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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 evening, and welcome to the Sidus Space Fourth Quarter and Full Year 2025 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Adarsh Parekh, Chief Financial Officer. Please go ahead. Adarsh Parekh: Good evening, everyone, and thank you for joining us for Sidus Space's Fourth Quarter and Full Year 2025 Earnings Conference Call. Joining us today from the company is Carol Craig, Chairwoman and Chief Executive Officer; and myself, Adarsh Parekh, Chief Financial Officer. During today's call, we may make certain forward-looking statements. These statements are based on our current expectations with respect to the future of our business, the economy and other events and as a result, are subject to risks and uncertainties. Many factors could cause actual results to differ materially from the forward-looking statements made on this call. These factors include our ability to estimate operational expenses and liquidity needs, customer demand, supply chain delays, including launch providers and extended sales cycles. We also expect to discuss certain financial measures and information that are non-GAAP measures as defined in the applicable SEC rules and regulations. Reconciliations to the company's GAAP measures are included in the MD&A of Financial Conditions and Results of Operations within Sidus' full year 2025 10-K. For more information about these risks and uncertainties, please refer to the risk factors in the company's filings with the Securities and Exchange Commission, each of which can be found on our website, www.sidusspace.com. Listeners are cautioned not to put any undue reliance on forward-looking statements, and the company specifically disclaims any obligation to update the forward-looking statements that may be discussed during this call. At this time, I would like to turn the call over to Carol. Carol, please go ahead. Carol Craig: Thank you, Adarsh. Good evening, everyone, and thank you for joining us. I want to start by saying that 2025 was a productive year for Sidus, and I am proud of the progress our team has made as we translate several years of development into operational capabilities supporting both space and defense missions across multiple domains. For those who may be new to our story, Sidus was built with a clear mission to deliver end-to-end space and defense solutions, integrating satellite design, manufacturing and operations with advanced computing and data capabilities. Over the past several years, we've made deliberate investments in our technology, infrastructure and talent to support that mission, and we're now seeing those efforts materialize into tangible mission-ready capabilities. As a result, today, Sidus is a proven U.S.-based vertically integrated space and defense technology company, delivering end-to-end satellite infrastructure, space and defense-grade hardware and AI-enabled data platforms. Over the past 4 years since we became a public company through a traditional IPO rather than a SPAC, the landscape has evolved considerably. At that time, our objective was clear: to transition from a predominantly government-focused contract manufacturing business into a diversified space and defense technology company positioned to capitalize on the rapidly expanding commercial space ecosystem while developing capabilities that support both commercial and defense missions. Since then, the geopolitical environment has shifted meaningfully, underscoring the growing importance of space as a national security domain. At the same time, as a smaller company operating with disciplined resources, we have remained focused on advancing differentiated high-performance technologies and integrated capabilities that few others are able to deliver. Our vision is to be a leading innovator and provider of space and defense technologies, infrastructure and actionable insights, and our mission is to deliver cost-effective solutions that enable multi-domain operations through agility and vertically integrated capabilities. This strategy is not theoretical. The strongest validation of our technology is not what we say, but what our systems are doing operationally. With multiple satellites on orbit, Sidus is moving into a new phase where the focus shifts from proving technical capability to executing and operating mission-ready platforms for customers. We launched 3 LizzieSat satellites between March 2024 and March 2025, each building upon the last and demonstrating increasing capability across design, operations and mission performance. Together, these missions validate our platform, strengthen our credibility and support our transition into the next phase of commercialization. An important part of our strategy is that our satellites are company-owned and company-funded with multiple customers contributing revenue before and after launch. Unlike others that may depend primarily on government contracts to finance and build their satellites, we made a deliberate decision to create a Sidus-owned platform, including the underlying intellectual property that can support commercial, civil space and defense customers on a single satellite. This dual-use multi-mission model creates diversified revenue streams, broadens customer opportunities and supports a more resilient business model in an increasingly dynamic geopolitical environment. Another important differentiator is that we intentionally designed our satellites to serve as both development and production platforms. From the beginning, our goal was to build a robust, redundant satellite architecture capable of testing and maturing technologies while simultaneously supporting customer missions, beginning with the very first spacecraft. LizzieSat-1 successfully launched and established communications, enabling us to test our bus structure, radios and other internal payloads. We also successfully executed the requirements for a NASA mission, which led to a follow-on contract for additional support on LizzieSat-1. And equally important, LizzieSat-1 enabled full commissioning of our mission control center, marking a shift from development infrastructure to active mission operations. LizzieSat-1 completed its mission, and we are, therefore, beginning the process of dispositioning. However, we will continue to track our location for situational awareness and orbital monitoring. LizzieSat-2 was launched in equatorial inclination and remains in the commissioning phase. We continue to receive signals from the satellite while working toward establishing consistent and regular communication passes as part of the normal commissioning process. The equatorial inclination was intentional with the goal to test and strengthen our ability to operate satellites across very different orbital environments. Equatorial satellite commissioning is more challenging than polar due to the limited ground station access, resulting in fewer communication windows and longer time lines. The reason we chose an equatorial orbit was for its long-term advantages, enabling repeated coverage of high-value regions near the equator with fewer satellites. Lastly, LizzieSat-3 has completed full bus level commissioning, including successful validation of a new autonomous guidance navigation and control software, achieving pointing accuracy of less than 30 arc seconds. With commissioning complete, LizzieSat-3 is now supporting recurring customer payload operations, including near real-time maritime data through its AIS sensor and on-orbit imaging through HEO USA's non-earth imaging camera payload. Taken together, these capabilities reflect a deliberate evolution in Sidus' role. We are increasingly expanding from discrete mission delivery toward operating integrated platforms that support sustained multi-domain operations for customers. Building on this operational foundation, we continue to advance our onboard computing and AI capabilities through our Fortis VPX platform, including a SOSO-Aligned single-board computer and a PNT card designed for GPS-denied environments. Fortis is a ruggedized modular computing system developed to perform data processing in challenging and constrained environments from seafloor to space. By integrating Fortis with our software-defined satellite architecture and flight-proven AI capabilities, Sidus is enabling more data to be processed closer to where it's collected. This reduces reliance on centralized ground infrastructure, improves responsiveness and supports mission execution in environments where bandwidth, latency and connectivity may be limited. This effort reflects our broader focus on developing practical deployable technologies that align with both defense and commercial needs. In parallel, we're working with commercial customers and defense prime contractors, along with systems integrators to evaluate Fortis VPX for operational use cases, including satellite payload processing, unmanned systems and ground-based computing deployed at operational sites. Our focus is converting these evaluations into long-term programs and support agreements that can drive scalable and predictable revenue as mission needs expand. The continued growth in government spending across defense and space supports demand for our capabilities and a key focus area for us is our recent award under the MDA's 10-year SHIELD IDIQ contract. Our work over the past several years has positioned us to participate in programs of this scale and complexity. The SHIELD program is part of the broader Golden Dome missile defense strategy, which is focused on developing more resilient layer protection across air, missile, space, cyber and other operational domains. The contract vehicle is designed to enable faster delivery of capabilities by incorporating approaches such as digital engineering, open systems architectures and where appropriate, AI and machine learning. For Sidus, this award provides access to a flexible procurement pathway aligned with evolving defense requirements, and it reflects the increasing emphasis on collaboration across primes, emerging companies and research institutions. Our defense strategy is aligned with these types of large-scale programs. We're focused on areas where our capabilities in satellite platforms, onboard processing and modular compute systems can contribute to applications such as persistent sensing and real-time data processing. Our vertically integrated model allows us to move from design through deployment in a more streamlined manner, which is increasingly important as time lines continue to compress. Another strategic area of focus for us is Lunar. We view the lunar economy as an emerging ecosystem rather than a single program, requiring scalable technologies and partners capable of moving quickly. Our approach is to align our capabilities with that direction, supporting both government and commercial missions as activity beyond Low Earth Orbit continues to expand. Expanding beyond LEO, we made progress across our Lunar and GEO initiatives. We signed an agreement to integrate the Lonestar's Commercial Pathfinder mission onto LizzieSat-5, completed the systems requirement review of mission kickoff with an initial milestone payment received, introduced LunarLizzie, our next-generation Lunar spacecraft concept and executed an MOU with a partner to support development of a GEO platform. Our Lunar strategy is aligned with broader national space priorities that emphasize speed, commercial partnership and operational capability beyond LEO. Recent leadership perspectives, including those advanced by NASA administrator, Jared Isaacman, reflect a shift toward a more commercially enabled and execution-focused approach to Lunar and deep space missions. This direction closely aligns with our approach to building scalable, commercially driven space and defense capabilities. Our focus on vertically integrated satellite platforms, onboard computing and adaptable software-defined systems positions us to support elements of the broader cislunar architecture, including communications, data relay and mission-enabling infrastructure. This approach prioritizes leveraging commercial innovation, shortening development time lines and building sustainable infrastructure through public-private partnerships while maintaining a focus on operational readiness, repeatability and cost efficiency over time. As we move into 2026, our strategy and focus are on accelerating commercialization and expanding in defense markets through our technology platforms while reducing reliance on lower-margin contract manufacturing and prioritizing scalable, higher-margin products. Diversification remains central to our approach, and our company remains agile in a rapidly evolving industry. While we have been intentional and disciplined in how we deploy capital, we have built a full technology stack spanning hardware, software and data entirely through organic development, not acquisition. Unlike others that pursued multi-domain capability through large debt finance acquisitions, we built these capabilities from the ground up, leveraging a 1.5 decades of heritage experience while maintaining a clean balance sheet and retaining full control over our intellectual property. As defense priorities continue to shift toward integrated multi-domain operations, we intend to aggressively pursue programs aligned with these needs, including missile defense, space-based sensing and resilient communications architectures. By combining our satellite platforms, onboard AI and modular compute capabilities, Sidus is well positioned to support next-generation defense missions and capture a larger share of this evolving market. One of the key advantages of the LizzieSat architecture is that it is software-defined, meaning capabilities are not fixed at launch. This allows the satellite to be updated, reconfigured and enhanced through software while on orbit. Over the past year, we've demonstrated this by deploying autonomous navigation software and commissioning FatherEdge100i entirely on orbit, delivering capability upgrades to an operational asset without additional hardware or launch costs. This model allows us to extend mission utility and adapt to changing requirements over time while maintaining a more efficient approach to capability upgrades. As we look toward the next evolution of AI infrastructure, including orbital and distributed data architectures, we see a logical extension of capabilities that we've already demonstrated. Our on-orbit experience with software-defined satellites, combined with proven onboard AI processing and edge computing hardware provides a foundation for supporting data processing closer to where it's generated. Recent announcements from NVIDIA and others point to a broader shift toward deploying high-performance compute beyond traditional data centers, including in space. This direction is consistent with how we've designed our systems, integrating software-defined platforms, reconfigurable payloads and onboard processing to enable real-time data handling. This reduces reliance on ground infrastructure and increases operational flexibility. Our VPX-based computing systems, along with our flight proven AI hardware and software position us to support elements of this distributed model across both space and terrestrial environments. These systems are designed to operate in constrained and contested environments, which is increasingly relevant as data processing moves closer to the edge. From a broader perspective, our vertically integrated approach spanning satellite platforms, onboard compute and mission operations allows us to participate in multiple layers of this emerging ecosystem. As investment in the next-generation AI infrastructure continues to grow, particularly in defense and national security applications, we are aligning our technology road map with areas where that resilience, autonomy and real-time decision-making are required. We've strengthened and refocused our sales organization to prioritize high-value opportunities across both commercial and defense markets with an emphasis on programs that align with our core technology platforms and offer the potential for longer-term repeatable revenue. As a result, we're