22% for the next years. Unknown Analyst: In your order intake you had in 2025, we should already assume this? Or is this still at the margins you've seen in '25? Tim Hameister: Well, the margin profile calculated in those projects is roughly on the same level as we've seen the year before. However, on the one hand side is the calculated margin. On the other hand side, is the actual project execution on the fields. And this has also a major impact on the earnings in the end. Operator: And we're moving on to 2 questions in our chat. Are you planning any buybacks? What are the key impacts for the Iran war for you? And what are you doing to hedge against it? For example, natural gas inflation, diesel? Tim Hameister: At the moment, there are no plans for any share buybacks. We've decided to instead increase the dividend and to also pay out the special dividend of EUR 0.40 per share. Adding on the answer from Torben regarding Iran, the major impact for us at the moment is, of course, the higher cost for fuel, especially diesel. To give you some color on that, the total cost of diesel last year was around EUR 12 million. So it's not the largest position in our P&L statement. And we've, of course, already hedged some of the amounts needed already before the war in Iran. So there will be, of course, some effect, but not a significant one. Torben Kleinfeldt: But on the other hand, the crisis also has a positive impact on the market because at the moment, customers are really pushing the projects and trying to get more LNG receiving capacity in Germany, which then, of course, also means constructing new pipelines and constructing new plants, which is then also good on the market side for us. Operator: Can you discuss your appetite to revisit medium- to long-term guidance? And what milestones would trigger an upgrade? Tim Hameister: Well, that's definitely a thing to consider this year as we are pretty well on track on the older mid- to long-term outlook. So maybe we can expect to see a new outlook in the second half of this year. Operator: Ladies and gentlemen, we still have a minute for your questions left. And if there should be no further ones, you can always get in contact with Investor Relations. And this is it. With no further questions, we come to the end of today's earnings call. Thank you very much for your interest in Friedrich Vorwerk Group SE. A big thank you also to you, Torben and Tim, for your presentation and your time. I wish you a successful day around the world and giving the last words to Torben again. Torben Kleinfeldt: Yes. Thank you very much for listening. I think especially this year, we can look at some very, very interesting projects we can execute for our customers. And please stay with us and hear the latest news from our projects in the future. Have a good time around the world. Bye-bye. Tim Hameister: Bye.
Operator: Good day, and thank you for standing by. Welcome to the Inventiva Full Year 2025 Financial Report Webcast and Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Nikodem, Head of Investor Relationship. Please go ahead. David Nikodem: Good morning, good afternoon, everyone, and thank for joining Inventiva's Full Year 2025 Financial Results and Business Update. Our press release was issued yesterday evening, and this webcast and slides will be available in the Investors section on our website following the call. Joining us on the call today are Andrew Obenshain, Chief Executive Officer; Jean Volatier, Chief Financial Officer; and Dr. Jason Campagna, Chief Medical Officer and President of R&D. I would like to remind everyone that statements made during today's conference call and during the Q&A session may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Please refer to Slide 2 of the slides and our SEC and AMF filings for a discussion of associated risks. These statements reflect our views as of today and should not be relied upon as representing our views at any later date. With that, I will now turn it over to Andrew, starting on Slide 3. Andrew? Andrew Obenshain: Thank you, David. Good morning, good afternoon to everyone, and thank you for joining us. Since joining Inventiva 6 months ago, I've been struck by the depth of scientific conviction behind lanifibranor and the dedication of this team. Today, every resource, every decision and every member of this team is now aligned behind a single objective, advancing lanifibranor towards approval for patients with MASH. Let me start with our main focus, our global Phase III clinical trial NATiV3. Enrollment was completed in April 2025 and represented a landmark operational milestone for this company. Today, we are updating the expected timing of our top line readout to Q4 2026, reflecting the disciplined sequencing of our clinical and biostatistical milestones. We believe the data from the NATiV3 trial, if positive, has the potential to carry weight with regulators, physicians and most importantly, with patients. And we believe we are running this program with the rigor and precision all stakeholders deserve. On our pipeline and organizational focus, in the first half of 2025, we made the strategic decision to concentrate all of Inventiva's resources on lanifibranor and MASH. As part of this plan, in Q4 2025, we sold our global rights to odiparcil to Biossil and we may receive up to $90 million of potential regulatory and commercial milestone payments, as well as potential high single-digit royalties on future net sales if approved. While this transaction frees up our internal resources to fully focus on lanifibranor, we are pleased that odiparcil has found a new home where its development can continue, potentially in offering patients with MPS VI an opportunity for treatment. At the same time, we strengthened our leadership team to align with the level this opportunity demands. Jason Campagna joined as CMO and President of R&D. Martine Zimmermann joined as new EVP and Head of Quality and Regulatory Affairs; and Nazira Amra joined as our Chief Commercial Strategy Officer. We are building towards launch in a lean and targeted way, advancing our readout and NDA preparations while laying the early groundwork for commercialization in anticipation of potential approval of lanifibranor. And the opportunity is real. MASH has been underdiagnosed and undertreated for too long, but that is changing. More patients are being identified, more being diagnosed and entering care. Awareness is growing, screening is improving and metabolic disease is finally getting the attention it deserves. The numbers tell that story clearly. There are an estimated 18 million people in the U.S. living with MASH, but only around 10% have been diagnosed, and that number has grown by 25% compared to 2024 estimates. Among those diagnosed with clinically actionable F2 or F3 disease, only around 40% are currently under the care of a treating position. So while diagnosis rates are improving and the market is evolving, far too many patients with significant fibrosis remain without the care they need and face a real risk of progression to cirrhosis and liver failure. If our NATiV3 trial can replicate the 18% fibrosis improvement seen in Phase II, we believe lanifibranor could be well positioned as a potential best-in-disease oral therapy with significant commercial impact. Ultimately, our goal is to make a meaningful difference for patients and that is what drives everything we are doing. I will now turn the floor over to Jason, who will give a brief update on lanifibranor, our differentiated oral anti-fibrotic, and a potential new treatment option that we believe addresses the remaining unmet medical needs in MASH. Jason Campagna: Thank you, Andrew. Good morning and good afternoon, everyone. Let me start by reminding you of the mechanism of action and the development pathway of lanifibranor. Lanifibranor is a small molecule designed to induce anti-fibrotic, anti-inflammatory and beneficial vascular and metabolic changes by activating all 3 PPAR isoforms, alpha, delta and gamma in a balanced manner. This broad mechanism of action is designed to target the hepatic and extrahepatic drivers of MASH simultaneously and in one oral therapy. Lanifibranor was the first asset to achieve statistically significant improvement in the composite endpoint of both fibrosis improvement and MASH resolution in our Phase IIb NATIVE trial, after just 24 weeks of treatment with a favorable safety and tolerability profile. On the basis of these results from our Phase IIb the FDA granted lanifibranor breakthrough therapy and fast track designations. NATiV3, our pivotal Phase III clinical trial was designed to confirm and extend those findings in a larger, more diverse global population over 72 weeks and is intended to provide the data to enable successful marketing authorization in the United States and Europe. NATiV3 is a randomized, double-blind, placebo-controlled trial in patients with biopsy-confirmed MASH and stages F2 or F3 fibrosis, the core of the MASH treatment population. Those with significant disease burden and a high risk of progression to cirrhosis, liver failure and liver-related mortality. We specifically chose a clinically meaningful primary endpoint for NATiV3, fibrosis improvement and MASH resolution. And at 6 months in our Phase IIb the 1,200-milligram dose of lanifibranor showed a 24% treatment effect. NATiV3 was also deliberately designed to mirror the patient population of our positive Phase IIb and the real world as it exists today. A meaningful proportion of our patients have type 2 diabetes and other metabolic comorbidities, and a number are on background GLP-1 and/or SGLT2 inhibitor therapies, mirroring the patient's physicians actually see in their clinics, which we believe will ensure that we generate clinically meaningful data to support both NDA and MAA submission. In April of 2025, we completed enrollment, exceeding our original targets with over 1,000 patients in the main cohort and additional 410 patients with MASH and fibrosis stages F1 through F4 in an exploratory cohort. We anticipate sharing the top line results of our pivotal Phase III trial in Q4 of this calendar year, a moment, I believe, will be significant for the field and for the patients who need new treatment options. I will now turn the floor over to John for our financial review. Jean Volatier: Thank you, Jason. Good morning and good afternoon, everyone. So yesterday evening, we issued our press release with our full financial results for the year ended December 31, 2025. I will focus on the highlights. As of December 31, '25, we held EUR 230.9 million, close to EUR 231 million in combined cash, cash equivalents and short-term deposits. This position was built by 2 significant financing events in '25. First, the execution of the second tranche of our 2024 structured financing in May generating approximately EUR 108 million in net proceeds. And second, our U.S. registered public offering in November generating approximately EUR 139.4 million in net proceeds. We estimate that we are funded beyond our anticipated NATiV3 readout. Based on our current operating plan and cost structure, we estimate that our cash runway extends to the middle of Q1 2027 and to the middle of Q3 2027, assuming the full exercise of our tranche 3 warrants, which could generate up to an additional EUR 116 million. We confirm this way the cash guidance provided earlier. Our R&D expenses for the full year were EUR 87 million, primarily reflecting our pipeline prioritization and, to a lesser extent, the completion of NATiV3 enrollment in April 2025. Marketing and business development spend increased to EUR 5 million primarily due to expenses related to a planned pre-commercial investment as we prepare for a potential launch of lanifibranor if approved. G&A expenses of EUR 47.9 million include approximately EUR 20.3 million of noncash share-based compensation tied to the governance and organizational transition we implemented this past year. I will now turn the floor back to Andrew for closing remarks. Andrew Obenshain: Thank you, Jean. Inventiva enters 2026, well-funded, operationally focused and ready for a consequential chapter in this company's history. NATiV3 is fully enrolled. We've built a leadership team with deep medical, regulatory and commercial expertise, and our regulatory and commercial readiness work is progressing in parallel. Our anticipated top line readout in the fourth quarter of this year represents a genuine inflection point, not just for Inventiva, but for the millions of patients living with MASH, who still have no adequate treatment options. We are truly executing with the discipline and urgency this moment demands. Thank you for joining us today. We will now open the floor for questions. Operators, please go ahead and provide instructions for the Q&A session. Operator: [Operator Instructions] We will now take our first question. And our first question for today comes from the line of Seamus Fernandez from Guggenheim. Seamus Fernandez: Just a few quick questions. First, can you update us on how the performance of the trial has been in terms of dropouts? I know that there were some requirements from the tranches that were coming in that were successfully completed. But just wanted to get a sense of where the dropout rate was as you were kind of wrapping up enrollment. Second question is, can you help us understand how you're thinking about the performance of the 800 versus the 1,200-milligram dose in terms of both weight gain and then ultimately on fibrosis? Is the sort of change from a more typical 12-month endpoint to the 18-month endpoint geared to have the 800-milligram dose catch up to the 1,200 but also manage the potential tolerability or weight gain issues? And then to the last question is just what you're seeing in terms of the overall market interest. Madrigal continues to see very strong uptake in the U.S. How are you thinking about the opportunity to compete with Madrigal? What do you think is the threshold necessary? Andrew, you mentioned 18%. Just interested to know if you think 18% is the threshold where the impact is going to be substantial or is that more reference to the powering of the study? Andrew Obenshain: So, Morning, Seamus. Thanks for the questions. I'm actually going to take your third one first and then hand the first 2 over to Jason. So yes, just to be really direct, we think that if we replicate the Phase II trial and have an 18% effect on a fibrosis, we have an excellent drug. That is the clearing efficacy that we need for in order to have a very attractive market opportunity. We continue to see a lot of market growth, thanks to the entry of the 2 approvals and a lot of awareness around MASH. And there still continues to be unmet need, especially we see in that F3 diabetic patient population, where we think there'll be a very good entry point for lanifibranor. And then at 18% of fibrosis effect with our HbA1c lowering, we have a very good profile for that. Let me then turn the question over to Jason first on the drop-offs and what we've last discussed publicly there. And then the second question about the 800 catching up the 1,200 dose. Jason Campagna: Seamus. So let's take the first one. So you are correct. As part of the structured financing from 2024, there were covenants in there around the release of follow-on tranches that the early termination rate for the trial needed to be below 30%. That number was selected because the original powering analysis from the trial was built allowed for up to a 30% dropout rate. So that was the metric that was used, and we have disclosed publicly at the time of both the first and the second tranche release, which would have been in April of 2025, that we were below that threshold. I think now that we're tightening the guidance to Q4 of this calendar year, I think we were able to confirm we are well within that range and feeling quite good about where we've landed and are reaffirming that the trial is well powered to detect the primary endpoint with the size of the trial that we have and the early termination that we've seen. So the second question you asked about the 2 doses, I think you're landing sort of in the right mixture of elements that are important to us. So we agree with you that in theory, with additional time just because of the way PPARs work and the biology of the liver that that 800-milligram dose will have time to sort of catch up to the 1,200. It was already quite a good dose back in NATIVE, as you recall. But 6 months is relatively thin for a PPAR, which is a transcriptional modulator to sort of do its work. So the idea that you could see a deeper effect with that 800 dose at 18 months, it's very reasonable. But I think where you're landing around the potential dose responsiveness of the tolerability concerns, that is also very important to us. So take weight gain, which you mentioned. Weight gain is a traditional PPAR gamma mediated fluid retention event, and we know that, that fluid retention is highly likely to be dose dependent just from what's been shown with other PPAR agonists and our own data from NATIVE. So we think that potential to have really strong efficacy with both doses, which we were able to show in NATIVE, but may have a different tolerability profile at the lower dose could be meaningful for patients. So it's our hope that both will be positive, and we'll have that opportunity to discuss that with regulators. Operator: Our next question comes from the line of Yasmeen Rahimi from PSC. Unknown Analyst: This is Dominic on for Yas. The first one, we know that NATiV3 is a very large data set. As we're getting closer to top line data in 4Q, what are some of the quality control, I guess, protocols going on in the background to analyze the biopsy samples and what procedures are in place to ensure timely and thoughtful assessment of these biopsies? And then our second question is, can you just talk or help us understand, I guess, how you have how -- if you had any recent safety monitoring committed? And are you seeing anything on a blinded basis on the safety profile? Any color there would be helpful. Andrew Obenshain: Good morning, Dominic. So 2 questions. Let me take the second one first, and the first one over to Jason. Just on safety monitoring, there are periodic monitoring committee meetings every 6 months. You would know if they had said anything. Other than that, we really can't say anything about those meetings. Go ahead, Jason, on the biopsy. Jason Campagna: Yes. Thanks, Andrew. Dominic, so quality control and biopsy. Let me start by saying that the team we have here is outstanding. The clinical operation, the clinical development team have been immersed in the world of MASH clinical trials for the better part of a decade. So this is something that they know well and we carried that expertise forward. So you could think of quality control biopsy around 3 issues. Are we hurting the patient? Meaning at the bedside, are we doing the right things. Second, are we capturing the biopsy according to standard practice? So that's the length of the biopsy, the overall quality of the core, if you will. There's measurements and things that sort of go in and say check or not check. We have reviewed all of those and continue to do so right up until when we get to last patient, last visit later this year. And then lastly, finally, when the slides are sectioned prior to going off and being read, there's a quality control set there that looks at what actually gets made on to the slide. Afterwards, at that point, we are obviously blinded to all of that information. But there is a quality check in terms of are the reviewers, the readers staying on time and on track reading biopsies in the paired matter that's specified both in the protocol and the analysis plan. So I like the teams that we have in front of it and more importantly, I think that they are doing exactly the right work to keep us on track. Operator: Our next question for today comes from the line of Ritu Baral from TD Cowen. Ritu Baral: I want to drill down a little bit more upon final powering. You guys disclosed the over 1,000 final patient number. I think it's 1009 and the 90% powering. What's the effect size that, that powering is for on the primary combined endpoint? And what are your expectations for potential movement around placebo of that, I think it was 7% at the 6 month upon the final primary endpoint? And then I have a follow-up on market expectations around that F3 diabetic population that was mentioned. Andrew Obenshain: Thank you, Ritu. Jason, why don't you go ahead and answer that question? Jason Campagna: On the first one, we are not guiding to the actual effect size, but I can reiterate for you and for everyone what we have been saying. So first, we are with the sample size of over 1,000 patients. We are powered to over 90% on a primary endpoint of the composite fibrosis improvement 1 stage or more MASH resolution. That one has a higher placebo response than we showed in NATIVE, which as you know, was 7%; and two, a smaller treatment effect than we showed in NATIVE data about the 1,200 milligram dose. So that means the overall effect size that we are powered to is smaller. So a much more conservative view than the actual data that we showed in the Phase II program. We just talked earlier with Seamus that, that alongside our comfort with the early termination rates we have, we feel very good that the trial is structurally sound and that will give us an answer to the question one way or the other. Did lanifibranor work first at the 1,200-milligram dose? The testing is hierarchical. We can't get to the 800, unless you went on the 1,200. But that is the core question. We think the trial was well set up to deliver an answer to that question that is well powered and highly confident. I think to your second question around placebo response. The individual endpoints of fibrosis alone. I think everybody on the call knows this, fibrosis alone improvement or MASH resolution alone can be quite noisy. It's not clear after all these years of study why that is, but we do know that they're noisy. On the other hand, the composite endpoint, the primary endpoint of NATiV3, are with us and other sponsors have shown that, that endpoint is much less prone to placebo response. And that makes sense, Ritu, biologically, right? You have in 1 patient, they may on a placebo response move their fibrosis stage by 1 point or more, but the idea that they can also resolve their MASH spontaneously. What that 7% tells you was that in the wild, in the real world, that's incredibly uncommon and that makes total sense with the actual way that patients walk in. It's unusual if you leave them sort of sitting along without treatment, that both of those things will get better on their own. So the placebo response there actually reflects, we believe, the underlying biology, and it should remain very low. We've seen it by precedent, and it's our expectation for the trial that we're running. Ritu Baral: Very helpful. And then, Andrew, a question on how you guys and your own market research is viewing that F3 diabetic population. Do you have an approximate patient number? How is the diagnosis rate in that population changing versus the overall MASH population given the ADA focus on MASH and its messaging to diabetologists? Andrew Obenshain: Thanks for the question, Ritu. So in terms of size, there's about 375,000 patients total F2, F3, in under treatment of care right now. The largest segment is -- one of the largest segments is that F3 diabetic patient population, being 55% to 65% of the patients are diabetic, and about it splits roughly 50-50 in our market research between F2, F3. So that patient population is quite a large patient population overall. In terms of growth, we don't have the granularity down to that segment. However, I would just know anecdotally that F4 is one of the fastest-growing segments. And I think the diagnosis rates are increasing quite a bit overall for F2, F3, F4, just to the number of entrants into the market. So they are growing a minimally proportionate with the market in that segment. Ritu Baral: To that point, Andrew, can you tell us of the 410 expansion cohort patients, how many are F4. Do you know at this point? Andrew Obenshain: I'll pass that question. Jason Campagna: Yes. Confirming you're talking about the exploratory cohort, correct? Ritu Baral: The exploratory cohort, yes. Jason Campagna: We do have F4s in that cohort. They would have screen failed in that case, by histology, potentially other lab values for the actual main cohort in NATIVE. So they represent a sort of range of F4 from. They're all compensated by definition, meaning they have no clinical outcome events, decompensation events. But the range of severity with portal hypertension can be from none to evidence of clinically significant. And those -- that data is going to be quite interesting to us. We're not yet guiding on when we'll have an opportunity to get those data out. It's unclear right now if we have them at top line per se, or in the weeks that follow it in one way or another. But I think as we get closer to top line data, we should be guiding on that more tightly. Operator: Our next question today comes from the line of Thomas Smith from Leerink Partners. Thomas Smith: Just wanted to follow up on that F4 population. And I know you're capturing some of those patients in the exploratory cohort. Can you just expand a little bit on what you hope to learn from that exploratory cohort and how you're thinking about planning for the outcome study in F4s pending the NATiV3 data and perhaps how you're thinking about perhaps how some of those plans could change. We know we're going to get F4 outcomes data for Rezdiffra also in 2027. So some interesting timing around that data set relative to when you're planning on starting this F4 outcome study. Andrew Obenshain: Thanks for the question, Tom. Jason, go ahead. Jason Campagna: So there's a lot there. Let me make sure I get it all for you. So one, just in general, what are we expecting to learn from that cirrhotic population in the exploratory cohort. First, above all safety of lanifibranor in that population. Clearly, right, if you're going to bring in a new therapeutic into a more, let's say, sicker population, you want to obviously want to have safety headroom to do that. So approximately 75 patients we have in that cohort safety above all else. Second, it's not that, as you know, that cohort is not tracked systemically -- systematically, excuse me, for efficacy. That being said, we do anticipate having data of things on like LFTs, transaminases and other things that would point directionally towards whether the drug is biologically active. So really a pharmacology question, very important. We have done hepatic impairment studies with the drug, but looking at it in a real world and a clinical trial would be incredibly helpful. And I think lastly, it will give us a sense in our own hands of how those patients progress over time to later-stage disease. You could read about it, you can model it, you can look at other people's trial, but in your own trial we will see how many of those patients go on to actually have liver related or other events. And that will be incredibly helpful as we think about powering and sizing of an outcome-driven trial, which is what we're right now calling NATiV4, for lack of a better term. But make sure that, that gets to your question, Tom, on the value of that cohort to us? Thomas Smith: Yes, that's helpful. Jason Campagna: Great. So now look, you know the Madrigal data coming. I think yet we acknowledge that. We agree. I think our view is that positive data, if Madrigal were to show it, would only be helpful for the field period, full stop. The idea that we have now finally shown that the surrogate endpoint does correlate with clinical outcomes would be an enormous one for the field. Look no further than what happened in the cardio renal division with proteinuria in the last 6 years. Proteinuria was issued as a surrogate in 2019. I have 5 or coming 6 approved therapeutics for IgAN, that's an enormous win for patients. So we expect something like that would hope would happen here. But clearly, that would influence our thinking about how we think about populations and the ones that are most likely to develop liver-related outcomes because we want to get more of them since we know that the sort of door is open to show that the histology will map to clinical outcome. Operator: Our next question comes from the line of Michael Yee from UBS. Michael Yee: I have [ 32 ] myself. First question is on weight gain, can you remind or confirm the views that based on the phase II also, I think what you're sort of said in the ongoing Phase III that there is some initial weight gain, but that it plateaus and that you don't really see anything beyond a modest increase in some patients, at least in the phase II, and that plateaus and that was initially seen in the Phase III, and therefore, no concerns. The second question is, is there any view that either because of other drugs or because of longer time duration of 18 months versus 6 months here that, that could actually come down in some of those patients or at least come back down to baseline, is that possible? And then the third question is around getting the regulators comfortable with that, what I guess fluid retention effect in some patients and that there would be presumably no at least initial cardiac imbalance in any of the arms that you see and which you'll be able to talk about no imbalance in any cardiovascular events numerically or any SAEs of that nature when you disclose the data in the fourth quarter? Andrew Obenshain: Mike. You were a little soft, so I'm just going to repeat some of it. So there was a question about does weight gain indeed plateau and number one, if in the Phase II. Number two, does that weight gain -- is there a chance of that weight gain would actually go down in the Phase III, either due to concomitant medications or longer treatment? And then number three, some of the weight gain do -- if the weight gain is due to fluid is there any concerns about a cardiac imbalance in the trial. So for those 3 questions, I'll hand it over to Jason. Jason Campagna: Yes. Mike, good to talk to you again. So we have previously said and we'll reaffirm it here that the data that we have previously shown from the blinded look at NATiV3 back in September of 2024, and that we also disclosed at that time the FASST clinical trial in systemic scleroderma, which was a year trial with treatment of lanifibranor same doses in NATiV3, 800, 1200 milligrams, that the weight -- the fluid retention weight gain appear to plateau. I think we don't have any additional information to guide on that publicly, but I think that is what we've seen in both of the clinical trials so far. I think second, do we expect the weight to come down? It's well possible. I think there are a couple of factors at play. Take the LEGEND study, for example. We show that when patients are given SGLT2 inhibition in parallel with lanifibranor that there's almost no weight gain at all. There are many patients in the trial that are on SGLT2 inhibition and do not have the number for you off the top of my head. And we know that patients can be started on those therapeutics for management of diabetes or any other reason. So it is entirely possible and reasonable to believe that if patients are getting SGLT2 inhibitors or other diuretics to manage blood pressure, et cetera, that, that weight gain either the fluid retention, could be blunted or resolved so that the final landing spot, if you will, for any patient, might be lower than the peak weight gain that they had in the trial. But I think we'll see what the data show. Lastly, in terms of regulators, I think I can't speak for the FDA, but I can only speak to what I've read of everything they've put out. The fluid retention is a known phenomenon with PPAR gamma agonism, the thing about lanifibranor is it was designed to be different than other PPAR gammas, and we'll see what the data show. Our view is that it is a very different type of PPAR agonist. But that being said, the PPAR gammas is a known effect. It is on target. It is not idiosyncratic in any way. So FDA has shown with labeling and other work that they are comfortable with fluid retention, I think you're hitting on the right point, the cardiac. And as we've talked about and guided publicly over the years, we are not seeing congestive heart failure as a clinical issue in our program. It doesn't mean that we don't follow it. And it doesn't mean that you're thinking about how fluid retention may lead to that. That's certainly in the PPAR labels today, the gamma agonist, but it is just not something that we are generally seeing in our program, but we will be paying careful attention to it, and it's a dialogue we'll have with FDA. Operator: [Operator Instructions] Our next question comes from the line of Ellie Merle from Barclays. Unknown Analyst: This is Jasmine on for Elie. So as kind of a follow-up to Ritu's question. You talked about the overlap of MASH in type 2 diabetes as a segment where lanifibranor can be particularly attractive. But do you have a specific bar for what competitive data would look like in this population? And then specifically, how many type 2 diabetes patients do you think have undiagnosed MASH, and how do you plan to work to increase the diagnosis in this population and unlock that segment? Andrew Obenshain: So I'll take those 2 questions. First of all, just the diabetes and overlap with MASH, it is enormous, right? And there's -- I think there's about 18 million patients in the U.S. with undiagnosed MASH. At least half of those or more have diabetes at it's obviously way, way more than 375 under the treat or care. The way we see the market evolving is we've seen since about 2004 that market has grown about 20%. So it's clearly quite robust growth, and we do anticipate that to grow nicely. We, as a company, probably will not be pushing diagnosis, at least initially, there are enough patients coming in that we can focus on the patients being diagnosed -- the existing patients being diagnosed. That would obviously, maybe a later marketing strategy would be to actually increase diagnosis. And then your first question about -- I'm sorry, I forgot your first question already. Unknown Analyst: Just if you have like a specific bar in that population for what competitive data looks like? Andrew Obenshain: Yes. So the -- in terms of competitive data, the way we look at this is that the differentiated profile that we have is we work both on the liver and we're extrahepatic. We work on the body and we work on the liver. So we have direct anti-fibrotic effect. Again, as I said, that an 18% effect size, if we duplicated that in the Phase III trial, we feel it's a very competitive drug. And then the other thing we'll be looking at is HbA1c lowering, which was on average across the whole patient population, diabetic and nondiabetic in the Phase II, with just over 0.5 point, that would be an approvable diabetes medication years ago. So that combination of HbA1c lowering, combined with triglyceride lowering, HDL raising and the fibrosis effect, we think, has an extremely attractive profile for that diabetic F3 patient. Operator: Our next question comes from the line of Lucy Codrington from Jefferies. Lucy-Emma Codrington-Bartlett: Just one left, please. Regarding the confirmatory trial, just wanted to confirm, do you have an understanding with the FDA in terms of what underway means when it comes to granting accelerated approval? Is it enough just to have started that trial? And does this need to be by the time you file or by the time you get to approval? And then related to that, is starting that trial included in that mid 3Q cash runway with the third tranche of warrants? Andrew Obenshain: Yes. So yes, it is included. Starting that trial is included in the cash runway of that mid-Q3 runway. Jason, you want to talk about what's necessary for the trial? Jason Campagna: Yes. Lucy, I think you have the broad brushstrokes of it, right, but just something on the language. So accelerated approval is only at the time of the review. What we're looking to get is conditional approval under Subpart H, which is you've got marketing authorization and then the trial, as you note, confirms your surrogate and then you get full approval. Whether accelerated is only a question of how long it takes the FDA to actually review the file. With that, I'm just trying to make sure that we're all clear on that, that we -- you have the broad brushstrokes, right? But the individual rules are discussed with each sponsor at the time of the pre-NDA meeting and then during the mid-cycle review. But the general framework is you need to have most of the trials structurally in place, protocol approved at the time you were filing the drug and it needs to be moving on the definition of moving is going to be something FDA will define for us. We will be prepared. We have our CROs selected, the protocol is approved, may even have sites open. All of that is in the future. But at the time we file, we will meet the FDA position of trial meaningfully underway. And then at the mid-cycle review, you need to show continued progress on that. So they will check again that made a much more detailed look around enrollment nerves, site activation curves, et cetera. Again, each sponsor has their own detailed agreement with FDA on that, and it is our plan, of course, not only to have those conversations, but to make sure that we're meeting those requirements. So that when we are offered if we're fortunate enough to make it there, and we offered, the conditional approval, that trial will be well underway at that point. Lucy-Emma Codrington-Bartlett: Got it. Thank you, and thank you for clarifying on the terminology. Operator: Our next question for today comes from the line of Annabel Samimy from Stifel. Jayed Momin: This is Jayed on for Annabel. Congrats on the progress. Just 2 for me. The first one is around the use of background GLP-1 in the trial. What are your expectations on the potential impact of having that background GLP-1 use on [ lani ] effect size of those patients? And my second question is around the AIM-MASH tool that was nearly FDA qualified as a supportive tool to help with histological assessments. Do you have any plans to maybe leverage that to control or minimize variability? Andrew Obenshain: Yes. Thanks, and thanks for the question on the impact on the lani effect size based on background GLP-1 and the tools. So go ahead, Jason. Jason Campagna: Yes. So in confirming we do have, and we've previously shared that we have about 14% or so of the population in NATiV3, that's across both cohorts, that have background GLP-1 use at the time of randomization. That could be semaglutide, older drugs, liraglutide, dulaglutide, et cetera. So it's not only limited to the modern GLP-1. And I think its effect on treatment response should be minimal, and that should -- it will sound tongue in cheek, it's not intended to be. It's because that when you enter the clinical trial independent of what drugs you're on, whether you've lost weight by any other measure, independent of a GLP-1, you're entering the trial issue have that F2, F3 disease with active MASH. So whatever it is, one, those drugs are not doing it for you or your lifestyle modifications; and second, that the doses that we're using are really the diabetic doses. So they don't -- they are not anticipated to have much of an effect at all. We're simply seen that in the clinical trial data. I think to the second question about the tools, are you talking about PathAI specifically or just more general non-invasives? Jayed Momin: Yes, no, it's the PathAI tool. Jason Campagna: Yes. It's an interesting idea, right? But if you -- looking at it really simply, what PathAI lets you do is substitute one human pathologist for a digital pathologist and then you need a second pathologist to read. It's still the same idea of 2 plus 1 consensus. In this case, 1 of the 2 is PathAI. It's interesting. It's not something that in NATiV3, we anticipate taking much advantage of. But it is something we're thinking very closely about for NATiV4, potentially using that as the -- in the exploratory cohort presently from NATiV3 to see how we may be going to pull more data out of those patients that happen to have a biopsy. Operator: Our next question for today comes from the line of Rami Katkhuda from LifeSci Capital. Rami Katkhuda: I guess can you remind us of lanifibranor's FC and F2 versus F3 patients in the Phase II study and how those differences may impact expectations for NATiV3 just given the higher proportion of F3 patients enrolled? Andrew Obenshain: Go ahead, Jason. Jason Campagna: Rami, just to qualify, you want the proportion of patients in NATiV2 or the responses of the F2, F3? Rami Katkhuda: The responses, please, between the F2s and F3s. Jason Campagna: The sample sizes are simply too small to break out what we have done. We think the analysis that's more helpful, it's in our corporate materials, is that when you strip away the F1s in that trial. You get down to about 188 F2, F3 across all 3 arms. You can see that the effect size actually slightly goes up. What we guide to is that it remains unchanged. So the drug seems to work equally well in more advanced fibrosis in patients with earlier disease. So you're not getting much of a free glide on those F1s, if you will. I think second, when we look at NATiV3, as Andrew talked about earlier, this is a contemporary MASH market. The majority of patients showing up and clinics today that have F3 disease, will have diabetes. So we think that aligns pretty well with the outside world. And we're pretty comfortable with what we've seen from our Nature publication back in 2024, that the drug not only works equally well in earlier and late-stage disease, but the adiponectin levels actually go up equally well across all cohorts and it's that adiponectin that's really driving, we think, well correlated with the clinical response. So we like where we're landing with NATiV3 and the likelihood of efficacy in both those F2 and F3 patients. And as a reminder, we're stratified by fibrosis stage and diabetes and NATiV3, so we're going to cut those data in a number of different ways to sort of get where you're headed with your question. Operator: Our next question comes from the line of Srikripa Devarakonda from Truist Securities. Unknown Analyst: This is Anna on for Kripa. So 2 questions from us. First, looking ahead a little bit in terms of the MASH guidelines, would you expect an update on the MASH guidelines this year? And how are you thinking about getting [ lani ] into the MASH guidelines? And then second question, in terms of cash, what kind of needs to happen for you to have access to that third tranche? Is it based on kind of Phase III success only? And are you looking at any other non-dilutive sources of funding such as partnerships? Andrew Obenshain: Thanks for the questions. So on the MASH guidelines, I think we will wait -- we need to get data first before we have any conversations about putting lanifibranor into the MASH guidelines. On cash, the tranche 3 is a positive endpoint, and we hit a positive endpoint in our trial, and then when those 77 million shares of EUR 50 become exercisable, and the investors have 45 days to exercise them. So that's how that mechanically works. So positive trial equals cash coming in, so as long as the stock price is above the EUR 50. We are always looking for ways to increase our cash runway. And we've obviously in a very strong cash position right now. In terms of partnerships, right now, our plan is to commercialize lanifibranor ourselves. Going forward, we think that there's plenty of access to capital, either in the equity markets or other kind of capital sources that we don't necessarily need to partner lanifibranor. Operator: Our next question comes from the line of Sushila Hernandez from Van Lanschot Kempen. Sushila Hernandez: Could you elaborate on your regulatory and commercial infrastructure? What steps are you taking to act with speed once the data is here, also considering your cash runway? Andrew Obenshain: Yes, good question. So yes, so we are being very careful stewards of our capital right now before data. So a lot of -- the regulatory team is fully staffed, and I would include the quality team on that, too, because that's necessary, to make a really good filing with the FDA. So we have invested. We've increased the size of that team and the talent on the team in the course of this year. From a commercial standpoint, really focused on strategic commercial execution. So being led by Nazira Amra, really focused on market access, the market research. I'm going to include in the broad commercialization medical affairs there. So the strategic role that won't really set us up for success in the future. We will not staff up aggressively in commercial until we have positive data. Operator: This concludes today's question-and-answer session. I will now hand the call back to Andrew Obenshain, CEO of Inventiva for closing remarks. Andrew Obenshain: Thank you so much. Thank you, everyone, for joining the call this morning. We certainly have an exciting remainder of the year coming up for Inventiva, and we look forward to engaging with you all as we go forward. Thank you. Operator: This concludes today's conference call. Thank you for participating. You may now all disconnect.