actively engaged with both commercial and Department of Defense customers to address growing demand for cost-efficient, rapidly deployable satellite platforms supporting communications, imagery and intelligence missions. In parallel, we continue to advance our next-generation satellite builds, including LizzieSat-4 and LizzieSat-5. LizzieSat-4 and LizzieSat-5 are being developed as a software-defined platform, incorporating capabilities such as laser comm and software-defined hyperspectral imaging. This architecture is designed to provide customers, including international partners such as the Netherlands Organization or TNO, with the ability to adapt mission requirements on orbit. This flexibility allows for adjustments to sensing, data collection and processing priorities over time, supporting both commercial and defense use cases as needs evolve. LizzieSat-4 also includes integration of the Lonestar payload, further expanding its mission profile. Our mission control center now in its third year of full 24/7 operations continues to support satellite operations, collection management and data distribution for both our own fleet and third-party customers, reinforcing our ability to deliver end-to-end mission support. We also entered into a strategic collaboration with Simera Sense to advance AI-enabled hyperspectral imaging focused on enabling near real-time intelligence-driven earth observation and situational awareness capabilities. To support these initiatives, we executed capital raises to fund key technology development, including our dual-use Fortis VPX product line, while also identifying operational efficiencies to reduce SG&A and maintain cost discipline as we scale. As we move forward, this operational transition informs how we think about scalability, margin durability and capital efficiency. Now Adarsh will walk through how this shift toward owned and operated platforms is reflected in our financial results and outlook. Adarsh Parekh: Thank you, Carol. At Sidus, we continue to build a scalable, vertically integrated company across space, technology and artificial intelligence. Our focus remains on operational excellence, rapid innovation and delivering cost-effective, high-impact solutions for our customers. Our investments to date have centered on expanding our satellite fleet, advancing innovation and implementing a robust ERP system to support scale and profitability. Momentum from 2024 carried through full year 2025, which reflects both our transition to commercialization of dual-use multi-domain products and the near-term financial impacts of scaling a deep tech space-based enterprise. During 2025, we continued our progress in establishing Sidus Space as an innovative space and defense technology company. Our rich space and defense heritage positions us to take advantage of opportunities across multiple sectors with a combined focus on commercial space innovation and national defense priorities. Let's review our results for the year ended December 31, 2025. Total revenue for the full year 2025 was approximately $3.4 million compared to $4.7 million in full year 2024. While this reflects a decrease of about $1.3 million or 28%, the change aligns with our strategic shift away from legacy contract work toward higher-value commercial space-based and AI-driven solutions. This repositioning is intentional and expected to generate more sustainable recurring revenue in future periods. The impact of milestone-based revenue recognition also influenced year-over-year performance and comparison. Cost of revenue was approximately $9.1 million, a 48% increase from $6.1 million in full year 2024. Key contributors included a $2.1 million increase in depreciation tied to satellite and software investments, reflecting the first full year of LizzieSat operations, a changing contract mix requiring greater material and labor inputs, ongoing global supply chain pressures impacting manufacturing operations. Gross loss for the year was approximately $5.7 million compared to a loss of about $1.5 million in full year 2024. This increased gross loss reflects increased depreciation, which is noncash and directly tied to recent investments that position us for future revenue generation, the transition away from legacy high-margin contracts as we focus on long-term value-added offerings, a shift in contract structure, which is expected to yield greater returns in future periods. When adding back depreciation, including in cost of revenue, gross loss for the year was approximately $1.7 million compared to a profit of approximately $453,000 in full year 2024. Selling, general and administrative expenses totaled $22.3 million compared to $14.2 million in the prior year. This $8.1 million increase supported key growth initiatives, including strategic headcount additions to support scale and expanded employee benefits to remain competitive, equity-based compensation and performance-based bonuses initiated during 2025, increased mission operations expenses to support our growing satellite fleet, infrastructure investments in software tools, and it was also -- it also included a $4.5 million impairment of LS-1 and related assets as well as depreciation expenses and severance costs as described further in the notes to the consolidated financial statements. To provide a broader view of our performance, we also report adjusted EBITDA, a non-GAAP measure we use internally to guide strategic decision-making. Adjusted EBITDA loss for the full year 2025 was $17.3 million compared to $12.9 million in full year 2024, reflecting ongoing investment in scaling our platform. The reconciliation table, including interest, depreciation, fundraising, severance, equity-related expenses and impairments is included in our annual report on Form 10-K. Net loss for the year was $29.5 million compared to $17.5 million in full year 2024. This increase is primarily tied to strategic investments in infrastructure, personnel and operational capacity, the $4.5 million LS-1 impairment charge and noncash depreciation related to our expanding satellite fleet. Turning to the balance sheet. As of December 31, 2025, Sidus had $43.2 million in cash compared to $15.7 million as of December 31, 2024. During 2025, we completed multiple capital raises totaling approximately $53.3 million in net proceeds from the issuance of approximately 47.1 million shares of Class A common stock. Notably, we entered 2026 with no outstanding term debt, a meaningful distinction in an industry where many peers continue to carry substantial debt obligations and the associated interest burden. As we move forward, we continue to manage cash conservatively while making strategic investments in our next-generation satellite builds and high-growth product lines. During 2025, we implemented meaningful cost reduction activities and operating efficiencies to support long-term profitability, and we remain focused on driving sustainable growth in the year ahead. With that financial context, I'll hand the call back to Carol for closing remarks. Carol Craig: Thank you, Adarsh. Before I close, I want to address a couple of questions we've received from investors and analysts, particularly related to our stock performance. We recognize the concern, and we view recent movement as the result of broader market conditions, volatility across small cap and space technology sectors and the timing of revenue as we transition the business. We've seen similar patterns across our peer group, particularly among companies moving from development into commercialization. From our perspective, the priority remains execution. We are focused on advancing a more scalable product and platform-driven model anchored by our LizzieSat satellite fleet, software-defined capabilities and Fortis VPX command and data handling systems. At the same time, we have strengthened our sales organization and are prioritizing opportunities that align with larger programs, including defense initiatives like MDA SHIELD as well as commercial applications. We're also maintaining a disciplined approach to capital allocation and cost structure as we move through this transition. Ultimately, our objective is to build a more durable business with higher-margin repeatable revenue streams. As we continue to execute, demonstrate capability in orbit and convert pipeline into contracted programs, we believe that progress will be reflected over time. As we move forward, we remain focused on execution, cost discipline, and innovation, and we are advancing with greater confidence than at any point in our history. Revenue in the period was impacted by the timing of legacy program completions and our transition toward product and platform-driven revenue streams while maintaining a disciplined focus on the programs that offer the greatest long-term value. Operating in a highly competitive industry while using significantly less capital than many peer companies presents both constraints and advantages. Remaining lean requires disciplined prioritization and difficult trade-offs, but it also drives technical focus, speed of execution and operational accountability. Sidus has intentionally avoided the excesses that characterize many space SPAC era entrants choosing instead a staged capital approach tied to milestone completion rather than speculative scaling. At the end of 2025, to ensure uninterrupted execution and reduce structural risk, we took proactive steps to strengthen our balance sheet. The approximately $41 million raised at the end of December was not intended to fund indefinite operating losses, but to improve liquidity, reduce financing friction, evaluate more favorable debt structures and lower our overall cost of capital as we enter the commercialization phase. This capital provides runway stability and optionality, allowing management to focus on execution rather than survival. We fully acknowledge that equity financing creates dilution. That impact is real, and it is not dismissed. However, dilution must be evaluated relative to what it enables. Our objective is not continued reliance on equity markets, but the conversion of validated technology into repeatable revenue streams, margin expansion and operating leverage. Per share value is ultimately restored through execution, not commentary. Sidus has raised material less capital than many public peers while achieving milestones that include satellite launches, on-orbit operations, vertically integrated manufacturing, proprietary computing and AI architectures and a growing patent portfolio. Importantly, we achieved these milestones through organic development alone, building, proving and retaining ownership of every capability in our portfolio. Looking ahead, management is focused on improving capital efficiency with each successive deployment and product cycle, reducing incremental capital required per platform and accelerating the transition from build to revenue as commercialization scales. These capabilities are now moving from demonstration into deployable products and services. So here are our key areas to watch over the next 12 to 18 months. LS-4 and LS-5 are in production as software-defined satellites with advanced onboard AI processing and Fortis VPX, enabling on-orbit data processing, autonomy and mission adaptability. The Fortis VPX platform is beginning customer deployment, marking a key step in commercializing ruggedized multi-domain compute solutions. We're increasing our focus on defense opportunities as demand grows and the convergence between commercial space and national security accelerates. And our collaboration with Simera Sense and other international agencies and partners is advancing AI-enabled software-defined hyperspectral imaging to support more responsive and intelligence-driven earth observation. Together, all these efforts reflect our continued focus on scaling advanced adaptable technologies across both commercial and defense markets. I want to personally thank our team, our partners and our investors for your continued support and confidence. We appreciate you taking the time to join us today. We remain laser-focused on execution, cost discipline and innovation and look forward to the next phase of growth for both Sidus and the broader space industry. Thank you. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Sean Peasgood: Good afternoon, and thank you for joining us for Intermap Technologies conference call to discuss its financial results for the fourth quarter and full year 2025. [Operator Instructions] Certain information in this presentation constitutes forward-looking statements, including statements regarding revenue growth, conversion of government awards, timing of revenue recognition, expansion of recurring commercial revenue, capital deployment, and future operating performance. Forward-looking statements are identified by words such as anticipate, expect, project, estimate, forecast, continue, focus, will and intend. These statements are based on current assumptions and involve risks and uncertainties, including availability of capital, revenue variability, timing and the structure of government contracts, customer concentration, economic conditions, competitive dynamics, technology risk, cybersecurity and other factors described in Intermap's public filings. Actual results may differ materially. The company undertakes no obligation to update forward-looking statements except as required by law. With that out of the way, I'd like to pass the call to CEO, Patrick Blott. Go ahead, Patrick. Patrick Blott: Thank you, Sean. Good afternoon, ladies and gentlemen, and welcome to Intermap's financial results conference call for the fourth quarter and full year 2025. I'm Patrick Blott, Chairman and CEO. Today, I'll provide highlights from the year, along with a business update and outlook. I'll then turn the call over to Jennifer to review our financial performance in more detail. Revenue was $10.6 million compared to $17.6 million in 2024. Fourth quarter revenue was $1.6 million compared to $7.4 million in the fourth quarter of 2024. As has been previously detailed, the decline in total revenue reflects delays with follow-on awards for Indonesia and U.S. government programs. Meanwhile, our commercial revenue grew strongly year-over-year, driven by customer adoption of our technology advances, including proprietary AI capabilities. In our Czech market, the beta introduction of the Risk Assistant saw 8 leading insurers representing more than 90% market share of the multi-perils market adopt Intermap's AI-assisted risk platform with major providers such as Generali already expanding their usage throughout Europe. Our precise object level evaluation supports more informed underwriting and reinsurance decisions at scale and with automation. We estimate this to be a $1.2 billion addressable market globally given the large protection gaps. Indonesia is progressing through a World Bank-sponsored procurement process, and we have been down selected across all 4 remaining lots, representing a potential $200 million opportunity. Intermap has positioned itself through advances in its commercial business and technology as a leader in the technologies required to achieve data sovereignty, provenance and custody objectives for governments as they increase focus on their national security. This is also happening in Indonesia. Governments around the world are worried about their sovereignty. They're worried about their data security, and Intermap is one of a small number of contractors that has both past performance and an installed base where we can provide military-grade data with assurances. We are also in final contracting on several U.S. government programs that were delayed due to the federal budget process. These are funded programs where we have a strong visibility toward award. Similar to our proven commercial offerings, these data solutions offer assured position, navigation and timing at scale with quality that is investment grade and suitable for large-scale automated deployments. Together, these government delays account for essentially all of the year-over-year revenue decline. The business itself is stronger than ever. Subscription and data revenue grew 29% to $5.2 million and is now our largest revenue category. We invested significantly in the business with over $1.8 million in technology upgrades, people, fixed asset and capacity expansion and $3.9 million to reduce liabilities and improve our working capital position and credit profile, lowering our cost of capital. Excluding currency fluctuations, working capital and the fixed asset investment, cash flow from operations improved 30% compared to last year. The business operated at cash flow breakeven while we invested in growth. We strengthened the balance sheet, ending the year with $22.5 million of cash and $24.6 million of shareholders' equity. We upgraded our audit to the more rigorous PCAOB standard and hired MNP to see Intermap through its road map towards an uplisting to the NASDAQ and a U.S. registration at the appropriate time. The underlying business is growing, scaling and better positioned than at any point in its history. We affirm our guidance of $30 million to $35 million revenue with a 28% EBITDA margin. And with that, I'll turn the call over to Jennifer to walk through the financials in more detail. Jennifer? Jennifer Bakken: Thank you, Patrick. As a reminder, we report our financial results in U.S. dollars. As Patrick mentioned, revenue for 2025 was $10.6 million compared to $17.6 million in '24. As we previously discussed, the decline was entirely attributable to delays in the follow-on work on Indonesia and U.S. government programs rather than any loss of existing programs. Operating loss for the year was $6.9 million compared to operating income of $2.5 million in the prior year. Net loss was $6.7 million compared to net income of $2.5 million in 2024. The year-over-year change was primarily driven by lower revenue related to contract timing, along with increased fixed costs as we continue to invest in our infrastructure and capacity to support expected growth in 2026. Turning to the balance sheet. We ended the year with cash of $22.5 million compared to $400,000 at the end of '24. Shareholders' equity increased to $24.6 million from $3.7 million over the same period. Our current ratio, which is defined as current assets divided by current liabilities, improved significantly to 5.2x at year-end '25 compared to approximately 1x at the end of the prior year, reflecting the substantial strengthening of our balance sheet and capital structure. These improvements were driven by financings completed during the year as well as the timing of government program execution and related revenue recognition. Overall, we believe our improved liquidity and capital position provide a solid foundation to support our expected growth in 2026. I'll now turn the call back to Patrick. Patrick Blott: Thank you, Jennifer. We're on Slide 5. The revenue mix shifted towards recurring and subscription data. Subscription and data revenue grew 29% to $5.2 million and represented 49% of total revenue. That growth was driven by expansion of our insurance analytic platform and broader enterprise adoption of our subscription offerings. While Acquisition Services declined due to the timing of large government programs, the overall business continues to shift towards recurring, higher-margin subscription and data revenue. During the year, we made substantial progress across the business. We strengthened the balance sheet through financings completed in February and September. We advanced large government opportunities, including with Malaysia, Indonesia and the U.S. government. We expanded our commercial insurance analytics platform. We deployed the AI-enabled Risk Assistant. We also completed infrastructure upgrades, including GPU capacity and security enhancements to support scalable delivery. In terms of priorities, we're focused on converting a large and growing government pipeline into contracted awards, particularly in Southeast Asia, starting with Indonesia and Malaysia. We're converting contracts in task orders for the U.S. Defense Department and FedCiv customers, and we're expanding geographically into South America and Europe. We're scaling recurring subscription data and analytics revenue, leveraging the Risk Assistant framework to accelerate adoption, growing deeper into the market opportunity globally, expanding into additional vertical markets that leverage our military-grade technologies and autonomous navigation and telecommunications. And we're allocating capital with discipline, both in partnership with previously announced DARPA programs that fund emerging dual-use geospatial technologies and while supporting key internal growth pursuits and product development with a focus on high-margin API-enabled recurring revenue. And we're leveraging our strengthened balance sheet to compete for larger, longer duration programs. We're now ready to move to the Q&A section of the call, and I will pass the call back to Sean. Sean Peasgood: Great. Thanks, Patrick. [Operator Instructions] First question, there are several questions on Indonesia. So do you have any color that you can share with respect to the drivers of the delays in the process? It looks like the technical component of the evaluation was completed last Thursday based on the publicly available schedule. How do you feel about the remaining milestones? And do you have any color on the competitors that cleared the technical component? Patrick Blott: Yes. I've mostly shared as much as we can share, but I can say that, I mean, it's a big program for them and us, but it's a big program for them. And it involves the World Bank. It involves layers of decision-making and approvals and a process that's new, and it's -- that's the driver of the delays. Sean Peasgood: Okay. And then no comment on the competitive side of things at this point. You don't have that information or not able to comment? Patrick Blott: Yes. Yes, we're not commenting on the competitive stuff. Sean Peasgood: Okay. Yes. So if that's it on the Indonesia stuff, I think we really don't have limited things that we can talk about. So on the Malaysia flood mapping contract, can you discuss if any revenue from Q4 was recognized from that contract? And then any insight of further opportunities from that initial contract in Malaysia? Patrick Blott: Yes. I mean that is actually several awards under a program there, which we've announced the award of one, but that is 2026 revenue, all of it. Sean Peasgood: Sorry, these questions are still coming in here. Can you speak about the uplift in the U.S.? Maybe just give everybody an update on that. Patrick Blott: Yes. I said before, I mean, it is a priority for the company. It is a strategic objective. And we're on a road map. There's a lot of things logistically that need to get done. A couple of big ones have occurred, including the foreign private issuer filings, the uplifted audit to the PCAOB standard, but the registrations and the uplisting are something that we're going to get done. Valuation is a factor. So it's going to get done at the appropriate time. Sean Peasgood: Can you -- while you can't talk about competitors, do you still feel that Intermap is the only company in the world that meets the technical capability to take on the contract? I'm assuming the Indonesia one is what they're referencing. Patrick Blott: I believe that. And most certainly, that applies to the past performance. Sean Peasgood: On the commercial side, obviously, there's a bunch of growth there. Can you talk about anything outside of insurance? Are there other drivers other than insurance in the commercial business that people should be looking at? Patrick Blott: Yes. I mean again, large-scale data problems, right? We sell it similarly. The customers consume it in a very similar fashion, but they consume it for different use cases. And -- but large-scale data problems, particularly things like autonomous navigation, which is a big one and also communications and signals, signals monitoring signals propagation, that's another big one. And so there's a variety of verticals that are benefiting greatly from the availability of what was once just high side classified military data. And now it's being used to solve big problems and at scale. So where there's commercial big problems at scale, that's where our data may be a good fit. Sean Peasgood: Next question. Given that AI companies seem to be eclipsing software companies these days. Where and how do you characterize Intermap on the spectrum of software versus AI? Patrick Blott: Yes. I mean that's a good question. I was invited to a government-led conference for mostly a government audience just a couple of weeks ago, military and intelligence where people are very focused on that and essentially leveraging the AI because from our perspective, where we use it, and we use it in about 5 different work streams at Intermap in terms of both product development and capability development. And then we market it, we have actually marketed and sold a product that is a agentic AI product. So we're pretty familiar with it. We've been working with machine learning and AI for a long time. We've had the GPUs in place for years now as we -- because we have one of the largest commercial archives in the world, right? We have training data that's unmatched at global scale. And so this is a capability that isn't new to Intermap. But what's happening is it is making our people much more effective, and it's making our customers and the products that we sell them much more accurate. And so speed and accuracy is where we focus and AI is helping us move the football there. But what -- I mean, Intermap fundamentally is a data company, right? People are consuming points. The more the more points I sell, the more money we all make. We're not -- people consume through various software features. And if I can find ways to make points easier to consume, especially for nonexpert users, I'm expanding my markets. So AI for us has been a huge help in terms of adoption, especially with new data sets as we try to get our customers to adopt more data and new data and integrate different data, AI has helped us do that. And I think it's a good thing. So that's where we -- I mean, we do definitely have software coders, but the software coders are using it, and it's making them more effective and faster. And we have also very strict -- I mean, it's not a consumer quality AI. We're dealing with, again, mil-spec data and some government and strict requirements. So things are happening pursuant to rules, and they're happening in ways that are very closely monitored as well. Sean Peasgood: Okay. Great. I had a few people asking this. So just back to Indonesia, this question says, Indonesia had a fairly limited number of bidders to begin with. So what does down selection mean in this context? And maybe just -- I don't know if you just described your term, down selection, but I did have some other people ask me right after the news release went out. Patrick Blott: It's a great question because it is a silly word. I mean it; means selection. How it became down selection, I'm not sure, but that's the universal term in government land, both in the U.S. and Canada and everywhere else when you get -- when you go through a process and you compete and you get selected, they call it down selected. Sean Peasgood: Right. Okay. Great. Just on the pipeline. So on other national mapping programs, what does the pipeline look like? And are any of these opportunities looking like a 2026 contract time line? Or should we think about those in 2027? And how important is winning Indonesia to winning these further programs? Patrick Blott: They're separate, not important at all, I would say, to the other programs. And they are in Southeast Asia, but also in other areas of the world. And there's a lot of activity going on. So I think the answer to the question is, yes, 2026, and they're not -- they're correlated in the sense that past performance matters everywhere, right, especially with larger programs. Nobody really wants to -- especially in governments, which tend to be risk-averse, they don't want to take a flyer on providers that have never done it before when the dollars are large. They might take a flyer for small dollars, but for large dollars, they want past performance. And so past performance matters. And to that extent, there's correlation there because it extends our past -- the first phase of Indonesia extends Intermap's past performance at an extremely high specification that then a lot of people around the world look at. So that's -- to that extent, they're correlated. But otherwise, they're not related at all. Sean Peasgood: Okay. Great. I do have a follow-up from the AI question. So how likely are large AI companies to replicate Intermap's technology? What is your competitive advantage in this regard? Patrick Blott: Yes. Again, I'll say it again, we're fundamentally a data company. So AI can't create data. And if it does create data, that's what we would call synthetic. So a synthetic data, you can't use for many things that our customers use data for, like you don't want to fly an airplane with a synthetic data. So it's not -- how we deliver and consume, we do try to make the consumption of our data as easy as possible. We use software to do that. And also, we want to do it at scale, right? Think of 1,000 points of light. We want to be able to deliver data into automated systems. Our insurance underwriters are pulling in excess of 5 million points a month. That's huge -- a human can't do that, right? Like a human can't look at a screen and underwrite risk at that scale. So in order to consume the data, we take every advantage we can in terms of software, AI, whatever that allows our customers to do their job in larger and larger ways. That also affects the military. Anybody can pick up the front page of any news recently and just see the evolution of targeting from looking for a bad dude in the war on terror 10 or 15 years ago to looking at literally hundreds concurrently in the current -- it's all about scale, it's all about automation. We're right in the sweet spot of all of that. AI is our helper. It's not particularly a threat because at the end of the day, people -- we want people to consume as much data as possible. Sean Peasgood: Okay. Next couple of questions on U.S. defense contracts. So have you got any traction on the key U.S. defense contracts? I know you mentioned it in your opening remarks, but any other comments there? And then are you -- again, on the pipeline there in the defense side, are there other opportunities that you haven't talked to that you're working on? Patrick Blott: Yes. And we'll announce when we can -- I mean, I can say this, we're in funded programs, and we're in contracting. So I have a pretty decent visibility, and we'll announce as soon as we can, but it's got to be inked. Sean Peasgood: Okay. This one on the World Bank. Does the World Bank have a time line on when the allocated funds need to be spent? Patrick Blott: That is a very good question. It's above my pay grade. That is a government to government Indonesia to World Bank. It's not us. Sean Peasgood: All right. I'm just looking here if there's anything else in here that we haven't hit on. Well, how many aircraft are you currently operating? And how many do you have in your fleet? Patrick Blott: We're not disclosing that, but we have more than we need, and it's not just aircraft. Sean Peasgood: Okay. Oh, from the revenue guidance for 2026, can you talk to how much of Indonesia is reflected in that 2026 number? Patrick Blott: I mean the way that we do it is we take a whole array of the pipeline, which is a factored pipeline, which is coming in from a whole bunch of different sales reps focused on a whole bunch of different things. And so it funnels through that and gets probability weighted and is basically a multi -- at the end of the day, becomes a multi-pathway. Any one of -- Indonesia is published -- it's a published budget. It's a published requirement. It's a published schedule. I'm pulling -- I don't have these numbers right in front of me, but 20% to 30% upfront of Indonesia is at least $40 million to $50 million a day the contract signed. So like pulling out any particular one is not the way that we do it, and I don't think it's the right way to do it. Sean Peasgood: So assuming you won Indonesia would be conservative. Okay. I don't think there's any other questions. And if there are, people can e-mail us if I've missed any. There are a lot in here, but a lot of them are just more on Indonesia, which we're not going to comment on or specific customers, which we're also not going to comment on. So I think with that, Patrick, I'm going to pass it back to you for closing remarks. Patrick Blott: Struggling with my mute here. Thank you for joining the call today. We look forward to updating you on progress in future quarters. Sean Peasgood: This concludes Intermap's Fourth Quarter of 2025 Conference Call. We thank you for joining us.