Operator: Good afternoon. My name is Dave, and I will be your conference operator today. At this time, I would like to welcome everyone to Jushi Holdings, Inc.'s Fourth Quarter and Full Year 2025 Earnings Conference Call. Today's call is being recorded. I will now turn the call over to Trent Woloveck, Co-Chief Strategy Director. Thank you. Please go ahead. Trenton Woloveck: Good afternoon, and thank you for joining us today on Jushi's Fourth Quarter and Full Year 2025 Earnings Conference Call. My name is Trent Woloveck, and I am the Co-Chief Strategy Director at Jushi Holdings, Inc. With me on today's call are Jim Cacioppo, our Chairman and Chief Executive Officer; Michelle Mosier, our Chief Financial Officer; and Jon Barack, our President and Chief Revenue Officer. This call is also being broadcast live over the Internet and can be accessed from the Investor Relations section of the company's website at ir.jushico.com. In addition to the company's GAAP results, management will provide supplementary results on a non-GAAP basis. Please refer to the press release issued today for a detailed reconciliation of GAAP and non-GAAP results, which can be accessed from the Investor Relations section of the company's website. Additionally, we would like to remind you that during this conference call, we will make forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. Although Jushi believes our estimates and assumptions to be reasonable, they are subject to a number of risks and uncertainties beyond our control and may prove to be inaccurate. We caution you that actual results may differ materially from any future performance suggested in the company's forward-looking statements. The risk factors that may affect actual results are detailed in Jushi's Form 10-K and other periodic filings and registration statements, which may be accessed via EDGAR and SEDAR as well as the Investor Relations section of our website. These forward-looking statements speak only as of the date of this call, and Jushi expressly disclaims any obligation to update this forward-looking information. I will now turn the call over to Jim. James Cacioppo: Thank you, Trent, and thank you, everyone, for joining our call today. This afternoon, I will provide a high-level overview of our performance for the fourth quarter and full year 2025, followed by an update on our recent refinancing. I will then discuss key regulatory developments, including progress towards adult use in Virginia before turning to our operational execution across the business and broader industry dynamics. I will conclude with a review of the regulatory landscape across our key markets before turning the call over to Michelle for a detailed financial review. Beginning with our financial results, revenue for the fourth quarter was $68.3 million, representing year-over-year growth of approximately 4% compared to the fourth quarter of 2024. On a full year basis, revenue increased to $262.9 million, up just over 2% from 2024. While the top line growth remains modest, these results reflect continued stabilization across our retail footprint. Contributions from new stores opened throughout the year and enhanced product availability and quality driven by improved operational execution at our grower-processor facilities. Gross profit for the fourth quarter was $28.6 million, representing 41.9% of revenue compared to $25.4 million or 38.6% of revenue in the prior year quarter. For the full year, gross profit was $114 million or 43.4% of revenue compared to $118.3 million or 45.9% of revenue in 2024. While margins were down modestly on a full year basis compared to 2024, the year-over-year improvement in the fourth quarter reflects the benefits of ongoing operational improvements at our grower-processor facilities, which have driven product quality improvements, yield and potency gains and better product mix. These benefits were partially offset by promotional retail activity amid ongoing pricing pressure in certain markets. Adjusted EBITDA for the fourth quarter was $13.9 million, representing a margin of 20.4% compared to $8 million or 12.2% in the prior year period. The improvement reflects the cumulative impact of the operational turnaround we began executing in late 2024, continued discipline around cost structure and better utilization of our production footprint as well as $3 million of employee retention credits recognized in the quarter. For the full year, adjusted EBITDA increased to $50.3 million, up from $46.2 million in 2024, with margin expanding to 19.1% from 17.9%. Full year results include approximately $10.6 million of employee retention credits recognized during 2025. Building on this strong operating foundation, we took an important step subsequent to year-end to strengthen our balance sheet and position the company for the next phase of growth. On March 27, 2026, we refinanced our existing term loan and second lien notes, which had outstanding principal balances of approximately $46 million and $86 million, respectively, and were scheduled to mature within the next 12 months. We completed the refinancing through the issuance of a $160 million first lien secured term loan due in 2029 with a 12.5% coupon structured as interest-only payments over the 36-month term. The proceeds were used to fully repay the existing term loan and second lien notes, including accrued interest and related fees with excess proceeds to be used for general corporate purposes. The transaction was completed with the participation from a syndicate of lenders, including our 2 largest shareholders, myself included. As part of the refinancing, I contributed additional capital, increasing my overall position relative to my prior participation in the first and second lien debt, reflecting my continued confidence in the strength of our business and our long-term strategy. Overall, the refinancing strengthens our balance sheet and improves our financial flexibility. Importantly, this financing was completed without issuing any warrants or equity-linked securities, unlike prior debt transactions, resulting in no dilution to shareholders. Additionally, the new term loan provides $13 million of incremental liquidity to our balance sheet and includes a single financial covenant requiring the maintenance of a minimum cash balance, which we believe provides a meaningful flexibility going forward. With a stronger balance sheet and improved liquidity in place, we believe the company is well positioned to capitalize on several growth opportunities ahead, including the anticipated transition to adult use in Virginia. In Virginia, several bills were introduced during the 2026 legislative session, including HB642 and a Senate companion SB542 as well as SB671 that established the framework and sequencing for a regulated adult-use market. Earlier this month, the Virginia legislature reconciled the competing bills via conference committee and sent the final bill to the governor for her signature. Under the reconciled bill, all existing medical operators will transition to a dual-use license with applications expected to be released on or before September 1, 2026, and license issuance on or before December 1, 2026. Converted licenses will pay a $10 million conversion fee subject to an agreed-upon payment plan with the regulator. Retail sales are expected to commence on January 1, 2027. We are encouraged by the regulatory process made and are very excited about the opportunity to transition Virginia to adult-use sales on January 1, 2027. In preparation, we are expanding cultivation capacity at our current facility and exploring development of a second cultivation site to support future demand. Importantly, our manufacturing and retail infrastructure are currently prepared to support adult-use sales with minimal incremental capital investment. In markets that have expanded from medical only to also allow for adult-use sales such as New Jersey, the overall market increased significantly following the transition. Based on publicly available data, when comparing annualized medical sales prior to the launch of adult-use with the first 4 full quarters of adult-use sales, total market revenue increased by approximately 3.2x. Assuming a similar market response, we would expect Virginia to experience comparable growth as adult-use sales begin. We also want to thank Speaker Scott, Madam Chair Lucas, Delegate Krizek, Senator Aird and countless others for their leadership in advancing this legislation and positioning Virginia to become the first southern state to pass an adult-use cannabis program. We are hopeful that Governor Spanberger signs the bill within the next couple of weeks. Stepping back, 2025 was a year of execution and recovery relative to 2024. We focused heavily on rebuilding operational consistency, improving product quality and aligning capital allocation with high-return opportunities. While the macro environment remains competitive and price constrained, particularly in adult-use markets, we believe the business is now meaningfully stronger than it was a year ago. From a macro perspective, the competitive landscape remains tight. Pricing pressure persists across most markets, driven by supply imbalances and consumer value sensitivity. At the same time, enforcement against illicit and intoxicating hemp products remains uneven in certain regions, and we continue to engage constructively with regulators and policymakers on these issues. Against this backdrop, our strategy remains centered on execution, quality and disciplined capital deployment, prioritizing margin, cash flow and long-term value creation. Operational execution at our grower-processor facilities was the most important driver of improvement in 2025. Investments in genetics, facility upgrades and enhanced cultivation and production practices translated into materially better yields, higher potency and improved product consistency. In the fourth quarter, average yield across the portfolio increased approximately 28% on a per square foot basis year-over-year, alongside an increase in [ AB bud ] flower production across the portfolio. Potency remained strong in the mid- to upper 20% THCa range. Together, these improvements supported a more favorable product mix across both our retail and wholesale channels. We continue to deploy high-return capital into our grower-processor footprint to meet current demand in Virginia, Pennsylvania and Ohio. In Virginia, we brought one additional flowering room online during the fourth quarter of 2025, adding approximately 3,000 square feet of canopy within our existing footprint. Additionally, we are planning to add 2 more flowering rooms of similar size within the existing footprint over the course of 2026 and early 2027, increasing canopy by approximately 33%. In conjunction with this canopy expansion, we are adding hydrocarbon extraction capabilities to support a broader mix of higher-value concentrate products, process more throughput and expand product selection for patients and consumers. We are also in the design phase for a new 65,000 square foot warehouse expansion in Virginia that would roughly double our canopy there and support expanded processing capabilities. In parallel, we are evaluating a potential expansion of our mortgage and other possible traditional financing options to support this build-out. In Pennsylvania, Phase 1 of our cultivation expansion involved converting a legacy flower room into 3 modernized flowering rooms, effectively creating new productive capacity. Two of those rooms completed their first harvest in January, and the third room is on track to complete its first harvest shortly. Phases 2 and 3 involve reengineering unutilized space with the potential to add approximately 4 additional flowering rooms and increase total canopy by roughly 40%. We have begun ramping up Phase 2 by completing targeted prework and other sequencing activities while deliberately limiting capital deployment at this stage. This approach is intended to shorten the time line required to bring capacity online once there is greater visibility into adult-use sales in Pennsylvania. Importantly, these activities are being funded from our existing balance sheet, and we would not pursue additional financing to fund these projects until there is clear regulatory direction. In Ohio, canopy increased approximately 2.4x year-over-year, allowing us to expand production capacity while maintaining quality and consistency across the facility. We are in the design phase for a warehouse expansion that would add additional canopy, though we would only proceed if market conditions and cost of capital are favorable. Turning to retail. Since the end of the third quarter of 2024, we have added 8 retail locations through the end of 2025, including Toledo, Oxford, Warren, Mansfield and Parma in Ohio, Linwood in Pennsylvania, Peoria in Illinois and Little Ferry in New Jersey. As of year-end, we operated 42 retail stores across our footprint. Subsequent to year-end, we opened an additional location in Springdale, Ohio in January of 2026, and we entered into an agreement to sell our Peoria, Illinois location, subject to regulatory approval. We are actively evaluating 4 to 5 potential store relocations to improve profitability, and we continue to evaluate retail license and store acquisition opportunities in Ohio, Massachusetts and New Jersey. We will not be moving forward with the previously contemplated Mount Laurel, New Jersey location following our termination of the underlying transaction. At year-end, Jushi had approximately 1,288 employees compared to 1,234 employees at the end of 2024. During this time, we grew from 38 stores to 42 stores while maintaining lean staffing levels and driving productivity improvements across the network. While our store count increased by approximately 11% year-over-year, headcount only increased by approximately 4%, reflecting our ability to scale efficiently. The performance underscores the effectiveness of our corporate and retail operating model and the execution of our leadership team. Commercially, we are evolving into what we believe is a genetics-driven product strategy. We've made substantial progress building a robust genetics pipeline and rolled out new strains across all our grower-processor facilities in 2025, with plans to refresh approximately 20% to 30% of our cultivator menu annually. We believe this disciplined approach to genetics supports product differentiation and strengthens our competitive position across markets. We also continue to see growth in our private label portfolio during the fourth quarter, supported by ongoing innovation across both emerging brands such as Hijinks and Flower Foundry and established brands such as Seche and The Lab. During the quarter, we added approximately 280 new unique SKUs, including new offerings across these brands. These launches reflect our continued focus on refreshing assortments, expanding premium and value offerings and meeting evolving consumer preference. As we aim to provide patients and guests with enhanced variety and as part of our ongoing focus on retail execution, we are exploring an e-commerce AI agent to drive growth, further optimize online ordering and recommend our expanded product offerings. On the regulatory front, in Pennsylvania, the state continues to face a significant budget gap and progress toward passing an on-time and balance budget remains an ongoing challenge. While adult-use legalization efforts have not yet produced enacted legislation, there has been movement on establishing a dedicated regulatory framework for cannabis oversight through SB 49. During the fourth quarter, bipartisan legislation to create a stand-alone Cannabis Control Board advanced out of the Senate Law and Justice Committee and is now awaiting consideration by the full Senate. The proposed Board would oversee the existing medical marijuana program and align state regulation of intoxicating hemp products with federal regulations. We continue to monitor these developments closely as regulatory clarity will be important for long-term planning. In Virginia, in addition to the adult-use bill, legislation was passed strengthening enforcement around intoxicating hemp products via SB 543, which enhances the enforcement authority and HB 26 and SB 62, which updates unlawful cannabis criminal penalties. In Ohio, the state enacted SB 56, which updates the regulatory framework for cannabis and hemp products and effectively restricts the sale of intoxicating hemp products to licensed marijuana dispensaries. This legislation, which was signed into law in December of 2025 and became effective in March 2026 is intended to close existing loopholes strengthen enforcement by state regulators and federal agencies and direct THC-containing products into the regulated dispensary channel. We believe these changes should support a more consistent and regulated marketplace over time. In Massachusetts, lawmakers have advanced proposals to update the state's cannabis regulatory framework, including legislation passed by the House that would increase the number of retail licenses a single operator may hold, potentially allowing up to 6 locations over time. The Senate has proposed a smaller increase and the chambers continue working toward a final version. If enacted, these changes could support greater consolidation and influence competitive dynamics in the market. At the federal level, there has been incremental progress toward addressing the hemp regulatory gap created by the 2018 Farm Bill. In November 2025, Congress enacted legislation that narrows the federal definition of hemp, restricts synthetic intoxicating hemp-derived cannabinoids and establishes new limits on THC and finished products. These changes are scheduled to take effect in November 2026. We believe these measures could help direct intoxicating THC products into the state-regulated cannabis markets over time, though the timing and broader regulatory framework continue to evolve. On rescheduling, the process to move cannabis to Schedule III remains underway with regulatory review continuing and no final rule issued as of today. While we view this as a constructive development, the ultimate timing and scope of impact remains subject to federal rule-making process. We'd like to thank President Trump for his leadership by signing the EO at the end of 2025. Finally, potential federal reforms that could improve capital markets access for U.S. cannabis operators, including proposals such as the ClimACT remain uncertain and no legislation has been enacted. We will continue to monitor developments at the federal level. With that, I will turn the call over to Michelle for a detailed review of our financial results. Michelle Mosier: Thank you, Jim, and good afternoon, everyone. I will now provide more detail on our fourth quarter results. Revenue for the quarter increased by $2.5 million to $68.3 million compared to $65.9 million in the prior year quarter. Overall, the year-over-year increase in revenue was driven primarily by retail growth, reflecting contributions from new stores in Ohio and strong sales performance from all our Virginia stores. Revenue in our retail channel was $60.4 million compared to $58.1 million in the fourth quarter of 2024. The increase was primarily due to growth in Ohio and Virginia. Ohio represented the largest contributor due to new stores, while Virginia delivered growth across all stores, primarily driven by increased units sold, while average selling prices remained relatively flat. This growth was partially offset by continued price pressure and competitive dynamics in other markets. In addition, our focus on retail execution and customer engagement continued to support stronger performance of our Jushi branded product sales, which represented approximately 58% of retail revenue across the company's 5 vertical markets in the quarter compared to 55% in the prior year. Our delivery business in Virginia continues to thrive both within our health services area and outside our HSA. For the full year, delivery sales increased approximately 29% year-over-year in our HSA II area and approximately 76% out of our HSA II area, driven by growth in the number of orders, which increased approximately 20% and 79%, respectively. Wholesale revenue was $7.9 million compared to $7.7 million in the comparable quarter of the prior year. Year-over-year increase reflects higher sales across several wholesale markets led by Massachusetts and Ohio. In Massachusetts, growth was driven primarily by increased bulk sales and expanded wholesale distribution, including placement in new dispensaries. In Ohio, the increase reflects expanded distribution and higher sales volumes. Pennsylvania also delivered steady growth across the wholesale channels. These increases were partially offset by a $1.2 million decline in Virginia, where wholesale partners continue to prioritize their own vertical sell-through. Gross profit was $28.6 million or 41.9% of revenue compared to $25.4 million or 38.6% of revenue in the fourth quarter of 2024. The year-over-year increase in gross profit and gross profit margin was primarily driven by higher production volumes, improved product quality and stronger performance across our grower-processor facilities, reflecting the operational improvements implemented over the past year, particularly in Pennsylvania, Massachusetts and Ohio. These benefits were partially offset by continued pricing pressure across our footprint, which led to increased promotional activity. Operating expenses for the fourth quarter were $27.8 million compared to $27.2 million in last year's fourth quarter. As Jim mentioned earlier, we continue to add new retail locations while scaling the organization efficiently. The modest year-over-year increase in operating expenses primarily reflects costs associated with new store openings and a larger retail footprint, partially offset by the impacts of continued cost discipline. Other income and expense included $10.4 million of interest expense, which is partially offset by an $800,000 fair value gain on our derivatives and by other net of $500,000. Other net was primarily comprised of $3 million related to employee retention credit claims, including interest received from the IRS, partially offset by a $2.6 million noncash adjustment to our indemnification asset related to acquisitions made in prior years. As with prior periods, we continue to recognize the ERC refund claims and income as the refunds are received from the IRS. As of the end of the fourth quarter, we had approximately $700,000 of remaining ERC claims outstanding, all of which were not factored. Our net loss for the fourth quarter was $15.6 million compared to $12.5 million in the prior year. Adjusted EBITDA was $13.9 million compared to $8 million in the fourth quarter of 2024, and adjusted EBITDA margin was 20.4% compared to 12.2%. Moving to the balance sheet. As of December 31, 2025, the company had approximately $26.6 million of cash, cash equivalents and restricted cash. Cash provided by operations was $6.1 million compared to $7.2 million provided in the fourth quarter of 2024. The change reflects working capital improvements. As of December 31, 2025, we had $193.1 million of debt subject to repayment, excluding the $21.5 million of promissory notes issued to Sammartino that remain in dispute as well as leases and equipment financing obligations. Our term loan with a principal balance of $46.1 million and our second lien notes with a principal balance of $86.2 million were scheduled to mature at the end of 2026. As Jim mentioned earlier, subsequent to year-end, we completed a refinancing of these facilities, which extends our debt maturities and further strengthens the company's balance sheet. For the full year 2025, capital expenditures totaled $16.1 million, consisting of $4.8 million of maintenance CapEx and $11.3 million of growth CapEx. As we consider capital expenditures for 2026, we currently expect maintenance CapEx to be in the range of approximately $4 million to $5 million, consistent with our ongoing focus on maintaining and optimizing our existing asset base. Excluding capital associated with potential regulatory changes, we currently expect 2026 growth CapEx to be in the range of $5 million to $8 million. These investments would support targeted initiatives across our grower-processor footprint and select retail build-outs. This would result in total projected capital expenditures of $9 million to $13 million in 2026. As Jim mentioned earlier, regulatory developments, particularly in Virginia, will influence the timing and scale of future capital investments. In the case of Virginia, we're developing plans for grower-processor expansion contingent on adult use. We believe a significant portion of any such expansion could be financed through an expanded facility mortgage, and we would expect the majority of construction-related capital spending to occur in 2027 rather than 2026. And with that, I will turn the call back to Jim for closing remarks. James Cacioppo: Thank you, Michelle. As we reflect on 2025, it was a year defined by execution, operational recovery and disciplined decision-making. We entered the year focused on continuing to stabilize the business, improving product quality and strengthening our operational foundation, and we believe the progress we delivered across cultivation, retail and commercial demonstrates that those efforts are taking hold. Across the organization, we improved yields, potency and consistency at our grower-processor facilities, expanded and optimized our retail footprint and continue to shift our mix toward higher quality and branded products. These operational improvements are translating into stronger margins and a more resilient business model, even as pricing pressure and competitive dynamics remain elevated across the industry. Importantly, we are approaching growth with discipline. As we discussed today, we are making targeted high-return investments to support current demand while carefully sequencing larger opportunities around regulatory clarity. In Virginia and Pennsylvania, we are preparing thoughtfully for potential adult-use expansion while remaining prudent in our use of capital and focused on protecting the balance sheet. Looking ahead to 2026 and 2027, we are particularly excited about the transition to adult use in Virginia. With our cultivation, manufacturing and retail infrastructure already in place, we believe we are well positioned to participate in what will be a meaningful expansion of the Virginia cannabis market. Our focus remains on preparing thoughtfully for that opportunity while continuing to operate with the same discipline that defined our progress in 2025. More broadly, our priorities remain unchanged. We will continue to execute with discipline, focus and operational excellence, allocate capital thoughtfully and build a scalable platform capable of delivering sustainable profitability and long-term value for shareholders. Before we conclude, I want to thank the entire Jushi team for their dedication and hard work throughout the year. Their commitment across the organization is the foundation of the progress we have discussed today. Thank you all for joining us and for your continued support. Operator, please open the call to questions. Operator: [Operator Instructions] Our first question comes from Frederico Gomes with ATB Cormarkets (sic) [ Capital Markets ]. Frederico Yokota Gomes: My first question, I guess, 2 questions on the gross margins. Was a decline sequentially from 46.7% in Q3. So could you maybe talk about it? Is it related to seasonality maybe or any onetime items impacting the gross margin? And then second, you did report an adjusted EBITDA margin expansion sequentially. So maybe just to clarify, is that related to some of the items you mentioned that are included in the adjusted EBITDA number? Or how do you square that with the adjusted -- with the gross margin decline sequentially? James Cacioppo: I'll do this. Gross margin -- on the gross margin, in the September quarter, the third quarter, we had a bulge of packaged goods and that created a lower cost per unit, and we pulled back a little bit based upon elevated inventories. It wasn't really market related. It was just production related, and we pulled back in October and November, which causes your cost per unit to go higher if you follow what I'm saying. So that was a lot of what had to do with. But also in December, you have discounting related to the holiday activity, both during Thanksgiving, things like Black Friday, which should be expand to 3 or 4 days of discounting. And then, of course, in Christmas, we do the 12 days of Christmas and it's a promotional time of the year for everybody in the spirit of Christmas. In terms of EBITDA, Michelle, do you -- I didn't quite catch that. Michelle Mosier: Yes. I think EBITDA improved. We had some ERC credit income during this quarter of about $3 million, which was a large contributor to the improvement in EBITDA. Frederico Yokota Gomes: Got it. I appreciate that. And then I guess the second question, just on -- you are increasing the percentage of branded sales in your own stores quite substantially on a year-over-year basis. So how much higher can this go? Do you have a target in mind? Any sort of rough guidance on that for this year? James Cacioppo: Yes. I mean we don't really target it as much as we focus in on consumer demand, patient demand. And -- but I think it's running sort of in the 60s, mid-60s in most of the markets. The market that brings the average down is Ohio, where we don't have supply or haven't been able to buy bulk at the right prices to do more branded products. And we have been talking over the last 6 months about wanting to do an expansion in Ohio, including on this call when we did this in prepared remarks. So one of our items that we have along with Virginia, Pennsylvania growth due to regulatory change is Ohio increasing the vertical in that market, which would increase margins in that market. We spent money in 2025 on expanding Ohio retail primarily, and we did some of that in 2024. And so we have a certain amount of budget to spend, and we decided to get the sales before we build out the core processor. Operator: The next question comes from Luke Hannan with Canaccord Genuity. Luke Hannan: I wanted to follow up on the conversation on Virginia. Jim, if I heard you correctly, I think you said that the CapEx budget -- the CapEx budget for this year is $9 million to $13 million in total, including maintenance and growth. How much of that, if any, includes a build-out in Virginia? You did mention, I think, all the -- assuming when adult-use lands, most of that CapEx is going to be coming in 2027, you're going to also draw on mortgage for that. Can you just frame up to us also what the size of that spend could be? I know it's in 2027, but I just want to get an understanding of the funds that you could have available for that. James Cacioppo: Yes. So I believe Jon will confirm this. I'll say it, but he's shaking his head that he will confirm if I'm right. But I think what we haven't planned in this year is $2 million to $3 million related to building out in warehouse. So we have grower rooms built that need to be equipped and updated these kinds of things because we haven't needed that capacity for the medical market. So we have 2 additional grower rooms. As a reminder, we have 6, are all roughly the same size. So it's 2 over 6 is the growth. That's I think will be primarily, if not all, for adult use. We don't think that will be needed for the medical demand, but it may be, some of it may be. So that's -- and we're also doing the hydrocarbon extraction. And then next year, which is not in this year's budget at all. There's not even sort of a budget item for like a deposit, but we're in construction diagram phase of the expansion of the warehouse. It's really another warehouse then we join it together. And so those of you that followed us for a long time realize that we have a lot of land that we purchased very well in Virginia during the COVID crisis. We bought the building and it was associated land, and we're going to build the warehouse on some of that land that doubles -- roughly doubles our canopy. That is not in the budget. And as Michelle noted in the prepared remarks, we believe a substantial portion of that would be paid by expanding our credit facility. And we did overfund our deal for existing cash. So we believe we'll be able to have the funding for that. We're waiting for the governor signature and then we need to get some regulatory approval as any construction project requires. Luke Hannan: Okay. And then I think you also touched on in your prepared remarks, all the medical stores there in Virginia will transition to dual use, but it is subject to a conversion fee. Did I hear you correctly that $10 million and then it's -- there's a payment plan that's set up for that as well? James Cacioppo: That's correct. Trent, do you want to comment on that? Trenton Woloveck: Yes, sure. So Luke, we get to propose a payment plan to the CCA for what we want to structure that payment -- $10 million payment to look like over 3 years. Luke Hannan: Okay. Got it. And there's no -- is there any implicit interest rate that's included in that? Or it's just a flat, you can chop it up 1/3, 1/3, 1/3? Trenton Woloveck: 1/3 -- we could do 1/3, 1/3, 1/3. We could propose whatever we would like to do. First payment would have to be made by December 1 of this year with expectation of sales starting on 1/1/27, and then we can space it out however we see fit and agree with the CCA on that. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Jim Cacioppo for any closing remarks. James Cacioppo: Great. Thanks everybody for attending. We appreciate it, and have a good day, and thanks again to all the great Jushi employees. We appreciate your effort. Bye-bye. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: Thank you very much, and good afternoon, ladies and gentlemen. Welcome, and thank you for joining our conference on the financial year 2025 results. My name is Jeroen Eijsink, and this is the first time I'm addressing you in my role as Chief Executive Officer of HHLA. I'm very pleased to be here today together with my fellow Executive Board member, Annette Geiss, to guide you through HHLA's performance in the 2025 financial year. Over the past 6 months since assuming the role on October 1, 2025, I've taken the time to get to know HHLA in depth. This has included spending a great deal of my time at our terminals in Hamburg as well as visiting our European subsidiaries such as Metrans and PLT Italy. Above all, I have met many of the people who ensure around the clock that supply chains continue to function. What I have seen during this time is a company with strong substance and committed teams. HHLA is operating in a challenging environment, but it is well positioned to address the challenges ahead. At the same time, I have also gained a clear understanding of where we need to improve and where we will focus our efforts going forward. Let me now briefly summarize the past year 2025. The year was shaped by a demanding market environment. Persistent geopolitical tensions and continued economic weakness in Germany weighed on supply chains and reduced planning certainty. At the same time, global trade flow shifted with declining volumes on North American routes and growth in Far East trades, particularly with China. Another factor during the year was the reorganization of liner services following the formation of new shipping alliances, most notably the launch of The Gemini Cooperation by Hapag-Lloyd and Maersk. In addition, MSC gradually shifted its Hamburg services to HHLA over the course of 2025. For the Port of Hamburg, this resulted in a noticeable reallocation of traffic flows, while all major alliances continue to be handled reliably by HHLA. In this dynamic environment, we focused on strengthening our operational base. We continued to modernize our Hamburg container terminals, building on our automation expertise at CTA and advancing our reorganization and expansion measures at CTB. At the same time, we strengthened our European Intermodal network by further expanding the activities of our Rail subsidiary, Metrans. For instance, we announced the modernization of our terminal in Slovakia and laid the foundation stone for a new site in Hungary in 2025. Most recently, we secured a 50% stake in a Romanian terminal to establish our first intermodal facility there. With investments like these, Metrans strengthened its position in Southeastern Europe. Even in a challenging geopolitical environment, we remain committed to our long-term strategic priorities. These include our continued engagement in Ukraine marked by the acquisition of a majority stake of 60% in the Intermodal Terminal Batiovo. Operationally, this all translated into solid growth. Container throughput increased by more than 5%, while Container transport rose by almost 11%. Supported by this volume growth, both revenue and EBIT made good progress. Revenue in the Port Logistics subgroup increased by about 10% and EBIT rose by more than 20%. At the same time, profit after tax and minority interests was burdened by a one-off and noncash tax effect. It was not cash-effective, but had a significant impact on net income for the year. Against this backdrop, the Executive Board, together with the Supervisory Board have decided to propose to the Annual General Meeting that no dividend will be distributed for the 2025 financial year. The focus remains on financing capabilities and a disciplined capital allocation to support the persistently high-level of strategic investments ahead. With that, I would now like to hand over to Annette, who will take you through the performance of our segments in more detail, starting with the Container segment. Annette Walter: Thank you, Jeroen, and good afternoon, everyone. Let's move directly to the performance of our Container segment. As Jeroen has already mentioned, we recorded overall growth in container throughput of 5.4%. Volumes at the Hamburg container terminals increased by 4.8% to almost 6 million TEU. The key drivers in overseas traffic were volumes to and from the Far East, especially China, as well as South America, Africa, Australia and the Middle East. By contrast, the North America shipping region declined strongly. Volumes in feeder traffic increased significantly year-on-year. This development was supported mainly by traffic with Finland, Poland and other German ports. However, cargo volumes from Estonia, Latvia and the U.K. declined. The proportion of seaborne handling by feeders was slightly above the previous year's level at 19.6%. At our international container terminals, throughput volume rose strongly by 19.2% to 339,000 TEU. Especially in Italy, we saw remarkable volume growth at the HHLA PLT Italy, which really makes us proud. At CTO, we resumed seaborne handling in the third quarter of 2024 and we were able to continue operations throughout 2025, also, still with certain limitations. This base effect leads to the significant year-on-year increase expected for 2025. Volumes at the multifunctional terminal at HHLA TK Estonia declined slightly on the other hand. Segment revenue climbed significantly by 9.0% year-on-year to EUR 843.2 million. This was supported by higher throughput volumes and beneficial shift in the modal split. On top of that, HHLA's international container terminals made a positive contribution to revenue growth with a strong performance of PLT Italy standing out once again. EBIT costs increased by 11.5% compared to the previous year. This was mainly driven by extensive automation efforts, the positive volume trend and correspondingly higher capacity utilization. Personnel expenses also increased, reflecting union negotiated wage settlement and the additional deployment of personnel from the general port operations pool. In addition, expenses for consultancy and related services as well for purchase services, rose strongly. As a result of necessary investments, depreciation expenses increased moderately. The earnings safeguard measures implemented at the Hamburg container terminal since March 2023 had an offsetting effect, but were not sufficient to fully compensate for the cost increases described. Against this backdrop, EBIT declined by 6.4% to EUR 73.6 million, while the EBIT margin decreased by 1.5 percentage points to 8.7%. So let's move on now to the Intermodal segment. Transport volumes in the Intermodal segment made particularly good progress over the year. As a result, container transport rose by 10.9% to 198,200 TEU compared to the previous year. Rail transport rose year-on-year by 11.2% to 171900 TOU. This strong volume growth was largely driven by traffic with the North German seaports as well as traffic in the German-speaking countries. Moreover, the transport volumes of Roland Spedition in the previous year were only included from June onwards. Road transport rose significantly by 8.7% to 263,000 TEU. This development was helped in particular by the recovery of transport volumes in the Hamburg region. With an increase of 12% to EUR 797 million, revenue outperformed the volume development. In addition to routine price adjustments, this was partly due to the further increase in Rail share of the total intermodal transport volume from 86.5% to 86.7%. EBIT increased by 23.9% to EUR 103.7 million. The main reason for this strong EBIT growth was the increase in transport volumes despite an opposing effect from ongoing operational difficulties caused by construction work on major transport roads and congestion at the North-German seaports. Let's turn briefly to the Logistics segment, where we have pooled for instant vehicle logistics consultancy as well as digital and leasing services. In the reporting period, the consolidated companies generated a revenue of EUR 92.8 million, representing an increase of 10.9% compared to the previous year. The rise is attributable to the leasing company for intermodal traffic and to vehicle logistics. After reporting a loss in the previous year, the segment returned to a positive operating result of EUR 6.5 million in 2025. The performance within the segment varied across the individual companies. Whereas the Leasing company and Vehicle Logistics made strong earning contributions, our Innovative business activities fell short of the prior year result. At-equity earnings also made encouraging progress, increasingly by 27.5% to EUR 5.7 million in the reporting period. Coming back to the Port Logistics subgroup as a whole, let's have a look now at our cash flow development. The reporting period, cash flow from operating activities of EUR 257 million mainly comprised earnings before interest and taxes as well as write-downs and write-ups on nonfinancial assets. The main items with an opposing effect were interest payments, trade receivables and other assets as well as income tax payments. Investing activities resulted in a net cash outflow of EUR 307 million, up almost EUR 26 million on the previous year. This development was largely due to payments for investments in large-scale equipment at the Hamburg container terminals as part of our efficiency program. As a result, free cash flow of the Port Logistics subgroup was a negative amount of EUR 50 million. Cash flow from financing activities totaled EUR 0.4 million. On the one hand, new financial loans of EUR 140 million, on the other hand, opposing effects from dividend payments and settlement obligations to shareholders of the parent company and to noncontrolling interest as well as from repayments on bank loans and payments for the redemption of lease liabilities. Overall, our available liquidity at the end of December 2025 remained at a robust level of EUR 180 million. Before I hand back to Jeroen, I would like to briefly address our dividend proposal. At this year's Annual General Meeting, the Executive Board and the Supervisory Board will propose, not to distribute a dividend for the 2025 financial year, neither for the Class A nor the Class S shares. As we already mentioned before, earnings per share are at a very low level. At the same time, we are currently investing at a high level in order to modernize our terminals and ensure that our infrastructure is fit for the years ahead. Against this backdrop, we have decided to retain the available funds within the company to safeguard our ability to invest and to finance our projects. This represents a responsible prioritization in favor of the long-term stability and future strength of HHLA. That concludes my remarks. For the review of our ESG performance, an update on the squeeze-out and an outlook for the 2026 financial year, let me now hand back to you, Jeroen. Jeroen Eijsink: Thank you, Annette. Let me start with the sustainability topic. Sustainability is not an image project for us. It's increasingly becoming a hard competitive factor. Our customers are paying much closer attention to low-carbon supply chains, and we are actively helping them achieve their targets. To do so, we are making investments in three key areas: energy-efficient systems, electrified equipment fleets and automated processes with significantly reduced emissions. There are already very concrete examples of this across our operations. At CTA, our tractor units are now fully electrified. At CTB, automated guided vehicles are helping us to significantly reduce diesel consumption, and at CTT, we are operating hybrid van carriers that are already designed to be converted to battery or hydrogen power. As a result, almost half of our total energy consumption is already covered by renewable sources today. This clearly demonstrates that technological innovation and sustainable solutions go hand-in-hand at HHLA. This is not only an ambitious aspiration, it's operational reality. Accordingly, this is also reflected in our EU taxonomy indicators, where we once again achieved very strong results. All of these measures are decisive steps towards our long-term objective to achieve climate-neutral production across the entire HHLA Group by 2040. Before we turn to the outlook for 2026, I would like to briefly address another topic that has been high on our agenda since the beginning of the year. In addition to our operational and financial performance, the squeeze-out request announced in early January by the Port of Hamburg Beteiligungsgesellschaft SE, HHLA's majority shareholder has required considerable attention. So where do we currently stand in the process? The amount of the cash settlement is currently being determined by an independent expert. Following this, the squeeze-out will require approval by the Annual General Meeting in June. Of course, the Executive Board will accompany this process in a responsible and constructive manner. Let me conclude by briefly addressing the current market situation and our outlook for the 2026 financial year. Recent developments in the Middle East once again pose significant challenges for international shipping. They continue to affect global trade routes, sailing schedules and supply chains and as a consequence, also have an impact on European ports and logistics corridors. At present, we are seeing a market rise in uncertainty. Shipping lines are adjusting schedules at short notice, opting for alternative routes and in some cases, accepting extensive detours. This results in longer transit times, higher operating costs and greater operational complexity along the supply chain. Against this backdrop, the outlook shown on this slide is subject to a degree -- a high degree of uncertainty. At the same time, the progress we've made in recent years in modernizing our infrastructure and expanding our European network provides a solid basis for our expectations for the current financial year. Overall, we expect a positive development for the current financial year. We anticipate a significant year-on-year increase in container throughput and a strong year-on-year increase in container transport. Moreover, strong revenue growth is expected from the Port Logistics subgroup compared to 2025. EBIT is likely to be between EUR 160 million and EUR 180 million. To further increase efficiency and expand capacity in the Container and Intermodal segments, capital expenditure in the Port Logistics subgroup will be in the range of EUR 400 million to EUR 450, around half of this amount will be invested in the Container segment with the majority going to the Hamburg container terminals. These investments will focus on the efficient use of existing terminal space in the Port of Hamburg and the expansion of our foreign terminals. The other half will be used primarily to further expand our own transport and handling capacities for our Intermodal activities. With this outlook for the current year, I would like to close my remarks on our 2025 financial results. Annette and I are both happy to take your questions now. Operator: [Operator Instructions] Ladies and gentlemen, there are no questions at this time. I would like to turn the conference back over to Jeroen Eijsink for any closing remarks. Jeroen Eijsink: Ladies and gentlemen, thank you very much for your interest in HHLA. Before we conclude, I would like to leave you with a closing thought. HHLA remains a central pillar of European logistics. Our international network strengthens our resilience, broadens our positioning, enhances our competitiveness. Our investments consistently focus on reliability, efficiency and sustainability, guided by our commitment to continuously improve customer satisfaction. We are determined to stay on this course. Thank you.