Operator: Good morning, and thank you for your participation. [Operator Instructions] As a reminder, this conference call will be recorded. I would now like to turn the call over to Lee Roth, President of Burns McClellan, Investor Relations Adviser to LENSAR. Mr. Roth, please go ahead. Lee Roth: Thanks, Josh. Once again, good morning, everyone, and welcome to the LENSAR Fourth Quarter and Full Year 2025 Financial Results and Strategic Update Conference Call. Earlier this morning, the company issued a press release providing an overview of its financial results for the fourth quarter of 2025. This release is available on the Investor Relations section of the company's website at www.lensar.com. Joining me on the call today is Nick Curtis, Chief Executive Officer; and Tom Staab, Chief Financial Officer of LENSAR, who will provide an overview of recent developments, our go-forward strategy and our Q4 financial results. Following these prepared remarks, we'll turn the call back over to the operator to answer your questions. Before we begin, I'd like to remind you all that today's conference call will contain forward-looking statements, including statements regarding our future results, unaudited and forward-looking financial information as well as information on the company's future performance and/or achievements. These statements are subject to known and unknown risks and uncertainties, which may cause our actual results, performance or achievements to be materially different from any future results or performance expressed or implied on this call. We caution you not to place any undue reliance on these forward-looking statements. For additional information, including a detailed discussion of the risk factors, please refer to our documents filed with the Securities and Exchange Commission, which can be accessed on the website. In addition, this call contains time-sensitive information accurate only as of the date of this live broadcast, March 31, 2026. LENSAR undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this live call. With that said, it's now my pleasure to turn the call over to Nick Curtis, Chief Executive Officer of LENSAR. Nick? Nicholas Curtis: Thank you, Lee. Good morning, everyone. I appreciate you joining us today. It is no doubt an understatement to say 2025 was a unique and unprecedented year for LENSAR. We take great satisfaction knowing that the leading eye care company in the world, Alcon, publicly recognized the value of ALLY and LENSAR given the joint acquisition announcement made in March of 2025. This validates our statement that ALLY is the best next-generation technology, delivering significant and relevant performance improvements in each of the critical elements of laser-assisted cataract surgery, including advanced ergonomics, efficiencies, imaging and automated treatment planning with a dual modality laser. ALLY is the only system that employs machine learning and compute power during treatment planning and optimized treatment to deliver outcomes that are better than any first-generation competitor. The termination of the acquisition agreement was a mutual pragmatic decision made after a year of focused effort and considerable expense from both sides. While this acquisition was approved overwhelmingly by our stockholders, ultimately, we made the decision to terminate because the Federal Trade Commission would seek to enjoin the merger. While both parties work towards offering acceptable accommodation to allow it to close, it became clear the FTC was not open to changing their position. We were disappointed in the outcome. However, the upside of this process is the validation of the ALLY Robotic Laser Cataract System superiority compared to all other first-generation lasers available today as well as the value attributed to LENSAR based on the success the product has achieved since its launch and its future potential. Therefore, with new resolve and new purpose, we're excited to emerge and reengage as an independent company, picking up where we left off 12 months ago. We've spent the last 2 weeks working on initiatives and jump-starting relationships with key stakeholders. I'll briefly discuss the last 2 weeks and share our high-level go-forward strategy today. Relationships are important. And before I present our strategy, I would like to take a minute to thank our partner vendors, agents and suppliers who not only provided excellent support and counsel, ultimately shared that disappointment and financial burden with us through granting reductions in fees as well as extended payment terms. These partnerships are beneficial in LENSAR returning to our prior operating cadence, allocating more of our financial resources and attention to operations. We can immediately start getting back to our business as usual and smooth return to focusing on growth and expanding our presence with increased installed base and procedures. We appreciate their collaboration and contribution to our future success. Additionally, in association with the termination of the acquisition, we received the $10 million transaction deposit that had been in escrow. In the last 3 quarters of 2025, we operated with an increasing degree of uncertainty among our partner customers, potential partner customers and distributors regarding our future and the timing of the close of the acquisition. Despite the uncertainty that delayed U.S. customer decision-making on ALLY and LENSAR and halted OUS distributor activities and purchasing systems, we expanded the ALLY installed base by nearly 50% compared to year-end 2024, while achieving 20-plus percent year-over-year growth in procedure volume for both the fourth quarter and full year 2025. There's no question the last 9 months of 2025 were negatively impacted by the acquisition process and extended time line and not just by the increased SG&A expenses associated with supporting the transaction. While our 2025 results include a 9% revenue growth, I need to be transparent and clear. We expect through the next several quarters of 2026, a gradual return to our historical operating performance. When you consider our longer-term growth metrics, the trajectory has been impressive. Our full year 2025 procedure volumes are up 50% compared to 2023, the first full year of ALLY commercial availability. By reflecting on a longer-term vantage point, you get a much better picture of what we see as the future opportunity for LENSAR and ALLY. Since the launch in August of 2022, we grew our installed base to approximately 200 ALLY systems and grew our procedure volume, gaining market share from 14% procedure share in the U.S. to 23.4% as of the end of 2025. I want to say we gained almost 9.5% of market share points in 3.5 years. These market share gains come from 3 specific areas. First, it comes from competitive accounts, replacing first-generation lasers with our ALLY Robotic Laser Cataract System accounts for the largest gain in share. Second, the gain in share is demonstrated by what happens after we replace a competitive system. LENSAR on average performs 27% more procedures annually than the national average per laser, providing evidence that we are growing the overall market for robotic laser cataract procedures. Third, nearly 50% of our systems in Q4 2025 were from Femto-naive surgeons, further expanding the market for laser cataract-assisted surgery. The data provides evidence LENSAR is addressing the shortcomings of the first-generation laser-assisted cataract surgical lasers by delivering the most technologically advanced next-generation robotic laser for cataract surgery in multiple ways. Significantly improving efficiencies and patient throughput, allowing for more procedures with faster treatments and fewer staff interactions, leading to the potential for fewer mistakes, less anxiety and a better overall patient experience. Second, customizing precise, specific reproducible treatments optimized by utilizing features such as machine learning and surface anatomy recognition, imaging and optimizing data for treatments by communicating with preoperative devices in the surgeon offices, leading to better outcomes in refractive cataract surgery using astigmatism management. To put in perspective, our competitors have the ability to bundle more products using cataract procedures, more feet on the street and much deeper financial human and operational resources. Despite this, we've been incredibly successful in increasingly growing ALLY's market share. Why? LENSAR is a small, nimble and resilient organization. We're known for innovation that aligns with surgeons' practices and patients' objectives. LENSAR is and always will be a surgeon and practice-centric organization. We have extensive clinical evidence that is giving surgeons the confidence to make the decision to implement ALLY in their practice. Over the last 3 years, ALLY's performance, placements and procedure volume speaks for itself. All I can say as we start the second quarter of 2026, we expect to compete as we have in the past. Listen here, we are back. I'd like to spend a few moments talking about our business outside the United States. As a reminder, while LENSAR started commercializing ALLY in the U.S. in August of 2022, it wasn't until 2 years later that we received the European certification and began to sell ALLY internationally. Looking at the time line, ALLY had been on the market outside the United States for roughly 7 months when the transaction was announced. The uncertainty over the post-acquisition ALLY distribution landscape had a greater impact on our outside United States distributors than our U.S. customers, and that uncertainty caused a meaningful slowdown in our international business expansion over the last year. With our distributors, the ALLY launch got off to a very successful start, quickly gaining acceptance with new sites and meaningful momentum, which came to a hard stop. After meeting with the distributors post-acquisition termination announcement, I believe we will begin to return to significant system growth in these international markets over time. Most, if not all, the distributors were both happy and relieved with the termination of the merger. Although they have all indicated their enthusiasm and are ready to support the business going forward, their conservative immediate forecast indicate this will take some time. We will work together on the transition timing to regain the lost momentum and begin to contribute to an increase in worldwide system and procedure market share. I'm confident in our ability to drive long-term success and create value for our surgeon partners in the United States, our distribution partners overseas, our global customers, the patients they serve and our shareholders. We also continue to rely on our long-term existing physician partners and private equity groups as they are our partners in success. These partners recognize we are working hard to deliver and provide the most responsive service, support and best product in the market. Going forward, we'll be focusing on a few key areas. Continuing to grow our procedure volumes and recurring revenue will be critical to our success. This will come through a combination of additional system placements and increased utilization on the 200 ALLY systems currently in the field. Our procedure revenue is recurring in nature. It is stable. It has a predictable trajectory following an install and importantly, carries a significantly higher margin than system revenue. The acceleration of system growth discussed in my remarks will contribute to significant long-term growth in procedure volumes, which will further strengthen our recurring revenue base. An important statistic to consider here is system utilization rates, another area where we are well positioned for success and driving overall market growth. Once again, LENSAR systems in the U.S. perform an average of 27% more procedures than the national annual average of lasers currently installed. There is not another robotic femtosecond laser available in the marketplace. We're excited to speak with you, answer your questions, and we appreciate the confidence and support you put into the LENSAR team. Now let me turn the call over to Tom, and he'll cover our financial highlights for the quarter. Tom? Thomas Staab: Thank you, Nick. I'd like to discuss our fourth quarter and fiscal 2025 results. However, my remarks will be succinct and pointed for 2 reasons. One, our fourth quarter and 2025 results were impacted by conducting our operations under the previously contemplated acquisition by Alcon; and two, we start the second quarter as a stand-alone company tomorrow. So I'll highlight the relevant aspects of Q4 and our 2025 results as they relate to our future results and operations. In association with the termination of the merger, there are some significant adjustments to our future financial statements that I'd like to highlight. First, the $10 million merger deposit that was being held in our bank account becomes ours. Thus, the cash that we report at December 31 of $18 million is ours with full title and the $10 million deposit liability will be eliminated in our first quarter 2026 results. Second, we recorded $17.1 million in total acquisition costs in 2025, with $14 million of those expenses unpaid as of December 31. With the termination of the merger, approximately $4.3 million of the unpaid balance will be eliminated or written off by concession of our acquisition advisers and then $5 million of the remaining liability will be payable starting in May 2027, a significant payment deferral. Lastly and importantly, as Nick has mentioned, we have reengaged with our key stakeholders, including our distributors, and we start today with the help of these key stakeholders to reestablish our stand-alone operations at an operating cadence more similar to prior to the announcement of our acquisition. Our performance in the fourth quarter was solid with a total revenue of $16 million, representing a 4% decline year-over-year, primarily as a result of lower system sales. As you look at regional sales, U.S. ALLY sales were 12 systems, increasing 1 system from Q4 2024. However, there was only 1 ALLY sale outside the United States in the fourth quarter of 2025 compared to 10 ALLY systems sold outside the United States in the fourth quarter of 2024. We attribute the fluctuation in ALLY unit sales year-over-year, largely due to our distributors' uncertainty as to when their collaboration with ALLY and LENSAR would end. You can understand our excitement as initial conversations with distributors demonstrated their willingness and enthusiasm to reengage. This will be an important growth driver to top line revenue, recurring revenue as well as enhanced cash flow. The quicker our distributors reach out to potential ALLY customers and reengage in ALLY's promotion, the faster our operations outside the United States begin to meaningfully contribute to our total system sales and enhance our cash flow. Another important aspect of our business is recurring revenue. While total 2025 revenue increased a respectable 9% over 2024, 2025 recurring revenue increased 15% over 2024, offsetting the decrease in system sales for the year. The decrease in system sales for 2025 was entirely due to sales outside the United States, decreasing to 20 systems in 2025 from 23 systems in 2024. This is especially noteworthy as 8 systems, 40% of our fiscal 2025 system sales occurred in the first quarter of 2025 prior to the acquisition announcement. And the comparable 2024 period, as Nick mentioned, was only 5 months of activity as we did not receive regulatory approval and launch in Europe and Taiwan until August 2024. Recurring revenue grew 17% in the fourth quarter 2025 to $12.7 million, annualizing to over $50 million, and we exited the full year 2025 at $46.3 million, up 15% compared to the $40.1 million in 2024. This performance reflects the continued expansion of our installed base as well as increased system utilization with procedure volume remaining a key driver. Fourth quarter procedure volume increased approximately 20% year-over-year and full year procedures grew 22%, surpassing 206,000 globally. We placed 15 ALLY systems in the fourth quarter, bringing the installed base to just over 200 ALLY systems, up 48% year-over-year, while our total combined installed base of ALLY and LLS systems grew to approximately 435, an increase of 13%. We exited 2025 with a backlog of 13 systems pending installation. Gross margin for the quarter was $6.9 million and represented a gross margin percentage of 43% compared to a 42% gross margin in the fourth quarter of 2024. Our gross margin for the full year was 46% versus 48% for fiscal 2024. The decline in margin percentage represents the impact of inflationary cost increases to our raw materials and production processed accompanied by tariffs assessed in 2025. We did not pass on tariff costs to our customers. We are forecasting an increase in our gross margin percentage and expect it to be in the 46% to 49% range for fiscal 2026. The more successful we are with system sales, the lower we will be in this gross margin range. However, increased system sales will have a more beneficial impact on our recurring revenue as gross margin percentage and recurring revenue factors are inversely correlated when it comes to ALLY sales. Other than the recurring revenue, another important aspect of our 2025 results is that we maintained a positive adjusted EBITDA for the year with a fourth quarter adjusted EBITDA of $595,000, thereby indicating operating cash flow positive operations, excluding any working capital impact. We are proud of our positive adjusted EBITDA operations for the year, considering we operated 9-plus months under the pending acquisition. And during that period, we were missing top line revenue and cash flow from our typical system sales outside the United States. From an expense perspective, our fourth quarter results were impacted by approximately $3.5 million in merger-related costs, which drove a 51% increase in SG&A year-over-year to $10.3 million and a 41% increase in total operating expenses to $11.9 million in the fourth quarter. Going forward, we expect that the underlying expense profile of the business will become more stable with our cash-based operating expenses being a reasonable guide for 2026 with us expecting no more than a 10% increase in cash-based operating expenses and the majority of this increase devoted to commercial activities. As we look ahead, our focus is on transitioning from this 12-month period of disruption to one of execution and growth with 3 clear priorities: first, accelerating revenue growth. We expect continued expansion of our installed base and increasing system utilization, thereby increasing recurring revenue. Second, maintaining our cost discipline. This priority continues and has been a focus since launching ALLY. Third, enhancing cash flow, especially as it relates to increasing system sales, particularly outside the United States. We believe that the combination of cash on hand as well as the discounted and extended payment terms of acquisition costs provide us with the necessary flexibility and financial resources to effectively restart our operations and return to our previous growth run rate and operating success. We would now like to turn the call over to Josh for Q&A. We're happy to answer your questions. Operator: [Operator Instructions] Our first question comes from Frank Takkinen with Lake Street Capital Markets. Frank Takkinen: A lot to cover. So maybe I'll start with the distributor commentary, Nick, it sounds like the conversations you've had over the last few weeks have been really positive, but I did hear the comment of exercising a little conservatism as you reengage with those folks and think about kind of how that's going to actually translate to OUS system revenues. What more can you tell us there? And how should we be thinking about reading into that commentary and applying it to our models as we think about growth reaccelerating throughout 2026 or 2027? Nicholas Curtis: Sure. Frank, good to hear from you. It's been a while since we've done these calls. So the business outside U.S. is different in a lot of cases, particularly in a few of the countries where you don't have as many private practice and, let's say, ambulatory surgery center owners where they can make the decision or a private equity group that makes the decision, for example, in Germany, where we have a large private equity group, and we are one of the primary suppliers there. And so in some of the -- particularly Southeast Asia, some of these go on tenders. And given the uncertainty, they were hesitant to engage in a tender because they're over an extended period of time. So for example, they'll start reengaging in these tenders and those tenders take time. And quite frankly, we may have lost a few renewals in the short term from some of these deals, not our deals where they had our systems, but where we had an opportunity to, let's say, quickly replace a competitive system. And so I just expect that it's going to take us several quarters to really reinvigorate, get out and assess where some of those tenders are, where we have opportunities and begin to do that as well as participating in some of the various conferences like we do here. And so I just caution to say that -- because we had this massive quick start when we got the ALLY approved 2 years later, now essentially, there's been 0 activity for the last 9 months and so there'll be some restart-up. And it's not like there's a backlog sitting there because essentially, these distributors didn't -- again, we're planning for life without LENSAR that they didn't expect to be distributing on a going-forward basis. So they're really enthused. And I just say it's going to take us a little time to get back to that sort of momentum that we had in the last quarter of 2024. Frank Takkinen: Yes. Very helpful. And then as we think about placements going forward, it's -- to me, it seems like there's 2 phenomenons going on. OUS likely more capital placement oriented. And then in the U.S., with each incremental placement, it gets incrementally harder. So maybe there's less upfront payment and more kind of lease-based placements. How should we think about that throughout the year and a mix of maybe kind of more lease-based or usage-based placements versus actual capital sales throughout the year? Nicholas Curtis: Yes, great question. So as you know, and as Tom had indicated, when we sell a system outside the U.S., when it leaves our dock, we essentially we recognize revenue on the system sale itself. And so it's a very quick recognition. In the U.S., the rev rec is different. You have to get the system installed. You have to begin training and the system is accepted by the customer, the end user, before you begin to recognize revenue. And on procedure deals or when we do placements and really even when we sell a system in the U.S., usually, you're looking at in the neighborhood of close to 60 days before you really start getting into the revenue phase that they get to some normal procedure volume because you're training people and you're getting the systems put up in place and procedures and whatnot. Traditionally, we've been in the neighborhood of somewhere north of 50% sold systems in the U.S. and, let's say, 50-50 or perhaps even a little bit more on the sold versus the placed. And I would expect that, that's probably going to drop a little bit. What we've seen is that the competition, they lack the system, they go out with procedures, and they try to drive a price competitive versus what we do with the value proposition with a much more efficient, faster, better treatment overall. So I think that over the next couple of quarters, you'll see us go from that sort of 50%, 55% sales sold systems versus placed systems in the U.S. to a lower percentage, particularly as OUS takes a little time to sort of ramp up there. Does that help you in terms of the percentage? Frank Takkinen: Yes. No, that's very helpful. I appreciate that. And then maybe just the last one for Tom. I heard the comment, a 10% increase in cash OpEx. So I just want to make sure I understand that. Essentially, if we look at 2025 OpEx and back out the $17.1 million of M&A-related expense and then grow that 10%, -- is that what you're inferring? So you would be in the neighborhood of kind of $38 million, $39 million of operating expense for 2026? Thomas Staab: That's exactly right, Frank. The only thing that I'll say is the way we look at things is cash-based operating expenses. So we threw out sort of amortization as well as stock-based comp and then it's the 10% off that base. But yes, you're correct. Operator: Our next question comes from Ryan Zimmerman with BTIG. Ryan Zimmerman: So maybe just to start, I don't think I heard the procedure growth was still really good worldwide. And I'm wondering if you could comment, Nick, on U.S. procedure growth because I think you also faced a tougher comp there. We saw a bit of a slowdown in cataract volumes through much of 2025. Maybe you could just comment on kind of where that stands? And then as you think about the business going forward, I appreciate that the system dynamics will be choppy as you kind of get the train out the station. But talk to us about the recurring revenue side of things, particularly around procedures and how you think that will kind of function as we look ahead to 2026? Nicholas Curtis: Yes. Thanks. Good to hear from you, Ryan. I appreciate your questions. So as Tom had mentioned, we exited the year with $46 million, approximately $46 million in recurring revenue, and that was ramping closer to $50 million when you look at the fourth quarter and on a rolling forward basis. And so we're really -- our business is becoming very healthy on the recurring revenue side. It was 79% of our revenue in the fourth quarter. And so as we go forward, we expect that those 200 installed systems will continue to produce. We're doing approximately about 600 procedures a year or so on average on the ALLY units in the U.S. on a going-forward basis on average. And so that's quite a bit higher than what the average installed base is. We expect that, that's actually going to continue. And because of what we do with astigmatism management, we started to see more femtosecond laser naive, we refer to as femto-naive, which represented 50% of our new business in the fourth quarter. So we expect that to continue and to continue to grow as well. Now those accounts of caution take a little bit longer to get to the -- they take longer to ramp because they've never done lasers before and they're putting in a new system and they're getting trained and they have to train staff and educate patients and whatnot. So that will take us a quarter, 2 quarters to get those folks sort of up to speed as more new customers come on, but representing a pretty large segment and a lot of -- particularly when you look at cataract surgery reimbursements and the need to deliver better outcomes, our astigmatism management over 65% of procedures that we do involve some form of astigmatism management. So I think you'll see the mix of customers that heretofore are replacing older competitive devices and so on average, we do 20%, 27% more procedures than the national average 0of systems. And so we take about a 60-day ramp and you see those procedures coming up to where our averages are or more. And then you'll see a mix of newer customers and maybe some of the office-based surgery centers, which is trending moving into office-based suites, where those are lower volume accounts take a little more time. So you may see the average number of procedures drop slightly, but you'll see more systems doing those and whereas the current installed base will continue to grow. Ryan Zimmerman: Okay. Very helpful. Just to circle back, Tom, on expenses. I appreciate the math and commentary that you gave. It's very helpful. But I guess my question is, in this transitory period, I imagine expenses came down artificially. Now you do also need to kind of, again, get the train up the station, if you will. And so when you think about kind of the cadence of expenses and appreciating kind of where it's going, shouldn't we see some type of kind of acceleration, foot on the gas pedal, if you will, to get things -- get kind of operations coming again. I'm just wondering if the 10% is the right number as I think about kind of into '27 and beyond, I guess. I know it's a little premature, but it just seems like there's kind of multiple vectors here, cross currents around operating expenses for '26. Thomas Staab: So very astute question and a very good observation, Ryan. I mean, yes, we're -- our expenses did go down over the last 13 months just because of being under the acquisition process. And with the -- even though our advisers discounted and extended the payment terms, that's still a big nut for us to cover as a small company. And so we're being very judicious in our expenses and the increases are all going to be commercial for the most part in 2026. And then as our distributors come online and we see a larger contribution of sales outside the United States and more cash flow coming in, I fully envision ramping up our commercial activities in 2027 well beyond 10% -- but we're kind of in this moderation phase until we're certain and how quickly our distributors can come back after this 13-month lag where they effectively put their pencils down. Ryan Zimmerman: Right. No, understood. And when you think about kind of what's entail, and this is more direct to that, Nick, I guess, like yes, you've had conversations with the distributors outside the U.S. They understand where you guys are at as a company now, not going through with the merger. Does your thinking around your OUS efforts change? Does it -- do you see bigger opportunities than maybe you thought about before? And is there room to go beyond kind of the markets that you were in kind of premerger. Some of those approvals were really good. We saw a really good uptake in Europe. But now the question is, as a stand-alone, does your aperture change, I guess, particularly outside the U.S. Nicholas Curtis: Yes. So a really, really great question. So you're starting to delve a little bit into some strategy here. So I've seen -- it's really interesting because in terms of especially replacing some of the older systems from competition that are out there. And so I've seen some interest in a few other countries that heretofore, we have not gone into. And so I'm going to be looking at a few opportunities such as Australia and New Zealand, in particular, where there's actually quite a bit of interest in replacement of older systems there. And that would be one market that we haven't been into that we may look into. I think that we'll see in Southeast Asia, our activity come back there. Like I said, there's more of a tender business there. And so it's going to take us a little more time where I see there'll be some systems there this year. But I think that really as we get into 2027 into first, second quarter of 2027, we'll see quite a bit more growth in that Southeast Asia market. And I think there's a lot more expansion growth in Europe into countries where heretofore, we haven't been in because, again, not to underemphasize or overemphasize, ALLY addresses a lot of the shortcomings as to the reasons why people abandon femtosecond laser-assisted cataract surgery before. And because we have this good installed base in the U.S. and our business is growing, it's almost been an advantage getting the approvals later outside the U.S. because it's helpful for the distributors where they see that there's uptake here in the replacement of