Operator: Good morning, everyone. I will now turn the call over to Elizabeth Hamaue, Aya Gold and Silver's Director of Corporate and Financial Communications. Please go ahead. Elizabeth Hamaue: Thank you, operator, and welcome, everyone, to Aya's Fourth Quarter and Full Year 2025 Earnings Conference Call. Here with me today, I have Benoit La Salle, President and CEO; Ugo Landry-Tolszczuk, Chief Financial Officer; Elias Elias, Chief Legal and Sustainability Officer; Raphael Beaudoin, Vice President of Operations; and David Lalonde, Vice President of Exploration. We will be referring to a presentation on this call, which is available via the webcast and is also posted on our website. We will be making forward-looking statements during the call. Please refer to our cautionary notes included in the presentation, news release and MD&A as well as the risk factors included in our AIF. Technical information in this presentation has been reviewed and approved by Raphael Beaudoin, Aya's VP of Operations; and David Lalonde, Aya's VP of Exploration, both of whom are Aya's qualified persons as defined under National Instrument 43-101 Standards of Disclosure for Mineral Projects. I would also like to remind everyone that our presentation will be followed by a Q&A session. With that, I would now like to turn the call over to Benoit La Salle. Benoit? Benoit La Salle: Elizabeth, thank you. Welcome, everybody, to this Q4 2025 presentation and full year 2025 as well. I would like to remind everybody that for Aya, the year 2025 is a ramp-up year. That's when we started the -- after the commissioning, which was in December of 2024, we did the commissioning of the new plant and then we went into the ramp-up year. So obviously, each quarter saw some improvement. And today, we're pleased to report that the fourth quarter was an excellent quarter and that the year overall is finishing very, very strong. So in the presentation that you have, I would ask you to go to Page 4 and you see here that we have record revenue, record net income and operating cash flow. So for the year 2025, our revenues are at $202 million, always reporting in U.S. dollars. So $202 million compared to $39 million for the previous year. Our net income stands at $46 million after tax and compared to a loss of $26 million in 2024. I also would like to point out that the $46 million is after more than $14 million of stock-based compensation, which is our 3-year option program for senior management, which is being expensed. So when you look at it on an earnings per share basis, at $46 million after tax, it's an earnings per share of $0.32 or $0.33 per share. But when you look at it on before stock-based compensation, you need to add $0.10 to the earnings per share basis. The cash flow is very strong. We had a cash flow of -- operating cash flow of $72 million compared to $9 million negative on the previous year. So we have a very strong position. And we're ending the year with a cash balance unrestricted of $136 million. And to that, you need to include $16 million of restricted cash, which is in an account for EBRD just as part of our long-term $100 million loan that we've obtained from EBRD for the construction of Zgounder. So globally, a very strong Q4 and a very strong year, knowing that it's a ramp-up year. Moving to Slide #5, which is where the KPIs are, which I've been telling you about and how we manage starting on the left-hand side on the mining tonnage. If you see in Q4, we've mined more tonnes than we've processed, which is a great sign, meaning that now the mine is putting through more ore than we need at the plant. Therefore, we are increasing our stockpiles. So you recall that in Q1, Q2 and Q3, we were processing more than we were mining. Now in Q4, we are mining more than we're processing. If you look at it on a yearly basis, you can see that we mined 1 million tonne and we processed 1.1 million tonnes. So for the year, we did eat up a little bit of our ROM pad. But for the quarter, we have changed the trend and we're now building ROM pad, which is excellent. The total mining came 62% from the open pit. Our goal is to be 70%-30%. We're getting there. But for the year 2025, we are at 62% from the open pit. The milling rate, which is in the middle on Page 5 is, you see the milling rate, how interesting it is. If you look at Q4 of last year, we were at 1,200 tonnes a day. You recall that historically, we were at 700 tonnes a day. We were just commissioning the new plant. By the end of Q1, we were at 2,800 tonnes a day nameplate capacity. So it took 1 quarter and we were at nameplate capacity. And then you see Q2, we were at 3,000 tonnes a day. Q3, we were at 3,300. And now Q4, we are at 3,800 tonnes a day average. So by 1 year of ramp-up, we're 1,000 tonnes a day above the nameplate of 2,700. So it's about 40% higher than nameplate. Exceptional plant, very well built. And if you go to the right and you look at the recoveries and the availability, well, that tells you everything. So not only are we operating 40% above nameplate is the recovery for the year is at 88.4% but the recovery for Q4 is at 91%. Again, you recall that in Q1 2025, we had issues with the oxygen plant. The recoveries were in the low 80%. We told you we would fix that. It was under designed during the construction and the planning, we corrected it. And now you have a recovery rate of 91.2% in Q4, which is exceptional. It's actually above the design when we did the feasibility study. Our average was supposed to be around 88%, and now we're exceeding that by 3 to 4 points. Plant availability, you see it on the right-hand side of the slide, Page 5. Plant availability in Q4 is 99%. I don't think you can beat that. It's extremely high. For the year, we're at 96%. Obviously, it's a brand-new plant. So we're comfortable with this. But all in all, what this is telling us is the plant is absolutely running well. It was built, you recall, a little bit under budget. We commissioned it on time. We ramped it up in 1 year or in 3 quarters and now we're running above nameplate. So it's a very robust plan that we have. We produced in Q4 1,547,000 ounces, some of which came from Boumadine because you know that Boumadine, we're processing stockpile. So globally, it was a very strong quarter. Going to Page 6, I think that is the summary of our industry. On the left-hand side, you see it's all about now margin. It's all about margin. Q4 2024, the margin was at the time because we were in ramp-up and in commissioning even -- so the margins were very, very small. And then you see to Q1, we get into a margin of $13. Q2, we have well, $13 margin. And then in Q3, the margin becomes almost $20. Now the margin is $38 in Q4 and the margin for Q1 because we're now done Q1, we know that the average realized price for the period of Q1 is more like $80. So we're about $20 above Q4. But that is everything. This is what our industry is all about right now is the margin. So the margin is very high. It's something that helps us manage the mining, the grade, the cutoff, but also is showing us and is creating a lot of liquidity. So on the right-hand side of the slide, you see the revenue from Q1 at $34 million to all the way up to Q4 at $75 million. And that Q4 at $75 million is based on a net realized silver price of $58. So you can imagine that going forward, we are a believer in the silver price. I mean, it's just going to get better. If you look at the net income, Q1 in the ramp-up, and I said that in the previous quarters, how many times you see net income in a ramp-up period. So net income of $7 million in Q1 of $9 million in Q2, $12 million in Q3 and $18 million in Q4. So very strong Q4 again and within Q4 with an earnings per share of $0.12 and for the year of $0.32. Again, and this is after $0.10 of stock-based compensation. So a very strong quarter. The plant is running well. The profitability is there. The margins are there, and we have enough cash, and that what takes us to Slide #7 is we have a very strong balance sheet with $136 million in cash. In Q4 of this year, we generated before working cap, $68 million of cash flow before working cap changes, $68 million for Q4, it was $35 million. So $68 million for the year, $35 million for the quarter. That pays for all of our expenses. So the CapEx, the capital expenditure for the year was $33 million. The exploration was $42 million. That's for 2025. Now for 2026, capital and exploration are similar, a bit higher on exploration, but you can see that the cash flow generated covers more than the capital expenditure and the exploration expense. So very strong year again. The cash position unrestricted is at $136 million. And we also have a little credit facility of $10 million available with EBRD. It's a $25 million. We did draw on $15 million on it just because we have it and we did not want the credit facility to end and -- but we still have $10 million readily available. So these are the results, but we're looking at the year 2025. So we just talked about the financial results, the operation, the fact that the mine is producing more than what the mill needs. So the mine is running well. The underground is running where we want it to be. The open pit is running where we want it to be. The open pit needs to increase a little bit its throughput, but it's -- we're exceeding what we need at the plant. What we did as well in 2025 was a new resource, a reserve resource update at Zgounder. So we reviewed the mine plan. We've reviewed all the geological model. We've changed the mining approach going from selective, very restrictive mining where we would take the high-grade zone, and we went to more of a bulk mining scenario. And the reason is, is because Zgounder is very unique geologically it's not a vein system. You're not following a vein like most silver mines where you mine what you see and you mine the vein and you have most of the time, silver, a little bit of gold, some have lead and zinc. Here, it's not the case. Here, the Zgounder mine is a loaf of bread. It's 200-meter wide, it's 1.4 kilometer long. It's 700 meter deep and it's mineralized. In there, you have some structures where the fluids went by and those structures are extremely high grade. But globally, the envelope is mineralized. So we've changed the approach, we've reviewed what was there. Of course, with the new silver price, it's extremely important to understand the geology because we do not want to leave behind pockets of 100 gram per tonne silver, though they're not in the model or they were deemed to be noneconomical 4 years ago. Today, this is absolutely economical. So what we have is we now mine the entire structure. We have created stockpiles, so a lower grade stockpile between 40 and 80 grams, which is set aside for later. We have the regular stockpile, which we quantify. Of that, we have 250,000 tonnes on the regular stockpile and we follow the mining based on our mine model. But what we are mining is not, again, not a vein, but a really a mineralized loaf of bread, which is we've gone from selective mining to bulk mining, makes a big difference. And you see it on Page 9. So on Page 9, you have the new mine plan. The new mine plan accounts for 6 million ounces of production per year for 11 years. It has an average cash cost for the period of $16.26 and AISC of around $19. And if you look at the mine plan in the 43-101 document, you see that for 2026, we're forecasting in that mine plan 5.8 million ounces per year with a cash cost of around $21. And the reason is because of the strip is we're at the beginning of the open pit. We have a lot of strip, strip ratio is between 13x and 15x. So we have a lot of strip and hence, that increases the cash cost in the first few years, and it reduces -- the cash cost will reduce in the later years as the strip is going to be coming down seriously. So today's Zgounder is done. It's built, it's debugged. It's running smoothly. It has its own team. It's accountable, and we know and it's predictable. So it will be 6 million ounces right now based on what we know in geology because, of course, we're always looking for more. But what we know, it's 6 million ounces per year for 11 years with an all-in -- with a cash cost of $16.26. Also this year and going to Page 10, this year being 2025, we've completed the PEA on Boumadine. Now that's been in the making for a couple of years. We've done a lot of drilling. We knew that this was a very robust project and we did it on the 2024 resource, which was available at the beginning of 2025 and we did a very thorough PEA with a lot of the work done to -- higher than the PEA level. And what this is showing us the highlight of the PEA is the low initial CapEx. That's the highlight of the PEA, $446 million of CapEx to build a company or a project that will be producing per year for the first 5 years, 400,000 ounces of gold equivalent or 37.5 million ounces of silver equivalent. Now we're showing it to you on 1 to 5 years because year 6 and after will be compensated by putting in the 2025 drill program, which was not put in at the time, and we are doing this as we speak, and that will be ready for the end of June, beginning of July. And that's going to change the mine plan, and it's going to change the production profile in the later years. But based on the 2024 results, we do have a project using $2,800 gold and $30 silver, you have a project on a pretax basis that gives us $2.2 billion of net present value. It's got a CapEx efficiency ratio of 5:1, CapEx to NPV and internal rate of return of 69% and a payback of 1.3 years, and that is using $2,800 gold and $30 silver. So you can imagine that at the current price and with the production that's going to be updated, this project is even more robust than what we're seeing. And all of that for year 1 to 5, the AISC on a gold equivalent production will be around $920. So where do you have that kind of a project that can produce 400,000 ounces of gold equivalent on an AISC of low $900 and a CapEx of $446 million, extremely unique, extremely rare in a great jurisdiction, and that's what Boumadine is all about. So when we look at Boumadine on Page 21 -- on page -- sorry, 11, it's a district scale project with low initial CapEx, extremely rare, extremely unique. It has a strong production profile with high-grade material. The mining permit is in hand. Strong economics based on production of 3 marketable concentrate. Now that's very important is you have a lead concentrate, you have a zinc concentrate and then you have a pyrite concentrate. And out of the 3 concentrate, we will recover silver or gold, silver, lead and zinc. Now the pyrite concentrate, which historically people thought was a problem, well, it's actually now an asset because following the war and following what's been happening in the Middle East, sulfur has gone from $100 a tonne to $500 a tonne and is expected to go as high as $800 a tonne. Sulfur comes from the pyrite concentrate because we have sulfur in the pyrite concentrate. So the value of our concentrate has never been as good as it is right now and is expected to continue. So historically, when people were saying projects like that are complicated and all that, sure, if you have low-grade material, it can be more complicated. But in this case, with a project where the -- on a silver equivalent basis, you're at 450 gram per tonne or on a gold equivalent basis, you're almost 5 gram per tonne. You're in an open pit situation and underground and you have 45% sulfur in your pyrite concentrate, this is really a valuable concentrate. So we're fast tracking this. We're pushing now on the revised PEA which to show you exactly how profitable this project is going to be once we've inputed the new resource, reserve resource model and some of the new data that we have, especially on the marketing side of the concentrate. Again, to close the year 2025, we did a lot of drilling. As I always say, Aya is an exploration company, but it has one project in operation, one project in development, and we do a lot of drilling. So at Zgounder this year, we completed 28,000 meters of drilling. The budget was 25,000 meters and the average cost of meter is $144. So extremely good cost, very -- this is all core drilling. It's all diamond drilling, giving us a lot of information. We have many new targets. We have discovered extension to the Zgounder main project, and we also have many new targets that we will be drilling this year. At Boumadine, we've drilled 150,000 meters this year, this year being 2025. The target was 140,000 meters. We exceeded the target. Our cost of drilling is also similar at $144 a meter diamond drilling. We have discovered or we have discovered extension to the zones, the 3 mineralized zones that we have, and we've also discovered new zones in the Boumadine complex. Boumadine is a very large piece of land. It's a district. We have -- this year, we've added 10 new permits. We have a footprint that is in excess of 300 square kilometers under the exploration permit and we have an additional 500 square kilometer under a [indiscernible] permit, which is an exploration permit, but not yet turned into the exploration permit that gets transferred into a mining permit. So it's different steps in how they approach exploration in Morocco. So we had a fantastic year drilling almost 180,000 meters in 2025 with beautiful results at Zgounder and at Boumadine. Moving just to the guidance. This is already public. We told you that this year, we expect to produce between 6.2 million ounces and 6.8 million ounces. We know that in the mine plan at Zgounder, it's based for 5.8 million ounces. Again, just to be conservative, we've given a guidance of 5.2 million ounces to 5.8 million ounces. And we've put in 1 million ounces of silver equivalent at Boumadine, where we're treating tailings. The cash cost at Zgounder is as per the mine plan. Again, I would refer to you to the 43-101 document of $21.50 and Boumadine is at $10. That is extremely conservative. You'll see that in Q4, we were a lot lower than this. Sustaining and growth capital for the year is at $36 million, which is at Zgounder mainly is to push the ramp down to the granite to the contact of the granite where we see high-grade mineralization. So we're going to be pushing this all the way down. We will also be putting in an ore sorter, and we are working on increasing throughput capacity, though we are at 3,800 tonnes per day. We're putting a little bit of work to bring our throughput capacity to exceed 4,000 tonnes per day. So very reasonable capital to be spent this year and the exploration program, of course, the $60 million in exploration program, and that is mainly 200,000 meters at Boumadine, which we really hope to exceed. And I have to say that as of now, we are ahead of schedule there on our drilling, and we will be drilling 20,000 meters at Zgounder as well. So going forward, for 2026, the guidance is straightforward. The costs are well under control as we are now in cruising speed at Zgounder. So just to close, what's the focus and where are we going? So the focus is to accelerate Boumadine. We do not need debt financing. We don't need new equity financing. We can do Boumadine with our own cash. We totally have $130 million in cash. If everything stays where we are right now, we could be generating net-net of all expenses, $200 million this year. So we can fast track the feasibility study in which we are fast-tracking feasibility study, all the work that needs to be done, every chapter in the feasibility study is being worked on right now. And we will start the construction of every element that is completed in this feasibility study as quickly as possible. The drilling, as I've mentioned, is ongoing, 180,000 meters of infill drilling on the main structures, which is to convert inferred resource into measured and indicated. And regional is really depending on what we see and what we find, but currently budgeted at 20,000 meters but again, this is completely open as we're drilling some very high priority targets on the Boumadine regional play. At Zgounder, we will continue to optimize mining operation. As I said, we want to increase the open pit a little bit more. We want to better control the grade in the open pit. We still need to work on that. Of all the KPIs, the only one left is to really control the grade in the open pit a little bit better. The underground is done. The throughput is done with the underground. So we will continue to optimize mining operation. We have steady-state production. Of course, our goal is to take the 3,700 tonnes per day and push it up to 4,000 tonnes per day. And we always look at other means to increase plant capacity. So the story is very simple is you have an asset that's in production, that's built, that's debugged, that has 100 million ounces of measured and indicated resource that will give you 6 million ounces a year at an AISC of $19, let's put it, $16 cash cost plus about $3. So let's say, $20. So you have 6 million ounces with a $20 all-in cash cost or cost, not cash, cost. And with that, it generates enough money to build the second asset, which is currently in development, which is called Boumadine. Boumadine today stands at 450 million ounces of silver equivalent, but that is being updated because that did not take into account the 2025 drill results. That's being put in as we speak. We'll have the revised PEA available for you in a couple of months. But on Page 15, to the right, that, to me, is the future of Aya is you look at Aya and what kind of strength it has, well, it has a project that will produce 6 million ounces called Zgounder. And it has a second project, which is discovered, geology done, metallurgy done, flow sheet done, water identified, power from the grid, people available. We're taking the same construction team, many suppliers are the same. And that project, once built, will produce 37 million ounces per year of silver equivalent. So as a company, we will be approximately 43 million ounces silver equivalent as a company. So when you look at this and you compare this level to others, we're clearly the up-and-coming silver producer with these 2 assets, not taking into account Zgounder Regional, Boumadine Regional and the other assets that we have. So going to Page 16 to close is I always say that to be successful, you need 3 things, and these are the 3 -- the end of each of the triangle is you need geology, which we have in Morocco. You need jurisdiction, which we have in Morocco because it is absolutely one of the best jurisdiction in the world. And you need the people that have done it, that have built mines, have developed mines, have made discoveries, and we have that. So if you have geology, you have jurisdiction, you have people and you are disciplined in not issuing too many shares, this is the success to have the best return on equity, meaning you have strong production and we have here. So if you look at our triangle, geology is at the top, strong growth profile, absolutely moving from 6 million ounces to 43 million ounces of silver equivalent. Core asset strength. We have 2 districts, and we're adding more districts to the story as we're putting in more permits. Exploration track record, I think we have the best in the industry, having discovered 550 million ounces of silver equivalent in the last 5 years. So you have a tight capital structure with only 141 million shares outstanding. No need to increase that number. We have cash in the bank. We are generating cash, and we're building a Tier 1 asset, which is Boumadine that will add 37 million ounces of silver equivalent as soon as it's ready to get into production. So when you look at this triangle, this is the -- why you want to be with us in Aya because you have the 3 elements that really create success. So this completes the formal part of the presentation. I will now, operator, open it up for questions. Operator: [Operator Instructions] And our first question comes from the line of Justin Chan of SCP Resource Finance. Justin Chan: Congrats on a big year. And yes, my first question is just you touched on sulfur today. I was just curious, I guess, maybe on both the positive and negative aspects of current events. Could you talk us through -- are you seeing any changes in terms of fuel pricing? And I guess, how do you plan ahead for that this year? And then on sulfur, for the updated PEA, could you give us a sense of how the payabilities might look? I realize like today's terms might not be what you've modeled long term, but I'm just curious if you can kind of give us a quantum on the payabilities for the prior PEA. Benoit La Salle: Yes. Thanks, Justin. It's a very, very good question and very current question. We're on that on a regular basis. I'll turn this over to Ugo and Ugo and Ralph are managing that part, you can imagine of the PEA. So Ugo, do you want to go ahead? Ugo Landry-Tolszczuk: Yes. So on sulfur, there's a few things. Obviously, sulfur pricing has gone from, call it, $150 when we did our PEA to close to $700 today. And also gold and silver prices have significantly increased since our PEA. The second thing is that because we're selling our tailings, we also have a much better idea of the market. We actually have some guys in China right now meeting with some of our clients. And so we expect that the payabilities that we have in our PEA to go up pretty substantially. Will we get paid for sulfur? I don't think we're going to have that as a base case in our update, but we are looking at some stuff in Morocco. We do have one of the largest purchasers of sulfur in the world in the OCP and with current price environments, obviously, us exporting a pyrite, which is very high sulfur content, I think they'd like to have some of that. So we're looking at that as well, but I think that's going to be kind of a separate thing from the main project. Benoit La Salle: But Justin, just in the PEA, the payability was established at 73%. Since then, they had revised their offer to 75% payability, and there's no long-term agreement yet signed because they're indicating to us that this will also improve, as Ugo said, considerably. So we're keeping all of the options open. We have an agreement that is signed for the Boumadine tailings because that is being exported every quarter right now to the probably similar clients or the same clients that we're going to have for the Boumadine main production in a couple of years. Unknown Executive: [indiscernible]. Justin Chan: Yes. So above 75% and potentially materially above that? Benoit La Salle: Exactly, yes. Justin Chan: Okay. Perfect. And yes, just maybe the other part of the question was just in terms of, I guess, what are you guys seeing in terms of fuel prices, consumables. I'd imagine where you are, it's not a question of availability, but just curious how do you guys -- if you have anything to manage with regards to price and protecting yourselves, I guess, in the long term? Ugo Landry-Tolszczuk: Yes. So on that, look, for sure, what's happening right now is affecting fuel prices everywhere. Morocco is not special. Morocco's fuel prices have gone up basically $0.30 in the last -- it's by law. So the law states the fuel prices. And so they've gone up pretty substantially. So we have that. We have zinc and we have cyanide. Those are our 3 main aspects. Our procurement teams are on it. We have quite a bit of cyanide and zinc on site already. So I think on that, we're quite fine. And then fuel, we have to manage and it's not so much a price. It's obviously going to affect cash costs like everybody else. And then on availability, we're keeping a close eye on it, and we're working with our contractors and ourselves to see if we can get more storage locally. And we have a pretty healthy stockpile as well. So even if ever we'd have to stop the mine, we don't run. We run our plant on electricity. And so we can still run for a good while even if we had -- if there was ever a constraint on fuel. Benoit La Salle: Yes, Justin, the big element here is our energy is from the grid. It's solar and wind, as we know. And unlike many other production assets in Africa where they have to buy fuel for energy, we do not have to buy fuel for energy. So our consumption is actually quite low when I compare that to what we were doing historically at SEMAFO and what we're buying right now in Aya, it's much, much lower. So the risk exposure is quite -- is much smaller. And as Ugo said, we have stockpiled, but we don't see any issues at the moment, except for a small increase in the price. Justin Chan: Got you. That's really helpful. And just one last one is we're almost through the first quarter now. I know it's Q4 reporting, but just curious in the -- I guess, we've almost done a quarter, I'm just curious what you're seeing in terms of mining from the open pit and underground. So in Q4, you did really well on grade from the underground, good on volume. The open pit had a tonne of volume, a little bit lower grade. I'm just curious if Q1 looks similar to Q4 or quite different actually. Benoit La Salle: Well, Raph, do you want to take this question? Raphael Beaudoin: Yes. Justin, so the beginning of the year went quite well. We have continued to increase our stockpile. We have continued to increase our mining rate in the open pit. As I've mentioned before, what we call the super pit and our change in mining strategy, everything is focused on ounce recovery to increase the recovery in the mine of silver, especially in this pricing environment. So this is what the team is focusing on, continue to accelerate the open pit, sustain the underground as it is and focus on ore recovery. So if there's silver in it, we mine it. The head grade has been stable as what we've seen last year. And we continue to evaluate what's the best way, the most cost effective and the fastest way to increase and to sustain plant throughput. So this year, we have several projects on the go to sustain throughput and to even increase it further, and that's reflected in our guidance. Now as for the grade, as you said, Q1 is almost over, and it's been quite similar, but the strip is slowly decreasing, throughput is stabilizing, and we continue to increase our stockpile. And as the year goes on, we will also continue to at least sustain the throughput and find ways to improve it. Operator: [Operator Instructions] And our next question comes from Don DeMarco of National Bank. Don DeMarco: So Benoit, you mentioned that a focus is to accelerate Boumadine. And of course, we're looking forward to the updated PEA later this year. But what are the levers or potential bottlenecks that you have to fast track the FS and then even looking ahead to construction beyond that, how can you potentially expedite that? And how much wiggle room is there in the schedule in certain optimal scenarios? Benoit La Salle: Well, the fact that you don't need debt is major because, as you know, if we needed some debt, you'd have to complete the feasibility study, give it to the lenders, they would hire outside consultants that would come over for a couple of months, review the work, question the work. We'd have to answer. You're looking at 6 to 9 months of time that is needed just to put the debt facility in place as we did with when we did Zgounder with EBRD, and we went through the whole process. In this case, assuming the silver price stays where it is and is -- or increasing, we don't need that. So the team is doing like let's take water. So water, we're putting together the strategy where the water is coming from. We probably will have to build some pipelines in between some of the villages where we're going to take gray water. We're also going to use one of the aquifer. So we as soon as that's done, the team will look at what can be done immediately, and we will start that right now. Same thing for power. Power will come from the grid. Power is built, as you know, with the national utility company. We're not going to wait for a banker to accept the PEA and give us the depth. We will get going immediately. So every chapter that we do, we look at what we can do and how fast we can do it. So it's -- of course, it's not as nice as having a gant chart and you say we'll be ready by the mid-2027, and then we'll do the debt financing and then we'll do the construction. Our mind is let's get this done as quickly as possible. So we are not cutting corners on technical things. We're not cutting corners on the flow sheet or because it's still an 8,000/10,000 tonne per day flotation plant. So not complicated, but you still have to build it. So we're not cutting corners. But clearly, the fact that you don't need equity or debt is -- will accelerate the construction of this project. Don DeMarco: Okay. Yes, that's a good point. And on the debt, I mean, you've got a little bit of debt on your balance sheet right now and looking at the cash flows that are coming in, are you thinking that maybe you might delever some of that ahead of -- as the FS gets finalized and ahead of a Boumadine construction decision? Benoit La Salle: Yes, absolutely. So the debt, as you know, is with EBRD. They're very, very good financial partners. They've been great. They are important in the country. We don't want to pay them down. And if we have even small penalties to pay, which we do have as per the agreement. So we're looking at what we can do with them. On the other hand, the fact that it's a repayment over 4 years allows us -- we think of this EBRD facility today as funding for Boumadine. We could pay it down almost today if we wanted to and be done with the debt. But we're also keeping it there while we see where the silver price goes, what's the cash flow per quarter because think of it as being utilized, whatever is generated is utilized on accelerating Boumadine. But we do have the flexibility. And yes, you will see over the next quarters and next year that the debt will be lower, knowing that if we wanted to at one point in time, in country, we could utilize Zgounder to -- if we needed some debt, which we don't, but if we needed some debt, Zgounder could be also the backbone of a special financing, balance sheet financing, not project. Don DeMarco: Okay. That excellent color there. And then just finally, as a last question, what are your thoughts on M&A at this stage? I mean, I think over time, there's been some discussion about there might be some smaller opportunities in Morocco, whatever stage that might be, maybe even close to production. But is that part of your strategy going forward over the next few years? Or is it more singularly focused on Boumadine? Benoit La Salle: No, it is, and we do review opportunities all the time, but we're extremely, extremely disciplined. So we have something fantastic 2 district, Zgounder and Boumadine. Often people say, what after Boumadine? I say, well, there'll be Boumadine 2, Boumadine 3, Boumadine 4 because of the size of the district. So there's a lot to come. And we do look at things. And if we don't like the price because they are asking too much and we don't think it's justified, we are extremely disciplined. You're not going to see anything outside of Morocco. We have a lot of work to do. We have a lot of potential in Morocco. So we're staying focused to this jurisdiction. We like it. We're comfortable. We have our team there. And so we are disciplined. Are we looking to buy Morocco? Absolutely, but very small transactions that's not going to affect really -- and most of that is not for share. Most of it is also for small cash payments and payment over time. So yes, we are looking to increase the portfolio. We do want to have a third and maybe a fourth district, but it will -- I'm quite comfortable that something is going to get done in 2026. Don DeMarco: Congratulations and good luck with Q1. Benoit La Salle: Thank you. Operator: Ladies and gentlemen, that concludes our Q&A period. I'd now like to turn the call back over to Benoit La for closing remarks. Benoit La Salle: Thank you, operator. Thanks, everybody, for being on the call today. Look, Q1 is done. It's done today. So what's coming for Aya in the coming few quarters is you will still see some Zgounder and Boumadine drill result. We have a very large program at Zgounder and an extremely large program at Boumadine. So you will see drill results on a regular basis. You will see, of course, our Q1 financial results mid-May. I believe May 15, we'll be issuing our Q1 financial results. Also, we didn't talk about this yet, but we are completing our U.S. listing. We were waiting to have our financial statements for the year 2025. Those are going to be filed with the American -- with the NASDAQ Stock Exchange. And hopefully, in a couple of weeks, we'll be able to announce that we will start trading on the NASDAQ in the States. Coming is the Boumadine technical report, as we said, over the summer. As soon as we have that available, we will be putting this out to show you the strength of this Tier 1 asset. And as Don asked, for 2026, there's going to be in-country consolidation of new districts that we like, that we see and we believe that there's a silver component to it. Some may have silver, gold, others that we look at our silver, copper, but we definitely are looking to increase our land package with silver exposure. So look, that is the end of this call. I believe we had a very good year 2025. The ramp-up is a ramp-up. It ended very, very well. We had a strong performance. We're getting into 2026 with a very strong view on silver, and we're very happy with our new mining method at Zgounder, where we go bulk mining because we believe that bulk mining silver is extremely rare, but it's also very appropriate when you have a strong silver price. Thank you all of you for being there. We will see you in 45 days in May for the Q1 financial results. Thank you, and have a good day. Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.
Operator: Greetings. Welcome to the Edible Garden AG Incorporated Full Year and Q4 2025 Business Update Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference you to Ted Ayvas, Investor Relations. The floor is yours. Ted Ayvas: Thanks, John. Good afternoon, and thank you for joining Edible Garden's 2025 Fourth Quarter and Full Year Earnings Conference Call and Business Update. On the call with us today are James Kras, Chief Executive Officer of Edible Garden; and Kostas Dafoulas, Interim Chief Financial Officer of Edible Garden. Earlier today, the company announced its operating results for the 3 months and year ended December 31, 2025. The press release is posted on the company's website, www.ediblegardenag.com. In addition, the company has filed its annual report on Form 10-K with the U.S. Securities and Exchange Commission, which can also be accessed on the company's website as well as the SEC's website at www.sec.gov. If you have any questions after the call and would like any additional information about the company, please contact Crescendo Communications at (212) 671-1020. Before Mr. Kras reviews the company's operating results for the quarter and year ended December 31, 2025, and provide a business update, we would like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical facts contained in the conference call, including statements regarding our future results of operations and financial position, strategy and plans and our expectations for future operations, are forward-looking statements. The words aim, anticipate, believe, could, expect, may, plan, project, strategy, will and the negative of such terms and other words and terms of similar expressions are intended to identify forward-looking statements. These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to several risks uncertainties and assumptions as described in the company's filings with the SEC, including the company's annual report on Form 10-K for the year ended December 31, 2025. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in the conference call may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. In addition, neither the company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements, except as required by law. All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements as well as others made on the conference call. You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. Having said that, I would now like to turn the call over to Jim Kras, Chief Executive Officer of Edible Garden. Jim? James Kras: Thanks, Ted. Good afternoon, and thanks to everyone for joining us today. 2025 was a defining year for Enable Garden as we continue to build on our foundation and expand our long-term growth potential. Over the past several quarters, we have executed a deliberate strategy to grow beyond our core controlled environment agriculture platform into a broader innovation-driven consumer packaged goods business focusing on higher growth, higher margin opportunities aligned with what consumers and retailers are actively seeking. During the fourth quarter, we continued to build momentum across our core business, securing new and expanded placements with key retail partners, including Kroger, Weis Markets, Safeway, The Fresh Market and Busch's, increasing our distribution to nearly 6,000 store locations. This reflects growing demand for our products, our ability to gain market share and the strength of our retail relationships. We saw a strong performance across both our core produce and CPG categories, including double-digit growth in cut herbs, driven by expansion in existing accounts and the onboarding of Kroger as well as continued strength in our vitamin and supplement portfolio, where demand remains robust, both domestically and internationally. We also saw significant growth in our condiment platform, supported by new customer wins such as Wakefern and Safeway. Importantly, these efforts, along with targeted investments in customer onboarding, resulted in incremental distribution of more than 700 additional retail locations, further expanding our reach across key markets. At the same time, we are expanding our portfolio of better-for-you brands, including Kick. Sports Nutrition, Jealousy GLP-1, Vitamin Whey, Pickle Party and Pulp and broadening distribution across domestic e-commerce and international markets, including placements with Amazon, PriceSmart, Target.com at Walmart.com. This expanded retail footprint and brand portfolio positions us to support our next phase of growth into higher margin, shelf-stable and ready-to-drink categories. This is not a shift away from what we've built. It's a deliberate evolution of our business, supported by our national retail distribution and infrastructure, much of which is already in place and positioned to drive scale across higher value categories. Key next step in our strategy is expanding into the ready-to-drink, or RTD category. The fast-growing market where demand for clean label, shelf-stable nutrition continues to outpace supply. We're leveraging our Farm-to-Formula approach, our sustainable manufacturing infrastructure and our established relationships with leading retailers to enter this category from a position of strength. Importantly, we are not starting from scratch. Our products are already carried across approximately 6,000 store locations, giving us the ability to deepen existing relationships while expanding into a category that aligns closely with our brand portfolio. To support this expansion, we recently announced the development of a state-of-the-art RTD manufacturing initiative at our Midwest facility as part of our Zero-Waste Inspired platform. We have selected Tetra Pak, a global leader in food processing and packaging solutions to plan, install and integrate proprietary processing capabilities, which we expect will enable us to meet growing retailer demand at scale. When you look at broader market, the opportunity is significant. The global RTD category is estimated at approximately $842.5 billion in 2025 and is projected to reach roughly $1.26 trillion by 2033. We believe this represents a durable opportunity and builds naturally on our platform, combining controlled environment agriculture, scalable aseptic capabilities and our portfolio of differentiated brands across sports nutrition, performance nutrition, adult nutrition, kids nutrition, GLP-1 supportive and functional categories. Looking ahead, we are focused on scaling our presence in higher-margin RTD, shelf-stable categories while continuing to build a more diversified consumer packaged goods business beyond fresh produce. As we execute on the strategy, Edible Garden is evolving into a more vertically integrated, innovation-driven company with the ability to deliver more predictable and scalable results. We believe this positions us as a differentiated player in the evolving food and nutrition landscape with a clear path to sustainable long-term growth. With that, I'll turn the call over to Kostas to review the financials. Kostas Dafoulas: Thanks, Jim, and good afternoon, everyone. Starting with the fourth quarter results. Revenue for the 3 months ended December 31, 2025, was approximately $4.1 million compared to $3.9 million in the prior year period, reflecting a strong quarter across the business. We launched our USDA Organic herb programs with Kroger in October and recorded our first international CPG segment of Kick. Sports Nutrition to PriceSmart, marking our entry into the markets beyond domestic retail. These wins reflect the growing demand we are seeing for our products and the continued strength of our retail relationships heading into 2026. Cost of goods sold in Q4 was approximately $5.3 million compared to $3.8 million in the year prior. The increase reflects the cost profile of the company that was actively onboarding new retail customers during a seasonally compressed period. We made a deliberate investment in these new accounts that secures 2026 shelf space and builds the fulfillment track record that major retailers require. We expect the cost structure to normalize as those programs mature and volume increases. Gross profit was approximately a $1.2 million loss compared to flat in 2024. Q4 was a quarter where we made a deliberate decision to absorb elevated costs to secure a 2026 shelf space and deepen relationships with retailers like Kroger, Wakefern and Safeway. Bringing customers of that caliber requires front-loaded investment and we see this as necessary to support future growth and operational scalability. Selling, general and administrative expenses were approximately $4.6 million compared to $2.6 million in the prior year. Primary drivers were depreciation and rent tied to the NaturalShrimp asset acquisition, higher legal and professional fees from that acquisition and our capital markets activities, along with higher compensation expenses in 2025. While the absolute number is elevated, a meaningful portion reflects nonrecurring or deal-related costs rather than ongoing run rate expense. Turning to the full year. Revenue was approximately $12.8 million versus $13.9 million in 2024. The headline decline is largely a function of our strategic exit from floral and lettuce which together contributed approximately $1 million of 2024 revenue but at low margins. Excluding those exits, core revenue was essentially flat year-over-year, and Q4 was a genuine growth quarter, up approximately 5%. That trajectory is what we consider most indicative of where the business is headed. Full year cost of goods sold was approximately $13 million versus $11.6 million in 2024. The increase was concentrated in the second half and driven by the same Q4 onboarding dynamics I described earlier. Gross profit for the full year was approximately a loss of $0.2 million compared to a gain of $2.3 million in 2024. The first half ran at margins more consistent with our historical range. However, the full year result reflects Q4 specifically and we do not view it as a representative of our ongoing cost structure. Gross margin recovery is a top priority for 2026. As new programs scale, third-party procurement cost decline and fixed costs are absorbed over a larger revenue base. Full year SG&A was approximately $15.3 million versus $11.6 million in 2024 with the increase driven primarily by the NaturalShrimp acquisition, along with other capital markets activity. The balance reflects continued investment in the team and infrastructure supporting our long-term strategy. On the balance sheet, we ended the year in a stronger position. Stockholders' equity improved through the preferred stock issuance associated with the NaturalShrimp acquisition and total debt declined approximately $0.6 million year-over-year as we continue to reduce our outstanding notes. We remain focused on managing costs while investing in the infrastructure and capabilities needed to support our transition to a higher margin, more scalable business model. With that, I will turn the call over to the operator for any questions. Operator: [Operator Instructions] Our first question comes from Jeremy Pearlman with Maxim Group. Jeremy Pearlman: Firstly, as you transition your business, you expanded away from -- not away from it -- from the fresh to include more shelf-stable CPG and now the RTD. How should we view the margin from the fresh to the CPG products? And what do you think the revenue expectation and breakdown for CPG versus fresh through 2026? James Kras: Kostas, do you want to -- I can do this with you? How do you want to... Kostas Dafoulas: You want to talk high level, and I can get into some detail. James Kras: Yes, that would be great. So first of all, thanks for the question. Our expectation, obviously, is there's going to be much more of a robust margin as it relates to the RTD business and the consumer packaged items. The fact that they are shelf stable, we don't have to worry about some of the shrink issues that we have with fresh. The fresh business has been great to us. It's really opened doors. It's built our relationships with major retailers such as Walmart, Meijer, whatnot, where we have great performance as it relates to our in-stocks and our delivery capabilities. So when you have a 98% in-stock rate and acceptance rate with major retailers, they tend to want to do more business. And this business is really all about availability. So on the margin end, what will be nice here is that there's a much more stable business because you control much more in manufacturing with the shelf-stable products that you may with fresh goods. And fresh goods, like I said, our -- have been our staple. And I think it's really showed our -- how we can execute and our operational excellence to be able to deliver on time in full in a really difficult category, and that's really paying out for us, that