competitive devices. And so there's a lot of systems outside U.S. where they're sitting in accounts that are just not very productive. And I feel like competitive systems. And so we'll have some opportunity there. I don't see the opportunity coming back in South Korea anytime soon. As you know, they've got big issues around reimbursement and insurance company reimbursement there, but that's been away from us for quite a while. So it doesn't impact our business negatively or positively, if you will. And I think we probably need to look at some other markets in South America, Latin America, where heretofore, we haven't been either. But I think now we can address some of these things. But those are longer term. I think we'll see Europe come back, and we'll have some opportunity outside of Germany that we hadn't really gone after before. I think our distributors are interested in doing that, and we've made some additional relationships there. And I think we'll see Southeast Asia in various countries there we do business come back strong, and then we'll look at a few of these other markets. Ryan Zimmerman: Okay. I appreciate it. I know this -- again, this call was a maybe change in plan from what everyone expected, but it's good to hear from you guys, and we'll get the dust off and move forward. Nicholas Curtis: Ryan, you know what, that's life and life throws your curves. And the reality is what you do to adjust and how you pivot and how you decide to move from there. You've got 2 choices. You can quit or you can come out fighting. And I've never quit, and I have to come out fighting so. Operator: Thank you. I would now like to turn the call back over to Nick Curtis for any closing remarks. Nicholas Curtis: I really appreciate everyone joining us today. It's been invigorating to do a call after not having the call for about a year now. While the termination of the merger was not the outcome that we anticipated, I think it really positions us to -- the positive there is it positions us to move forward with a much greater focus and control as an independent company. As a stand-alone company, we certainly know we have the best product available. I think it was -- came out loud and clear through the process here, and we're ready to capitalize on the significant market opportunities that lie ahead. Rebuilding momentum is going to take several quarters, but our priorities are very clear, and I believe our team is aligned to deliver. We're confident that on the path it really is enabling us to unlock even greater long-term value for our surgeons, patients and shareholders, and we look forward to sharing our progress with you all as we move forward. And so in closing, I just want to say once again, LENSAR is back. Thank you. Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.
Operator: Good morning, ladies and gentlemen, and welcome to the Charlotte's Web Holdings, Inc. 2025 Fourth Quarter Conference Call. [Operator Instructions] This call is being recorded on Tuesday, March 31, 2026. I would now like to turn the conference over to Cory Pala, Director of Investor Relations. Please go ahead. Cory Pala: Thank you, and good morning, everyone. Thank you for joining us today for Charlotte's Web Q4 2025 earnings conference call -- provide some color around the recent developments around BAT transaction, the Medicare opportunity, regulatory momentum and other progress. Afterwards, we will take questions from our analysts. As always, before we begin, please note that certain statements made during this call, including those regarding our future financial performance, business strategy and plans, constitute forward-looking information within the meaning of applicable security laws. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause actual results to differ materially. We direct you to review the cautionary language in this morning's earnings release as well as the risk factors and other important considerations that are detailed in our regulatory filings, particularly in our most recent Form 10-K report. During the call, we will also refer to supplemental non-GAAP accounting measures, including adjusted EBITDA, which do not have standardized meanings prescribed by GAAP. Please refer to the earnings press release for descriptions of these measures and reconciliations to their most directly comparable GAAP financial measures. And with that, I'll now hand over the call to Charlotte's Web's CEO, Bill Morachnick. William Morachnick: Thanks, Cory. Good morning, and thank you for joining us today. I want to say right up front that this is not business as usual for Charlotte's Web. We've had several key announcements that have tremendous positive impact on our business that I'm excited to share with you. So let me also add that this includes another quarter of demonstrated progress for our push towards achieving scalable profitability. But first, let me start with the most recent development. Last night, we announced a financial transaction with British American Tobacco in relation to its existing convertible loan note. This transaction has 2 primary components. First is the conversion of BAT's outstanding $55 million convertible debenture, plus approximately $10 million in accrued interest in the common shares of Charlotte's Web at a conversion price of CAD 0.94 per share. This eliminates our largest balance sheet liability entirely and avoids approximately $3 million in future annual interest for the next 3.5 years. The second component is a new equity investment of $10 million through a private placement. This is fresh capital coming into the business to support the execution of our key strategic initiatives, including our upcoming participation as a leader in the CMMI Medicare pilot programs. So in total, BAT's combined equity commitment under this transaction is approximately $75 million. And following completion, BAT will hold approximately 40% of the company on a non-diluted basis. Among other things, this transaction provides clarity and stability around BAT's existing investment decision. Let me also provide some additional background on why we believe this is the right transaction at the right time and appropriate in the current circumstances. The original debenture was issued in November 2022 at a conversion price of CAD 2 per share. Due to several issues, including the ongoing federal regulatory delays around consumable hemp, it was extremely unlikely that BAT would voluntarily convert its debt anytime soon. If this debt burden were left unaddressed and continued to accrue interest at 5% per year, the company would have faced an additional $12 million or more in aggregate interest from now through the maturity date in November 2029. This transaction eliminates all of that. The net effect is a dramatically simplified equity-based capital structure. We go from carrying significant debt obligations to a clean balance sheet with a well-capitalized long-term investor. The additional $10 million in fresh capital strengthens our working capital position and provides flexibility to pursue multiple exciting growth opportunities. All right. So now let me turn to our most exciting recent growth opportunity the Center for Medicare & Medicaid Innovation pilot program, or CMMI. Under the CMMI pilot program, for the first time, seniors gained access to science-backed CBD products through a federally authorized Medicare pilot, and Charlotte's Web is positioned to be a participant within this program. Just 10 days ago, CMS, which is the Center for Medicare and Medicaid Services issued additional guidance that significantly clarifies and strengthens this opportunity. CMS established the Substance Access Beneficiary Engagement Incentive or Substance Access BEI, which will be the specific mechanism through which the pilot will operate. Notably, the guidance confirmed that the hemp-derived CBD products, including nonintoxicating full-spectrum products containing up to 3 milligrams per serving of naturally occurring THC are eligible under the program. This means our core portfolio of full-spectrum CBD wellness products qualifies under this federally authorized program. Under the Substance Access BEI, participating health care organizations primarily accountable care organizations, or ACOs, and oncology providers may purchase eligible hemp-derived CBD products for the Medicare patients with up to $500 per beneficiary annually available. To provide some clarity, it's important to note that Medicare does not directly reimburse these products. Rather, the ACO purchases hemp CBD products directly and furnishes them to its patients. The economic rationale is that if these products contribute to lower utilization of higher-cost services, the ACO may benefit through reduced total cost of care. As a result of that, the ACO may have an incentive to support adoption of the Substance Access BEI. Participants in the ACO REACH Model and the Enhancing Oncology Model are anticipated to begin offering the Substance Access BEI beginning April 1, which is tomorrow with the ACO LEAD Model expected to follow in January 2027. I want to be really clear about what this means. This represents an established health care integration pathway. It operates with CMS authorization, physician oversight, patient support through the program's partner Realm of Caring and structured outcomes data collection. To facilitate the pilot, Charlotte's Web will offer products intended to support eligible patients through a secure online health care portal. The initial phase is focused on senior patients receiving care through the ACO REACH provider. Over time, this type of model has the potential to be applied more broadly within the Medicare population, which currently includes approximately 67 million beneficiaries. And looking ahead, there is a second potentially much larger Medicare pathway development. In November, CMS proposed for the first time, allowing Medicare Advantage plans to be included -- to include hemp-derived CBD products in their benefit design. That is a separate program from the CMM pilot and it represents a potential expansion of CBD access into the broader Medicare Advantage system, which covers roughly half of all Medicare beneficiaries. The timing of additional details for this program are still being finalized, but we remain confident that our quality standards and compliance infrastructure position us well for this potential opportunity. All right. Let me take a moment now to talk about the federal regulatory status. Despite ongoing challenges, recent federal policy developments are showing progress for hemp-derived CBD. Congressman Morgan Griffith, who's the Chairman of the House Energy and Commerce Subcommittee on Health, which oversees the FDA, advanced the Hemp Enforcement, Modernization and Protection Act known as the Hemp Act. This proposed legislation would establish a science-based federal framework for hemp-derived products under the FDA oversight. We are actively working with our one hemp partners through the markup process. The Hemp Act is expected to proceed through regular order in the House Energy and Commerce Committee this year with potential pathways for advancements for broader legislative vehicles, including Congress' continuing resolution in September. At the same time, we recognize that multiple legislative approaches to hemp regulation are under active consideration in Congress. And we remain actively engaged with policymakers and stakeholders across these efforts and will support the most effective path forward to achieve a durable science-based federal framework. It's clear that a broader federal solution is critical. Recently issued Substance Access BEI guidance explicitly permits hemp-derived CBD products containing up to 3 milligrams of THC per serving under the CMS program. This would certainly seem to be a direct signal from the federal government that full spectrum products are considered safe and appropriate. Okay. Now let me turn to DeFloria, which is one of our most compelling long-term potential opportunities outside of our core consumer business. This is our collaboration with Aragen Bioscience and British American Tobacco. Last year, DeFloria received FDA clearance to proceed with Phase II clinical trials for its investigational new drug. This botanical IND is for the treatment of irritability associated with autism spectrum disorder. It represents a natural alternative to pharmaceuticals that are often poorly tolerated. It uses our proprietary full spectrum CBD extract derived from a patented hemp cultivars and we believe it represents the most advanced cannabinoid drug program utilizing the FDA's botanical drug pathway. Building on favorable results from Phase I, which established the dosing parameters for the Phase II program, DeFloria has been actively preparing for entry into Phase II clinical trials. Preparations are substantially advanced, and the program is expected to initiate midyear, subject to the customary development activities and resource alignment. Phase II consists of multiple studies across distinct patient populations. These studies will evaluate safety and tolerability and provide early signals of therapeutic effectiveness to inform a subsequent Phase III program. A reminder, as stated in this morning's press release, the potential strategic value to Charlotte's Web shareholders is significant. Clinical advancement through FDA regulated pathways validates the therapeutic potential of our proprietary genetics and strengthens the scientific foundation underlying our entire consumer business. We also hold exclusive commercial manufacturing rights to ultimately receive FDA approval which is clearly a significant long-term revenue opportunity. And we currently own approximately 1/3 of DeFloria, providing us with direct exposure to massive value creation as the program advances. With that high-level update, I'll now ask Erika to walk us through the Q4 and full year financials, and I'll return after her remarks to discuss our business execution and outlook. Erika Lind: Thank you, Bill, and good morning, everyone. As Bill noted, our 2025 financial results reflects 2 years of disciplined execution to stabilize the business return to growth and fundamentally restructure our cost base to drive to profitability. Let me walk through the key metrics, and I'll keep this concise so we can focus the balance of our time on the strategic discussion. Consolidated net revenue for Q4 2025 was $13.3 million. Q4 delivered a strong sequential rebound of 15.8% recovering from the Q3 dip driven by the planned B2B restructuring. Q4 also came in up 4.7% versus the prior year's $12.7 million in revenue. Growth was driven by continued direct-to-consumer momentum across our diversified botanical wellness portfolio, including expanded sleep and functional gummy mushroom offerings, the Brightside low-dose hemp THC gummy line and new minor cannabinoid formulations. Gross profit for Q4 was $5 million with a gross margin of 37.5%, and I want to provide important context around this number. The reported margin was significantly impacted by a nonrecurring $1.3 million inventory charge related to the disposal of legacy gummy products that did not meet our quality standards, which alone reduced gross margin by about 10 percentage points. Excluding this item, the underlying gross margin performance improved meaningfully. In-house manufacturing, net of onetime inventory charges contributed approximately 400 basis points of margin benefit in the quarter, validating our vertical integration strategy. We also saw improvements in the B2B channel mix following our Q3 restructuring driven by a reduction in trade spend. Our direct-to-consumer promotional efficiency improved as we shifted from broad discounting to targeted cohort-based campaigns. We expect gross margin to normalize toward our historical 50% range as we lap transitional items and as production efficiencies continue to scale. Total SG&A expenses were $10.6 million in Q4, consistent with the prior year and slightly higher than Q3. The quarter included several discrete nonrecurring items that impacted comparability, including a $600,000 state sales tax audit accruals and certain contract termination and timing adjustments. Excluding