investment. So you'll see. But in this business, you're going to see the margins, they're going to be much more stable. There will be, like I said, more robust as a function of that. And then the revenue side of it, just based on the size of the market, which I outlined in the call earlier in our script, is more than meaningful. And this is a big category with a lot of pent-up demand, with a lot of capacity issues out there. And so we're stepping in really at the request of retailers who trust us and want these products, and they want it from somebody who they know who can deliver in time, on full, on spec. So for us, it's a great evolution, leveraging our Farm-to-Formula approach and our wherewithal as a strong supplier to major accounts. So Kos, do you want to add to that at all? Kostas Dafoulas: Yes, sure. Thanks, Jim. Yes, Jeremy. So just to kind of add to what Jim said, we can think about the portfolio kind of in 3 pieces, right, the core CEA business, which I think we'll see kind of return to steady growth in the high single digits sort of range, maybe even higher depending on customer wins and customer growth. In the CEA space margins, we can kind of look to return to like normalized margins that we saw earlier this year and last year. In addition to that, the nutraceutical business actually showed really strong growth in kind of double-digit, 20%-ish range year-over-year. And that, I think, is going to be a larger component of our revenue growth story going into 2026. The trade-off there is most -- a good portion of that product is co-manufactured. So while it gives us a lot of stability and visibility into our cost structure, the margins are not as rich as if we were to do it ourselves. So I think blended margin kind of low double digits to mid-teens is a reasonable expectation going forward. And then the biggest upside we have in the whole portfolio is around this RTD business where we're looking at pretty significant revenue opportunity with margins kind of in the 20% to 30% range. We're working through that right now as we start scoping this project out and understand the input cost a little bit better, but that's sort of first [ plus ] expectations there. Jeremy Pearlman: Okay. Great. And maybe while we're talking about RTD, it is a broad category. Where specifically do you expect to put out your products within there? I don't know, energy drinks, more like the healthy green drinks. Just -- and then is that also -- is that going to be produced at the Midwest facility that you talked about? And then I have another question to follow up about that facility afterwards. James Kras: Okay. It's going to be primarily in the protein segment. Obviously, we'll have a few different formulations, but we've been requested by a major retailer to help develop this for their private label as a start. And then it just opened up the floodgates. We're at a point now where our goal is -- I don't think it's lofty, but is to sell out the plant in the next 90 days or so, which when you think about we're looking at capacity into the hundreds of millions of units within a couple of years. This is transformative for Edible Garden. It's a huge opportunity. The fact that we've got the type of association that we have with Tetra Pak, that's driven by the major retailers saying, hey, we trust these guys. These guys do a great job, not only in fresh, but also in the nutraceuticals. I've been doing nutraceuticals, I grew up in the business, I've been doing it for almost 30 years. So kind of all points have led to this. And so for us, we're going to be playing in the sports nutrition, performance nutrition arena. I don't want to use anybody out there as an example. I just know we're going to do it cleaner, we're going to do it better, and we're going to do it at massive scale. We'll be not only driving our own Kick, high protein, lower calorie, lower carb type of product, that's going to be something that we'll be providing. We'll be doing clean label, of course. We have a GLP-1 formula, supported formula under our Jealousy brand. So we'll have our own higher-margin brands. We'll also be taking on [ co-man ] opportunities with brands that are out there that don't have their own manufacturing. But then obviously, I would say, half of the facility will be private label, ranging from all the major players, from -- you name them, all the chains. And the existing -- what's great about Edible is the existing relationships we have. I mean we service Meijer. We service Walmart, Wakefern, Ahold Delhaize, Kroger, Safeway. So the investment that you saw in Q4 serves a couple of purposes, one of which obviously is, it's great to get their businesses. Our competitors had issues and they turned to us and we picked up the phone and we made the investment to service their business and capture that opportunity. We have a nice business with Weis Markets right now. We have a nice business with Kroger. Those conversations, when they're happy with you, they turn to RTDs for them as well, not whether it's looking at what you're currently making for yourself or for your brands or doing it for them. And so when you look at our roster of accounts, Walmart and Target and Meijer and Wakefern, and like I said, Ahold Delhaize and the list goes on and on, CVS and Walgreens. I mean, these are -- they're coming to us for innovation. They're coming to us for -- because they know that we'll get the job done. So for us, we're going to start -- [ the answer was so long awaited ] but excited about it. The -- it's really in the sports nutrition, then we'll move to the adult type of products. Many of these you're familiar with out in the marketplace, whether it's Ensure or BOOST or Premier Protein product. We'll be doing similar type of products in Tetra Pak, which is the world leader in this packaging. So sustainable as well, which really goes to our core as a company and what we stand for with sustainable -- using sustainable materials, using less resources. It's why we're Giga Guru with Walmart. So that's the plan. It's exciting. And it's -- I got an exciting team here. So I hope that answers your question. Jeremy Pearlman: No, that's great. It really sounds like a really great opportunity for the company. And maybe just a final question just around the Midwest facility. What can we expect some of the CapEx requirements for that and the build-out time line and when you expect to be -- what's the total scale of that, what you're hoping for and when you could reach that? James Kras: Well, yes, I mean it's -- I don't want to give any specific numbers, but -- and there's -- some of it's also we just don't -- it's such a huge opportunity. We're not the only ones who would want it, right? So -- but look, this is a significant -- we're talking about a big facility with considerable velocity coming out of it. We're working closely with the local and state areas to be able to support this with incentives. We've already gotten the nod on a few things, which is great. Obviously, we're going to need to buy machines and retrofit a building. So you're talking some real CapEx. But we've been there before. And we've built a significant greenhouse in New Jersey, and we did a beautiful retrofit in Grand Rapids for Meijer. So we're prepared as a company to take on the challenge. And our plan is to really hopefully be out in the marketplace probably towards the tail end of 2027. Operator: [Operator Instructions] The next question comes from [ Nick Pincus with Forest Capital. ] Unknown Analyst: Congrats on the progress. A lot of my questions have already been asked. But you highlighted the strong fourth quarter momentum, including new retail placements and expansion to nearly 6,000 locations. My question is how sustainable is this level of growth? And should we expect similar distribution gains and category performance going forward? James Kras: Oh, yes, yes, yes. The expansion into doors, I mean that has -- that's been a lot of us getting kind of organized on the greenhouse business and getting focused and getting rid of some of the product lines that just didn't make sense like floral and lettuce at the time because of the lack of margin. We really shored things up this past year. It's been challenging and tough because we are in a growth sector. People are eating better. People are buying more fresh goods. People are cooking -- continue to cook more and more at home, whether it's pressures with cost of eating out or just people being more creative because that's been a trend line. We benefited from that. Herbs, they make any average dish that much better, right, using fresh herbs. And so for us, it's really just about making sure that we continue to take care of our current customers. They're the ones who got us here. They continue to give us opportunity not only within this category, which means more penetration and ideally more velocity, sales velocity at current doors. And then there's a great story around our organic growth, by the way, Nick. And that's where we've seen good same-store sales over the last year. So for us, that's great kind of exit velocity out of the year. We're going to continue to focus on our core because that's what's gotten us here. And now when you look at something like RTD, which is just a huge massive business with just so much untapped opportunity and there's just a shortfall of capacity. It's very rare in your career that, that does intersect, and you've got people asking you right, for -- to take on their business because they trust you. It's -- it makes me sleep a little better at night knowing that the money that we spent over the last couple of years has really gone to unlock these opportunities. So look, you're going to see more store count, I think across -- I know you're going to see it across the whole business, whether it's the herbs, whether it's the pickles, which, by the way, is a sleeper. And then RTDs, I think you're going to see doors, you're going to see new accounts, you're going to see all kinds of -- it's just incredibly -- I mean those are sold everywhere in all kinds of classes of trade, including classes of trade that we're not even in like convenience store currently, right? And there's -- so the beverage business, it's a great business. People love the convenience. These are great items. Protein is hot, has been hot for a while. No one sees that slowing down. And we're going to have a state-of-the-art facility cranking the stuff out for the betterment of our supermarket partners. So yes, it's going to continue, Nick. Operator: Okay. We have no further questions in the queue. I'd like to turn the floor back over to management for any closing remarks. James Kras: So thanks again to everyone for joining us today. We believe 2025 was a year of meaningful progress for Edible Garden as we continued to build our -- build beyond our CEA foundation and expand into broader, higher-margin consumer packaged goods platform. We're seeing that progress reflected in our momentum across our business, growing demand for our products and our ability to continue to gain market share with our leading retail partners. At the same time, we believe our expansion into the ready-to-drink category represents a significant opportunity for Edible Garden, one that builds on our existing infrastructure, retail relationships and our product development capabilities and positions us to scale into a large and growing market where demand continues to outpace supply. As we look ahead, we remain focused on executing against that opportunity while continuing to expand higher-margin categories and leverage our retail network to support long-term growth. We believe this continued evolution of our business is positioning us to deliver greater scale, improved margins and long-term value for our shareholders, and we're confident in the path that we're on as we continue to execute and deliver on the opportunity ahead. We're encouraged by the progress we're making and look forward to updating you on our continued execution and success in the months ahead. So thank you, everybody. Appreciate it. Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
Operator: Good morning. At this time, I would like to welcome everyone to AlTi's Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] I would like to advise all parties that this conference call is being recorded, and a replay of the webcast is available on AlTi's Investor Relations website. Now at this time, I will turn things over to Lily Arteaga, Head of Investor Relations for AlTi. Please go ahead. Lily Arteaga: Good morning to everyone on the call today. Today, we will hear from Michael Tiedemann, Nancy Curtin and Mike Harrington. Nancy and Mike Harrington, along with Kevin Moran, our President and COO, will be available to take questions during Q&A. I would like to remind everyone that certain statements made during the call may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, comments made during the prepared remarks and in response to questions. Forward-looking statements can be identified by the use of words such as anticipate, believe, continue, estimate, expect, future, intend, may, planned and will or similar terms. Because these forward-looking statements involve both known and unknown risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these statements. For a discussion of the risks and uncertainties that could cause actual results to differ, please refer to AlTi's filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. AlTi assumes no obligation or responsibility to update any forward-looking statements. During this call, some comments may include references to non-GAAP financial measures. Full reconciliations can be found in our earnings presentation and our related SEC filings. With that, I'd like to turn the call over to Michael Tiedemann. Michael Tiedemann: Thank you, Lily, and good morning, everyone. Before we begin, I would like to reflect on where AlTi stands today, 3 years since our listing. In early 2023, we entered the public markets with a clear ambition to build the premier global wealth management platform focused on the fastest-growing segment of the wealth landscape, the ultra-high net worth segment. I feel immense pride in what we've accomplished over this period and believe our team has created the most complete high-end investment solution set for large and complex families that exists. Today, AlTi delivers full-service global wealth management solutions in 19 cities across 9 countries. Since our listing, we've grown our AUM in our wealth platform by 70% while maintaining industry-leading client retention rates above 95%. We are established in the highest end of the wealth market with clients that average assets in excess of $50 million, a number that continues to rise as our prospects grow in size over time. Our team and the platform we have built is positioned to perform over both the near and long term. Now I want to turn to an important update, which also was announced earlier this morning with our earnings press release. After more than 25 years leading the company, I will be stepping down as CEO and Nancy Curtin, our Global Chief Investment Officer, will become Interim CEO. I've known Nancy for many years, and her leadership has been pivotal to the success of our business. I am confident the company is in capable hands and will continue to be supporting Nancy to ensure a smooth transition. Importantly, we've built a world-class team uniquely able to serve the most sophisticated client base in wealth management. I have immense respect and admiration for my colleagues all over the world for the dedication they have to serving our clients. Their relentless collaboration defines our corporate culture as a firm. And lastly, I would be remiss not to thank our incredible and loyal client base who've placed their trust in AlTi over the years, allowing us to serve their families across generations. With that, I will turn the call over to Nancy and the leadership team for their prepared remarks and today's subsequent Q&A session. Thank you. Nancy Curtin: Thank you, Michael. I'm grateful for the opportunity to step into this role and to work with our talented professionals and global leadership team as we continue to drive the business forward. I also want to personally thank Michael for his many years of dedication and focus, which has laid an excellent foundation to advance the company into its next chapter. As he mentioned, AlTi was built to serve the most sophisticated segment of the wealth market. This segment is looking for what we can deliver, holistic and independent approach to complex wealth management where client needs span family governance and education, tax and structuring and multiple generations and jurisdictions. We've been doing this for over 2 decades and are one of the few firms truly able to deliver customized solutions on a global basis. We're proud of what we've built. The same investment discipline and long-term client-centric approach also underpins how we serve clients on the platform today. Alongside our work with families, we have leveraged our institutional capabilities to build a leading global endowment and foundation or E&F business, using our institutional investment management platform and capabilities. This complementary and growing practice has grown to more than $8 billion in assets under management at year-end 2025, largely serving private and family foundations, and we view it as a natural extension of our wealth management business. Building on that foundation, growth across the platform has been strong. Since our listing, organic growth has been driven by both new client additions and continued expansion of existing relationships as families, endowments and foundations increase the scope of their engagement with AlTi over time. Over the past 3 years, we've generated over $9 billion of projected billable assets, including nearly $4 billion added in 2025 alone. Reflecting sustained demand from ultra-high net worth and institutional clients across our U.S. and international businesses. At the same time, we've been deliberate in where we focus the business. Over the past 3 years and especially in 2025, we have remained firmly focused on our core Wealth and Institutional Management business with continued emphasis on delivering excellence in client service. In parallel, we've taken meaningful steps to simplify the organization and address noncore costs, actions that are enabling continued investment in our platform and positioning earnings to scale over time as these initiatives progress. As part of that focus, a comprehensive strategic assessment led to the exit of our noncore international real estate business in 2025, eliminating the future costs and obligations associated with that platform. Complementing these efforts, we have adopted zero-based budgeting process as our budget methodology. Through the 2025 and 2026 process, ZBB has enabled us to identify approximately $20 million of recurring annual gross savings, with the majority expected to be realized by year-end 2026. Separately, our investments in alternative strategies continues to strengthen our capital and liquidity position and made a meaningful contribution to our results in 2025. Our interest in these internally and externally managed strategies provide a complementary source of cash flow to our core wealth and institutional management businesses and support future growth initiatives within that segment. With that context, I want to turn to our results highlights for the year. In 2025, AlTi generated $255 million in total revenues, representing 29% growth compared to 2024. Total revenues benefited from contributions from our alternative interest, while the core of our revenue base remained anchored in nearly $200 million of predictable recurring management fees. Adjusted EBITDA reached $35 million for the year. As we look ahead, we are increasingly excited by the opportunities to continue to grow organically while continuing to streamline the cost basis of the firm. With the platform now simplified following the restructuring of our noncore international real estate business, we expect our results to increasingly reflect the strong fundamentals of the company. In closing, I want to provide an update on our strategic review. As announced in December, a special committee was formed to review strategic options to maximize long-term value for shareholders. To date, the special committee has not received a proposal that it believes encapsulates the long-term value of the business, and it continues to evaluate a full range of alternatives with a clear focus on enhancing shareholder value informed by our clear strategy, strong management team and simplified platform. If any proposal received from any party, the committee will evaluate it consistently with its fiduciary duties. With that, I'll turn it over to Mike Harrington to walk through the financials. Mike? Michael Harrington: Thanks, Nancy. We made significant progress in 2025, and we expect to see the benefits that progress in 2026. The exit of noncore activities now complete and the impact of zero-based budgeting beginning to show, we believe the strength of our business will become increasingly evident in the years ahead. Total assets under management reached $50 billion at year-end, up 10% year-over-year, driven by strong investment performance and the acquisition of Kontora. That growth was achieved despite a more muted market impact in the international business stemming from foreign exchange headwinds related to the U.S. dollar depreciation, given that growth assets within these portfolios are typically unhedged. For the full year 2025, AlTi generated approximately $255 million of total revenue, representing a 29% year-over-year growth. The increase was driven by robust AUM expansion, along with meaningful contributions from incentive fees, reflecting the strong investment performance throughout the year across the alternatives managers in which we hold ownership stakes. Fourth quarter revenue totaled $88 million, up 71% from the prior quarter, reflecting continued AUM growth and a $29 million contribution from incentive fees associated with the strong performance of the arbitrage strategy in 2025, which generated an 11.3% return for the year. Stepping back from the contribution of incentive fees in the year, the underlying strength of our business continues to be reflected in the growth of our recurring management fees. Management fees totaled nearly $200 million in the year, up 9% year-over-year and $53 million in the fourth quarter, up 14% compared to the same period in 2024, supported by sustained asset growth. Before turning to expenses, I want to highlight some important nuances in our financials. The results we're presenting today continue to reflect the lag in actions taken and costs incurred in 2025. And as a result, the operating leverage of the business is not yet visible. That said, revenue growth remains strong, and we are seeing benefits from zero-based budgeting in areas such as occupancy, systems and marketing. At this stage, however, those benefits are being offset in our reported results by discrete onetime items, including temporary costs associated with the strategic review process. We expect these costs to subside in the coming periods and allow the underlying expense trends to become clearer. For the full year, reported operating expenses increased by $72 million to $329 million. The increase was largely driven by higher compensation costs, inclusive of an approximately $14 million bonus accrued associated with the arbitrage incentive fee recorded in Q4, the integration of Kontora in 2025 and other onetime items related to the strategic review process, zero-based budgeting program and the exit of the international real estate business. On a normalized basis, excluding nonrecurring and noncash items as well as the arbitrage incentive fee bonus accrual, full year operating expenses were $205 million compared to $182 million in 2024. The increase primarily reflects higher compensation costs, including the effect of the Kontora acquisition, increased professional fees and G&A expenses driven partially by the strategic review process as well as foreign exchange and VAT. Beneath these temporary and noncore items, our cost structure is improving as zero-based budgeting initiatives continue to progress and noncore items roll off, we expect these improvements to come increasingly visible in our reported results. For the full year, adjusted EBITDA increased 45% to approximately $35 million, reflecting the contribution from incentive-related performance during the year. Adjusted EBITDA for the quarter was $11 million, nearly doubling sequentially, largely driven by the net contribution from the incentive fee. Adjusted EBITDA margins were 14% for the year and 13% for the quarter. On a GAAP basis, we reported a net loss of $155 million for the year and $10 million, $15 million for the quarter, driven largely by noncash nonrecurring items. For the full year, other loss was $31 million, primarily attributable to a $35 million impairment charge of the arbitrage fund recorded in Q3. In the fourth quarter, we recorded a loss of $8 million, reflecting fair value adjustments on certain items. Looking ahead, we expect 2026 to mark a turning point for the business. As initiatives continue to take hold, progress should become increasingly evident in our normalized results, supported by additional savings from optimizing office occupancy and completing the wind down of legacy technology and vendor contracts. As revenues continue to grow and the platform scales, the impact of zero-based budgeting and platform efficiencies should become clear, allowing the financial profile of the business to reflect its underlying strength. With a focused strategy, durable client relationships and a simplified operating model, we believe AlTi is well positioned to deliver sustained growth and increased profitability over time. And with that, I'll turn it back to Nancy Curtin for her closing remarks. Nancy Curtin: Thank you, Mike. 2025 was a critical year for AlTi. While we continue to grow our business and deliver for our clients, we also made necessary decisions to simplify the business, sharpen our focus and position the firm for long-term value creation. As a result, we entered '26 with a cleaner structure, a stronger operating model the platform aligned around recurring revenue wealth and investment management. Thank you for your continued interest and support. We look forward to updating you on our progress in the quarters ahead. I'm now turning it over to the operator for questions. Operator: [Operator Instructions] And our first question will come from Wilma Burdis with Raymond James. Wilma Jackson Burdis: Could you provide a little bit more color on the decision to transition CEOs and just talk about what the search process looks like from here? Nancy Curtin: Well, first of all, well, it's Nancy, and thank you very much for your support of the company. I think it was a bit broken up, but I think you asked the question, can we give a little more color on the transition process? Is that right? Wilma Jackson Burdis: Yes. Nancy Curtin: Yes. Okay. Great. So it was a thoughtful discussion, as you can imagine, between the Board and management as part of AlTi's ongoing focus and next phase of growth. And I think we just decided it was the right time to appoint a new leader for AlTi's next chapter in growth ahead and continuing to execute our strategy. But I want to say upfront that while there's a change in leadership, obviously, myself our overall strategy of being a preeminent ultra-high net worth firm operating on a global basis with excellent client service, independent advice and all those characteristics that both Mike and I spoke to, that remains continuity, momentum and the strategy that's already in place is absolutely what we aim to continue to deliver on. And it might be helpful just to turn to Kevin, who's sitting next to me as well, and he can comment on it. Kevin and I are working side by side, and we look forward to the partnership together. Kevin Moran: Thanks, Nancy. Will, I've joined -- I've spoken to you in the past on some of these calls. So as I think you know myself, Nancy, Mike and Tied, like the management team here at the firm has been together for a very long time. I've been with the firm for about 18 years. That's the case for many at the management level. So as Nancy says, we believe in the strategy, there will be continued execution on the go-forward strategy that Mike Tiedemann put in place 25 years ago when he launched what was at that point, Tiedemann Advisors. And we, as the management team, it's a very cohesive, long-tenured team, and we remain absolutely focused on continuing to grow and execute the business strategy that Nancy and Mike Tiedemann laid out in their remarks. Wilma Jackson Burdis: Great. And I think you made a few comments on the process on the call, but can you just give us an update? I mean it sounds like is this more of a pivot towards focusing on operating. Can you just talk a little bit more about how that all fits together? Nancy Curtin: So let me take. I think what you're saying again, straight line. I think the strategy of being the preeminent global leader executing in a marketplace that is growing with ultra-high net worth, huge intergenerational wealth transfer and our already existing excellent clients that we have in place remains unchanged. But let me turn to Kevin because a core part of that is, of course, growing our business organically and from time to time, opportunistically and strategically looking at inorganic, but there's nothing on the horizon at the moment. But also continuing to be mindful of ZBB, which is a core part of our cost discipline and process and continuing to think about how we scale the business. So let me turn to Kevin to pick up on that because he's really led that over the last couple of years. Kevin Moran: Sure. Thanks, Nancy. So we're very focused, as we've talked about on previous calls, I think I'd like to talk again about today on further optimizing our cost structure. What we're really looking to do is make sure that our cost structure is as optimized as possible to allow us to continue to scale the business. So we're very focused on the cost structure. But at the same time, we're very focused on growth. So organic growth for us is really the hallmark of a really healthy business. So we're very focused on continuing to -- we think we have a terrific service model and one of the best platforms for servicing the ultra-high net worth client base that exists globally, certainly in the United States and elsewhere. So we're very confident in our ability to win business and bring on clients and service them in the best way possible in the industry. So that's on the growth side. Nancy said, we're uniquely positioned to also execute inorganic growth, both in the United States and elsewhere. So we have a just a terrific opportunity set in terms of both growing organically and inorganically. At the same time, we are really not taking our eye off the ball on the expense side. We're going to make investments. We're seeing that on the technology side. So we're making technology investments that we think will drive efficiencies over time. I think everything from mid to back office and even on the front office side, there's a lot to do in AI and technology initiatives. At the same time, looking to really streamline the rest of our non-comp costs. So we've been really proactive around occupancy as an example, and you're seeing that in the numbers. We're going to continue to make sure that we're rightsizing our occupancy expense. And then the major -- where you're going to see continued improvements is on tech spend. So I mentioned we're investing into technology. We are also actively managing the technology spend. So as some contracts were off, you'll see a continued improvement on the tech spend. And then professional fees, again, that's where Mike Harrington remarks talking about some of the noise that we've seen through from costs related to the strategic initiatives and elsewhere, as those onetime expenses come off, you also see improvement on the professional fees. So it's management team that's very focused on both the top line growth as well as bottom line improvement on the expense side. Wilma Jackson Burdis: Great. And then it look like you had pretty solid merger arbitrage performance in the quarter. Maybe give us a little bit more color on that. Kevin Moran: So the merger arbitrage strategy has been operating for a very long time. 2025 had a strong year. So I think performance was up a little over 11% for the year, and that correlated to the improving management fees, which took based upon improving AUM growth as well as a strong incentive fee. As you know, the incentive fees for that are crystallized at the end of the year. So those -- based on the performance for the full year, we earned a pretty strong incentive fee for 2025. We don't have a view on 2026 because again, we don't know what performance will be for the strategy, but that strategy has a very long track record of doing pretty well in most market environments. Nancy Curtin: I guess I would just add to that, Wilma I mean, we'll have to see what happens, of course, with the conflict in the Middle East, but M&A activity is broadly picking up both the volume and value of transactions, and this represents a pretty ripe opportunity for the arbitrage strategy. So we'll see what happens this year, but it's a good [indiscernible] he manages to produce performance in all sorts of years, but I would say M&A activity, it looks like, again, assuming we get through the conflict will be a strong year in 2026. Wilma Jackson Burdis: Okay. Great. And it looks like there were some pretty solid additions in AUA. Can you just touch on that a little bit? Kevin Moran: So I think you're seeing on the AUA growth, we did add Kontora acquisition, so was the acquisition of the German multifamily office that we completed last April that led to increased -- obviously, revenue -- our revenue numbers increased as a result of that transaction. But also, they have their business -- multifamily office, they have AUM and AUA. So you're seeing the uptick in the AUA really from that acquisition. Part of the business strategy behind that acquisition was over time to convert their AUA assets to AUM assets, which we have had a very long successful track record of be able to do with the rest of the business. That was really the main driver in the AUA uptick in 2025. Wilma Jackson Burdis: So I guess drilling into that a little bit more. I think there was some AUA that was added in 4Q. Just was curious on that. Kevin Moran: I think what you're seeing there is just the typical sort of movement of client assets in and out of their portfolios. We provide holistic services across a client's entire network. So everything from real assets like real estate to investment assets. And again, Nancy and the investment team have done a terrific job of managing client portfolios. So I think there's nothing unusual. It's just as we -- particularly if we can bring on large clients, they may have at times very large AUA as opposed to AUM assets. Just think of AUA is really nonfinancial assets, just anything else in ultra-high net worth clients could own. So real estate, hardware collectibles, those would all be flowing into our AUA as opposed to our AUM. But it's really core to the service model for us to be able to oversee and report and manage and advise on both the AUA and the AUM. Wilma Jackson Burdis: Could you give us a little more color on the 13D that was filed by Allianz. Nancy Curtin: Yes. Thank you for that question, Wilma. So as you know, Allianz has been a strategic partner of the firm for the last 18 months, and they filed a 13D. We have no further insight into what their intentions or plans are. But from a regulatory perspective, if they have any plans to increase their engagement, they are required to file a 13D. They've been a trusted and excellent partner. And if they decide to move forward, and we don't have any visibility into that at this point, that would -- could be welcome. Of course, in any event, as you're well aware, we have a special committee of the Board of Directors -- and any kind of proposal about the company strategically would go into our special committee who is committed of the independent directors to delivering the value for shareholders and representing all shareholders of the company. So that's all I can say at the moment, but thank you for the question. Wilma Jackson Burdis: And then could you just give us a little bit more detail on ZBB, where you stand with that? What's to come? What else you're doing there? Kevin Moran: Wilma, it's Kevin again. I can take that one, and Nancy or Mike may want to jump in. So zero-based budgeting is, I think, primarily one is the budgeting approach we're taking going forward. So the numbers -- the $20 million number that we talked about was based upon the zero-based budgeting approach that we used for the 2024 -- sorry, the 2025 budget. So of the $20 million, right, it's really -- it was across the entire scope of non-comp expenses. The expenses that we identified were expected to be realized over about 9 quarters going into the first quarter of 2027. The reason it's an extended period of time it's a lot of those expenses are subject to contracts. So think of anything from leases to technology vendors that as we identify and then we just don't renew the contract, we have to wait until the contract itself runs out. So what we saw in 2025 is really the noncontractual expenses. So what Nancy talked about or Mike Harrington we talked about things like marketing, travel and entertainment and tech expenses where we have contracts expiring in 2025. So that's what we've seen so far. Same thing with occupancy, we made a significant improvement in reducing our occupancy expense. So what we'll see in 2026 is continued cost reductions around technology and occupancy as we continue to move through leases and contracts that are expiring over the next 4 to 5 quarters. Wilma Jackson Burdis: Just following up on the earlier question on Allianz. Can you just remind us, it seems like I thought Allianz had a multiyear standstill. Can you just remind us where that stands, I guess, no pun intended. Nancy Curtin: Kevin take that, Kevin? Kevin Moran: Yes. So when Allianz invested, they did have a standstill, so they would need Board approval or Board consent for us to waive the standstill. So standstill can be waived. They do have one in place. So they will discuss that with the special committee in terms of how to move forward if they wish to do so. Wilma Jackson Burdis: Makes a lot of sense. And then could you just give us a quick reminder of where you stand with capital and potential to grow, acquire new advisers or new platforms? Nancy Curtin: So that's a core part of our strategy. It's both organic, which is the priority, but of course, inorganic as well. Let me turn to Kevin on that. It's -- so he can talk about the funding that we have and sources we have to continue to allow us to pursue inorganic opportunities. Kevin? Kevin Moran: Thanks, Nancy. So on the organic side, we don't see a need for funding to allow us to continue to execute on the organic growth initiatives. We have a terrific group of advisers and support staff business development teams globally to allow us to continue to pursue organic growth. We have -- in the event we identify an attractive sort of M&A opportunity or a larger lift out that would require capital. We have had discussions with capital providers and think that capital is readily available. For us, we can execute on a great idea, and we can show any capital provider, how accretive that transaction will be. So to sum it up on the organic side, we have -- we don't see a need for capital at this time to continue to execute. If and when we identify an inorganic opportunity, we are confident we'll be able to raise capital to fund and execute on that. Operator: [Operator Instructions] And this now concludes our question-and-answer session. I would like to turn the floor back over to Nancy Curtin for closing comments. Nancy Curtin: Thank you very much for joining us on the call this morning. Of course, we look forward to sharing updates on our progress on our first quarter call, and thank you for the excellent questions. Very much appreciated, and thank you for your time. Operator: Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.
Operator: Good day, and welcome to the Dawson Geophysical Fourth Quarter 2025 Earnings Conference Call. Statements made by management during this call with respect to forecasts, estimates or other expectations regarding future events or which provide any information other than historical facts may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which the company is unable to predict or control, that may cause the company's actual future results or performance to materially differ from any future results or performance expressed or implied by those statements. Wherever possible, we will try to identify those forward-looking statements by using words such as believe, expect, anticipate, pursue, forecast and similar expressions. These risks and uncertainties include the risk factors disclosed by the company from time to time in its filings with the SEC, including in the company's annual report on Form 10-K, expected to be filed with the SEC on March 31, 2026. Furthermore, as we start this call, please also refer to the statement regarding forward-looking statements incorporated in the company's press release issued yesterday, and please note that the content of the company's conference call this morning is covered by those statements. During this conference call, management will make references to adjusted EBITDA and free cash flow, which are non-GAAP financial measures. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures can be found in the company's current earnings release, a copy of which is located on the company's website, www.dawson3d.com. The call is scheduled for 30 minutes, and the company will not provide any guidance. Shareholders who might have questions are encouraged to contact the company directly. I would now like to turn the call over to Tony Clark, President and CEO of Dawson Geophysical Company. Please go ahead, sir. Anthony Clark: Thank you, Olivia. Good morning and welcome to Dawson Geophysical's Fourth Quarter 2025 Earnings and Operations Conference Call. As Olivia said, my name is Tony Clark, President and CEO of the company. Joining me on the call is Ian Shaw, Chief Financial Officer. Before I start the call, I have a few items to cover. If you would like to listen to a replay of today's call, it will be available via webcast by going to the Investor Relations section of the company's website at www.dawson3d.com. Information reported on this call speaks only of today, Tuesday, March 31, 2026. And therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay listening. Turning to a review of our current operations, outlook and fourth quarter year-end December 31, 2025 results. I am proud of the continued progress the Dawson team made during 2025, generating $14 million in cash from our operations and reinvesting a portion of that into new single-node channels to increase our capacity and strengthen our foundation for profitability and our future. We purchased $24.2 million of new equipment, primarily new single-node channels, and received our first delivery in August 2025. Due to demand from our customers, we accelerated our delivery time line throughout the fourth quarter and received the final delivery in January 2026. This equipment has been highly utilized in our U.S. and Canadian operations. These single-node channels weigh approximately 1 pound, compared to our legacy equipment which weighs approximately 10 pounds. We believe this lighter-weight equipment will provide us with improved efficiency in our operations. Currently, we have over 180,000 channels of legacy and new equipment available to service the industry. And we are increasing our efforts to secure passive seismic monitoring with positive activity. We believe that we have a significant competitive advantage for larger seismic jobs due to our higher channel count and our quality of operated energy source units. While we continue to grow our top line and invest in our future, we are continually monitoring our cost structure and reduced our general and administrative expenses 9% in 2025 compared to 2024. We believe that the Dawson team has shown continuous improvement over the past 2 years, which is evidenced by the continued improvement in our profitability metrics. We expect that improvement to continue into 2026. I will now turn the call over to Ian Shaw, who will review the financial results. Then I will return with some final remarks on our operations and outlook into the first quarter of 2026. Ian? Ian Shaw: Thank you, Tony, and good morning. For the fourth quarter ended December 31, 2025, the company reported fee revenues of $22.9 million, an increase of 67% compared to $13.8 million for the fourth quarter of '24. The company reported net income of $0.6 million or $0.02 per common share, compared to a net loss of $0.8 million or $0.03 per common share for the quarter ended December 31, '24. The company reported adjusted EBITDA of $3.3 million, compared to $0.9 million quarter-over-quarter. Now I'll cover some results for the year ended December 2025. The company reported fee revenues of $16.9 million (sic) [ $61.9 million ], an increase of 16% compared to $53.5 million in 2024. In 2025, the company reported a net loss of $1.9 million or $0.06 per common share, compared to a net loss of $4.7 million or $0.13 per common share in 2024. The company reported adjusted EBITDA of $4.7 million for the year in 2025, compared to adjusted EBITDA of $2 million for the year in 2024, which was a 139% increase year-over-year. Regarding our capital budget and liquidity, in 2025, we generated $14 million in operating cash flow and increased our cash balance to $4.9 million as of the end of the year, compared to $1.4 million at the end of 2024. In October '25, we entered into a revolving credit facility with a maximum lender commitment of $5 million, and had a borrowing base of $4.9 million and no balance outstanding on our revolver as of December 31, 2025. The company's Board of Directors approved a capital budget of $3 million for 2026, which included the final payment under the equipment single-node channel purchase of $0.9 million, which was made in January of 2026. And with that, I'll turn the call back to Tony for some comments on our operations and outlook. Anthony Clark: Thank you, Ian. As indicated in our earnings release issued yesterday, activity levels during the fourth quarter increased with 4 crews operating in the Lower 48 and 2 crews operating in Canada. The company was operating 1 large channel crew and 3 smaller channel crews operating in the United States and into the first quarter of 2026. High crude utilization in the fourth quarter resulted in healthy margins and profitability. And we are experiencing an increase in utilization and revenue in the first quarter of 2026. We resumed our Canadian operations in the fourth quarter of '25 with 2 crews and moved to the first quarter of 2026 with 3 large channel count crews. We anticipate our Canadian operations to have a successful first quarter. We've expanded our customer base to include more unconventional exploration, such as carbon capture, geothermal and critical rare earth minerals, as well as other uses of seismic acquisition capabilities. And we are seeing an increase in bid activity for these projects, as well as oil and gas exploration. I wish to thank all of our hardworking employees, valued clients and trusted shareholders. Now we will open up the lines for any questions. Operator: [Operator Instructions] And we have a question coming from the line of John Daniel with Daniel Energy Partners. John Daniel: I've been away from the seismic market for some time so my question might show some ignorance, and for that, I apologize. But how would you characterize sort of the quality of the service technology that you all provide today versus maybe what you would have had 5 to 10 years ago? In other words, just what are some of the key developments that you all have accomplished over the last several years? Ian Shaw: Tony? Anthony Clark: I'm sorry. What was the question again? I'm sorry. You said that what are some of the key developments that we have the last couple of years? John Daniel: Well, I'll dumb it down for me. I haven't been super-close to this part of the space for a while. And so I'm just curious like how has the service, the technology, how has it evolved over the last, say, 5 to 10 years? Just a little bit of history would be hugely helpful. Anthony Clark: Okay. Well, obviously, the big factor is going to these single nodes, which I quoted going from a 1-pound node to -- from a 10-pound node to a 1-pound node, it certainly helps in our acquisition characterizations of mob and de-mob, getting the equipment to the job site, from the job site, reduces our footprint in the field with less personnel, less equipment, decreases the HSE portion of our operations. And it's a higher technology. We went down from a 10-hertz phone to a 5-hertz phone. So that's the main movement of our operations. John Daniel: Okay. And then an unrelated follow-up. I know you don't want to give guidance, and that's fine, but just in light of what's going on in the Middle East, have you seen any early signs or changes in demand for services as a result of the conflict? Anthony Clark: Well, we saw an uptick for the last 3 quarters of increase in bid opportunities and utilization, as shown in our quarterly reviews. We're not sure that the -- there's been a major uptick coming around because of the war or the conflict. These budgets were set last year for exploration this year, with projects identified. So there may be some. But we anticipate if this conflict would resolve soon, that the activity level would remain at its present consistency. Operator: [Operator Instructions] And I am showing no further questions in the queue at this time. I will turn the call back over to Mr. Tony Clark. Anthony Clark: We want to thank everybody for attending and listening this morning. We wish you all well. That concludes our call. Operator: Ladies and gentlemen, that does conclude our conference call for today. Thank you for your participation, and you may now disconnect.
Operator: Good day, everyone, and welcome to Sportsman's Warehouse Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. Now it's my pleasure to turn the call over to the Vice President of Strategic Programs and Investor Relations, Riley Timmer. Please proceed. Riley Timmer: Thank you, operator. Participating on our Q4 and full year 2025 call today is Paul Stone, our Chief Executive Officer; and Jennifer Fall Jung, our Chief Financial Officer. I will now take a moment and remind everyone of the company's safe harbor language. The statements we make today contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which includes statements regarding expectations about our future results of operations, demand for our products and growth of our industry. Actual results may differ materially from those suggested in such statements due to a number of risks and uncertainties, including those described in the company's most recent Form 10-K and the company's other filings made with the SEC. We will also disclose non-GAAP financial measures during today's call. Definitions of such non-GAAP measures as well as reconciliations to the most directly comparable GAAP financial measures are provided as supplemental financial information in our press release included as Exhibit 99.1 to the Form 8-K we furnished to the SEC today, which is also available on the Investor Relations section of our website at sportsmans.com. I will now turn the call over to Paul. Paul Stone: Thank you, Riley, and good afternoon, everyone. Before we begin, I want to recognize our dedicated outfitters across the country. Every day, they deliver on our promise of great gear and great service, strengthening our connection with customers and supporting the progress to transform Sportsman's Warehouse. I'm pleased with our fourth quarter and full year results, which exceeded our revised expectations. While the first half of Q4 reflected a more pressured promotional environment, we turned our sales trends positive in the back half of the quarter, which contributed to our better-than-expected results. We also delivered positive same-store sales growth in each of the first 3 quarters of 2025, resulting in a 1% growth for the year. This is our first year of positive comps since 2020 and a meaningful milestone in our turnaround. This progress reflects disciplined execution of the 3-year strategy we launched in late 2024. While there's more work ahead, we are encouraged by the traction across many areas of the business. For several weeks prior and through the first week of December, sales softened, driven by external factors, including the government shutdown and weaker-than-expected Black Friday and Cyber Week performance. We moved quickly to adjust our holiday strategy with a more promotional cadence to meet a value-driven consumer. These actions helped reverse trends with sales turning positive in December with strength coming into January, February and March. While we are encouraged by these improving trends, we remain measured as the U.S. consumer remains under pressure. Within the quarter, performance across our core pursuits was strong. Hunting and shooting sports grew more than 5% with firearm units again outperforming adjusted NICS checks, indicating continued market share gains. We also believe January demand benefited from external event-driven factors accelerating our personal protection category. Throughout 2025, we strengthened our position in personal protection by building a more focused assortment aligned with growing customer demand for safety solutions. This work is supported by the expertise of our outfitters, many with law enforcement or military backgrounds who provide trusted service and credibility that we believe is difficult for competitors to replicate. By leaning into this category with expertise, service and a more disciplined assortment, we are attracting new customers and gaining share, which is accelerated given current external factors. Fishing delivered quarterly results of 3.2%. Warm weather in the West drove a double-digit decline in ice fishing, masking underlying strength. Excluding ice fishing, the department grew over 11%, highlighting the strength of our business and the share growth opportunities ahead. We are encouraged with our early start to the spring season with sales up double digits so far this quarter. While our key pursuits performed well, camping and softlines remain challenged, reflecting their discretionary nature. We continue to sharpen assortments, eliminate lower productivity SKUs and align these categories more tightly to our core pursuits. Inventory in these categories declined in line with sales, demonstrating improved discipline, efficiency and healthy inventory. Our e-commerce business outperformed again with sales up 8.3% in the quarter and 6.6% for the year. This underscores the strength of our omnichannel model and the growth potential in our core pursuits. We also saw improvements in both units per transaction and average order value, driven by regionally and seasonally relevant merchandise, better in-stocks and stronger attachment across categories. In 2025, we made meaningful progress across 4 strategic priorities. First, through stronger planning and merchandising discipline, along with strategic technology investments, we significantly improved in-stock levels in the core 20% of products that drive 80% of our business. This delivered faster turns, SKU reduction and improved seasonal alignment. Second, we re-anchored the business to our local market advantage by strengthening the roles of our outfitters as trusted local experts and expanding locally relevant brands and products. Our position remains clear, out local the big box players and offer more depth in merchandising authority than smaller competitors. Third, we strengthened our authority in personal protection by optimizing our assortment, increasing depth in key handgun brands and introducing a broader non-lethal offering, including an exclusive collaborative partnership with Byrna that brought in-store theater, innovation and a new customer in the Sportsman's. This reinforced our leadership and drove growth. Finally, we strengthened brand awareness and advanced our digital-first go-to-market strategy. We optimized our performance marketing approach, driving efficient traffic across our channels through targeting and a more powerful customer experience. Leveraging data-driven insights and personalization, we are reaching customers with greater precision to support profitable omnichannel growth. Now I'll walk you through the next phase of our 3-year transformation. In 2026, we are strengthening our leadership position in our core pursuits, Fishing, Hunting and Shooting Sports and Personal Protection. These pursuits define our brand and attract our most engaged, highest value customers. Building on the foundation we set last year, our focus centers on 3 initiatives to support our core pursuits. First, we are upgrading our loyalty rewards program. We are partnering with a leading strategy and platform design firm to build a more powerful program that directly connects loyalty and our credit card ecosystem. Our goals are clear: increase retention, expand lifetime value and drive higher AOV and frequency through compelling rewards and personalized engagement. This work is early, but grounded in new data capabilities and best-in-class design. We expect later this year to begin testing and plan to launch the enhanced program in early Q1 of next year. Second, we are developing firearm solution bundling, building on our strength in Hunting and Shooting Sports and Personal Protection. With over 75% of firearm purchase beginning online and significant firearm traffic already coming to our site, we see meaningful opportunity to convert more of that demand through an improved digital experience. This tool will help customers build a complete firearm solution tailored to the pursuit while improving our overall margins. Given our natural store moat, which requires the customer to pick up their firearms in-store, we are leveraging our e-commerce experience to improve attachment to these items relevant to a single firearms purchase. Third, we are reinventing the omnichannel Fishing experience. Fishing represents meaningful growth upside. We believe we have about 1% share of a large and growing category, and we have an ambitious omnichannel plan to double that share over the next 3 to 4 years. This strategy includes two pathways. First, we are elevating the in-store experience through locally assorted merchandise built around species, seasons and innovation. Second, we are strengthening our digital fishing experience with the new species and region-focused platform that integrates content and commerce. This will help anglers build their total solution more easily and quickly. While this work began in mid-2025, we are accelerating our pace given the category's appeal to new high-value customers and its margin accretive profile. Looking to the year ahead. The U.S. consumer remains under pressure. Rising fuel costs and broader macro dynamics are adding weight to discretionary spending. At the same time, however, we've seen bright spots. Since January, demand in Personal Protection and ammo has strengthened, driven by external factors. We are capturing that demand while remaining realistic about duration. We also see potential tailwinds ahead, such as America's 250th anniversary, which aligns well with our customer and categories. While early, we are seeing a strong start to the fishing season and believe we are well positioned to capture demand due to our strategic initiatives in place for this category. Given all of this, we feel optimistic about our positioning. Our strategy is working, our initiatives are gaining traction and the turnaround is firmly underway. The team is energized and disciplined, and our focus remains on driving profitable growth, disciplined management of inventory while executing against the priorities we've laid out. With that, I'll turn the call over to Jennifer. Jennifer Fall Jung: Thank you, Paul, and good afternoon, everyone. For the full year 2025, we delivered net sales and comparable store sales growth of 1%. We are encouraged by how the year finished with results exceeding our revised guidance following Q3. Importantly, this marks our first year of positive comparable store sales growth since 2020. Adjusted EBITDA for the year was $27.5 million. While modestly below prior year, this result exceeded our revised expectations, driven by stronger-than-expected sales in the fourth quarter. A key focus throughout the year was disciplined inventory management. We ended 2025 with inventory down $29.1 million or 8.5% year-over-year. We are pleased with the quality and composition of our inventory and believe we are well positioned to support growth in our key categories while continuing to improve productivity and turns. We ended the year with net debt of $90 million, a reduction of 6.1% versus the prior year and total liquidity of $107.8 million. We also generated positive free cash flow, reflecting improved operating discipline and improved working capital efficiency. Turning to full year department performance. Fishing remained our strongest growth driver in 2025, increasing 10.3% for the year and nearly 18% on a 2-year stack basis. This performance reflects more precise inventory timing, improved locally relevant assortments and continued strength in participation trends. We see this as a category with ongoing opportunity for both growth and share gains. Hunting and Shooting Sports increased 4.4% for the year, driven by improved in-stock levels in core firearms and ammunition, better alignment of inventory with key hunting seasons and continued traction in personal protection, including less-lethal alternatives. Our other categories declined for the year, reflecting pressure on discretionary spending. Importantly, we maintained inventory discipline in these areas with inventory reductions exceeding sales declines, supporting improved efficiency and margin structure over time. Turning now to fourth quarter results. Net sales were $334.9 million, down 1.6% versus prior year, with comparable store sales declining 1.8% Performance was led by Hunting and Shooting Sports, which increased 6.2%, driven by strength in firearms, ammunition and less-lethal personal protection, partially influenced by event-driven demand. Fishing increased 3.2% in the quarter, though performance was impacted by unseasonably warm weather in the Western U.S., which pressured ice fishing sales. Excluding ice fishing, sales in this category were up over 11%, reflecting its underlying strength. Our other categories declined, reflecting a more promotional environment, the impact of the government shutdown and continued pressure on the U.S. consumer. Gross margin for the fourth quarter was 28.4% compared to 30.4% last year. The decline was primarily driven by category mix with a higher penetration of firearms and ammunition, increased promotional activity and lower sales in higher-margin categories. SG&A expense improved to 28.7% of net sales compared to 29.4% last year, driven by disciplined cost control, particularly in payroll. We remain focused on managing expenses while continuing to support the business. Net loss for the quarter was $21.7 million or $0.56 per diluted share compared to a net loss of $8.7 million or $0.23 per diluted share in the prior year. Adjusted net loss for the quarter was $3.9 million or negative $0.10 per diluted share compared with adjusted net income of $1.6 million or $0.04 per diluted share in Q4 of the prior year. Adjusted EBITDA was $9.6 million compared with adjusted EBITDA of $14.6 million in Q4 of last year. Now I'll provide more details regarding the balance sheet and liquidity. We ended the year with inventory of $312.9 million, down $29.1 million from the prior year and better than our expectations exiting Q3. We exited the year in a healthier inventory position having worked through the majority of our seasonal product. As part of our ongoing inventory efficiency efforts, we are further refining the timing of receipts. As an example, for the upcoming spring season, inventory is planned to arrive later, which we expect will support improved turns and overall productivity. We expect to operate with lower average inventory levels throughout 2026 compared to last year, while still having sufficient levels of inventory to hit the top end of our plan. Capital expenditures for the full year were approximately $19.5 million, primarily focused on general store maintenance and strategic technology investments to support our operational and digital capabilities. We ended the year with net debt of $90 million and total liquidity of $107.8 million. We generated $8.9 million of free cash flow and used that cash to reduce debt. Debt reduction remains our top capital allocation priority as we continue to improve our leverage ratio. As we conducted a thorough review of our fleet of stores, we estimated we will be closing approximately 5 stores in the next 12 months. We expect these closures to happen after the holidays. Therefore, we do not anticipate a material impact to this year's results. Turning now to our guidance for 2026. Starting with our net sales outlook. We estimate same-store sales to be in the range of down 1% to up 2% over last year. This outlook reflects a balanced view of the current environment and the health of the U.S. consumer, which continues to be pressured. We expect adjusted EBITDA to be in the range of $30 million to $36 million. This improvement is expected to be driven by better gross margin performance, continued inventory discipline and ongoing expense management. We expect capital expenditures to be between $20 million and $25 million, primarily related to technology investments as well as normal store maintenance. To reiterate, our priorities for 2026 are driving profitable comp store sales growth through the execution of our strategic initiatives, managing our inventory efficiently and using excess free cash flow to pay down our debt and strengthen the balance sheet. That concludes our prepared remarks today. I will now turn the call back to the operator to facilitate questions. Operator: [Operator Instructions] It comes from Matt Koranda with ROTH Capital. Matt Koranda: I wanted to start out with the near-term demand trends that you highlighted. I know you mentioned sort of a shift that you saw at the end of December that carried through. And I think you said in the prepared remarks, all the way through March. Does that mean we're effectively comping positive in the first quarter to date? And maybe just how you think about the category strength. I would assume it's still kind of the usual suspects in terms of firearms, ammunition, personal protection that's doing well, but maybe just unpack category strength as well for us. Jennifer Fall Jung: Yes. Matt, this is Jennifer. Thanks for the question. Yes, what we made in our prepared remarks is that we were seeing the trends that really started in January continue through February and March, where you just called it as really strong growth coming from firearms and ammunition. And as we know and as you know, our industry tends to be really influenced by external events. And we think there's some tailwinds right now going on because of what is kind of going on externally. So yes, we feel good about the quarter. We gave guidance of a negative 1% to a positive 2% on the year, but we feel like we're coming out strong in Q1. Matt Koranda: Okay. Understood. And then maybe just for the EBITDA improvement that you're embedding in the guidance for the full year. Just wanted to hear how to think about the building blocks there because obviously, the comp guide is, let's call it, flattish at the midpoint. And I would assume that the mix of categories being more skewed toward firearm, ammunition probably puts a little pressure on gross margin. So where are the building blocks to get to the positive EBITDA outlook despite kind of the flattish top line and maybe a little margin pressure from category mix? Jennifer Fall Jung: Yes. So we do feel bullish about our fish category as well. That has been positive comping on a 1-year and a 2-year stack. So we're continuing to put our shoulder against fish, and we have a lot of initiatives that support it. And that with the exception of ice fishing in January, that category has bounced back nicely. So we will have some goodness there with the fish coming into play. That being said, Q1, just based on the penetration of firearms and ammunition, we expect margins to be down year-over-year. And then for the rest of the quarters, margins will be flat to slightly positive, slight improvement. And then with SG&A, a little bit of the same story, do expect slight -- flat to some slight leverage within that range. And that essentially kind of gets you to where our improvement in adjusted EBITDA comes in. Just the one thing to note that Q3 of last year versus Q4 of last year, there was a heavily weight of EBITDA in Q3 versus Q4, but we do think some of the Charlie Kirk effect influenced that. We expect those to be a little more balanced going forward. Matt Koranda: If I could sneak just one more in on the way to think about free cash flow this year, especially on, I guess, the inventory front. It sounds like the signal is we see more efficiency opportunity. Just wanted to hear about how you think about inventory balance throughout the year, especially as we're closing the 5 underperforming stores and how maybe there might be opportunity for inventory per store to improve further this year? Jennifer Fall Jung: Yes. We're definitely -- as part of our go-forward strategy in addition to executing on our -- against our core pillars, we do think there's opportunity to continue to find efficiency in inventory, everything from really about the timing of inventory, making sure that we're getting in similar to what we did in Q3 and Q4 of this year, getting in a little ahead of the season and definitely looking to take the marks before the season is over while the demand is still there. So that's what's really helped our inventory, especially towards Q4 and then how we ended up lean even though we came into the quarter with the first 6 weeks were a little bit tough. So definitely opportunity in inventory. From the stores that we discussed, which is an estimated 5 stores, it might be a few more, it might be a few less. We're still in negotiations on that one. Those we don't expect to close until after the holidays. So you're not going to see a material impact on those. depending on when we actually take action on those, we will transfer inventory and liquidate anything seasonal within the store when those, in fact, do close out. Paul Stone: Matt, I would just add, I think there's been a lot of learning on the inventory front as we went through last year. And I think from a seasonality standpoint, course correcting from '24 to '25, we're probably in seasons a little too early, carried inventory a little too long. So I think as we think of the discipline in the inventory approach this year, really, the rigor is going to be around being able to hit the mark, be able to improve the turns and to look at this improvement in inventory going through the quarters all the way through the year and be much more efficient with how we land the inventory and how we get out of the inventory. Operator: Our next question comes from Anna Glaessgen with B. Riley Securities. Anna Glaessgen: I guess I'd like to follow up on Matt's question about the first quarter here. I guess how should we be thinking about -- it sounds like the tailwinds from the external events are supporting demand offsetting maybe the con of gas inflation and the government shutdowns. How should we be thinking about the potential risk as the conflict extends? Do you think we should layer on an assumption of more consumer headwind if it extends into April, May? Jennifer Fall Jung: Yes. With the risk, we do think the health of the U.S. consumer is really the risk that we're seeing. Q1, we do have a couple of months behind us, so we're feeling pretty good. But with fuel prices and given where our customer is positioned, that's definitely something we've contemplated in our guide. On the offset of that, the tailwind really is the 250th anniversary of America, which we think resonates well with our customer. And also, if there's anything else from an external event-driven factors, a lot -- we were just looking at all the legislation, both state and federal that's out there, and there's 16 that are on the table right now, some good for our industry, some not so good, but that's just -- that also impacts consumer demand. So there's a lot of variables in there. So we've tried to make sure that as we're thinking about the quarter and the year that we've accounted for that the best we can. Anna Glaessgen: And then a bigger picture question. In the past, we've talked about potentially getting the mix back to pre-COVID, implying a lesser mix from firearms and ammo to help support margin recovery going back to the historical mid- to high single-digit adjusted EBITDA margin. Now we've seen hunt increase in penetration this past year, while, of course, it's great to see the outperformance versus the industry. I guess, how should we be thinking about the hunt penetration over -- in '26 and over the next few years and how that's being contemplated in the margin outlook? Jennifer Fall Jung: Yes. We've contemplated it in our margin. What we're trying to also do kind of going back to the mix question is, as I mentioned on the first question, continuing to put our shoulder against fish. In addition, we have been working on cleaning up the apparel business. There was a pretty big hangover in that category. And we're finally getting to the point where we're able to bring in some new and exciting brands and kind of get that -- the soft goods business back on track as well. Probably have a little bit more work to do with camp. But as we actually start taking these other categories, the soft goods and camp and gift bar and whatnot and make them more attached to our pursuits, we know that's also going to help get them back on track as well because right now, they're a little bit ancillary and doing their own thing, but it's really aligning everything to hunt, shoot, Personal Protection and fish. Paul Stone: Yes. I would just add, Anna, I think the website experience that I mean, we're really leaning into this year and the opportunity around the bundling component of it where we're not putting that complete burden on the outfit or when they come in to attach at that rate, but to be able to allow the consumer to be able to walk through an easy process to be able to have the complete package and solution that they need and then allow them to have that solution when they get to the store versus putting the complete burden on our outfitter in the store. We like what we're seeing and what we're putting into place with that. And then fish as well. We've started the work with fish. We know we're underpenetrated online with fish, even though we've seen growth over the last couple of years, we think we have a large opportunity to improve what our overall experience looks like online and to be able to allow us to be able to grow that penetration of fish as well. So the growth has really happened from fish. We need to accelerate it this year, and we think there's a huge opportunity for us to do that through investments we make on working online to allow the consumer to have an ease of experience. Operator: It comes from the line of Mark Smith with Lake Street. Mark Smith: Can you walk through a little bit more some of the different headwinds on gross profit margin in Q4? Any additional insights you can give us on kind of how much of the pressure came from mix versus promotional intensity maybe late in the quarter and anything like freight that was an additional headwind? Jennifer Fall Jung: Yes. It's a combination of mix as well as promotional cadence. We -- as we came out off of our third quarter call, we were still in the midst of having some pretty pressured sales. So as we discussed on that call, we had the inventory, and it was seasonal inventory that we needed to make sure that we were clean up into January. So we did take the opportunity to be more promotional to drive sales as well as to clean up our inventory. So that's definitely a component of it. But in addition to that, with ice fishing not performing, -- it's probably one of our weaker comps for fish was Q4 simply because of ice fishing, there was no ice to fish. So that put pressure on it as well. But that since has come back. That season is behind us. So fish is back on track now. So a little bit of both. But as we look forward, there's not a ton of tariff impact in here. There's some. We know what that is, but I wouldn't say that's putting the pressure necessarily on our margins going forward. Paul Stone: I think, Mark, I mean the big part of it, we had to play a lot of catch-up in the back half. I think we -- November was an extremely challenging month for us as we started December, we were seeing the same thing. And to Jennifer's point, we were going to clean up and lift our commitment to be able to get out of product in season and not carry it forward. We like the way clearance is year-over-year now and the health of the inventory. So we did have to take some steps being promotional at the same time being cognizant of getting out of the seasonal inventory within the season. So I think the slow start that we saw in November and carrying over into the 1st of December caused us to react. And we did that knowing that we wanted to be in a much cleaner position and not have this continuous carryover of inventory. Mark Smith: Okay. And I think, Jennifer, you may have said that you expect Q1 margin to be down a little bit year-over-year. Is that just some continuation post January of some of those same pressures and lack of snow and that's all mix. Jennifer Fall Jung: Yes, that's a mix. It's heavily penetrated towards firearm and ammunition. Paul Stone: I think that the way you think about it is with the mix, we're seeing a macro effect and February and March being lighter months for fish, not to help you there, then we get into the peak of fish, that helps to outweigh or at least to be able to take a little bit of pressure off of what the mix looks like, but to have February and March in there, especially with some of the temps that we saw on East and in particular, in the Southeast to start the year that we just don't have enough volume in those first couple of months of fish to be able to offset it. Mark Smith: Okay. And then I just wanted to dig in a little bit deeper on some of the store closures. You guys took impairments on 10 stores. It sounds like closing an estimated 5, but it's all going to come after kind of the holiday. Can you just walk us through the thought process, maybe of those 10 stores, how many are losing cash? And if any of these are kind of at the end of lease terms as you close it? Jennifer Fall Jung: Yes. So we -- I think we've always talked about how -- in general, our fleet is very healthy. If you go store by store, it's good. But really, it came time to take a hard look at those 5 underperforming stores that just don't have a long-term place in our fleet and make some calls on those. So the thought process there is these are long-lasting leases that we have because our leases are unfortunately, 10 years long. So these aren't all 10 years, but they're going out quite a bit. But right now, what we're doing -- and these are actually losing adjusted EBITDA stores. So we're working with some brokers to try to either renegotiate, get a subtenant in there, look at all different options, do a buyout, all of which financially makes sense for us just given where they are within the portfolio. I'd say the others, there's a lot of -- not a lot, but there are a few stores that are going to roll off within the next coming, call it, 18 or 20 -- excuse me, 12 to 24 months anyway. So those -- you really can't do much with landlords when you have that short of a time left on your lease. So those are ones we will -- that we may have impaired, but we will just let run off. And then there are some in there where if we're going to close some of these other stores that we know we want to close, there'll be some sales transfers to their neighboring stores, and that will actually help improve the overall productivity of those stores. So those might actually remain in the fleet. Operator: And as I see no further questions in the queue, I will pass it back to Paul Stone for closing comments. Paul Stone: By way of note, we posted an updated presentation on our Investor Relations website. Thank you for all joining the call today, and thank you to all the passionate outfitters around the country for their commitment to Sportsman's Warehouse. Together, we look forward to providing our customers with great year and exceptional service. Thank you. Operator: And this concludes our conference. Thank you for participating. You may now disconnect.
Operator: Good morning, ladies and gentlemen, and welcome to the Serica Energy plc Full Year Results Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself; however, the company can review all questions submitted today and will publish responses where it's appropriate to do so. Before we begin, we would just like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from Serica Energy plc, Chris. Good morning, sir. Christopher Cox: Good morning, and welcome to our 2025 full year results presentation. I'm joined as usual by Martin Copeland, CFO; and Andrew Benbow, our Head of Investor Relations. Thank you to everyone who has submitted questions ahead of the call, but please feel free to post any further questions you have during the presentation. And should we not get time this morning, then please contact Andrew directly. We will respond promptly to every question we receive. Martin and I will now run through a short presentation and then answer as many questions as we can in the time available. This slide is a reminder of our strategy and our purpose. We're here to produce hydrocarbons safely and efficiently while creating value for shareholders and also helping to deliver energy security, jobs and investment for the country. You may be aware that this has been our purpose unchanged for some time now. And I know that such statements can sometimes sound like typical corporate speak. But as we speak today against the backdrop of the terrible events in the Middle East, the importance of our contribution to domestic energy security has never been more apparent. We are unapologetic about the role we play in providing much-needed energy products for society. We have a two-pronged strategy for creating value. Our DNA is taking on mid- to late-life assets and then extending their field life and optimizing production. We've been delivering on that strategy recently with a number of M&A transactions, and we expect that to continue. And we are well positioned at present with a highly cash-generative production portfolio with organic growth options fighting for capital allocation. Our strong positioning is partly as a result of strategic delivery last year. We invested in our existing portfolio, carrying out significant work on resilience and asset life extensions as well as completing a highly successful 5-well drilling program around Triton. These wells will help retain robust production at the FPSO, and the success of that campaign gives us confidence to continue to exploit multiple organic investment opportunities elsewhere in our portfolio. As we continue investing, we also continued our track record of shareholder distributions with dividends amounting to 16p per share. As announced today, these distributions are continuing in 2026, as we recommend a 10p final dividend in respect of last year, continuing to strive to offer investors a compelling mix of growth and returns. And of course, key to our strategic delivery in 2025 were multiple acquisitions. We were one of the more active M&A players in the U.K. sector last year, announcing multiple acquisitions that increased and diversified our portfolio, enhanced cash flows and added to our opportunity set. In total, we increased our reserves by 19%, adding some quality long-life fields to our portfolio. The impact on production will also be material, adding over 20,000 barrels a day to our production capacity. The deals were done at very attractive prices with reserves added at a low cost of $3.30 per barrel. The acquisitions, which we have completed, being Prax Upstream and now TotalEnergies, which completed today, have resulted in the net receipt of cash by Serica amounting to $75 million in aggregate. And the ones still to be completed, from ONE-Dyas and Spirit Energy, will also result in net cash receipts or only limited cash paid out on completion. Hence, these acquisitions will be cash flow accretive this year, thereby supporting further portfolio investment and returns to our shareholders. Looking ahead, our strategy remains unchanged as we seek to acquire assets that may be non-core to others, but can be enhanced by Serica through extending field life and delivering further value, both corporately and through the subsurface. We will continue to look for potential acquisitions in the U.K., although the amount of recent consolidation means there may be fewer opportunities in the near term. As a result, and as we previously signaled, we will continue to explore opportunities overseas, but only in areas where we are confident that we can deliver our clear value creation strategy. As we grow, we are ensuring that the capabilities of our team grow with us. We are confident in our strategy and confident that we have the right team to deliver it. Since joining, I felt there were some areas in which Serica lacked the expertise required to excel as a North Sea producer. And as our portfolio has grown, the need to strengthen our capability has grown with it. We've made a number of targeted senior appointments that have materially improved our decision-making, our talent management and our ability to deliver for shareholders. We have established a quality executive leadership team and are putting in place the wider organizational structure and processes to position us to deliver on our strategic and operational goals. We are not finished, but I believe we are close to achieving the goal of establishing the right team to lead a top-performing FTSE 250 company. We need a team with depth and breadth, as we are now building a broader and more complex business. Our portfolio is more diverse and robust with assets that will encompass the entirety of the U.K. continental shelf from the West of Shetland to the Southern North Sea. Our new assets will significantly enhance the predictability and quality of our overall production and cash flows with less reliance on the 2 main hubs and the number of producing fields set to more than double. By the end of the year, we will have equity in a total of 26 producing fields. We are growing our presence in the basin and keen to continue growing. We now operate around 10% of the U.K.'s natural gas production. And today, having assumed control of the Shetland Gas Plant, we have the potential to play a key enabling role in the most prospective gas basin in the UKCS. The projected decline in North Sea production, we often see reported, is one enforced by policy and not geology. As our Chairman has said today, we urge the government to unblock the logjam in its approval of the development of new oil and gas fields, change its stance to the award of new licenses, scrap the onerous and counterproductive EPL and replace it with the already announced OGPM as soon as possible and to change its tone towards the sector. The opportunities in our portfolio alone show there is more to be delivered from the UKCS, much of which is short cycle in nature, and we're keen to play our part. And we are set to increase our production materially in 2026. As you can see from the chart on the right, our expectation for 65,000 barrels a day by the end of the year is not aspirational. It is, in fact, less than what we would be delivering today had all the asset transactions completed. That figure does include Lancaster with production scheduled to cease in May as expected, when the FPSO moves on to its next project. But of course, we need to actually own these assets first. And I'm pleased to say that completions remain on track with the previously stated timetables. We targeted the end of the first quarter for the TotalEnergies acquisition, and that completed today, slightly ahead of schedule. This transaction brings into the portfolio over 5,000 barrels a day of unhedged gas production. We also remain on track for midyear completion for the ONE-Dyas transaction and later in the second half of the year for Spirit Energy. On our Core portfolio, production has increased in 2026 year-to-date compared with Q4 last year, but it's still not where we would want it to be. Production at the Bruce Hub has largely been robust, and we are regularly producing 20,000 barrels a day net from the hub, which is a real positive given the current gas prices. Unfortunately, some further unscheduled maintenance at Triton needed to be carried out in February and early March that required a shutdown for just over 3 weeks. The operator, Dana, concluded that due to overdue maintenance on some production and power generation systems, they could not wait until the summer shutdown to complete work on those systems. They, therefore, took the proactive step to fix the issues immediately rather than to continue to run the equipment that could potentially fail. This work was completed on the 9th of March, and Triton has been running continuously since that time. As indicated in our January trading statement, we also lost production from Orlando for much of the period due to wave damage caused to the Ninian host platform, but this is now also back online and producing over 3,000 barrels a day. Since production restart at Triton, we have seen a fortnight of stable production averaging over 50,000 barrels a day in that period. Over the last few days, we have also seen the first production from Belinda, the last field in the U.K. to receive development consent. It is too early to determine a stable rate for Belinda, but early indications are promising. Triton is currently running with a single gas export compressor as the second compressor is offline awaiting a spare part. Maximum production in this operating mode is roughly 25,000 barrels a day net to Serica. And as we now have excess well capacity, we can anticipate being able to flow at that rate at least through the end of 2027. Once the second compressor is available, we will need to decide with Dana whether it makes sense to keep the second compressor as a backup to give more stability at 25,000 barrels a day or to run the 2 compressors in parallel at a higher rate, but with more vulnerability to downtime. Our production guidance of significantly over 40,000 barrels a day was based on very conservative uptime, effectively building in a weaker month of downtime at Triton. As such, with a significant production uplift to come, we are comfortable in retaining our guidance is unchanged. Going forward, the predictability of our production will be enhanced by the new assets coming in with some, notably GLA and Cygnus having historically very high uptime. But for now, we continue to be focused on delivering improved performance from our existing assets where there's still plenty to do. We are working to embed a culture of operational excellence, where we are not satisfied if we produce anything less than the maximum possible on any given day. In the last few years, there have not been enough maximum production days, and we are reenergizing our entire workforce to pull together to deliver more. There is also work to be done this year to help deliver production well into the future. At the Bruce Hub, there is exciting subsurface potential, and we are doing the necessary work this year to prepare for potential drilling in 2027. At Triton, we are working closely with Dana, and the focus is very much on delivering stability of operations. Dana have been taking many of the same actions that we have taken at Serica to improve performance, in particular, with strengthening of their team with new offshore installation managers, maintenance team leaders and safety advisers as well as bringing in-house some key technical specialist roles, which were previously outsourced. We are also, of course, working hard to integrate our new assets, and I am delighted to welcome our new colleagues from TotalEnergies into Serica and those transferring across to our operations and maintenance contractor, px, today. Even without the addition of reserves from new assets, I'm pleased to say that our reserves replacement effectively achieved 100% in 2025. This was achieved through the excellent work of our subsurface team and largely by 10.2 million barrels being moved from resources into 2P reserves due to the maturation of the Kyle redevelopment, which has now been renamed Kyla. This effectively offset the 10.1 million barrels of production in the year. With the addition of the newly acquired assets, our 2P reserves rise 19% on a pro forma basis. We will continue to be balanced between oil and gas. But on completion of the acquisitions, we will become slightly more gas-weighted as our acquisitions are mostly gas fields. I'm pleased to say we have also delivered a 16% increase in 2C resources, indicative of our attractive opportunity set. This increase was driven by the extensive work on maturing the potential Bruce drilling program as additional infill well opportunities delivered an 18.2 million barrel increase in 2C resources. This outweighed the relinquishment of the Mansell license and transfer of Kyla to reserves. The addition of Wagtail, which we announced during the year, also provided an uplift of 8 million barrels of 2C resources. In total, we now have over 100 million barrels of 2C resources, constituting a diverse and attractive opportunity set. These are projects of various types and across our asset base, but are all tangible and deliverable opportunities. With prudent investment, there is plenty in the hopper to sustain our production at or above current levels into the next decade. We are continuing to high-grade the suite of opportunities and plan to share considerably more detail on these at a Capital Markets Day in early June. We are focusing at present on those opportunities that have the potential for rapid payback, and there are a number of projects that fit that description. One that we have talked about before is Bruce. Bruce is a huge field, and there is plenty of remaining potential there, as can be seen by the increase in resources we have been able to share today. There has been no drilling on Bruce since 2012, and drilling on the field, which sits with our -- within our subsidiaries that do not have tax losses, would be highly tax efficient. First hydrocarbons are possible within 1 year of drilling, and we see a first phase of wells that could add over 10,000 barrels a day to production. This is a significant opportunity to deliver greater production of critical gas supply to the U.K. in a relatively short-term time frame. This opportunity is the result of work done over more than a year now across the integrated disciplines within our exceptional subsurface team, which, as I may have mentioned before, is the best in the business. Market screening for a rig is currently underway to enable us to potentially take an investment decision later in the year, which could enable drilling to begin in 2027. There is still more work to be done, and there are other opportunities also battling for capital. Kyla also offers a material production uplift. This was a previously producing field, which ceased production due to the host infrastructure being decommissioned. A horizontal well drilled into the best part of the reservoir and producing into Triton could also, therefore, add 10,000 barrels a day to our portfolio. And then, we have the opportunities just welcomed into or to be brought into our portfolio via acquisition. Glendronach is a compelling opportunity, and there are others not even mentioned on this slide that we look forward to discussing at the Capital Markets Day. And we are very excited by the overall potential West of Shetland. I realize this is quite a busy map, so let me give you a quick overview. We've acquired the acreage, which is shown in blue, which includes the Laggan and Tormore and other producing fields as well as a number of exploration prospects plus the associated pipelines in orange and the Shetland Gas Plant. Further west and north of our acreage is an extensive area colored in gray. This acreage is owned by Adura and Ithaca, 2 of the largest U.K. producers who are bullish about the drilling prospects in the area. The industry consultant, Westwood Global Energy, recently published a report identifying that the West of Shetland Basin holds an estimated 5 trillion cubic feet of gas. Of course, that sounds like a big number, and it is. In fact, it's equivalent to supplying every household in the U.K. for 5 years. And yet some people continue to say that the amount of gas we can produce in the U.K. is not significant. With 1.5 billion barrels of discovered and prospective resources situated within tieback distance of our existing infrastructure, this is an area of material potential for the industry and for Serica. And the Shetland Gas Plant is an asset of strategic importance to the country. While we are not primarily a third-party infrastructure company, as well as processing our own gas through the plant, we are currently processing gas for Adura from their Victory field, which only started producing last September. And we hope soon to be doing the same for Ithaca and Adura, Tornado field, which they are looking to move to final investment decision by the end of the year. But as well as exciting third-party opportunities, which all add value for Serica, there are also opportunities for the GLA joint venture to develop and add value from the assets on which we have completed today. These include the Glendronach tieback and a possible infill well at Tormore. And now that these are in our portfolio, they will be assessed and ranked against the other development opportunities we have in the battle for capital allocation, about which, again, we will give more detail at our Capital Markets Day. And with that, I will hand over to Martin to give you more on our finances and how we are seeing things in the near-term market situations. Martin Copeland: Thanks, Chris. As we largely preannounced with our January trading statement, the story of last year is mostly that despite a challenging year operationally, our relative financial strength and our confidence in the resolution of those issues enabled us to continue delivering on investment in the portfolio and on healthy shareholder returns, including maintaining the full year dividend at 16p, inclusive of the 10p proposed final dividend we are announcing today. When it comes to how we generated and used cash during the year, this waterfall chart shows the picture of what actually happened to gross cash from our year-end 2024 to our year-end 2025 position. But the real story of the business potential lies in understanding what the deferred production cost us in foregone 2025 revenues from the unscheduled Triton interruptions. Based simply on adjusting for what would have happened if Triton had delivered operating efficiency in line with our 2025 budget and factoring in the actual prices of oil and gas, which prevailed, we estimate we missed out on some $250 million of revenues last year. And because those missed revenues were at Triton, where not only do we still have material tax losses, but we were also investing heavily, which is the key method of sheltering the EPL and that our cost base is very largely fixed in nature, those foregone revenues would have flowed almost directly to additional free cash flow generation. We were, however, helped last year by the receipt of $63 million tax rebate in respect of overpaid taxes from 2024, but also from a low cash tax bill during the year, given we were able to factor in the impact of group relief into the installment payments made during the year. These are the reasons why the tax bar is, in fact, a positive on this chart. So we very much do not see 2025 as representative. And indeed, as we indicated in January, we are confident of material free cash flow generation this year, and that outlook has, of course, only improved in the current market conditions. In fact, as it says on this page, with the completion of the TotalEnergies deal today, we have more than halved our net debt as compared to the year-end level and are on track to be in a net cash position by the end of H1. Turning in a little more detail to the income statement. While realized prices were generally not materially different than in 2024, being marginally lower in oil, but higher in gas, our revenues of $601 million were down 20% from the prior year, essentially in line with the lower volumes. But the truer comparison of the impact of Triton issues can be seen in the comparison with the 2023 pro forma levels. On this basis, production was down some 4.5 million barrels or approximately 30%. Our hedge book was in the money at year-end and delivered unrealized hedging gains of $75 million and just under $8 million in realized gains, as we benefited especially from protection against the lower prices seen in Q2 in the wake of the liberation day tariff announcements. Operating costs were roughly 10% higher than 2024, largely as a result of increased maintenance activity at the Bruce platform, as we sought to reduce maintenance backlogs, but also because of a slight weakening of the dollar versus our largely pound-denominated costs. G&A costs were up by just under $2 million, as we made choices to add capabilities to set us up for future success, and we incurred transaction costs of $5.5 million associated with the extensive M&A activity. Despite the challenges in the year, we still delivered a profit before tax of $80 million, but at half the level of the prior year. Our current tax charge was only $2 million, as we benefited from in-year group relief associated with losses made in the Triton subsidiaries. However, in common with all our North Sea peers, and as we also reported in our H1 results last year, we had a material deferred tax charge of $130 million, including a $65 million charge relating to the enactment in Q1 of the extension of the EPL from 2028 to 2030. The result of these noncash accounting impacts is that we reported a book tax charge of 165% and posted a loss