these items, our underlying operating expense base remained consistent with the structurally lower cost profile established throughout the year. Total net loss for the fourth quarter was $11.4 million or $0.07 per share compared to a net loss of $3.4 million or $0.02 per share in Q4 of 2024. Looking at full year results. Consolidated net revenue of $49.9 million increased 0.5% year-over-year, modest but significant as it was our first annual revenue increase since 2021. Full year SG&A expenses were $42 million, a 21.2% decrease from $53.3 million in 2024. This reflects the successful execution of our comprehensive cost optimization strategy, which has now reduced annualized SG&A by approximately $33.6 million or 44.5% over the past 2 years. We believe our cost restructuring is now largely complete. Going forward, we expect quarterly SG&A for the core business to remain in a normalized range of approximately $10 million to $11 million. Excluding anticipated launch spend for the previously mentioned Medicare coverage program. Net loss for the full year was $29.7 million or $0.19 per share compared to $29.8 million or $0.19 per share in 2024. This year, the full year net loss included a noncash change of $6.4 million in the fair value of the company's debt derivative and our investment in DeFloria. However, notably, our operating loss for 2025 improved by more than 36% to $20.3 million, a significant improvement from the $32 million operating loss in the prior year further demonstrating the impact of our cost restructuring. Turning to our cash flow and liquidity. Fourth quarter net cash used in operating activities decreased to $1.9 million compared with $5.5 million in the prior quarter and $1.8 million in Q4 of 2024. For context, quarterly cash change reflects the timing of cash outlays relative to accrual-based expense recognition so there is a natural variability quarter-to-quarter. In addition, our third quarter expenses always experienced a greater cash outlay than other quarters due to the timing of business insurance renewals. That said, the Q4 result demonstrates continued progress. Cash and working capital as of December 31, 2025, were $8 million and $21.7 million, respectively. It is important to note that this cash position does not reflect the BAT private placement, which adds $10 million in fresh capital, strengthening our liquidity and working capital position heading into this next critical phase. Before I hand it back to Bill, I do want to underscore the financial significance of the BAT transaction, which fundamentally changes our financial position. The transaction is transformational for our balance sheet eliminating material liabilities and adding fresh working capital. We are evolving from a company carrying significant debt obligations into one with a clean equity-based capital structure and a highly aligned strategic partner with a stable operating base, improving gross margins from in-house manufacturing and the capital to pursue the growth opportunities now emerging, we are well positioned for the next chapter. With that, I'll turn the call back to Bill to discuss our business execution and outlook. William Morachnick: Thanks, Erika. All right. So let's bring this all together. 2025 was a defining year for Charlotte's Web. We stabilized the business. We returned to annual revenue growth for the first time in 4 years, reduced our cost base by 44% over 2 years. Launched our boldest product innovations to date and laid the operational groundwork for what comes next. And I want to share one more data point that speaks directly to operational readiness. This month Charlotte's Web completed its annual NSF dietary supplement good manufacturing practices audit and received zero findings. For those unfamiliar, that's the gold standard of manufacturing compliance for dietary supplements. And achieving zero findings is an exceptional result. It reflects the discipline and the rigor of our quality team and validates the manufacturing infrastructure that underpins everything we do, from the products on our website to our qualification for federal health care programs. When we say Charlotte's Web is built to meet the standards that regulated health care requires, this is exactly what we mean. Let me share with you quickly what excites me about what's ahead. The CMMI Medicare pilot program, the presidential executive order, bipartisan legislative momentum for a rational federal framework, the advancement of DeFloria through FDA clinical trials and now a clean balance sheet with a well-capitalized strategic partner standing behind us. These are not speculative possibilities. They are real catalysts unfolding now that have the potential to fundamentally transform the scale and scope of our business. We built Charlotte's Web for moments exactly like this. Our brand, our science, our manufacturing capabilities and our regulatory engagement have positioned us to be at the forefront of the hemp industry's integration into mainstream health care. I want to take a minute to thank all of our shareholders for your continued confidence and patience. I know this has not been an easy ride, but the work of the past 2 years is now converging with the most favorable external environment our industry has ever seen, and we intend to capitalize it. Operator, we're now ready for questions from our analysts. Operator: [Operator Instructions] First question comes from Pablo Zuanic from Zuanic & Associates. Pablo Zuanic: Good morning, everyone. Look, I obviously have a lot of questions that I want to ask here given all the very positive news and of course, positive performance. Let me start with the CMS program. A few questions there. Precisely, when we talk about participating centers, what are these participating centers in the CMMI program? Which type of companies, are these established doctor offices or are these new setups, can Charlotte's Web own some of these participating centers. If you can give more color in terms of what are the participating centers in the CMMI program? Mindy Garrison: Well, good morning, Cory. This is Mindy Garrison here with Charlotte's Web, and thank you so much for your question. The participating centers are health care organizations that are already enrolled in specific CMS Innovation models. There are 3 actual models at play right now. The first 2 are ACO REACH and Enhanced Oncology Model or the EOM program, both of which can begin offering CBD, the Substance Access BEI hemp-derived products starting tomorrow, April 1. The third is an ACO LEAD Model, which is expected to launch in January of 2027. So these are not actually new facilities created for this program, they are established physician practices, health care systems, all combining together under an accountable care organization that are managed -- managing Medicare patient populations. The initial cohort under ACO REACH and the Enhanced Oncology Model, address approximately 2 million Medicare beneficiaries. Over time, as additional models come online, particularly the LEAD model and potentially the Medicare Advantage model, the addressable population will expand significantly towards a broader 67 million Medicare beneficiary base. And please excuse my mistake Pablo. Again, I really appreciate your question. Pablo Zuanic: And then just a follow-up on the same subject. Who is going to fund the $500 per patient per year under the BEI. Is that Medicare? Or is someone else funding that? And as part of that question, I'm assuming that the participating center will issue a prescription and the patient will go on your portal and order the product from you. So if you can just clarify in terms of who funds the $500 and then the logistics in terms of how the patients can access the product. Mindy Garrison: All right. Thank you, Pablo. Another really great question. And there's an important distinction here in that Medicare is not directly reimbursing these products. The participating ACOs and EOMs that I just talked about a few moments ago, will purchase the eligible hemp-derived CBD products using its own funds and furnishing them to its Medicare beneficiaries as part of their broader care strategy. The economic rationale for an ACO to participate in the Substance Access BEI and the hemp-derived products is that it will contribute to better patient outcomes, lower total cost of care, reduced hospitalizations, fewer high-cost interventions and lower pharmaceutical utilization. So they benefit through the savings under the CMS model. So the $500 per beneficiary annually represents a maximum of amount that the ACO can invest per patient, funded from the ACO's own program economics, not from a Medicare fee-for-service system is a value-based care incentive, not a traditional reimbursement. To get to your second question about logistically how will this work? Charlotte's Web has built a portal specifically for ACO and EOM programs to access the hemp-derived products that will be eligible under the Substance Access BEI program. They will order the products as if you were issuing a subscription to a pharmacy, except it would be through our portal. And those products would then be drop shipped to the patient's home. So it is a little bit different in that it's actually not a prescription. It's a recommendation from a health care provider to begin utilization of hemp in the service of helping their patients become healthier and live healthier lives. Pablo Zuanic: That's very helpful. And then on the same subject, what revenues does Charlotte's Web will expect from CMMI pilots in 2026 and 2027. I'm not sure if you can talk about guidance here. And as I ask that question, I wonder whether the participating centers will be able to buy from other companies or is Charlotte's Web were the only one pretty much in the pilot. But any guidance the company can give would be helpful. William Morachnick: Yes, sure. Pablo. So I think the way to think about it without giving you a ton of specificity around modeling is this is really early days in the pilot program. So I think I mentioned earlier, it literally starts tomorrow. For that TAM that Mindy just referenced that 1.7 million, 1.8 million folks in the ACO, the patients in there and then another couple of hundred thousand in EOM. I don't foresee massive revenue opportunity for, let's say, the balance of this year. We have to build out the education for the participants. I'm going to frame it as the channel participants, which are these medical and health care practitioners and networks. So they've got to understand the value proposition that CBD represents. They've got to get comfortable with it before they're going to make the recommendations that Mindy referred to. So it's going to be a gradual build over the next 12, 18 months. And we're really positioning ourselves for how this program scales out. So we'll see an uptick, say, in that 2 million TAM over coming quarters, not a whole lot initially. And then as the Medicare Advantage program progresses, then you're talking about a very large number, I think I referenced it in my earlier talk there, Medicare Advantage is about half of the 67 million participants in overall Medicare so that turns into a very large TAM. But we've got to see the specifics around that program and how it's going to flow and what the economics are. In terms of who else is participating, there is no exclusivity. But presumably, there are going to be continuing standards that have to be followed for anyone participating in the program around quality, around safety, around efficacy. So we really like the way we're positioned because we believe we're at the highest standard as that goes. And we've got a really fulsome robust go-to-market strategy immediately to do the kind of training that I was referring to earlier as well as establishing the portal for both the consumer and the health care practitioner. So we feel very confident about the way it's going to scale, but I think it's just -- it's too premature to start modeling around that for your purposes. Pablo Zuanic: No, that's great color, Bill. And one last question on the CMS program. How is the CMS program going to be reconciled with the potential hemp ban that's going to become effective November 12, 2026. William Morachnick: Yes. You always ask the hard question, Pablo. So here's where it stands at the moment, as you're aware, but for all the folks listening. At this current time, we've got the "Hemp ban" that could trigger in November of this year. That's the way that the language in the Ag [ Appropriations ] Bill that was inserted in the continuing resolution in the fourth quarter of last year [ reads ] such that if we're capped -- if the industry is capped at 0.4 milligrams of THC per container, it basically demolishes the CBD industry as we know it. At the same time, talk about cognitive dissidence that makes your head blow up. We are deploying a program for seniors that has a 3-milligram THC cap per serving. So dramatically different scenarios. We're working very closely through our resources in Washington, D.C. and beyond to come up with a very meaningful science-backed approach to where these things can get synchronized to where there is federal regulation that has a consistency that can operate across the country that can deliver the level of efficacy that's required. So at this moment in time, it exists in a way that you framed it, if I may, that we have a potential ban on the horizon. At the same time, we're deploying a program to address seniors that have dramatically different product components to it. So we have to see how the next several months play out but we're feeling good and confident that the Griffith's bill as well as the way the FDA is looking at things is going to land in a place that is much more like the Substance Access BEI is trending as opposed to the language that we saw at the end of last year. Pablo Zuanic: I guess, Bill, before I move on, maybe just a quick follow-up. I mean, would there be a concern that maybe the participating centers will wait to have clarity on the ban before they start getting involved or not necessarily? William Morachnick: It's a fair concern and I can only share with you in the conversations that we've had thus far because we've already done our outreach to potential participants. So ACOs and EOM practices, we're seeing -- I would categorize it as a reasonably high level of enthusiasm for what we have to offer. They're very intrigued by the power that CBD brings to their patients for those need states that we talked about, that their patients suffer to a large degree from. So lack of sleep, anxiety and pain, and they're looking at CBD with a very high level of curiosity and open mind in this of how this can be a phenomenal alternative, both from a cost perspective and an efficacy perspective. So again, I think it's too early to know if I was to say, I don't have a big enough sample set to say where that will go directionally. But early indicators are leaning much more towards we want to get on board with this now because we want to provide these solutions to our patients as soon as possible. Pablo Zuanic: That's good. Look, I'll just move on to some questions about the quarter. Obviously, congratulations on the 16% quarter-on-quarter sales growth. Give more color in terms of what drove that. I know you had something in the prepared remarks, but more color in terms of what drove that? And is that sustainable? Erika Lind: Pablo, this is Erika. Thanks for the good question there. So obviously, for the increase that we had, there were several factors. We have had continued D2C momentum because our portfolio continues to diversify, and we're doing much more targeted campaigns to broaden the top of the funnel. We also purposely restructured our B2B channel so that we removed a lot of the underperforming accounts. And we also think because of that, we've got some retail customers who transitioned to our D2C portal, which has been very positive for us. And then Q4 also benefits from a strong holiday season as with many companies. So it's really the combination of those things that produce really the strongest growth we've had in quite some time. Pablo Zuanic: And then just in terms of your balance sheet, obviously, I'm