after tax of $52 million for the year. Turning now to the balance sheet and notable changes in the year, which result mostly from acquisitions. Our exploration and evaluation balance doubled to $43 million, primarily as a result of the completion of the Parkmead acquisition, as we became operator and brought into a greater share of the Skerryvore exploration prospect. We also consolidated the acquisition of Prax Upstream, which completed on the 11th of December as a business combination. As preannounced in January, we ended the year with net debt of $200 million, being effectively 1x EBITDAX. But as already explained, we see this as something of an anomaly and would have been net cash pro forma for the deferred cash flow from the Triton issues. And as already noted, we have more than halved our net debt since the balance sheet date. Finally, inclusive of the impact of new drilling at Belinda and Evelyn as well as bringing Lancaster into the portfolio from the Prax Upstream business, we ended the year with the exceptionally low level of decom provisions of less than $2 per 2P barrel of oil equivalent. While we always update on our hedging with our results, given the dramatic events in commodity markets year-to-date, we felt that a slightly deeper dive is merited today. Before turning to how we positioned -- we are positioned and what we expect to be doing in the future, we wanted to give a bit of background on what's been happening in oil and U.K. wholesale gas markets year-to-date. We came into the new year with all market fundamentals in terms of physical supply of oil and, to a lesser extent, gas pointed to a weak Brent prices during 2026 and medium-term weakness in gas prices. Bearish sentiment was evident in the market, and this was apparent in that despite unusually low European storage levels, U.K. gas prices averaging around 84p per therm for January and February were roughly half the level of the equivalent mid-winter period in 2025. However, of course, things changed dramatically after the war in Iran commenced on the 28th of February. For the 3 weeks of March so far, NBP day-ahead pricing has averaged 127p per therm, and Brent has averaged $103 per barrel. But as the charts on this page, which show the shape of the forward curve for Brent and for NBP at various dates since early January right up to a week ago on the 19th of March, things really elevated in reaction to the de facto closure of the Strait of Hormuz and the physical attack on the Ras Laffan and Pearl GTL plants in Qatar. But although near-term prices, the front end of the curve have risen sharply, the prices further out in time have not risen nearly as much, and the forward curve for both oil and gas are in very steep and, in fact, unprecedented backwardation. These forward prices should not be seen as predictors of future prices, but they do represent the levels at which Serica would be able to hedge in the market through swaps. So with this backdrop in mind, we turn to where our hedge book stands today. We've been building our hedges materially during the first quarter, and the reason for that goes to the reasons why we hedge. Firstly, we have an ongoing requirement by our banks to hedge a certain amount on a rolling basis, being 50% of the current year and 30% of the following year. But beyond that, we are always striving, appreciating that we cannot predict events and prices to find the Goldilocks solution, not too little and not too much. On the one hand, we seek to ensure that we protect downside sufficiently to ensure that we can cover our cost base in tougher times as well as to support our capital allocation priorities, including the dividend. This also includes maximizing the liquidity available to us through the borrowing base under our RBL. But on the other hand, we do not want to overhedge so that events, even if they are the kind of tail risk events we have seen this month, which cause prices to spike, can benefit our shareholders. So we were always looking to protect the downside, but leave as much as possible of the upside potential. In common with our peers, we do this both by imposing policy limits on our absolute amount of hedging and by the choice of instruments that we use for hedging. As shown on this table, Serica is currently hedged for about 60% of our forecast production in 2026 and about 50% in 2027, which is inside our policy limits. When we combine the impact of the unhedged part with the use of zero-cost collars, which retain an element of upside exposure, we retain about 40% upside exposure in 2026 and around 55% in 2027. The position in gas is actually more exposed to upside than in oil with only around 50% of our gas volumes hedged this year and less than 40% for next year. While we have built the book since the beginning of the year, about 50% of the hedges we've built have been taken on since the start of facilities from the 2nd of March, and we've been able to capture some very attractive opportunities. For instance, although the table show averages for the quarter, we have, in fact, recently placed some swaps for March at levels up to $111 per barrel for oil, which is especially pleasing given our most recent Triton lifting concluded only earlier this week. We appreciate that it can be confusing to understand the intricacies of hedging approaches. And although we hope the floor prices are quite clear on this table, it is tough to figure out what the foregone upside price implications are. So, as a bit of a guide, we estimate that our current hedge book for 2026 with oil prices at a notional $100 a barrel, we realized roughly $80 a barrel. And at 150p per therm for gas, we realized roughly 130p per therm. Taking a look at this slide, you may think you've seen this before, and that is because you have. We're pleased to say that we are simply reiterating our guidance across production, OpEx and CapEx at the levels we set forth with our trading statement in January. What we have though updated on this page is the carry-forward tax loss balances that we've reported today as of the 31st of December 2025. As you can see from a combination of our own activities during the year as well as M&A that we completed during 2025, we ended the year with essentially double the level of tax losses as we started with. We now have roughly $2 billion of corporation tax and SCT losses and roughly $500 million of EPL losses. And using the simple math that we've applied before of corporation tax loss times 30%, SCT times 10% and EPL times 38%, then the notional value of these losses is around $1 billion. Finally for me, I wanted to say a few words to add what Chris has already covered in relation to the M&A we announced in the year. In my previous career as a banker, we would tend to consider that the M&A was done when the deal was signed. But what I've since learned is that to ensure we deliver value, we need not only to be capable of efficiently delivering complex operated asset transactions through to completion, but also to ensure that the businesses are integrated efficiently into Serica and set up to realize their value potential. Serica has, therefore, invested in human capital to ensure that we have the skills and processes that are needed to be successful in an M&A growth strategy. This includes being agile and opportunistic in the execution phase and ensuring that we always do what we say we will do. So we sustain Serica's good reputation in the M&A market as a credible and trustworthy counterparty. That also means having the people, processes and systems that are set up to deliver in a repeatable way to coordinate and drive forward the multiple work streams needed to get to completion and day 1 in the fastest possible time, all while also ensuring safe and reliable continuous operation of high-sensitivity assets and complex IT systems. The process we have just completed to see GLA and the Shetland gas plant come under our control today is a great example of this. Finally, this also means doing the necessary work upfront to protect value from the transaction and to ensure that the people and systems can be integrated as smoothly as possible to ensure that the value can be realized in practice. One example of this is the approach we've taken with the Spirit Energy deal, which is not yet completed. Although we only assume completion from around end September, we know that future gas prices were key to value realization on this deal. So based on a very constructive relationship with Spirit Energy and with their parent, Centrica Energy, we have been able to put in place deal contingent hedging for roughly 50% of the production, but on a basis which protects the value of our deal, but still leaves ample upside potential for Serica to enjoy. This was made possible in part thanks to Centrica Energy being a leading participant in gas markets and working through the complexities of a structure like this with us. With that, I will hand back to Chris for some concluding remarks. Christopher Cox: Thank you, Martin. This is another slide that should look quite familiar, and that's because our focus areas remain unchanged. Safety is, of course, the #1 priority and delivering reliable production this year that will generate material free cash flow. We are integrating acquisitions, progressing organic growth projects and still looking in the market to continue prudently adding to the portfolio to deliver for our shareholders. In addition, we continue to plan to move from AIM to the main market of the London Stock Exchange during the year. We are very excited by the opportunities ahead and look forward to updating you on progress throughout the year. And with that, I will hand over to Andrew to run the M&A (sic) [ Q&A ]. Andrew Benbow: The M&A, I hope not. Christopher Cox: Q&A, the Q&A. I'm sorry. Andrew Benbow: I think we'll keep other people with the Q&A -- with the M&A. Andrew Benbow: Right. So the first question actually is about the last thing that you mentioned. When are you anticipating being admitted to the main market? And what impact do you think this might have on the share price? Martin Copeland: So probably I'll take that one. Yes, we -- I think we put in our detailed announcement today that we expect now that will be in Q3. It's -- the work is ongoing for it. There's a lot of process. And I know, as Andrew often says, a surprising amount of process just to move from one part of the London Stock Exchange to another. But nonetheless, there is, and we are working it hard. We expect it will be during Q3 of this year. So very much on track to get there during the year. In terms of what it will do for the share price, I mean, it's very -- obviously, our main reason for wanting to do that is to get a greater degree of exposure for Serica to investors generally. And the wider the exposure we get, the better it is generally for support for our share price. And in particular, certainly at anything around our current market capitalization, we would be very comfortably inside the FTSE 250. So one of the 350 biggest companies in the U.K. And the benefit of that is once you get into the FTSE 250, there are a lot of tracker and index funds that have to follow stocks in that segment. So that's one of the main reasons why we see a benefit in moving to the main board, and we remain very much on track to make that move during the course of the year. Andrew Benbow: Moving on to Triton. We've had a few questions come in unsurprisingly. So I'll try and amalgamate in a way that makes sense. There's kind of 3 questions really. One is, why couldn't the maintenance have been done last year? Second is a similar one, which is, will the work at Triton reduce the maintenance period later this year? And then the general question, which I think is the one that everyone wants to know is, how much should the reliability of Triton concern shareholders? Christopher Cox: Thank you. I'll try and address all 3 of those. So the work that had to be done in February and March was not something that we actually even knew about when the last shutdown took place. What happened was in doing some inspections of key equipment, Dana discovered that they could not vouch for the status of some of that equipment. They could not prove that they've been maintained properly or inspected properly, and they didn't have the records to be able to prove that. So there wasn't necessarily evidence that there was anything wrong with the equipment. They just couldn't show from their maintenance systems that it had been inspected when it should have been inspected and maintained properly. And so what that meant was when they put all of that together, they felt that there was a risk that was intolerable and equipment could break before it got to the next shutdown. And so rather than take that risk, they took the decision that they would shut down and fix it now. I think you asked, does that shorten the shutdown in the summer? It doesn't because some of the things they discovered that need maintenance, they haven't done now and they haven't to the summer shutdown. However, I will say that in our planning for the year, we assumed that Triton would be off essentially for 3 months in the summer, whereas Dana is planning for a 65-day outage. So we've built in a buffer there to some extent. And as I said during the presentation, we've also assumed a week's downtime on Triton as we go through the year outside of that summer shutdown window. So we think we've made some fairly conservative estimates around Triton for the year. So how much should shareholders be concerned about Triton? Look, it's still not as reliable as we want it to be. That's clear. And we are working with Dana on a number of things to try and improve the reliability. And the key is, frankly, it's the power turbines and the compressors where we're reliant on one of each at the moment, and there are 2 of each on the vessel. And we need to get to a point where we've got 2 power turbines and 2 compressors available. And that's -- it's going to take a few months before we're in that position. In the meantime, we're quite vulnerable to outages. But as I've said, I think we've been quite prudent and put in place some fairly conservative assumptions this year such that we're confident with the production guidance that we've given. And we're going to be part of -- Dana has just formed a compression improvement task force, which is targeting getting 90% efficiency with a single compressor and figuring out what else needs to be done in order to have 2 compressor operations. And we're going to be involved in that work ourselves. So I think, as we move forward, things will get better. But for now, it's -- we still have that vulnerability. We can't shy away from it. Andrew Benbow: And just briefly to clarify, our guidance takes in effectively 1 week of downtime each month over the course of the year. Keeping on Triton for another one, would you be comfortable bringing Kyla into the FPSO? Christopher Cox: So -- yes, I'll take that one. So, Kyla, just to be clear, we've announced that we've moved the barrels from Kyla into reserves as of the end of last year. That doesn't mean we've taken a sanctioned decision on it yet. As I mentioned during the presentation, it's fighting for capital with a lot of opportunities in our portfolio. And we will make a decision on which ones we're going to pursue in which kind of time frame as we go through the year, and more detail at the Capital Markets Day. So we haven't taken FID on Kyla yet, but it's mature enough. We know enough about it. We like it as a development. So we were at a point where we could move it from resources into reserves. Now, of course, we're not going to bring in another field into Triton until we're comfortable that we can produce it safely and efficiently. And the fact is we've only just brought on Belinda in the last few days. And we had anticipated that at the end of January, and it didn't happen because we had a shutdown. So there's no way we're bringing another development into Triton until we get stable operations there. But as I've said, I think Dana is doing a lot of the right things to achieve stable production and 2 compressor operations. And I'm hopeful that we get to the point where, yes, we can sanction Kyla and bring it into Triton. Andrew Benbow: Somebody on the side actually has just said that they're a bit bored of talking about Triton's compressor... Christopher Cox: Me too. Me too. I'm fed up with talking about it, too, but it's what we get asked questions about and for good reason. Andrew Benbow: They do have a question with it as well, which is -- which I think I'll take the time to broadly think about it, which is what percentage of group production will come from Triton in 2027? Now, we obviously haven't guided for 2027 as yet. But if you look at analyst expectations, it's probably somewhere in between 1/4 and 1/3 of production will come from Triton next year. So it clearly becomes of significantly less importance to the portfolio, albeit still being highly cash generative. Next question, I think, is one for Martin, actually. Why do companies who acquire assets from [ TotalEnergies ] sometimes pay Serica rather than Serica paying for the assets? I presume they're concerned about the decommissioning costs at the end of field life. What value is it that you can see that vendors can't? Martin Copeland: Good question. So yes, there's a bunch of things embedded in that, obviously. One is companies like TotalEnergies makes a strategic decision that they basically want out of an asset like this. And you can understand why because we think it's got amazing potential, we're buying it as it is, but they thought it was going to be a lot bigger than it actually is. And so it's kind of got -- it's been something that's been strategically on the decision to exit. So, therefore, price is not the most important thing. But add to that, yes, why -- they're not -- obviously, they're a commercial and sensible company, and we are too. And therefore, they -- whilst we're receiving cash, that's because the effective date, the historic date at which the deal we economically owned it was the 1st of January 2024. So the $57 million odd that we received today is basically the after-tax cash flow from that asset for that period until today. So that effectively, we economically owned it, and we receive it today because we've legally completed today. And then, when you think about how that works, yes, we are taking on the decommissioning liability associated with that asset in the future. The thing about decommissioning liabilities are that they are obviously an obligation to decommission in the future, but the timing of that decommissioning, and indeed, the absolute amount of the cost of it are not certain. And absolutely, our objective, which is different than that of, say, TotalEnergies when they owned it, is to continue to invest in the portfolio through some of the things that Chris talked about, like maybe Glendronach, maybe a Tormore well, but also getting the benefit of third-party gas into the plant like Victory that's already there and Tornado that we hope to come in the not-too-distant future. All of those things would just push out the time at which decommissioning happens. And all of that is very significant in terms of additional value for us. So for us, it's about delivering on those things, which TotalEnergies was not going to do because the capital investment associated with them just didn't screen for them relative to all the other global opportunities they have. It does screen for us, and we, therefore, look forward to doing it. And it's a case of, again, as Chris indicated, it's right assets, right hands, and it's just the natural kind of food chain, I would say. One other little point is there's also a tax differential. And TotalEnergies was being fully taxed on it under their ownership. And indeed, the receipt of cash we've had today is after it's been taxed for that whole period at 78%. But when in our hands, we're buying it into some of the entities we acquired through Prax Upstream, and that means it will be sheltered from a large amount of the tax now as of from today when it comes into our ownership. So there's a different valuation reference point for us as well. So I hope that answers the question. And that's just using GLA as an example, but you could play that across to other things as well. Andrew Benbow: And speaking of some of the other things that we're acquiring, given the context of very high commodity prices, could you talk about the expected payments on closing of the acquisitions of the ONE-Dyas and Spirit's assets? Assuming oil and more particularly gas prices stay where they are, those payments could be very favorable to Serica. Martin Copeland: Yes. I mean, clearly, they will -- we do -- as we track them, they're going to be up versus where our original planning for them was when we did the M&A because we weren't planning for prices where they are right now. So yes, the net impact of that is going to be that we expect to get higher payments than we would have done or in the case of Spirit Energy to essentially probably the net payment by us will probably be lower. The exact numbers of those is obviously something that needs to be worked through based on what actually happens to commodity prices between now and when we actually complete. The only other cautionary note I'd say is that, again, just as I mentioned for TotalEnergies in the case of both ONE-Dyas and Spirit Energy, under their ownership, they're being fully taxed with the full EPL rate. And so whatever the increment is, it's going to have a higher tax rate against it than it would under us. So that does help to dampen the impact of higher prices a little bit. Andrew Benbow: A more general question on the M&A landscape in the North Sea. How is the current market? And how has the M&A dynamics changed after Adura and NEO NEXT+? Martin Copeland: Yes. I mean, I think Chris alluded to that in his remarks that -- we'll have to say that we think the opportunity set in the U.K. this year is going to be down on last year. And I guess, it's kind of easy to say that because there was a hell of a lot of activity last year, right? So the bar would be very high to be able to repeat the level of activity in the basin this year that we saw last year. But that impact of the significant consolidation that we've seen is probably a reason why we think there'll be less M&A this year. It doesn't mean to say there won't be any. And I do think in time, as the likes of an Adura or a NEO NEXT+ and some of the others, Ithaca, as they look at their portfolios, they may well see that there are assets within there that in the normal course, they look to divest and move on. And that's kind of normal course business that we would expect to carry on. But overall, we just think the activity in the U.K. is likely to be down. The other cautionary note on M&A is that whilst we see these very high prices, high -- not just high, but volatile prices, prices that move all over the place are very difficult to transact M&A in, right? It just makes doing deals really hard when prices are moving really fast. So that's not a comment specifically about the U.K. It's just a general comment about doing M&A in the upstream. Andrew Benbow: And while we're on the discussion about U.K. M&A, then how about overseas? You mentioned it's something that you're looking at. So what kind of areas could people expect an acquisition to be made in? Christopher Cox: Do you want me to take that one? So look, we are starting to look overseas and get a bit more serious about that. And there's really a couple of reasons for that. One is what Martin just mentioned, there are fewer and fewer opportunities in the U.K. We're still working on a few opportunities, but not as many as they were a year ago. And we want to have a sustainable business. And at some point -- the U.K. is in decline. And at some point, you'll get to a point where there's not enough production left for us to maintain the kind of size of business that we are. So sooner or later, we have to look overseas anyway if we want to have a sustainable business. So look, we don't want to limit ourselves too much to where we might go. We do quite like Southeast Asia. So why would that be of interest? Really, it's an area where we can see playing out our strategy in a similar way to we do in the North Sea. Southeast Asia in general is a bit less mature than the North Sea, but it's -- most of the fields are kind of mid- to late life now. So you're getting to the point where a number of the majors are thinking about exiting fields there or just reducing their exposure in the area. So we're at that point now where -- probably where we were in the North Sea 10 or 15 years ago, frankly, where opportunities are coming available for companies like us to go in. And as we said, push out the decommissioning, extend the life of fields, drill more wells, find more reserves. So we just see that it's a ripe area for that kind of an opportunity. Yes. And I don't really want to comment too much on other areas because as soon as we say we're ruling something out, and then, an opportunity comes up, who knows where we could go. So never say never, but I think Southeast Asia is probably first on our list of places that we like for the reasons I've just mentioned. Andrew Benbow: I'm aware we're running out of time. We've got quite a lot of questions still to go through, so I'll try and group them together. Dividends, quite a lot of people have asked about dividends. So a question for Martin. Do we see a return to dividend growth? The dividend looks quite small considering the free cash flow to come. Martin Copeland: It's a really good question. And look, the way we think about the whole capital allocation piece is we've got to balance the dividends to shareholders with investment in the portfolio and with M&A growth. And it's the -- we're not alone in that. That's kind of the conundrum for all of us and our peers that are involved in this. It's probably going to sound a bit like a stuck record in saying, wait for the CMD, but we are definitely planning to give a great deal more detail about how we balance all of those things at the Capital Markets Day. I guess, it's a sign of confidence we felt to show that we were able to continue the dividend at the same level as before despite the fact we had a challenging year last year, but -- now, but we expect to give a lot more clarity. And we've got to -- and show the really interesting and exciting returns can come from the investment in our portfolio, but it always while ensuring that we also pay a sensible amount of dividend. So I know that's not going to directly answer your question, but that's probably what we can give for now. Andrew Benbow: Another quick one for you, Martin, about tax losses. How long do you think they'll last for? And which of your assets do they cover? Martin Copeland: Really good question. And we -- you probably noticed that we've sort of stopped giving guidance on how long we think they're going to last for, and that's because we used to give it. And then, we found that they lasted for a lot longer. And as it happens last year, we created a lot more losses either through our own activity because the silver lining on Triton performance was that, as I probably indicated, we actually added to the loss pool there rather than reducing it during the year. But then, of course, we also did some transactions that brought some losses with them. So in terms of -- and then, of course, how quickly use it is also a function of what happens to the commodity price, which is incredibly difficult to predict. So it sounds like a bit of a cop out. We've got a lot of losses now. They basically will -- are reasonably balanced across our portfolio with the exception of Bruce, Keith and Rhum, which is in the entities that basically don't have any losses. But that, as Chris indicated, is one of the key areas we're looking to make investment into. And investment is not only needed to bring short-cycle gas to the U.K., which it desperately needs, but is also efficient when it comes to the use of tax because if we can invest, we get still strong capital allowances against the 78% tax rate that applies there. So we have a strategy which is kind of fit for all seasons in that respect. Andrew Benbow: And speaking of tax rates, I think we should finish with politics and apologies to people whose questions we haven't got around to, but please do e-mail them over to me directly if you'd like a response. Are you talking face-to-face with Ed Miliband or Rachel Reeves? With such pressure from so many sources, do you feel the logic of the message is getting through? And are there any milestones going forward? And do you feel more positive in the stance of Whitehall? Christopher Cox: So we're speaking with everybody that will listen, both individually and as part of industry bodies. I was personally in the meeting with Rachel Reeves, #11, whenever that was, just around the spring statement time. The message is definitely getting through about the need to stimulate the North Sea before it's too late. We have a tax regime that's been designed by this government in consultation with the industry. And yet, as we sit here today, that won't come into force until 2030. And our argument is just bring that in now. Treasury absolutely get that. I guess all I'll say is there are other parts of the government that are not necessarily sold on that idea. So I'm not going to try and predict where we'll end up on that because at the moment, I don't think anybody in government really knows where we're going to end up on that. Andrew Benbow: Martin, anything you want to add? Martin Copeland: No. I think Chris has covered it very well. I mean, look, everyone in this call will know, we've seen the volume of really quite broad-based sentiment now to recognize the importance of security of supply. And that's an argument that we've clearly been supporting for a long time. We just hope that a sense of pragmatism, the recognition of the importance of security of supply from a sort of defense and just national security perspective will begin to carry more weight than it perhaps does -- has done in recent times. Andrew Benbow: And with that, Chris, would you like to give any closing remarks? Christopher Cox: Well, just that we've got another exciting year ahead of us. We are integrating new assets into our portfolio. We're seeking to do more M&A still on top of that. We will be growing production as we go through this year, both on our existing portfolio and the new assets. We will be moving to the main market this year. And we've got lots of exciting investment opportunities in our portfolio, about which we will speak at the Capital Markets Day, which is the next time we will see you. Operator: Perfect, guys, if I may just jump back in there. Thank you very much indeed for updating investors this morning. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback. On behalf of the management team of Serica Energy plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all.
Operator: Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Buzzi S.p.A Full Year 2025 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Pietro Buzzi, CEO of Buzzi S.p.A. Mr. Buzzi, you have the floor. Pietro Buzzi: Thank you, and good afternoon, everyone. Welcome to our conference call. And again, thanks for participating. We do publish a presentation, which I will follow at least in part, if not in full, that is available on our website. So I will mainly refer to that and to the page. So starting from the first page, we have a brief summary of what has been 2025 for Buzzi. Overall, a good year, although not as good as the 2 last one, so with some decline in profitability, but still showing, let's say, very strong results and very significant cash flow generation. So as you can see from here, we had a slight improvement in our revenues, in our net sales. This was already disclosed at the beginning of February with an impact -- positive favorable impact coming from the changes in scope. EBITDA is falling somewhat short of last year, minus 3% approximately, which would be actually minus 6% like-for-like. So the overall impact again of the Forex and the Scope changes was favorable. EBITDA margin, we are losing some profitability, which is mainly due to the fact that the additions, let's say, to the perimeter to the scope at least initially for the first year, they are coming in with an average profitability, which is below the one of the, let's call it, traditional scope perimeter and to the fact that one of the -- or the strongest country for us, U.S. declined somewhat. CapEx are, let's say, similar to last year in terms of industrial CapEx, a little bit lower than last year, considering also the equity investment, and we can let's say, enter into that later in the presentation. Net financial position also with the help of some lower CapEx improved significantly and cash flow generation was very close to last year regardless of the slight decline in profitability. We have -- we propose to the next AGM to keep the dividend unchanged versus last year. But -- and we will comment later the shareholders' remuneration in 2026 is anyway going up significantly, thanks to the buyback program, which is underway. As you can see on the following page, let's say, Page 2, one of the key feature, let's say, of 2025 was the Scope changes, which included an Asset Swap, if you wish, which occurred in Italy and Italy and its bordering country, in particularly Austria, where we sold, let's say, the Fanna plant in the Northwest, is in the Pordenone province for those that are a little more acquainted with the Italian geography. And Alpacem is the owner, is part of the Wietersdorfer group. This group, which acquired the Fanna plant is composed basically of 3 parts. It includes 1.5, let's say, plant in Austria, which is quite strong, let's say, locally. The Slovenian plant where we have already -- we used to have already a presence since some year, which is a very stronger plant just on the other side of the Italian border. And some Italian assets that now includes also the Fanna plant. So quite a strong and integrated group in the Northeast of Italy. And then we expanded our presence internationally between starting from March, April until December, it's an ongoing process, if you wish, by acquiring initially over, let's say, a 30% stake in a listed company in the Emirates name Gulf Cement Company, which is a single plant, let's say, entity, but with a quite significant capacity, very powerful in terms of machinery, let's say, and equipment. Then through the OPA, the ownership was increased. And later on, December and also something more will follow during this year. We achieved a gradual improvement in our ownership, which at the end of the year is around 66% indirectly is a little less because we participate to this investment together with a partner in a specific entity called TC Mena Holdings, where we see as 90% and the partner as 10%. So the, let's say, economic ownership is a little less than the 66% at the year-end. On the following page, you'll see the bridge, let's call it, of the turnover -- 2025 turnover by regions, so by main regions where we operate. And Italy had a fairly good year, I would say. If we do not consider -- so excluding the scope impact, actually, our volume and pricing will remain basically the same, prices slightly better. So this was quite a strong support in Italy coming from the infrastructure project of the so-called resilience plan of the European funds, let's say, allocated to Italy. Central Europe was kind of mixed. So there was a recovery in volume, but prices suffered mainly in Germany. And this translated into, let's say, an offset of the progress that we achieved in the volume in our cement, let's say, shipments. Eastern Europe, I would say, good results overall. There was a negative impact -- unfavorable impact coming from the deconsolidation from the sale of the of the Ukrainian assets. So this was the first year without Ukraine included in the scope of consolidation. But the remaining countries overall performed well, in particularly Poland and Czech Republic. And we did have also some benefits from the strengthening of the local currencies, both zloty, Czech koruna and also the ruble in Russia. U.S. was, in a sense, the worst performer also due to the size. So every time that something, let's say, negative happens to U.S. in our case, impact on our figures on our numbers is inevitably more significant. What happened in U.S., we had a minor, let's say, decline in volumes more in ready-mix actually than in cement. Pricing fairly stable, but no improvement if you look at the average or there were some improvements in specific geographic areas, but some declines in other ready-mix prices were a bit under pressure, particularly in Texas and the overall result was a little negative. And the dollar lost us some of its value affecting the translation. So around EUR 70 million or EUR 70 milliojn negative on our net sales figure. Brazil is coming in for the full year for the first time. So the comparison of the first 2 bars refers to the last quarter of 2024. But the impact is, I would say, overall positive with the exception of some unfavorable variances coming from the Forex. -- and is bringing in additionally, let's say, EUR 2,065 million of turnover. Same reasoning more or less for the UAE, which is smaller in terms of turnover and is also including -- included -- it's been included starting from May, so about 6, 7 months. And this brings us to the EUR 4.5 billion approximately level up to EUR 4.3 billion of last year that you see in the bar at the right. Not top, right side of the slide. And then if we move to the main, let's call it, operating figure for the results, which is the EBITDA. What you can see from here is, again, fairly simple, if you wish. So volumes good trend. A favorable variance of about EUR 44 million, but a number of, let's call it, negative items or unfavorable items associated, first of all, with the price environment, which was overall slightly negative besides what happened in the U.S., particularly, I would say, in Germany. So Germany and the U.S. were the 2 countries where we suffer actually Germany, more than U.S., we suffered the most in terms of pricing trend. Variable cost not so much coming from energy and fuel or electrical power. It was more related to raw material and other variable costs, for example, logistic ones. And fixed cost, typically labor, maintenance were also going up, difficult to fully, let's say, control versus the volume and price trend. Other mixed cost also showing a favorable figure. CO2, basically not an issue last year because we still remain -- this refers, of course, to the countries under the ETS scheme. And in those countries, we basically remain in line with the free allowances received with a few exceptions and a minor, let's call it, negative variance versus the previous year. FX overall negative, mainly in the U.S. And then Scope changes that refer to, okay, on the positive side, Brazil and Emirates on the negative to Ukraine, rebalancing somehow the negative impact that you see on the center of the slide by EUR 61 million. So overall, the decline is what we mentioned at the beginning, and this is the -- in brief, let's say, the explanation and more explanation can be given, of course, country by country or region by region where things did not behave, let's say, or happen in a consistent way. We had, of course, some regions more affected by costs, some regions more affected by prices, et cetera. In the following pages, the cash generation and capital allocation. You can see that operating cash flow, as I was mentioning at the beginning, remained very, very close to last year besides the EBITDA decline. CapEx industrial slightly lower than last year, not really because of our decision to decrease them was actually somehow related to the execution phase, which on more complex projects usually takes than you might budget or when you, let's say, translating the design in the engineering phase into implementation and execution usually takes longer. And remuneration of the shareholder was quite good, I would say. You can see the split between, let's say, dividend and buyback. We have an ongoing program, which started at the end of February, which has been more or less so far 50% completed and we should get to the end. We will see, of course, it depends on the liquidity of the shares on the daily trading. But normally, with this kind of trend, we should be able to complete it by the end of May or maybe even earlier. We will see. It's well advanced and likely to be completed in maybe 2 more months. There is also a proposed resolution taken today by the Board of Directors to cancel the shares that will be in portfolio, let's say, in treasury at the time of the AGM. So we don't know exactly the number. But anyway, both the shares that were already in treasury at year-end and the ones that are being bought currently will be canceled, which is also, I think, overall a positive news for the shareholders. Just to give you a little more color on the different geographic areas, we move to Page 7. The U.S. always, let's say, a very strong contributor to our results. But last year, they were not able to keep up with the same level of profitability that we enjoyed in 2024. Basically, in terms of EBITDA margin, as you can see, we went back to the level of 2023, which is anyway a very good one, both in absolute terms and also in relative terms when you compare to other peers operating in the U.S. But the trend was slightly negative. We faced difficult volume part of the year. Then in the second part, there was a recovery, but not full. So we were unable, let's say, to close with a favorable volume trend, minus 2.2%, I think, very similar to the overall market trend. And ready-mix volumes suffer like we were a little bit more in terms of shipment deliveries and also pricing ready-mix, as you know, as you recall, in our case, they are mainly in the Texas area, which was one of the -- yes, I would say, more difficult in terms of market environment also due to the presence of the significant presence of both incumbent and new importers into the -- along the coast from Houston to Corpus Christi, et cetera. So we have a structure in the U.S., a cost structure which is compared to our countries, skewed in a sense of more significant weight of the fixed cost. So when you lose also slightly volumes, this has an immediate impact on our profitability, which was the main case. So cost not really going down, volumes going down a bit, pricing not moving or more, let's say, moving unfavorable than the opposite. And this was the result. On top, we had the negative foreign exchange impact following the devaluation of the dollar, which on the EBITDA -- on the EBITDA means around EUR 26 million, not a small amount. Moving to Italy, which is the following page, more favorable situation, support, as I was mentioned before, mainly from the PNRR programs. So public building and infrastructure projects, which also are typically enjoying a greater cement intensity versus either new residential or residential renovation. So there is a decline in cement volume, but this is a direct consequence of the Scope changes that we were commenting at the beginning. Meanwhile, for example, our ready-mix concrete subsidiary has been able to increase volume by around 6%. Pricing performance was okay, some improvements. And our cost, both fuel and power were definitely under control. So we did not suffer any significant, let's call it, inflation -- energy inflation during 2025. The changes in scope on EBITDA means 13 million -- EUR 14 million let's say, about EUR 14 million of impact, which is not very different from what you see in the EBITDA variance actually. We are showing plus 3.5% like-for-like. So it was fully offset by the good trend or the stable trend in volume and favorable trend in pricing. In Central Europe, which means for us, basically mostly Germany plus Luxembourg and ready-mix operation in the Netherlands, quite a different trend if we look at Germany versus Benelux. Unfortunately, Germany has a much greater weight on the area because the performance of Luxembourg was -- and in the Netherlands was growing, was okay, was improving. Meanwhile, Germany did improve some. So there was a rebound in the volumes, but there was no rebound. Actually, there was a decline in prices, which started already on the previous year. Actually, we entered 2025, the exit price, let's say, of 2024 was already lower, and we were unable to recover or to change it significantly or just slightly to 2023 and '25. And this was the major impact on the -- I mean, the major reason for the EBITDA decline together with a cost situation, cost environment, which was not favorable or quite different from what we experienced in Italy, mainly on the -- we suffer mainly on the energy cost, on the power cost, not so much on the fuel. But yes, on power, this is also somehow related to the -- to an hedging, which was made in advance so to cover the purchases for 2025, which at the end was not, if you wish, successful in a sense that maybe it was a bad timing. But of course, I mean, the reasoning behind hedging is not to pick the right timing. Just in this year, I mean, in 2026, we will see a totally different trend because the market condition has changed in the meantime. So the change -- the favorable change in Benelux was able to help somehow the region. But Germany, clearly is waiting significantly on this specific portion of the business. And the performance in terms of EBITDA certainly was not was poor overall. I mean there are reasons behind it, which explains it, but was overall quite poor. In Eastern Europe, on the following page, we are, I think, continue to be on a steady, let's say, profitability outcome. Of course, these businesses are not as big and as significant. So their contribution, let's say, to the overall profitability of the company is not as significant as Germany or U.S. But the good news is that there is a positive momentum, both in Poland and in Czech Republic, which should also continue in the coming year. So strong cement volume dynamics in Poland was clearly -- I mean, it was quite meaningful. Czechia, it's smaller, but also stable. Our ready-mix business in Czechia performed very well. We lost cement volumes in Russia. That's the only area where I think also after some years of war, let's say, the impression is that the economy is starting to feel more, let's say, the pain than in the previous year. And also probably in Russia, the prospects for the next year are also quite difficult or more difficult than in other Eastern European countries. Ukraine is not part of the region anymore. So -- but its contribution was not very significant anyway. So if we exclude Russia, there is a margin expansion. And driven by higher production and also, in this case, lower energy cost, which did not as opposed to Germany that we commented before. Exchange rates also favorable, if you wish, not a minor, let's say, contribution, but anyway, a favorable contribution. And the impact of the deconsolidation of Ukraine was, I would say, totally absorbed and also the negative contribution from Russia was totally absorbed by the strong performance of Poland and Czech Republic. Brazil, which is a newcomer, let's say, first year in the group. So let's say that we are on a pro forma comparison here because last year, actually, only the last quarter was included in our figures. We had a volume trend, which was favorable, 2%, 3% up again compared to the full year 2024. Price trend in local currency also favorable. This translated into, I would say, significant margin expansion. Our cost also were particularly the energy costs are lower than the previous year. So -- as a first, let's say, year of full operation in the group, I think we can be fairly happy with the overall performance. There is room to do better in the coming year if the external condition and also the industry trend will go in a certain direction, which is possible. And the only negative factor, the only negative is the exchange rate trend, but not so impact. I mean, not so dramatic on our -- on the overall figure with minus EUR 5 million on net sales and minus EUR 1.5 million on EBITDA. And currently, actually, if we look at the -- of course, it's not necessarily a trend that will continue for the entire year 2026. But what we are seeing lately is actually a more stable real versus the euro since the beginning of 2026. So if the local currency -- if the trend in local currency will perform better, which is what we expect also in euro, we should have -- it should be reflected, I mean, also in euro terms in likely absence of negative FX impact in the coming -- in the current year. Mexico is not part, as you know, of the group is not line by line consolidated, but it remains a very important part in terms of, let's call it, also management involvement, but in particular, in terms of results -- net result contributed to the other company. The Mexican performance was mixed, but overall, still very good. We [ suf ] a bit on the turnover on the EBITDA in euro terms. But when we clean up, let's say, from the foreign exchange impact, actually, both figures were better than last year. And this is one of the few countries together with the Eastern European country, Poland and Czechia, that is -- was able to achieve an improvement in the EBITDA margin, which is already very, very high, as you can see. So I would say that we cannot complain about the Mexican performance. The only complaint is that it cannot be included in the line-by-line consolidation. But for the rest, very strong performance coming from this country. Some comments on how we see [ 2020 ] also on the light of what has happened so far and also recent change in the macroeconomic environment. I mean, we are -- we were, let's say, but we still are pretty confident that we can continue to perform fairly well during the year. There are uncertainties. There are certainly geopolitical tension, potential inflation pressure for how long this difficult, let's say, situation in the Middle East will last and will affect particularly the energy cost, but not only because there are anyway also impacts on the demand in part directly like in the Emirates or indirectly like in Europe or probably less in the U.S. and Brazil. But anyway. So by major, let's say, regions like we showed before, U.S., the expectation are for -- the association is, let's say, forecasting some additional decline in demand. probably in the range of 2%, 3%, something similar to what happened in the previous year. But of course, if this happens, it would be already the 3, 4, 5, 6, 4, at least fourth year in a row of decline versus the previous peak which was not historical peak, but anyway, the previous peak of the cycle in 2022. And this is something that clearly is not, let's say, helping the overall price environment because there's most of the regions of the state, some capacity available. And as I said before, due to our cost structure to lose some volumes almost immediately translates into a margin construction because the fixed costs are quite high in the area. On the other hand, we have seen also at the beginning of the year, particularly during the month of February, demand quite resilient. So it's true that on one side, you have residential weakening, but there are definitely in the nonresidential portion of the demand or yes, some kind of projects that are going well that require cement and concrete. Typically, just to mention one, which is, of course, very much on the fashionable the data center construction, but this is actually happening. It's happening and it's relatively intense in terms of cement consumption. So again, a mixed environment with the nonresidential segment and also the infrastructure probably supportive and maybe even better than what the association has been forecasting for the full year. So we will see. There are, of course, other factors to be considered in the U.S., which we mentioned in the comments of the press release that are a bit disturbing or potentially disturbing, let's say, the price environment. But okay, a situation or a scenario which is, I would say, moderately optimistic. I would be optimistic about the outcome for the U.S. in the current year. Italy should be a year very similar to the previous one as long as we continue to have demand coming from the infrastructure plan, let's say, or the European funds, there are good chances that we can more or less repeat last year results and also Italy is more likely probably than the U.S. to be able to improve somewhat the prices. There are underlying reason related to the introduction of the CBAM, the scarcity or the less availability of CO2 allowances, which also translate into a higher cost. So there are -- there's probably more room than in the U.S. on the pricing side to be a favorable variance. Central Europe, we should see some rebound. We are forecasting some rebound in Germany. The federal infrastructure plan should start -- will start to have some impact also on cement demand. We are coming from a year where the prices, as we were commenting before, remain fairly weak. So there is -- there should be a possibility also couple being within, let's say, the ETS system similarly to the -- to Italy, there should be a possibility to recover something on the pricing side. Clearly, this means also additional cost for CO2, but more chances, let's say, to gain something on the price level. Eastern Europe, with the exception of Russia, which is probably entering a much more difficult phase than what we faced in the last 2, 3 years. We don't see a reason why Poland and Czechia should be worse than the previous year. These are also countries where as opposed to Germany, Italy, we are operating at a very high capacity utilization level. And so we are definitely optimizing, I would say, our profitability, thanks to the capacity utilization, which is -- we think they have to stay. In Brazil, we mentioned it already, we see a positive trend overall, particularly in the Northeast, which has been growing in terms of volume and prices more than the Southeast. But if there is an easing of the monetary policy, which today represents significant constraints for the construction investment with interest rates at 15% or 16% the number of projects that are -- that have been on hold so far should start. And clearly, this has even more impact in the Southeast where most of the consumption and the population actually are because this is where the bulk, let's say, the cement consumption of the country is located. In the Emirates, we will certainly suffer from lower cement consumption until at least -- we will see until something different happens. But that's the country with more direct impact coming from the local, let's say, turmoil or conflicts going on. But on the other hand, we are -- we have a number of initiatives of projects that are -- that have been put in place last year and will continue this year to improve the profitability. So even with the lower cement volume, we may be able to do something better in terms of EBITDA. Mexico craze not affecting directly our numbers. But we are seeing -- we're, let's say, more positive versus last year in terms of volume trend and profitability should remain at a very, very high level. This is for the, let's say, the top line and the volume prices scenario. The risk or the, let's call it, the uncertainties are definitely more related to the cost side, where it is true that many components or many items are -- have been contracted for a certain number of months. So we have certainly some stability for a good part of the year. But it is clear that on the energy cost, in particular, the current situation is creating an environment of rising cost driven by renewed inflation like we mentioned here. So there is volatility, but volatility mainly on the high side in a sense of more expensive side. This is difficult to, let's say, assess completely right now. We ran some number, taking, of course, kind of sensitivity analysis. And there is certainly an impact that we don't know if we will be able to offset with the price improvement or not. It will mainly depend on the specific situation, demand, pricing demand, let's say, competitive environment, what is the attitude of the competitors, et cetera. So the idea is, of course, to try our best to preserve the margins. But how much we will be able to do that and how much actually the cost environment will be unfavorable is difficult to assess. In general, we do see a significant risk of rising cost, in particular, the energy component in the coming months. The FX foreign exchange is very difficult to somehow forecast. Initially, in our budget, we introduced an exchange rate for the dollar, which was definitely weaker than the 2025 average. Is this going to be true? It's not going to be true. We don't know. So far, again, not as much as we forecasted, but this could change in the coming months and can certainly move, let's say, the variance from positive to negative if the dollar will weaken more than what we expected or more than what is showing up to now. So overall, again, reviewing our numbers, reviewing our budget in a quick way, we think that it will be quite difficult or actually as of now impossible to achieve an EBITDA greater than in 2025. So our view right now is to as we wrote, let's say, marginally decline by how much is difficult to tell right now. But I think the message, which is important to give today is that looking at all the variables, looking at all the available information as of now, it is -- this is the best, let's say, forecast that we can make, and we think that is a correct one, which means that, okay, there our profitability will not improve in 2025. But if it is a marginal decline like we expect, will remain anyway at a very good level. And we would be happy, of course, to change this view as soon as possible. And -- but this, realistically speaking, is likely to occur if it does occur only after more months of actual results available. So with, say, 1 quarter or maybe let's call it, 6 months behind us, we will have definitely a clearer view on the full outlook. But I think it's important to give this message today, which has been, I mean, analyzed in a very deep and serious way with, again, running several sensitivity analysis that are giving us this kind of outcome at least at the current stage. So I think I spoke for almost 1 hour. So probably -- in order not to be tedious and to make the conference a little more interactive, I would let you read the following pages by yourself and open now, let's say, the Q&A session. Thank you for listening. Operator: [Operator Instructions] First question is from Ben Rada Martin, Goldman Sachs. Benjamin Rada Martin: I've had 3, please. My first one was on CapEx. I know in the release, you spoke to an increase planned in 2026 versus '25 and some of the buckets in terms of decarbonization and production. Would you be able to talk to what kind of quantum you expect for 2026 CapEx and then in terms of the medium-term CapEx expectations as well? And then the second would just be on the guidance assumptions and very much understand how uncertain the backdrop is currently and very helpful to kind of talk through some of those impacts. But if we look at that moderate decline or slight decline in EBITDA expected, is it right to assume that there's limited energy impacts so far in that number? Or I guess, what kind of pressure do you see embedded within that forecast? And then finally, would just be another quick one on energy. When would you expect to see, I guess, pressure come through the cost base? Is it more of a second half story at the moment? Pietro Buzzi: Yes. I mean the last 2 questions are, I think, related. And the answer, yes, is that definitely, we have -- as usual, I mean, we have in front of us about I mean, starting from January more than today because already 3 months past, but usually 5, 6 months of fairly stable energy cost or at least as we budgeted because of, let's call it, hedging policies, which is different from one country to another. So -- but if you look at the mix or the weighted average, in general, we have 40%, 50% more or less of our cost already hedged for electrical power or fuel. So yes, the trend if it changes, which I think it will change, unfortunately, will be more evident in the second half. By how much, it depends because we have, for example, also countries in Europe, typically Germany and in Europe, the debate about power cost is really significant. I mean there's a lot of political pressure on power cost being too high to reduce even talking about how to amend the ETS. Tomorrow [indiscernible] will speak about that. Let's see what he say. But -- so specifically in Europe, the big countries like Italy and Germany, we don't see a big risk on power cost. The [ famous ] also energy release has been approved. So there, we should be okay. On fuel cost is different, of course, also even if our share of so-called waste-derived fuel is increasing gradually, we are still strongly dependent on pet coke. So let's say, a price which is somehow linked or index to the -- to some extent, certainly to the oil price. So there, easily, you could see an increase of, I don't know, 20% or so. And unfortunately, this is well possible. It will impact only partially, as I said before, the full year results, let's say, 6 months, but it's well possible. On the CapEx, our trend, I think -- I mean, we are always very kind of ambitious. We are approving the budget. And then as I was explaining before, some of the biggest projects are actually taking longer to be executed to come to the execution phase. Engineering is more complex versus the initial -- I mean, at the time of the initial approval. So if you want to take an average of the next 2, 3 years, I would move it to between -- I mean, to be -- except for -- I mean, just the industrial CapEx, then there will be other kind of equity investments or M&A transaction is different. But I would move it to between 500 and 550 is probably a number that considering the major projects that we have underway, including some expansion projects is likely to be the right one. Operator: The next question is from Elodie Rall, JPMorgan. Elodie Rall: So maybe you could talk to us a bit on the price action that you're taking in Europe to start with to offset indeed the increasing inflationary environment. You talked about your hedging strategy. Are you pushing prices a bit more? Are you seeing the industry pushing prices and where are we at, at the moment in terms of price increases in Europe? And same question for the U.S. You talked about better demand year-to-date. So how do you see scope for price increases? I guess April will be the big start in the U.S. And then I had a clarification on your buyback plan. You did EUR 200 million very recently, I think. And now you announced another EUR 300 million plan. Is that the correct way to understand it? You can do another EUR 300 million from here? Okay. I'll stop here. Pietro Buzzi: Yes. On the buyback, in theory, well, first of all, we have to complete the -- undergo, let's say, EUR 200 million. And then the idea is to renew, let's say, the authority to ask for a renewal, to ask the AGM a renewal for the authorization to authorize an additional EUR 300 million. This EUR 300 million still will -- I mean it doesn't mean that we will necessarily, let's say. exercise the authorization. This is a preliminary authorization, which is given by the AGM, and then the Board will have to decide whether to actually start the program or not. What I think is likely to -- I mean this is unless, again, the market changes completely, but I think we will complete the undergoing EUR 200 million. And then we will have an opportunity or a possibility for another, let's say, EUR 300 million in the 18 months, -- is lasting, let's say, 18 months after the AGM resolution or authorization. On the price section, well, there are some countries, I would say, in Europe, mainly which are also -- the biggest one Italy and Germany. The winter has been difficult in Europe. In general, what we saw and what you also will see when we release our, let's say quarterly summary. There's been cold rain. So particularly January and February was not a good time, let's say, to go for a price increase and March is better. And also the weather has been improving. And of course, January and February are not big shipment months anyway. So the attempt in Europe to increase prices is driven yes, mainly by the cost trend, which includes an additional cost for CO2 like we mentioned in the beginning, probably an additional cost associated with the CBAM, let's call it, also a decline of allowances because you have the 2 components. And yes, more, let's say, today than yesterday, of cost pressure on the energy side, mainly fuel, as I said before, than power. The magnitude, I think, it's moderate. We have to make sure, let's say that we will not be, let's say, losing volume or market share, either against the import or local competitors. But I think there is at least in these 2 important countries in Europe, there is a chance to a price improvement and being able to offset the additional costs like we were commenting before, let's say, on the -- on our policies to at least keep the margins. In the U.S., very differentiated from area to area. There are -- okay, we don't have the ETS, but we have other issues that are associated with the, first of all, okay, the imports where they are strong. That continue to be, let's say, have a very competitive approach in terms of pricing. Second, the industry structure has changed quite significantly. As you know, in particular, I think, the growth, the presence of QUIKRETE as a cement player has changed the picture quite a bit. Also QUIKRETE being major customer of cement from us but also from other competitors. And the fact that the declining, let's say, capacity utilization is clearly for them, let's say, an opportunity to self-supply cement to their, let's say, mixing operation as much as possible. It has to be obviously, economically feasible. So if they are too far away from one of their plants, they will continue to buy from another competitor. But if they can, they will obviously buy from themselves. And this is something that is putting pressure because if you lose volume, you have to look for volumes somewhere else, to look for volume somewhere else maybe -- I mean, pricing is a tool. And this is one of the changes we have to -- which again is very regional, but can have a significant impact. Another point which we also briefly mentioned in the press release is the product mix. There was an effort 2, 3 years ago, particularly by the European player in the U.S. to move as quickly as possible to the so-called 1L product. So with a lower clinker content for limestone, which is actually a very good product, but more capacity available and again, players in the market that don't have maybe European parent, like, again, QUIKRETE, their interest in developing or in pushing 1L is much less. And this is also translating into a competitive pressure, which is different from the past where you compete not only on pricing, et cetera, but you compete also on the kind of product that you're selling. So again, a mixed environment. Anyway, if the demand stays, I think that maybe not everywhere, but some price improvement we can get also in the U.S. And then we will see how much the cost pressure -- how much cost pressure there will be on the margins. But it's a complex -- it's a more complex landscape than 2, 3 years ago certainly. Operator: Next question is from Emanuele Gallazzi, Equita. Emanuele Gallazzi: I have 3 questions. Well, the first one is on Germany. Can you just discuss a little bit more on your expectation for the German market in 2026. You mentioned a gradual recovery supported also by the infra spending plan. When do you expect the first contribution from it to kick in? The second one is on the capital allocation, very clear on the buyback. I was looking at, let's say, the M&A, can you just update us on your M&A strategy at this stage and the opportunities that you see in the current environment? And the last one is a clarification on the guidance. I probably missed it. But on which euro-dollar exchange rate is based your current guidance? Pietro Buzzi: Okay. We are at [ 120 ] right now as an average for 2026 versus [ 114 ] -- was [ 113 ] approximately in '25. So this of course, can be -- as I said before, can be better. If we look at the trend so far is better. Will it last? I don't know, anyway. M&A, yes, is the focus. I mean it is a focus in a sense that our idea is to be, of course, continue with a stronger financial discipline and consider only, let's say, targets that are -- can represent a real opportunity, not only on a strategic view, but also on the financial, let's call it soundness of the overall proposal. I think that today, but also before, it really hasn't changed much. The focus remains countries where we already are. So the opportunities -- if there are opportunities where we already have a presence, certainly they are -- we give them much more investigation, but much more, let's call it, focus than versus opening totally new country or venture with someone else. I say something that is publicly known publicly available, certainly in Brazil recently there have been movement announcement, CSN is announcing -- more than announcing, I think, it started actually a sales process of its cement division. And is it -- is this a real opportunity or not for us? Difficult to tell. I mean, we have to -- but certainly, again, looking at the main strategy, which is reinforced in a disciplined way. The presence where we already are, it could represent, let's say, an opportunity. It has to be investigated. I mean the process is at the beginning. So we need to understand a little better. But generally speaking, this kind of, let's call it, opportunities are more interesting than others. And basically, that's it. In Germany, it's not totally clear how much of the, let's call it, public infrastructure plan will translate into a greater consumption already this year. We think that something will show -- is starting to show, will start to be available. In terms of quantities, let's say, of cement coming from these kind of projects. It's difficult to tell, but maybe I don't know. I don't have -- I don't want to spend a clear number without support. But what we are seeing that, yes, there is a rebound due to the normal, let's call it, cyclicality. The fact that after 2, 3 years of declining consumption, it is rebounding. There is more, I think, also optimism let's call it, confidence within the country after the change of government. And there is a potential, but more than potential consumption coming from the infrastructure plan. So what we can do maybe is to look at -- again come back with some figure with you looking at -- because last year, the association was giving some information of some -- was somehow trying to assess the overall impact, but was more on a longer time horizon. So in the next, let's say, 5, 6 years. Maybe there are more recent, let's say, population assessment of what could be or what will be -- what can be, let's say, the impact already in 2026. But I think certainly, there is some. Operator: Next question is from Arnaud Lehmann, Bank of America. Arnaud Lehmann: So I have 3 questions, please. Firstly, on CO2. Do you have an idea how much reduction in free CO2 allowance you will get for '26 relative to '25, that's my first question. The second -- yes, go for it. Pietro Buzzi: No, no. Let's take... Arnaud Lehmann: So the other one is, I think you're announcing a stable dividend for 2025, even though your net cash position is above EUR 1 billion, it seems very comfortable. So maybe we could have hoped for a little bit of growth in the dividend. And lastly, on your assets in Russia, we've seen some competitors in different sectors are seeing their assets being seized. Do you think that's a risk for Buzzi as well? Pietro Buzzi: Well, it is a risk. It's probably the largest or the greatest or the biggest risk that we have also in our, if you call, enterprise risk management tool. The probability, extremely difficult to tell. I think -- because this thing really depends on one person now. He wakes up on a certain morning, and if you ask me, I don't see it very likely. I believe that we can continue this way, which is not great because, unfortunately, we are not able to manage the way we would like. But to see really political attack of this kind, in my opinion is unlikely. Anyway, the risk is certainly there. And it's, I think, yes, the biggest risk we have currently in our system, in our -- the second question, tell me again was... Arnaud Lehmann: So the other 2 were how much reduction in free CO2 allowances and why a stable dividend? Pietro Buzzi: Okay. Reduction is about 1 million less for the group, 1 million tons less. And I think we estimate to be in deficit, certainly in Poland and, I think, in Czechia too. And in Germany, I don't recall if we will be in a deficit also, yes. Yes. In Italy, probably slightly deficit, but not as important. And I think we will continue with our internal let's call it, guideline, which is to use the bank or the inventory of free CO2 allowances in the countries where they were coming from. So meaning in Italy, we will continue to use them and in the other country, also the way of somehow hedging the cost by CO2 rights to the extent needed. But we are also able to secure some already at the beginning of this year when the prices went down. So I think we should have a yes, of course, a cost -- additional cost versus last year, but probably a per ton cost, which is still, let's say, favorable. On the stable -- the idea behind a stable dividend was quite simple. Our net income is the same of last year. It is true that our payout is not that great, and there would be room for improvement. I think there is room also in the coming year is basically -- is basically -- and overall, to let's say, examine and to consider the overall shareholder remuneration. So it is true that on one side, we did not increase the dividend. But we do have the undergoing buyback, which makes the overall -- okay, maybe not for everyone because it depends if you're selling your shares or you're keeping your shares. But in general, I think the buyback is beneficial to everyone. And also the decision to cancel the share will adjust at least in -- finally, in a definite way the EPS with an improvement there, which should translate sooner or later, providing, let's say, that the markets are also becoming a little less volatile and improvement in the share price. So we thought that this would be a balanced decision. And also looking at the coming year, where our outlook is not for an improvement. It seems to us that to keep the dividend, which is, yes, same as last year was a balanced decision. Operator: Next question is from Yassine Touahri, On Field Investment Research. Yassine Touahri: I would have 3 questions. First, a question on pricing. I think in Germany and Italy, some of your competitors have announced price increase of 5% to 10% as soon as April. Have you seen price increase later -- in the U.S., I think it was outside of Texas. You had also price increase of like, I think, between $8 and $12 per ton sent by many of the largest players to ready-mixed concrete producer. Again, have you announced similar price increase? Then I would have a second question beyond the price development. On your vertical integration strategy in the U.S. I think that a lot of your competitors are vertically integrated. And you can see -- I understand from your comment that the lack of vertical integration, for example, versus QUIKRETE has been an issue. Is it something that you could consider addressing in the next 5 to 10 years with potentially more acquisition in aggregate of ready mix? And the last question would be on Russia. Could you give us the amount of cash which is currently in Russia when we're looking at your net debt position? Pietro Buzzi: Okay. Russia, I will check it and let you know quickly. In the U.S. as well, we are not totally, let's call -- let's say, without it, in some area, actually, our vertical integration in Texas and San Antonio, Houston, Austin, et cetera is quite significant. We don't have a presence in the aggregates. I mean, this is true. We have some aggregate production, but not -- never, never considered a business in itself and always somehow related to our ready mix activity. So as a way to supply our own ready mix activity. This will become more significant in the coming years. I would say yes. I think initially, at least more oriented towards ready-mix than aggregates because is the most important in terms of keeping your production levels steady, again, not losing customers or avoid losing customers. So it can be seen more, I would say, as a defensive move than strategy, devoted to additional vertical integration in a market which is -- has been shrinking, let's say, in a way or another in a market that's changed like we mentioned before and also changed in terms of big ready-mix producers that are importing cement for their own supply. The number -- I mean, the risk of losing customers and not being able to replace it with another customer, particularly in the ready-mix environment is great. So it can certainly make sense to add the vertical integration, as I said, more as a defensive move than something else. But it is a defensive move that will allow you to keep your volumes and also to keep your -- again, to keep your margins. On the pricing environment, I think, we moved that, but not by the same percentages there. Yassine Touahri: I think the percentages are mentioned, where the price increase announced. Not the price increase that are expected to be realized. I suspect that the message, I think, of the larger -- of some of the large cement players in the U.S. would be that a low single-digit price increase being expected which I suspect means like maybe half for the price increase... Pietro Buzzi: Yes, probably this is, again, not everywhere, but probably this is the most likely outcome, usually. You have protection, you have anyway, as I said, many players that are behaving maybe not exactly as the big ones that are particularly in this moment where the output is not going up. So clearly, looking very much to their capacity utilization than versus just even if economically speaking, it could make more sense sometimes to lower your production and increase prices in the long run. This is not necessarily a good move because if you lose a customer and you're not able to recover it in the long run, this will translate into lower profitability, too. So yes. Yassine Touahri: And another question was, have you sent a price increase letter for April in the U.S., Germany and Italy? Pietro Buzzi: In the -- so-called price increase letter is more a technique of -- more common in the U.S. than in Italy or Germany. In Italy and also in Germany is more case-by-case, customer-by- customer, let's call it, discussion or any way proposition. So... Yassine Touahri: If we look at -- if you look at your own vertical integration into concrete in Germany and Italy, are you increasing prices in April substantially to offset the higher fuel costs that you're expecting and the CO2 alone? Pietro Buzzi: Is not yet the higher fuel cost. It was more, let's call it, decision taken already at the beginning of the year. And yes, we have price improvement in place, which I don't think will be the magnitude that you were mentioning, right. Like I mean, for the reason that you were mentioning. But yes, we think it's likely to stick also because again, more recently, people are feeling pressure also on other cost factors. So it's more -- it's easier, let's say, to accept also an increase of the cement price if there is a general inflation rebound. Yassine Touahri: And maybe following on this situation. I think like the importer in Europe, especially in Italy, they will probably have to pay a CBAM cost, but it's a bit unclear they don't know. I think what kind of cost they will have to pay because the benchmark is not public. What do you feel? Do you feel that the independent importer are being a little bit careful because they might have EUR 10, EUR 15 extra cost, but they are not yet increasing prices? Pietro Buzzi: No, I think they've been already increasing in general. It is like you're saying, it's not totally clear what will be the -- it depends actually on their CO2 content. And yes, each importer can have a different impact according to the kind of product that is bringing in. But yes, I think everyone is considering just maybe as a conservative move to make sure that they are not losing, let's say, versus the previous price. So that they will be able somehow to offset the additional CO2 cost associated with the CBAM scheme. Yassine Touahri: And on the pricing as well, I think, on one side, you've got the imports that are making it difficult to increase prices. But at the same time, I guess, the cost of importing is probably increasing a lot with the oil price making shipping more expensive? Is it something that could be helpful for you to either increase prices or get back the market share that you lost versus especially the big bag imports? Pietro Buzzi: Yes, yes. It is a chance. The -- anything that makes the import more expensive will allow, let's say, or will help, let's say, domestic supply to be more and more competitive, certainly. Yes, it is a chance. Yassine Touahri: On the other side, on Texas, you've got a new cement plant. I think it's the first time there is a cement plant in Texas for many, many years in West Texas. It looks like it's 10% of the Texas capacity, so it's a lot. And the -- it looks like they're going to -- it looks like the cement plant could be -- I guess, do you see a risk for your market share in West Texas? I think where there is a lot of oil well cement. Do you see a risk as well in your market share in the Dallas Fort Worth area where I guess that if they want to ramp up, they will have to sell to Dallas and Fort Worth. Is there a risk for sure? Pietro Buzzi: Of course, there will be more competition, particularly on the oil well. On the other hand, it is true that GCC was already preparing, let's say, the commissioning of the plant by importing cement from Mexico in the area. So it's not totally new. I mean, of course, they have more capacity locally, so they are more competitive, and they can be more aggressive, but they were anyway preparing the commissioning already before. And on the oil well, yes, at the end, the oil well is really a matter of what is the oil price. So if the oil price stays or goes up, I think, yes, okay. There can be more comments. I think this kind of customer is a little different. I mean, being really special products with a very strong significant quality requirements, consistency must be difficult -- it's much more difficult for a customer of oil well to change supplier versus the normal ready-mix customers. So there must be -- okay, there is a huge pricing difference they will consider it, but then they have to test it. I mean they have to go through their quality department is quite complex. So -- and again, the demand is driven purely from the cost -- from the price -- oil price. Yassine Touahri: Okay. Is it fair to assume that in the U.S. in your forecast, you've assumed maybe a bit of a price increase in land, but no price increase in Texas at this stage? Pietro Buzzi: Correct. Yassine Touahri: Maybe on Russia, on Russia, you don't have the number on even approximately the amount of cash that you have in Russia? Pietro Buzzi: EUR 150 million. Operator: Next question is from Alessandro Tortora, Mediobanca. Alessandro Tortora: A few questions, if I may, as -- so the first one is on you made a comment on a very significant margin expansion. Clearly, volume were up, let's say, low single-digit prices, let's say, not slightly up. So the game changer not to stay in this, let's call it, new level, very good level. So you -- it was the work you did on the cost side. And the real mission of the market is I don't know, to be structurally above 30%. So just to understand that clearly, I understood your comment on we need, let's say, more, how can I say, disciplined competitive landscape and for the CSN deal could help on this. So just your thoughts on this because clearly, the margin expansion, especially in the second half was very, very good operationally. Pietro Buzzi: Yes, yes. It was driven, yes, by -- well volumes were good, let's say. So capacity utilization is some plant is really pro capacity, which is giving the best operating leverage. So this is always -- the energy -- power cost, in particular, we save some. We are also becoming in a sense, indirectly, but let's say, producer of renewable energy. We have now an investment into a renewable energy company, which is allowing us to enjoy, let's say, better -- lower, let's say, power cost. And pricing, not a great change. I mean you don't see such a significant improvement. But there are some improvements in prices. Also again, because the market is quite brilliant, let's say. And yes, CSN could be an opportunity besides -- I mean, whoever buys it, will buy anyway, we'll have to invest a significant amount of money because -- okay, relatively speaking can be cheap or expensive. It depends on how much we want to take. But in absolute term, is any way sizable company. So -- and yes, CSN has been certainly more aggressive, let's say, than other competitors on prices, particularly in the Southeast region. So we hope that this could translate into a more disciplined competitive environment that is certainly a chance, let's say. Alessandro Tortora: Comment on pricing strategy discussion client by client in some countries. So is there at least with some clients in some countries, some kind of indexing with, let's say, CO2 price and so on? Because we saw the decline in CO2 price recently. So just to understand if there is or not. Pietro Buzzi: No, there's not. It would be too dangerous in our -- I mean someone definitely did it in the past, but it's very dangerous. I think in our opinion, will not be the right commercial marketing strategy. Alessandro Tortora: Okay. Because there are different opinions on that. And on the CapEx side, the question is, first of all, you mentioned this run rate for the next 2, 3 years with EUR 500 million, EUR 550 million per year CapEx. Does this include the, let's say, U.S. expansion project you had in mind? Pietro Buzzi: Yes. Yes. Correct. Alessandro Tortora: And which is... Pietro Buzzi: I mean, which will start, but we'll start at a slow pace, let's say. But it will start, yes. Alessandro Tortora: Okay. Okay. And secondly, in theory, we should have, let's say, a second round of grants, let's say, in Europe also for, let's say, some innovative carbon capture projects. Is it something that you're still monitoring? Do you believe that maybe you can take, I don't know, a decision on developing at least one single project for this technology? Or let's say, the approach is to be extremely, let's say, conservative and maybe waiting a little bit for technology getting more mature? Pietro Buzzi: Monitoring, yes. Lorenzo, you want to add something? Lorenzo Coaloa: No, I mean, again, monitoring for sure and -- but let's say, at the same time, we need probably more clarity on the regulation and also on the criteria that will be, let's say, considered by the commission when it comes to the evaluation of the project. Pietro Buzzi: Let's see if there is -- what happens on the ETS side, I say tomorrow, but not tomorrow, I mean the so-called revised ETS by June, I know it's, if I recall correctly, let's see what happens there. Because still, we believe that the cost benefit of a carbon capture project is unjustifiable, let's say, today. So what you are focused much -- is -- and also to -- okay, if you build a totally new plant, but again, cost benefit very difficult to justify, it can make sense. I mean you build a totally new plant. You introduce also the carbon capture installation. But to add the carbon capture installation to an existing plant, which dates to maybe the 70s or the 80s, they are not bad, but let's say there's plenty of room for improvement in energy consumption and also fuel consumption before carbon capture installation. So we are a little bit shifting our focus on projects in countries like Poland or Deuna. Deuna, where we put on all the carbon capture projects to something that will reduce, let's say, maybe CO2 emission by 20%, 25% and modernize the plant. So being ready to possibly at a later time, which I think it will be inevitable because the deadline that are set today are realistic at a later time to introduce a carbon capture on a plant, which has already been optimized, instead of doing it on a plant, which is again 30 -- 40 years old. Lorenzo Coaloa: And maybe if I may add, with a return -- I mean, return on investment definitely much more interesting than a single installation, carbon capture installation with, let's say, a business plan, which is at the moment and with the current situation is not really flying. Pietro Buzzi: It's a better way to lower CO2 emissions for sure. Alessandro Tortora: Okay. Okay. Just if I may, sorry, you mentioned that the financial, let's say, income was not pretty high this year. Can you help us to quantify, sorry, the FX gain component in that number? Pietro Buzzi: Yes. Well, one item, which is included into that figure is also the bad will of the UAE acquisition, which is EUR 44 million positive. If you look at the fewer net interest expense and net interest income in this case, we have EUR 60 million and last year, it was EUR 55 million -- EUR 60 million, yes. Last year it was EUR 55 million. So it is EUR 5 million up. This is the cash portion. The noncash portion, the 2 big items are [ 75 ] of ForEx, so nonmonetary. And -- well, I don't know if it nonmonetary, the bad will because we paid anyway. So -- but we paid less than the equity -- book equity. And so we have [ 44 ] positive that we are also inside the same line item. Operator: [Operator Instructions] Mr. Buzzi, there are no more questions registered at this time. Pietro Buzzi: Okay. Good. Thanks, everyone, for listening. I don't know how many are still listening. But anyway, I hope it was somehow helpful. And we stay in touch, of course, with our Investor Relations team and looking forward to meet you personally in the coming months. Thank you. Operator: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.
Operator: Greetings, and welcome to Aqua Metals Fourth Quarter 2025 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, [ Dan Scott ]. Thank you. You may begin. Unknown Attendee: Thank you, operator, and thank you, everyone, for joining us today. Earlier today, Aqua Metals issued a press release providing an operational update and discussing results for the full year ended December 31, 2025. This release is available in the Investor Relations section of the company's website at aquametals.com. Hosting the call today are Steve Cotton, President and Chief Executive Officer; and Eric West, Chief Financial Officer. Before we begin, I would like to remind participants that during this call, management will be making forward-looking statements. Please refer to the company's report on Form 10-K filed today for a summary of the forward-looking statements and the risks, uncertainties and other factors that could cause actual results to differ materially from those forward-looking statements. Aqua Metals cautions investors not to place undue reliance on any forward-looking statements. The company does not undertake and specifically disclaims any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur, except as required by law. As a reminder, after the formal remarks, we will conduct a question-and-answer session. With that, I'd like to turn the call over to Steve Cotton, President and CEO of Aqua Metals. Stephen Cotton: Thank you, Dan, and good afternoon, everyone. I appreciate you joining us for Aqua Metals Fourth Quarter and Full 2025 Earnings Call. Today, I'll walk through what was an active and milestone-filled year for our company, covering how we evolved our technology, what we accomplished on the product side, how our strategic partnerships developed and the financial foundation we built heading into 2026. Eric will then follow with a detailed financial review. Let me start with the overall frame for 2025. It was a year in which discipline and execution went hand-in-hand. We made deliberate adjustments to our commercialization approach as market conditions evolved, cleared important technical hurdles, extended our platform with new strategic initiatives and put the balance sheet in meaningfully better shape than where we started the year. On the technology and product front, I would call 2025 the most expansive year in Aqua Metals' history in terms of what the AquaRefining process demonstrated that it can do. We grew the product portfolio. We raised the bar with product specs and proved the feedstock flexibility of our platform in ways that matter commercially and allow us to address the variability of material, not only in the battery recycling market, but beyond to include other markets like rare earths and undersea mining, for example. One of the most important strategic decisions we made this year was to sharpen the commercial scope of our first ARC facility. With the AquaRefining platform that's capable of producing a broader range of outputs, we made the deliberate decision to simplify the first commercial plant around 2 core feedstock streams, NMC black mass and LFP black mass. From those inputs, our initial commercial focus will be on 3 primary outputs: battery-grade lithium carbonate, nickel, cobalt mixed hydroxide precipitate or MHP, and iron phosphate. We have already successfully produced these materials at our innovation center, which gives us confidence that this is the right first commercial configuration. That decision is expected to reduce execution risk, shorten time to market, lower upfront capital requirements and support attractive unit economics and a stronger payback profile. In short, we are intentionally designing the first commercial ARC to be simpler, faster and more capital efficient to deploy while preserving the flexibility to expand the product slate over time as we scale. We believe that it is the right disciplined approach to commercialization and long-term shareholder value creation. On product quality, our team delivered results that we believe set a new benchmark for the recycling industry. Our lithium carbonate achieved fluorine levels under 30 parts per million, a specification that to our knowledge, places us at or above the quality standard for any recycled lithium source globally. Material meeting this threshold has been produced at meaningful scale and distributed to strategic counterparties for evaluation. The responses have been substantive and encouraging. On the broader product side, we generated product qualification representative volumes of multiple products and advanced those materials through partner qualification processes. We also developed nickel carbonate, producing initial samples calibrated to specific downstream partner requirements, which opens additional product pathways and gives us greater optionality as partner discussions mature. Now an LFP or lithium iron phosphate battery chemistry, which is cobalt and nickel-free, I want to get this attention it deserves because I consider proving that we can economically recycle this type of material is one of the most significant technical achievements in this company's history. We moved from engineering analysis and bench scale work on lithium iron phosphate recycling all the way through to processing an entire metric ton of LFP cathode scrap at our pilot facility. Recovering battery-grade lithium carbonate that was validated by OEM and third-party testing. That is not a lab result. That is demonstration at commercially meaningful scale. And because LFP chemistry is capturing an increasing share of both EV and stationary storage deployments, the ability to handle it gives our platform a decisive competitive advantage in terms of addressable feedstock. We also initiated trials on sodium sulfate regeneration, a process that could allow P-CAM producers to convert a problematic waste stream back into a usable chemical inputs, creating cost and sustainability advantages for our partners. And we extended our alternative feedstock testing to include nickel refinery residue alongside polymetallic nodule materials, rare earth-bearing magnets and e-waste, which underscores the core flexibility built into our electrochemical process. One achievement from 2025 stands out beyond the product and process milestones. We were central to producing the first cathode active material made entirely from recycled nickel sourced within the United States. That material has now entered qualification at a Tier 1 battery manufacturer. This matters not just as a technical accomplishment for Aqua Metals, but as a demonstration that a fully domestic closed-loop battery material supply chain is not a theoretical goal. It is something that can actually be built. As the field of players in this market continues to consolidate, we intend to be at the center of it. On the commercial development side, we advanced our ARC facility design to support a processing range of 10,000 to 60,000 metric tons of black mass input feedstock annually. That flexibility is intentional. It allows us to size the first commercial facility to the specific partner configuration and capital structure we ultimately bring together rather than being locked into a single predetermined scale. We also conducted structured due diligence on several candidate sites for the first commercial ARC, working through factors like feedstock proximity, offtake accessibility, utility infrastructure, permitting pathways and the strategic alignment of potential partners at each location. The process has been thorough, and we are in a good position to move forward with final site selection later this year as the remaining commercial conditions come together. And I want to be direct about the build decision because I think our approach is sometimes misread as a hesitation. In fact, this is exactly the opposite. We are not going to build before we are ready. And what ready means is contracted feedstock, committed offtake and project financing that is genuinely bankable. Our posture is simple: build once, build right and execute from a position of confidence. That approach protects shareholders and gives us the best possible path to a facility that ramps to profitability on a reasonable time line. We also remain actively engaged in diligence with Lion Energy around a transaction structure that we believe could be highly strategic and meaningfully additive to Aqua Metals. If completed, this opportunity would not only provide immediate commercial revenue and extend our reach downstream into branded energy storage systems across portable, residential, commercial, data center and industrial applications, but it would also position Aqua Metals and its shareholders to participate more directly in 2 of the fastest-growing segments of the electrification economy, distributed energy storage and domestic LFP battery manufacturing of cells. Importantly, through Lion's existing relationship with an equity stake in American Battery Factory, or ABF, this transaction would also bring with it a meaningful equity interest in ABF, creating exposure to the emerging U.S. GigaFactory build-out and LFP cell production market. We view this as a compelling strategic fit that could broaden our platform, advance our long-term circularity vision, enhance our commercial relevance and create additional pathways for shareholder value creation. We remain disciplined and thoughtful in our process, and we look forward to updating the market in the near term. Let me now turn to our partnership activity in 2025, which was broad and meaningful. I'll walk through the key relationships because the pattern they reveal is important. With 6K Energy, we formalized a multiyear supply agreement that establishes the commercial terms under which we would deliver battery-grade nickel metal and lithium carbonate into their domestic cathode active material manufacturing operations. This moves the relationship beyond technical collaboration and into a defined commercial framework, positioning Aqua Metals as a main supplier into a domestic CAM production chain. With Westwin Elements, we entered a nonbinding LOI outlining terms for a potential supply of recycled nickel carbonate that would support Westwin's efforts to build a domestic nickel supply chain. What makes this relationship particularly interesting is the downstream implication. We believe that a Westwin Aqua Metals commercial partnership and relationship can help stand up nickel production and refining capability on U.S. soil that simply does not exist at scale today. We also signed 2 MOUs that extend the AquaRefining platform into adjacent critical minerals territory. The first with Impossible Metals explores applying our refining process to material collected responsibly from the seafloor, feedstocks that contain nickel, cobalt, copper, manganese and rare earth elements. The second with Moby Robotics evaluates whether AquaRefining can be applied to polymetallic nodules with the potential to recover true rare earth elements as well. Both extend our platform well beyond battery recycling and into strategic areas of focus on critical minerals in today's world. I want to address the strategic logic here directly. These are not departures from our mission. The chemistry underlying AquaRefining, electrochemical refining of dissolved critical mineral streams is the same whether the feedstock originates from black mass, refinery residue, e-waste or deep sea nodules. The intellectual property travels. What these agreements do is extend our total addressable market and create optionality that a licensing and partnership-oriented business model can monetize without heavy incremental capital. Battery recycling remains our primary commercial path to these adjacencies, add strategic depth. We also continued active industry engagement at our Tahoe Reno-based Innovation Center and demonstration plant throughout the year, hosting the National Battery Conference, automotive OEMs, battery manufacturers, recyclers and upstream material suppliers for facility tours and technical reviews. The consistency of the feedback about the quality of our output and the operational sophistication of our pilot plant continues to build credibility in commercial discussions. And you can see some of that feedback on our blog, the current on our website. On the governance front, we made targeted additions to the Board of Directors, bringing in directors with specific expertise in growth strategy, commercialization and financial markets. These additions reflect where we are in our development, a company that is transitioning from technology validation to commercial execution, and the Board now reflects that stage appropriately. We also completed a CFO transition with Eric West stepping into the role of bringing both deep Aqua Metals institutional knowledge and a fresh financial perspective to this next phase. On intellectual property, the U.S. Patent Office granted allowance of a foundational patent covering key elements of our lithium battery recycling process. This is a significant addition to an already substantial IP estate and reinforces the long-term defensibility of the AquaRefining platform at commercial scale. We also filed a provisional application covering a novel low-cost leaching approach applicable to mined manganese ores and deep sea nodule feedstocks, which is further evidence of the expanding reach of our IP program. As we enter 2026, our priorities are well defined. We are advancing engineering and permitting work to support site selection for our first commercial ARC. We are deepening commercial negotiations with supply, offtake and project financing partners. And we are moving strategic partner qualifications for our lithium carbonate and MHP forward in a deliberate milestone-oriented way. The broader environment for domestic critical minerals has continued to shift in our direction. The policy and geopolitical case for building domestic battery material production capability has never been stronger, and we are increasingly recognized as a technically validated credibly financed player in that space. We have the process, the people, the operating demonstration plant and the strategic relationships to move from validation to commercialization. Now it is about refining that momentum into commercial results, and I am confident in our team's ability to deliver. With that, I will turn it over to Eric for the financial review. Eric, over to you. Eric West: Thanks, Steve. We'll now provide an overview of our full year 2025 financial results and balance sheet position. Given this is our fourth quarter and full year call, I will focus primarily on annual figures while noting fourth quarter specifics where relevant. Let me start with the balance sheet. We ended the year with cash and cash equivalents of approximately $10.8 million. The significant capital raise activity in 2025 is the most important context for understanding our year-end position. In October, we closed a $13 million investment from a leading institutional investor, combined with approximately $7 million raised through our ATM and equity line programs. Our total new capital raised in 2025 was approximately $20 million. This was a proactive raise made from a position of strength and strategic momentum, and it provides us with multiple quarters of operating runway and the resources needed to advance engineering, permitting and site selection work for our first commercial scale AquaRefining facility. I also want to highlight a key balance sheet improvement that I'm particularly proud of. We ended the year with no long-term debt. This is the result of the deliberate financial management decisions made throughout 2025, including the completion of the Sierra ARC asset sale in the second quarter and the associated retirement of the $3 million Summit Building loan. Having fully eliminated our debt, we entered 2026 with a cleaner, more flexible capital structure than we have had in years. Now moving to the income statement. I will cover the full year 2025 results with prior year comparisons where described. Total operating expense for the full year 2025 was approximately $23.3 million compared to approximately $23.8 million for the full year 2024. While total expenses were relatively consistent year-over-year, 2025 included approximately $9.1 million of impairment and loss on the disposal charges, compared to approximately $3.1 million in 2024. These impairment charges are nonroutine and noncash in nature. Excluding these items, underlying operating expenses declined meaningful year-over-year, reflecting the sustained cost discipline we have maintained throughout 2025, including the benefit of workforce reductions implemented in the prior periods while continuing to support our key technical and commercial development programs. We are running a lean, mission-focused operation. General and administrative expenses for the full year were approximately $10.5 million, down from approximately $12 million in the prior year. The decline was driven primarily by lower payroll and related costs following prior year workforce reductions, reduced professional fees and broader overhead efficiencies. For the fourth quarter, specifically G&A came in at approximately $3.8 million. Research and development expense for the full year totaled approximately $1.3 million, reflecting our continued investment in process optimization and product expansion, including lithium carbonate quality improvement, MHP production, nickel carbonate development and LFP processing capability. For the fourth quarter, R&D was approximately $0.4 million. While we maintain disciplined cost controls, we are intentional about funding the technical work that derisks commercialization and advances partner qualification. Every dollar spent in this area has a clear commercial purpose. Our full year 2025 net loss was approximately $22.6 million or negative $15.15 per basic and diluted share compared to a net loss of approximately $24.6 million or negative $38.25 per share for the full year 2024. For the fourth quarter, our net loss was approximately $4.4 million or negative $2.97 per share. These figures reflect the pre-revenue development stage of our business, and they continue to trend in the right direction as our cost structure matures. I want to take a moment on the year-over-year net loss comparison because the 2025 figures also reflect some noncash items that are worth noting for investors evaluating our underlying operating trajectory. Our 2025 results include noncash items associated with warrant liability remeasurement, impairment on disposal of property, plant and equipment and other noncash adjustments similar to prior periods. We are pleased that the core operating cash consumptions continue to trend lower year-over-year, which is a direct reflection of the cost discipline we have discussed on every call this year. Moving to the cash flow statement. Net cash used in operating activities for the full year 2025 was approximately $10.3 million compared to approximately $13.6 million in 2024. This improvement, a reduction of more than 24.8% year-over-year reflects our disciplined overhead management and the lower cost structure we have built over the past 18 months. Investing activities for the year primarily reflect the Sierra ARC building and equipment sale proceeds received in Q2, partially offset by minor fixed asset activity. In December of 2025, we also provided approximately $2.1 million of short-term financing to Lion Energy, which remained outstanding at the year-end as a note receivable. Subsequent to year-end in February 2026, we entered into a nonbinding term sheet contemplating the potential acquisition of Lion Energy and contributed the outstanding note along with an additional $2 million to acquire a subordinated position interest in its senior secured credit facility in connection with our evaluation of the potential transaction. On the financing side, the year was characterized by meaningful capital inflows from our October institutional raise and ongoing ATM and equity line activities, partially offset by debt repayment activity completed earlier in the year. Looking ahead, as Steve outlined, we anticipate a measured increase in cash usage as we ramp engineering, process optimization and site readiness activities in support of our first commercial facility. We will continue to manage our spending with rigorous discipline. Every dollar invested must advance a clear strategic and technical milestone. The focus remains on maintaining adequate liquidity, aligning investment pace with commercialization progress and ensuring we have the financial platform to reach our goals. The balance sheet improvements we achieved in 2025, eliminating debt, raising $20 million in new capital and continuing to reduce our operating cash burn has positioned Aqua Metals to approach 2026 from a place of genuine financial stability. We have the runway we need and we intend to use it wisely. That concludes my prepared remarks. I will now turn the call back to the operator for the question-and-answer session. Operator: [Operator Instructions] Our first question comes from Mickey Legg with The Benchmark Company. Michael Frederick Legg, Jr.: Congrats on another quarter. Just a couple here on the Lion Energy acquisition. Assuming that it does get approved and closes, just what are your main areas of focus near term and some of the most natural areas of synergy you see for Aqua Metals? Stephen Cotton: Yes. Mickey, good question. And yes, so first off, we're really been very deep in due diligence across all the key work streams associated with this acquisition. That's like inclusive of financial, legal, operational and commercial. And that's included everything from auditing the financials to completing a detailed independent market, product assessment across Lion's revenue, generating portable residential, commercial, industrial and data center offerings. So we've had -- the team is spending a lot of time talking about synergies with each other in each other's facilities and working closely through all the discussions. So on the process, it's been very active, very substantive, and we expect to bring it to a conclusion in the near term and update the market accordingly. And in a greater sense, what we see with the synergies is an integrated battery materials and battery energy storage company is much stronger than those that stand on their own. And that's because of the synergies you can get with the circularity with the ingredients that go into the batteries, the production of the batteries, inclusive of the ownership that Lion Energy has in American battery factory with their planned GigaFactory in Tucson, Arizona, and being able to put that all together and expose the shareholder, frankly, to the optionality of having a stock they can buy that is really a combination of energy storage, battery materials and GigaFactory production. It's much how it's done in China. And the one reason that China has been successful is by integrating these solutions and creating those kinds of synergies to reduce costs, increase efficiency and have a better story about the overall solution. So we're really excited about that opportunity to work everything out with Lion Energy and come out swinging is what we think will be the first integrated energy solution provider and battery materials provider in North America. Michael Frederick Legg, Jr.: Great. Okay. Okay. That's very helpful. And then just one more on the acquisition. And I want to understand a little bit better the equity stake it could bring in American Battery Factory, how does that fit in there? Does it just sort of align with your closing remarks there, your ending remarks about fitting into the domestic end-to-end battery ecosystem? Stephen Cotton: Yes. So definitely, the equity stake in American Battery Factory is a huge value creator and a huge synergistic opportunity. But American Battery Factory is planning a first GigaFactory in Tucson, Arizona. They've already secured the land about 270 acres, where we see synergistic opportunities as one of the sites we're considering to deploy our ARC facility at a commercial grade plus Lion Energy having some battery fabrication. So if you can think of like a single location that would have cells being generated, the agreement that we already have with American Battery Factory in an MOU form today, which is that we would take the scrap from that GigaFactory as an input to our recycling facility and get lithium carbonate right back to that GigaFactory. While right in that same area, you've got Lion Energy putting together really innovative battery energy storage products for the various segments of the marketplace I was talking about earlier. So the GigaFactory plays are large plays. And what American Battery Factory is seeking is the final phase of financing to get that GigaFactory started this year -- later this year. And those are hundreds of millions of dollars of investment -- based on project finance, we think our equity position would still be still quite meaningful post financing and a GigaFactory produces a heck of a lot of revenue and a heck of a lot of product that also adds to those synergies. So we really see that as a key aspect of our relationship with Lion Energy and American Battery Factories kind of tying that all together. Operator: I would now like to turn the call back to Dan to facilitate questions that were submitted online. Unknown Attendee: All right. Thank you very much. First question for Steve. Could you give us a site selection update? Where does the process stand? And when can we expect an announcement? Stephen Cotton: Sure, sure. So the biggest gating factors now are really site selection, project structure, lining up the right capital and commercial partners. And as we've already mentioned, we're in active due diligence on 2 specific potential sites, looking at things like feedstock access, logistics, utilities, permitting and of course, the overall economics of the project in that particular type of location. And our goal is to settle on and secure the lead site and then spend the balance of the year making real progress on site-specific FEL2 engineering. And that's really basically the stage where you move from concept into a much more defined and specific plant design down to every nut and bolt for that particular location, cost estimate and the execution plan to begin executing a bond. Unknown Attendee: Excellent. The second question, Steve, is what is the status of the feedstock market? There's been a lot of volatility in battery metal prices. How does that affect your commercial position? Stephen Cotton: Yes, great question. So today, effectively all of the black mass produced in the United States and really North America is being exported offshore, simply because there really aren't yet commercial scale refining options here domestically. And that's exactly the opportunity we're pursuing with the first build of our commercial ARC. The market does demand competitive payables for feedstock, but we believe our lithium AquaRefining process puts us in a very strong position because of its potential CapEx and OpEx advantages. And importantly, we're already working to diversify through both end-of-life batteries and GigaFactory scrap, as I mentioned earlier. And that includes our announced MOU, like I mentioned earlier, with American Battery Factory in Tucson. So we can take end-of-life and beginning of life batteries that didn't make it. And that's about half of the scrap of the overall material is GigaFactory scrap at this point in time. It's also important to note that the overall economics around refining black mass have improved meaningfully over the last year. A number of projects across the industry, which including ours, slowed or paused when lithium carbonate prices fell to around $8,000 a ton in 2024. With pricing now having recovered to roughly the $20,000 plus or minus range per ton, we think that creates a much healthier backdrop. And that's, in turn, a real opportunity for the remaining U.S. players and especially for Aqua Metals given the stage that we're at today. Unknown Attendee: Thanks, Steve. Next one we got is, can you talk about the LFP breakthrough in more detail? Why is it significant? And what does it mean for your business model? Stephen Cotton: Yes, great. As I mentioned in my prepared remarks, the LFP breakthrough is really about our ability to economically recover lithium while also recovering the iron phosphate into a reusable form. And that's really a big deal. LFP does not have nickel or cobalt to support the economics. So you really have to run an efficient process. And that's exactly where our lithium AquaRefining technology stands out. That matters not just for future end-of-life batteries, but for the growing volume of LFP GigaFactory scrap such as American Battery Factory already being generated today and what we expect from American Battery Factory as they come online. As LFP continues to scale across energy storage and EVs, we really think that puts us in a strong position to be a leader in the new LFP batteries. Unknown Attendee: All right. Eric, next one is for you. Can you expand on your liquidity position coming out of 2025? And how long is the current capital -- and how long your current capital supports your operations? Eric West: Yes, definitely happy to expand on that. Point to, we ended the year with $10.8 million of cash, no long-term debt and a lower operating burn. This has put us in a pretty strong position as compared to prior periods. We continue to exercise cost discipline as we continue to progress. And just to add some additional context, the capital raised during 2025 was about $20 million in total, which really helped us to strengthen the balance sheet and put us in a position to fund all of the work that we're doing now. So really that gives us the solid flexibility as we continue to move forward on the overall engineering site selection and our partnerships that we've discussed that really lead us to our first commercial facility. So overall, we feel good about where we are. The focus now is just continuing to be disciplined and making sure that we deploy the capital against the right milestones. Unknown Attendee: All right. A couple more. Steve, you've announced MOUs with Impossible Metals and Moby Robotics for deep sea mineral applications and also an LOI with Westwin Elements. How do these partnerships fit with Aqua Metals core business? And what do they look like commercially? Stephen Cotton: Yes. So at a high level, all of these partnerships are about applying our core AquaRefining platform to new sources of critical minerals and importantly, opening up to a very large high TAM market set access to that, where we can really monetize that capability. So we view them as directionally aligned and not a distraction at all. Whether it's black mass or GigaFactory scrap or primary resources like deep sea nodules or refining intermediates from partners like Westwin, the common thread is our ability to process these complex materials efficiently and with a lower environmental footprint and have access to the TAM of those gigantic markets in addition to battery recycling in our sites. Unknown Attendee: Okay. The last question we have is, Steve, how do you view the ongoing consolidation in the battery recycling industry? And does it create opportunity or risk for Aqua Metals? Stephen Cotton: So we view the consolidation overall as a net positive for Aqua Metals. The reality is that the lithium price collapse that happened in 2024 exposed which models were resilient and which were not. And at the same time, the industry is learning that simply copying China's chemical-intensive hydro approach into North America is really a very tough economic proposition. That's why we built AquaRefining differently from the beginning. And that is inclusive, again, as a reminder of vastly lower chemical intensity and costs, lower waste because we don't produce sodium sulfate waste streams. Whereas the incumbent China hydro process produces more sodium sulfate waste stream than product, we produce 0 sodium sulfate waste stream and don't have all the costs associated with it. And it's a process that we believe is much better suited to North American permitting and operating realities with safe jobs and a much more clean type of an operation without the cost in those waste streams. So as the weaker models fall away, we think that our position does become increasingly and interestingly more differentiated and stronger. Operator: Okay. Thank you. There are no further questions at this time. I'd like to pass the call back over to Steve for any closing remarks. Stephen Cotton: All right. Well, thank you, everybody, for listening in. And for those of you that are reading the transcript in the future, we look forward to continued communicating our updates in the near future as we continue to develop Aqua Metals and the rest of 2026. We're really excited to keep everybody in the loop. Thanks again. Operator: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.
Operator: Good day, and welcome to the TOMI Environmental Solutions, Inc. 2025 Financial Results Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Zach Nevas from IMS Investor Relations. Zach, the floor is yours. Zachary Nevas: Thank you for joining us today for the TOMI Environmental Solutions Investor Update Conference Call. On today's call is TOMI's CEO and Chairman, Dr. Halden Shane; E.J. Shane, our Chief Operating Officer; and our Chief Financial Officer, David Vanston. A telephone replay of today's call will be available until April 7, 2026, the details of which are included in the company's press release dated March 31, 2026. A webcast replay will also be available at TOMI's website, www.steramist.com. Certain written and oral statements made by TOMI may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements should be evaluated in light of important risk factors that could cause our actual results to differ materially from anticipated results. The information provided in this conference call is based on the facts and circumstances known at this time. Please refer to our filings with the SEC, including our 10-K for the year ended December 31, 2025, for a discussion of these risk factors. The company undertakes no obligation to update these forward-looking statements after the date of this call. I will now turn the call over to TOMI's CEO and Chairman of the Board, Dr. Halden Shane. Halden Shane: Thank you, Zach, and thank you for joining us for our 2025 earnings report today. I am pleased to share our full year 2025 results and more importantly, our perspective on where TOMI Environmental Solutions is headed. While 2025 was a year that tested our patience, it was also a year that validated our technology, deepened our customer relationships and positioned us to execute on a meaningful revenue opportunity in 2026 and beyond. I want to walk you through the highlights with optimism I generally feel as I review the progress our team has made. The SteraMist Integration System, which is our SIS platform, achieved its first commercial installation at a leading CDMO in June of 2025. The milestone proved our concept and by year-end, we had 4 fully operational SIS enclosure installations. We closed the year with a signed purchase contract of $500,000 for a global biopharmaceutical leader in December for integration into sterile manufacturing pass-through fill boxes. In the same month, a leading cell and gene therapy manufacturer adopted SteraMist iHP for a commercial scale pharmaceutical facility, a landmark win in one of the fastest-growing sectors of life sciences manufacturing. We were selected by NASA Johnson Space Center for a biosecurity operation, and they have continued to express satisfaction with our technology's performance. We deployed critical resources to support wildfire recovery efforts in the California communities, demonstrating both our civic commitment and our operational agility. We secured a bid from a leading university in Rhode Island for our CES technology. That project has been completed and awaits factoring testing. In the eye health sector, one of our most prominent new platinum customers onboarded in Q1 2025 has grown to 2 active facilities, each using 5 SteraMist machines for sterilization procedures. A third site in Berlin, Germany is set to commence trials in June of 2026. This customer also operates under an open monthly BIT Solution order, exactly the recurring revenue model we are building. Our OEM partnership strategy is gaining serious momentum. Relationships with PBSC, ESCO and Steelco are embedding iHP directly into clean room enclosures, pass-through hatches and biosafety cabinets at the point of manufacture, creating a scalable distribution channel that expands our reach without proportionately increasing our direct sales cost. We successfully completed our first collaboration project with partner PBSC, the iHP pass-through, which exceeded decontamination cycle speed expectations and generated strong customer feedback. We have already begun a second PBSC project. We expanded into the agriculture industry through our partnership with Algafeed, who has committed to acquiring additional handheld units before the end of 2026 in food safety. The FDA's late 2025 approval of hydrogen peroxide as a direct food additive for multiple uses, including as an antimicrobial and bleaching agent is a watershed regulatory moment for us. We are now engaged with significant partners, including Danone and Nestle and are actively winning bids, both directly and through service providers. SteraMist iHP is demonstrating real-world efficacy across a wide range of food processing environments. We are actively pursuing a food contract notification or FCN and have identified 2 specific opportunities to enhance our efforts on a tailored FCN for powdered infant formula, which comes at the request of an existing customer. Additionally, we are awaiting approval of our -4 label from the EPA for our cannabis industry and other requested markets in our Food Safety division. We also plan to submit a -5 EPA label based on the studies conducted with Plum Island as previously announced. A landmark USDA study confirmed BITs efficacy against the formed wing virus for agricultural biosecurity in honeybees. In 2025, SteraMist was honored with the Disinfection Decontamination Products Company of the Year Award by MedTech Outlook. We achieved compliance, recognition across 3 safety vendor management platforms and are in the process of adding a fourth to support 2 ongoing integration projects at a well-known Baltimore hospital. Our customer service team is actively transitioning our larger base to open order policies for support service offerings and BIT Solution orders. The backlog of our orders for support services is up 16%, and BIT Solution is up 24% in the first quarter of 2026 compared to the same period last year, providing early and compelling indicators of increasing recurring revenue trajectory we are building. To our long-term supporters of our technology and company, we are pleased to announce that we're finally receiving approvals from the HSE and the BPR submissions, we are now officially recognized in the United Kingdom, including Wales and Northern Ireland as well as in the Netherlands. The recent approval in the Netherlands strengthens our confidence that other EU countries will soon follow suit. Our heart monitoring device project is nearing completion and is scheduled for factory testing next month. We are preparing to introduce our iHP device to the U.S. markets through the appropriate regulatory pathways, including the FDA 510(k) premarket notification process once testing is finalized. The success of receiving the FDA 510(k) means that we'll finally be able to go after the entire ethylene oxide sterilization market. The global ethylene oxide market was a $5.29 billion market last year. Key growth factors is a rising demand for sterilized medical consumables and improved healthcare infrastructure, particularly for hospital, labs and surgery centers. Our technology is protected by more than 30 utility and design patents through 2038, and is deployed in over 40 countries. We are entering 2026 with operational momentum, growing recurring revenue and expanding global customer base and a clear strategy to drive sustainable growth. Our focus remains on execution, converting our pipeline into recognized revenue while continuing to advance the technology platform that makes all of this possible. The pipeline that we have is the strongest we've ever had. Our first quarter 2026 revenue is greater than our first quarter of 2025. I will discuss some details in my conclusion today, but our entire opportunity book for integration projects remains at $16 million. The entire SteraMist iHP opportunity book is currently at $20 million. However, first, I will now hand the call over to our Chief Financial Officer, David Vanston, who will provide an overview of the financial results for the full year ended December 31, 2025, compared to the same period in 2024. David? David Vanston: Thank you, Dr. Shane. I will now walk you through our full year '25 financial results. Our complete audited financial statements are included in the Form 10-K we filed with the SEC and in today's press release. Revenue for the year ended December 31, 2025, was $5.6 million compared to $7.7 million in '24. The decline was driven primarily by the timing of customer equipment purchases. Service revenue remained relatively stable year-over-year, which we view as an indicator of the durability of our installed base. Gross margin improved to approximately 55%, up from 46% in '24, reflecting lower cost of sales and a reduction of inventory reserves compared to the prior year. Total operating expenses were $6.9 million, down approximately 10% from '24, reflecting disciplined cost management. The net loss was $3.7 million or $0.19 per share, an improvement from a net loss of $4.5 million or $0.22 per share in 2024. We ended the year with approximately $88,000 in cash. Working capital was approximately $1 million, and we used $1.2 million in operating cash during '25, an improvement from $1.4 million in '24. We have taken steps to address our liquidity position, including a $535,000 convertible note raise during '25, a $20 million equity line of credit with Hudson Global Ventures entered into November '25, from which we have made our first draw approximately $94,000 in February '26. We've done an effective S3 shelf registration for up to $50 million, and we've engaged Bancroft Capital to explore additional financing options. I encourage investors to review our Form 10-K in full. I will now turn our call over to our Chief Operating Officer, Shane to discuss upcoming business highlights. Elissa Shane: Thank you, David. As Dr. Shane highlighted earlier in the call, we are actively focusing on open BIT Solution orders and annual service offerings, leading to a higher open sales book metric. This initiative stems from our growth in personnel and operations, along with our enhanced comprehensive training program that prioritizes continuous recertification. This strategy not only elevates customer standards for implementation and safety, but also has the potential to drive additional revenue and foster deeper product adoption in the future. The sales performance of support services and BIT Solutions sales are expected to exceed 2025 levels as evidenced by the increase of 16% in the backlog of orders for TOMI Support Services and an increase of 24% in BIT Solution backlog of orders for the first quarter of 2026 compared to the same period last year. Dr. Shane also provided updated information on 2025 announcements for just a handful of customers. This includes anticipated orders from our aquaculture customer, a completed Custom Engineered System, or CES, for the Rhode Island University, 2 iHP chambers for the biopharmaceutical partner, a second order with our partner in Malaysia, and a third location in Berlin, Germany for the eye health company, which we expect will proceed with the same standard operating procedures as the first 2 sites. We anticipate approximately $3 million in sales among these 5 customers and the trends in support services and BIT Solutions sales for 2026. It's important to note that this projected $3 million in revenue includes approximately $920,000 that overlaps with the $3 million integration pipeline announced on November 26, 2025. When factoring in our iHP deployment services, which generates over $1 million consistently, we can confidently state $6 million in revenue just among 5 customers and 3 revenue streams for 2026. To date, approximately $800,000 has been recognized from the November 2025 $3 million integration pipeline. This amount originates from 10 distinct customer orders. Of these 10, 7 customers have formally placed the order. We anticipate final approvals from the remaining 3 accounts, and we have added 4 more integration projects moving towards CapEx approvals since the November announcement, which is anticipated to contribute another $2.3 million to our active immediate integration project pipeline. Our East Coast distributor, ARES Scientific, has been instrumental in securing multiple university wins for our SIS platform. We're actively collaborating with VWR, Avantor, engaging with all case managers and overhauling marketing initiatives with them. We are prioritizing the ongoing education and engagement of our international partners, investing in them to promote their own long-term customer base instead of expanding into new regions. This strategic focus, coupled with recent regulatory approvals, is expected to support our growth and positively influence our revenue. For example, we have successfully received HSE approval and announced a preferred partnership with Total Clean Air, or TCA in the United Kingdom, where we recently completed factory testing on a custom engineered project that they brought to us. TCA has also invested in mobile equipment in quarter 1, 2026 to support their demonstration and service deployment capabilities. The food safety sector is also beginning to gain momentum, and we're receiving valuable referrals and case studies from our current clients. This industry uses our SteraPak product or requires custom applications, indicating that we are still in the early stages of realizing significant revenue. Additionally, there remains much work to be done on the regulatory front. For example, Nestle's pending expansion waits for other international registrations outside the ones received in the European Union. One of the most exciting developments comes from our long-standing relationship with Disinfectant Care, which has secured a service contract at a major dairy facility in Mexico. Following customer-specific testing and studies conducted on site, SteraMist iHP not only demonstrated its efficacy, but also showed the preservation of cheese quality, a key finding that strengthens our credibility and served as a valuable referral for other new customers. In summary, we are now making strides across a diverse range of sectors in the food industry. We are used in cheese, eggs, coffee, ice cream, consumer packaged goods, cannabis, nutrition, vertical farming, pet food, food ingredient suppliers, refrigerated foods and specialty ingredient suppliers. This is broadening of our market presence positions us well in the industry. Another significant area of focus for us, which we believe is expected to see returns in 2026 is the biological safety cabinet or BSC industry, particularly regarding our service providers and the SIS stand-alone system. We have developed the necessary accessories and protocols for treating all classes of cabinets, a progress required as we prepare for NSF approvals this summer. Currently, we have certified service providers utilizing our SteraMist iHP technology, including [ Triumvirate ] and MarathonLS on the East Coast as well as HEPA in Canada. On April 2, we conducted a key demonstration with one of the most recognized providers in the industry who operates multiple locations across the United States. Triumvirate hosted a webinar this quarter where they showcased how iHP technology outperforms key competitors in the market, including Spor-Klenz, Formaldehyde, and Vaporized Hydrogen Peroxide. This webinar was well attended attracting approximately 250 participants. Ultimately, our goal is to enable these service providers to compete effectively by incorporating iHP technology into their offerings for BSCs. They appreciate this innovation because it allows them to complete more treatments in a single day compared to older technologies. In addition, we maintain a robust intellectual property portfolio, CE and UL listings and are preparing to pursue USP 1072 material efficacy, which will expedite our sales process in the life sciences market. Furthermore, we are committed and continued to conduct customer-specific studies that help us secure contracts and maintain the client roster we hold, such as those highlighted today. I will now return the call back to our CEO, Dr. Halden Shane. Halden Shane: Thank you, EJ. I want to take a moment, maybe even more of a moment and express deep appreciation to the majority of our shareholders who supported us and have believed in our mission through our highs and lows. You are the majority and our long-term investors. Thank you for supporting our team and most importantly, believing in our technology and products. I believe at the start, we all knew this was not going to be easy because we're creating a new standard in many industries, and it's very hard to accomplish being undercapitalized makes it even harder. But we are on the verge of accomplishing the impossible. To the handful of naysayers, we believe we'll be able to earn your support, and we continue to execute a deliberate strategy to expand our operations and improve our financial performance. If not, then maybe it's the wrong company or you need to see a professional. It was a tough year for us from the financial perspective, but we remain focused the whole time on the future. In my eyes, there are no excuses, but were definitely roadblocks. Those roadblocks included DOGE, tariffs, working capital and recently the war. We chose to become the standard in the pharmaceutical, life science and university vivarium market. Unfortunately, some of the negatives of becoming a standard in that market is the perfect storm that occurred in 2025. Like there was panic buying behind the 2020 COVID, there was a lack of buying in the 2025 due to the reasons I stated above. Just recently received an e-mail from a major university that everybody knows on the West Coast of the United States. They were putting off a purchase until the end of 2026. The reason they had to postpone the purchase was because of DOGE, tariffs and political uncertainty, including the war. Also, that person stated there was an uncertainty maybe about her job. But no matter, we are a team, and we can overcome situations like that. And I can assure it's all temporary. The university will purchase this year even if it's a new professional in that job position. I did a review of our stock over the last 10 years. I choose certain points because it was approximately when we received our hospital health care EPA registration and had marketing in place. The key metrics are pretty amazing. In 2014, revenue was about $2.2 million. Our stock price was $2.16. Our major clients was a Panamanian hospital and a group in Mexico trying to sell to Mexican hospitals. In 2020, we had a banner year. Unfortunately, it was due to the pandemic. We did $25 million, demonstrated that we're capable of handling that volume of business. It did take away from the focus on the life science industry, pharmaceuticals, et cetera, but most of that was temporary panic buying. Our stock price was $4.57. In 2024, our revenue was approximately $7.7 million. Our client list was pretty impressive compared to 2014, and our stock price ended up at $1.05. The next year, 2025, our sales was $5.6 million. The sales that we could recognize as revenue, obviously, as you know, the sales were much higher, as we stated, provided in our pipeline with open significant orders for the first time moving across into 2026. As stated previously, we were confronted with tariffs, DOGE, political uncertainty. We closed the year with a stock price of $0.78. Now we're in 2026. It looks like our first quarter, which includes recognized revenue and open orders, could be $3 million or higher. Not sure how this ends up playing out later today. But for sure, we're beating our first quarter 2025 revenue in the first quarter of 2026. Our stock price is around $0.55. We estimate our revenue for this year will be around $12 million, bearing any unknowns. In 2020, we did a reverse split. Today, that $0.55 comes out to be about $0.0688 pre-split. So here's a short list of our current clients. Pfizer, Merck, Thermo Fisher, Fresenius Kabi, [ Allogene ], Boehringer Ingelheim, Catalent, CSL, [ Seqirus ], ITH Pharmaceuticals, Nestle Purina, Mead Johnson, [ Ziegler ], Simplot, Perdue AgriBusiness, Kindred Health, Mercy Health, Novant Health, St. Jude Children, Gila River Health Care, FDA, USDA, CDC, NIH, DHS, USAMRIID, [ Armitron ], ESCO, [ Telestar ], ServiceMaster, First Onsite, Avantor, Tecumseh. In retrospect, do you think a company like TOMI with that list is worth $0.0688 only? My point here is our stock price was $2.14 when we had 2 customers, 1 in Panama and 1 in Mexico. I remember a statement from a very successful person, Warren Buffett, "be greedy when others are fearful." That statement couldn't be true today about our company. I choose to run this company making a decision that many CEOs will never make. And that's because it hurts before it pays. I stop relying on easy sales and onetime equipment and build something from a more potent recurring control over how customers operate. The shift does not show up cleanly on quarterly charts. It shows up as a service revenue climbs and consumables replace capital purchases. Our customers stop buying, they start attending. That is where the game changes. We are not growing very fast, but we are growing very smart. Our company has moved from episodic revenue to embedded revenue before a deal closes, the relationship reset. Not every deployment creates a tail, more usage, more replacement, more service. This is not a product business anymore. It's a system. Recurring revenue isn't about stability. It's about control. Most executives say they want predictable revenue. What they actually want is predictable revenue without sacrifice. We took the hit upfront. Volatility increased, revenue looked uneven. Margins had to be rebuilt. But underneath the engine changed. Short-term policy facility is often the price of long-term dominance. Instead of building expensive infrastructure scale globally, we use distribution channels and partnerships to expand and reach without expanding costs. International revenue became a large slice of the pie without dragging down the balance sheet. That's not expansion. That's leverage we used. Scale without cost is the cleanest form of growth. At the same time, we wanted the business towards higher-margin solutions and service -- services. That's our razor-razor blade model, not louder, not last year, just better economics. The following current numbers could possibly change, but the point I want to make is that at this moment, our economics, of course, is first based on sales of equipment revenue, but our scaling and cleanest form of growth is solution sales, support service and iHP in-house service. Quarter 1 of 2025, we did $299,000 change in solution sales. In quarter 1 of 2026, at this moment, our solution sales are $429,413. As far as support services in quarter 1 of 2025, we had 73,279. Currently, in the first quarter of 2026, we have 253,390. In support services, these are such things as training, certifications, qualifications, validation cycle developments, installations, et cetera. And the third part, iHP service. In the first quarter of 2025, we had $439,386. Currently, with invoice and open orders, we have a total of $729,440. Margins improved, mix improved, the business became more resilient without announcing it. We were able to figure out how to achieve success by having money actually compound. Do you keep chasing revenue to reset every quarter? Or do you endure short-term pain to build revenue that compounds without permission. That decision defines whether you're playing offense or playing survival. We didn't eliminate risk. We repositioned it. In doing so, we created something more valuable than growth. We created dependency in a world chasing speed. We chose structure and structure wins. I can't take the credit for all this writing. I want to thank [ Joel Block ] for understanding how we have created this company and understanding the suffering we've gone through. Once again, I want to thank everyone for their long-term commitment and support and for a small team of 20 working endlessly to achieve all the goals. I also want to thank our creditors who've been super as we go through the stage of growth. At the end, the warriors that have helped us achieve success. Also, I'd like everybody to pray for our brave soldiers that are in difficult situation. To all that are listening, we're excited about what's ahead. Operator, let's open the call to questions. Operator: [Operator Instructions] And the first question today will be from [ Carl Wright from Lonetown Capital ]. Unknown Analyst: So first question, could you provide some more insight into the global opportunities you mentioned in the quarter? Elissa Shane: Yes. Hi, Carl. Certainly. So the first of the EU registrations on the submission we did came in, so we expect many other EU states to follow suit within the next upcoming months. And with that, we have been positioned with current relationships and distributors from Poland, Germany, Netherlands that have been around our technology and really educated to be able to take on the opportunities that have been waiting for just that registration. So just as the U.K. did once the HSE came through earlier in this quarter with bringing on TCA and quickly being able to fulfill our first custom engineered system, I see that happening with the other regions in the EU. Unknown Analyst: Got it. And then congratulations on bringing down operating expenses by 10%. Could you provide a little more color about how we should think about operating expenses in the business just going forward? Halden Shane: Sure. David, go ahead. David Vanston: Sure. I think the -- again, as Dr. Shane mentioned earlier, as we grow, we will have to invest into our operating expenses, but we already have leverage in it. So we do not expect to see a significant jump in our operating expenses. You should -- if you're going to model it, you would model it as a percentage of revenue growth. But I would say it would slightly decrease as we grow as a percentage. Operator: [Operator Instructions] The next question is coming from John Nelson. John is a private investor. Unknown Attendee: Several questions. First one, I'm one of those long-term investors that... Halden Shane: I know you are. Unknown Attendee: Is -- confident that over the years you're going to deliver. So thank you. Thank you for your... Halden Shane: And I thank you for your help. Unknown Attendee: First question is, you mentioned in the press release in '25 versus '24 revenues, customers deferring, capital expenditure, projects due to uncertain economic environment with the impact of tariffs and Middle East crisis. Are you seeing any signs of -- and you must be seeing some signs of it improving because of your first quarter comments. But are you seeing any of those customers that were deferring CapEx projects starting to move on them? Halden Shane: We are. Unknown Attendee: Okay. And then the BIT Solution revenues for '25 versus '24. Can you provide any details on the comparisons there? Halden Shane: Sure. Are you talking '24 versus '25 or '25 versus '26? Unknown Attendee: No, '24 versus -- '25 versus '24. Halden Shane: Okay. EJ? Elissa Shane: Yes. There's an increase in the solution between '24 and '25, and we're seeing that continue into '26. A lot of it has to go in with Dr. Shan's closing and this moved into open orders. And this came in tandem. About 1.5 years ago, we mentioned a big push on different support services. And having us be able to go on site and speed up the use of our technology and qualify different areas, we're able to predict how much solution they're going to be able to use. So that, in essence, is now finally starting to pay off with them purchasing the orders that they need in advance and just get into more of an auto shipment. So that's the goal, and it's starting to come into play. It started at the end of 2025, and it's moving into this year as well. So that's the big difference. And the 2, why it's referenced in the script that way is because they go in hand. Our support services and our BIT Solution are definitely together in trends. Unknown Attendee: Okay. And then are most of your customers in '25 using more -- significantly more BIT Solution than they did the prior year? Elissa Shane: Yes, definitely. I mean there's always some fluidity to it because you'll have our service provider shift -- if there's -- the fires produced a lot of solution in Q1, different decommissioning of buildings if they get large -- large service contracts, then this definitely increases our solution. So that's a little harder to predict. But when we're able to go in and qualify different spaces or similar to the eye health company where we know how and exactly where they're using the equipment, that's a little easier. But the Q1 of last year certainly was due to some emergency use. So there's definitely an increase in solution. Unknown Attendee: Okay. And then on -- can you provide any more detail as far as how the application would be used to deal with the wing syndrome for honeybees? Elissa Shane: So we do -- we have the study, and we've done a few other lab type studies, and it's definitely a good use, and we're looking and are still speaking with a local university on trying to get live use case. Once we're able to reestablish that and actual application use, it will proceed from there. Halden Shane: So John, I've reached out to the associations, the honeybee associations, domestic, globally. I've reached out to the Board, and I've yet to get a reply and with overwhelming evidence of what we can do and how we can help the pollinators around the world. And right now I'm reaching out to the Department of Agriculture to see if they can help or at least get this technology in front of somebody that wants to make a change. Unknown Attendee: Okay. And then you had mentioned briefly the use for treating marijuana plants? Halden Shane: Right. Unknown Attendee: Is it mites -- or is it for the powdery mildew? Halden Shane: It's for powdery mildew funguses on the plants. We have an EPA label we're trying to get from the EPA just for that. Is that - 4, EJ? Elissa Shane: Yes, that's correct. Unknown Attendee: Okay. And -- but currently, you're not getting any revenues yet from that particular type of usage, correct, because of the need for the EPA label? Halden Shane: I think, EJ, you can answer that. I think there were some... Elissa Shane: There's a handful of customers. With them, it's scaling up. And right now, they're doing a lot of handheld treatments, but we do have a good partner that is promoting our product and even some international interest on the treatment. But we do have some wide use, which is great, and that usually is the first step. Unknown Attendee: Okay. Good. And then one thing that I've been curious about is and whether you've explored or thought about exploring it is uses of SteraMist in the military. And I was thinking about it with regards to the Middle East crisis with all of the Navy ships and the -- in the Gulf and how people are crowded together. It's got to be a potential breathing around for germs and potential infections transfer. So has that -- have you explored that at all or ever talked to the Navy about possible usage of SteraMist? Halden Shane: So the Navy has been -- are they still a customer, EJ? Unknown Attendee: No. Well, are they -- if they are a customer, that's new to me, but have you explored uses with it? And if you have, what response have you gotten from the military? Halden Shane: I think we're a little too small and overwhelmed with everything to go after that at the moment. But I believe there was a testing center that the Navy was involved with. It's a great idea and especially with the new COVID variant that seems to be running around and came from the Netherlands to the U.S., I'm sure that you're right of the close proximity on these ships, they do need to get a disinfectant. And I think this is something that we're going to go look into immediately. Elissa Shane: And we have completed some request for information on the grant government site for military vehicles and how to best implement SteraMist. So they are creating information that way, but that does take quite a bit of time. But we do complete those on a regular basis to get the [indiscernible] out there. Unknown Attendee: Okay. And I don't know if there is a particular certification required, but I was thinking the same thing about SteraMist application possibilities for military hospitals or the VA, which, as we know, has a number of problems with infectious disease transfers. Halden Shane: I think they're waiting for me to answer, John. Elissa Shane: Sorry, I don't -- not anything specific. I think [ almost ] to that. We do have a closed service provider been into military housing, but too early to speak about. Unknown Attendee: Okay. And my -- one of my final questions was going to be on scale up. If you do get a significant amount of new orders, how easy or difficult that would be for you? Halden Shane: Well, it's -- again, we probably need to raise some capital to scale up significantly. The 20 people we have do a hell of a job as a team. We were able to handle COVID pretty much with the same amount of employees, and we did really well. So I think we could handle the immediate scale up depending upon the equipment, but we definitely need to go ahead and increase the size of the company going forward in lots of divisions. Unknown Attendee: Okay. Good. And then last question was a number of -- have you actually total them up as far as the number of new customers added net in '25 versus '24? Halden Shane: I haven't -- David, EJ, have any of you done that? David Vanston: No. Elissa Shane: Not based on new customers, no. Definitely -- individual orders between the years, but... Halden Shane: I think we'll do that, John, and I'll talk about it on the call coming up soon in 6 weeks. Unknown Attendee: Okay. I mean you definitely have listed a number of new names that I hadn't heard on previous calls. So -- but I was just curious about... Halden Shane: Yes, I know. And I left out half of them, too, but it was impossible to go through them all. It's just frustrating to see what happens to the stock and what occurs with the difference. So the point, I think, was well made, and we'll see what goes on. Unknown Attendee: Okay. And then as far -- you've done an excellent job of adding significant distributors, both domestically and internationally. Do you -- is that still a significant part of efforts going forward to add even more distributors? Halden Shane: Absolutely. We're in talks right now with many. Operator: There are no other questions at this time. I would now like to turn the call back to Dr. Halden Shane for closing remarks. Halden Shane: Okay. I just want to thank everybody again and wish everybody a happy Passover and happy Easter. Thank you, operator. Operator: Thank you. This does conclude today's conference. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation. Halden Shane: You too. Thank you.