looking here at the year-end '25, right, $8 million cash, you still have negative -- I mean, negative operating losses. But you do have the BAT transaction now. Maybe just to address on a pro forma basis, the state of the balance sheet and your path forward on cash management and also cash flow generation, specifically I'm asking CapEx there. Erika Lind: Sure. And I appreciate the question, and I -- and the chance to really provide context because I know it's something that people are really sensitive about right now. So obviously, we had $8 million in cash to end the year, but it does not reflect that $10 million in fresh equity through the private placement. That placement clearly significantly strengthens our liquidity and cash position. So -- but I think it's really as important to note that this conversion eliminates our $55 million in the debt principle plus the $10 million in interest and prevents us from having to pay another $12 million for the balance of the note. So that really gives us a lot of optionality. On the operating side, as you know, we worked really hard to rightsize this business. Over the past few years, we've reduced OpEx by 44.5%. That's significant. And obviously, we're going to maintain that cost discipline because that's the norm for us now. We will have some launch costs related to the Medicare pilot program, but our leaner cost structure, improved margins, the steady consumer demand that we're seeing and the additional working capital for the BAT transaction, really strengthens everything for us. And I do want to stress to shareholders that the completion of this transaction requires approval from the majority of the shareholders. BAT obviously does not vote on it. So the decision rests entirely with the independent shareholders. And I strongly want to remind everyone that their vote matters. I encourage you to enter your vote as soon as you receive your proxy, it only takes a minute online. And that would make a huge difference for us and our consumers. Pablo Zuanic: Right. And on the same subject, in terms of the BAT transaction, why did management and the Board think this was the right time to do it at this point? Erika Lind: I'll expand a little bit on Bill's commentary on that. Obviously, we have some extraordinary opportunities ahead of us. And the Medicare pilot programs DeFloria FDA pathway require us to be properly capitalized. We have to be unencumbered by debt, and we have to be positioned to execute. In this case, the opportunity drives the transaction. I -- to talk numbers a little bit, I do recognize that the conversion price is lower than the original CAD 2. But the implied enterprise value per dollar of revenue is actually higher today than it was in '22 and I think it's important for people to understand that. The lower share price reflects the company's reduced revenue base and the industry headwinds. It does not give preferential treatment to BAT. The current transaction is struck at a higher implied EV to revenue multiple at about 3.5x compared to the original '22 deal, which was at about 2.1 to 2.5x. Even though the share price is lower, the enterprise value per dollar of revenue is actually higher today. BAT is paying more per dollar of revenue and not less. And I think that's a reflection of CMMI and the DeFloria catalyst that didn't exist back then. I also know that there are some dilution realities to this. The debenture reduces the debt but it's -- the conversion reduces the debt, but that's not new money. And in terms of enterprise value, that's approximately neutral. The market capitalization increase while debt decreases by the same amount. And what fundamentally changes is the company's risk profile. The debenture overhang, the interest burden and the refinancing risks are all eliminated. This clean balance sheet all else being equal, justifies a lower risk premium, which means the same enterprise value translate to a higher fair value for equity holders over time. And the private placement represents the incremental dilution from new capital, which is approximately 5% of post-conversion shares. We believe that is a modest cost for meaningful working capital at a critical time to capitalize on our growth opportunities. Pablo Zuanic: Yes. And the only comment I would make is that, obviously, I agree that this was a source of overhang, right? I mean the stock -- your stock is up 14% up today. So seems that it was an overhang. So the clarity is helping and investors are responding positively to that. The last question on the subject. BAT now is going to own around 40% of Charlotte's Web, right? We know that BAT also own stakes in Organigram. They own stake in Sanity Group, which was acquired by Organigram. Can BAT own more than 50% of Charlotte's Web at some point or are there restrictions given that they are U.K.-based. Erika Lind: So a couple of important points on that. There are no restrictions based on the fact that they're U.K.-based. The investment is made through BT DE investments or what we call BDI. And that's a Delaware incorporated subsidiary. They will be the direct holder of the shares. However, in the agreement, there is a part 49% cap of ownership and anything beyond that would have -- would be a subject to the applicable securities laws, TSX rules and also potentially shareholder approval depending on the circumstances. So we did build into the agreement of 49% cap that protects us from that. Anything else would have to go through some measures. BAT has been very supportive. They're a noncontrolling strategic partner. And there's a governance framework in the investment rights agreement that's designed to preserve the Board independence and the management autonomy regardless of BAT's ownership. Pablo Zuanic: Right. Understood. Look at the very last question. There were some headlines this week about the FDA submitting a CBD Compliance and Enforcement policy to the White House for review. What do you expect from this week's OIRA meetings? William Morachnick: It's -- I haven't been successful thus far, Pablo speculating where these things are going to land. I want to give this a little bit of time to see how it plays out. We're really head down focused on this transaction was just completed and how we ramp up our readiness for the CMMI program. There's just so much noise in the system right now between federal regulatory, state regulatory, CMMI versus the other things that you brought up. I want to give this a beat to play out a little bit. We've got contingency plans under any potential outcome. But I think it's just -- it's too early and too speculative right now. Pablo Zuanic: Right. And if I may just ask a quick follow-up, right? So I mean, given the way the headline reads, CBD compliance and enforcement policy, is this something to make it consistent with the CMS program? Or is this something to address this hemp ban in November because I guess, I'm confused in terms of the timing and what does it relate to specifically? Because it has repercussions for both, right, in theory, for the CMS program and for what the ban may be in November. And I know maybe it's too early to say, but thank you. William Morachnick: Yes. I mean you're raising the root of why I have an upset stomach most mornings trying... Cory Pala: Bill, your line is disconnected or muted. I'm in a different office, so I can't tell if they've completely disconnected. Pablo, are you still there? Pablo Zuanic: Yes, I am, but we can leave it for a separate follow-up call if you want, Cory. Yes. Cory Pala: Yes. At the end of the day, it's too soon to know exactly where these meetings are going to go in the next few days. We are encouraged that they're occurring but too soon to speculate on exactly where that's going to go. But at the end of the day, we are seeing a convergence of policy. So that's encouraging. Okay. Well, then with that, we seem to have technical difficulties on our end, but that was your final question, I think. So we'll close it off here. I would like to thank everybody for participating on the call today. Pablo, thanks as always for your in-depth questions. And we will look forward to speaking to you all again in the coming months. Thank you. Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and we ask that you please disconnect your lines.
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: 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: 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: Greetings. Welcome to the Abra Group's Q4 FY 2025 Performance Call. [Operator Instructions] Please note, this conference is being recorded. I would now like to turn the conference over to your host, Maria Ricardo, Head of Investor Relations. You may begin. Maria Cristina Ricardo: Thanks, operator. Good morning, and thank you for joining us today. With me are Adrian Neuhauser, Chief Executive Officer of Abra; Manuel Irarrazaval, Chief Financial Officer of Abra; Gabriel Oliva, President of Avianca; Nicolas Alvear, Chief Financial Officer of Avianca; Celso Ferrer, Chief Executive Officer of GOL; and Julien Imbert, Chief Financial Officer of GOL. Our financial statements for the year ended December 31, 2025, as well as the presentation we will reference today are available on our investor website, abragroup.net. This call is being recorded, and a replay will be available shortly after the call concludes. Before we begin, I would like to remind you that on June 6, 2025, GOL successfully emerged from Chapter 11 reorganization, at which point, Abra became the controlling shareholder of GOL and began consolidating its financial results. Accordingly, GOL's results are included in Abra's consolidated financial results from that date forward. To facilitate comparability of financial and operational performance, our remarks today will reference pro forma results as if Avianca and GOL were combined for the full year periods presented for both 2025 and 2024. Today's discussion may include forward-looking statements, which are not a guarantee of future performance or results and involve a number of risks and uncertainties that are outside the company's control, including those related to the company's current plans, objectives and expectations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations. The company assumes no obligation to revise or update any forward-looking statements. We'll begin with an overview of the business, followed by a review of our operational and financial performance for fourth quarter and full year 2025 and closing remarks before opening the call for questions. With that, I will turn the call over to Adrian. Adrian? Adrian Neuhauser: Thank you, Cristina. Everyone, thank you for joining us. If we can turn to Page 4, please. This is the first quarter where we are presenting our consolidated results as a group. We're really excited about this and proud of what we're going to show you. Slide 4, for those of you that have not joined us before, is just a summary of really what we are. We are today the second largest airline group in Latin America with the result of the consolidation of 3 main carriers: Avianca, which is the #1 airline in Colombia, Ecuador and in Central America; GOL, the second largest airline in domestic Brazil; and Wamos, a European ACMI provider. By putting together those groups over a few short years, we've created -- or those airlines over a few short years, we've created the second largest group in the region with over 300 aircraft, 375 routes, over 70 million passengers a year, 30,000 employees. Importantly, the strongest order book in the region, both on the narrow-body and wide-body side and also an agreement in principle to acquire SKY, which would add to our footprint domestic Peru and domestic Chile. Turning to Page 5. What did we achieve this year? First of all, we -- as Maria Cristina highlighted, we successfully completed GOL's restructuring, emerging as the -- with GOL emerging from its bankruptcy as a more sustainable and competitive airline and with Abra resulting as the controlling shareholder of GOL. We continue driving synergies. Today, we have over $180 million cumulative in value creation by increasing coordination across fleet, procurement network, commercial and loyalty. And we strengthened our leadership team as we drive more coordination through the group. We now have a Chief Procurement Officer, Chief Loyalty Officer and Chief Corporate Responsibility Officers at the group level. On the operational side, we announced a robust incremental fleet plan and the expansion of our wide-body strategies, adding 330s and 350s to enable the future growth and drive more efficient operations. We enhanced our value by coordinating our airlines more and beginning the process of aligning our products to drive an improved travel experience and operational excellence. And we continue progress in sustainability, delivering ongoing improvements in fuel efficiency while improving connectivity in the region. What does this mean financially? It means we achieved a pro forma adjusted EBITDAR growth of 26%, $2.7 billion for the year at a 27.4% margin. That's an over 300 basis point increase. We ended the year with liquidity at over $2.5 billion, about 25% of our LTM revenues and net debt to LTM EBITDAR decreasing sequentially to 3.3x. Both of our important additional business units, Cargo and Loyalty delivered strong performance. Cargo, in particular, delivering approximately $1.6 billion revenue generation on a pro forma basis. And importantly, and we'll talk about this later on, we aligned accounting policies across the airlines in line with market standards. Turning to Page 6. So what are we today? As we said, second largest group in the region, both of the key airlines in the region performing admirably, 98.3% schedule completion for Avianca and 99.2% for GOL. Both airlines with some of the strongest on-time performance in the world, continue to drive brand loyalty, one of the largest loyalty programs in the world combined with over 46 million members, a 34% increase in premium customers through our networks, 7% increase in gross billings and the program member share of our total passengers on average at about 50%. We drove an enhanced customer experience. We upgraded our premium offering through Avianca and VIP lounges and Insignia check-in in Bogota, and we enhanced our long-haul Insignia experience on the transatlantic routes. We've rolled out Business Class across the entire Avianca network, and we announced the fleet expansion, adding 7 A330-900s to support international growth for the group. Up to 5 of those will initially go to GOL and 2 to Avianca. Turning to Page 7, consolidated business indicators. ASKs growing nearly 12% on -- for the group with load factors holding at above 80%, passengers increasing by 5%, average fare in the network increasing, PRASK holding almost flat and PAX CASK holding about flat. Turning to Page 8. If you look at the 2 carriers to understand what's going on in the underlying, both carriers showing strong growth in their networks. GOL, if you'll remember, putting its fleet back in the air and recovering its operations as it worked through its bankruptcy, but also an important redesign in the network with GOL increasingly focused on strengthening its Rio hub. Avianca continuing to grow by extending stage length and expanding flights out from Bogota into the rest of the region. Passengers in Avianca decreasing slightly as we extended the stage length over 7%, average fare increasing at GOL, passengers increasing pretty much in line with the growth of the network. PRASK at both companies holding in spite of the very strong network expansion and CASK at both companies -- at Avianca continuing to decrease slightly and at GOL holding basically flat, passing through a little bit of inflation at about 4%. Turning to Page 9, handing it off to Manuel Irarrazaval, our CEO -- our CFO, sorry, to continue with the conversation. Manuel Irarrazaval: Thank you, Adrian, and good morning, everyone. I'll walk you through our financial performance for the full year. Maybe we start in Page 9 on the pro forma revenues. Pro forma revenue for this year has increased 11% to $9.7 billion. That is driven in about 8% by passenger revenue and as Adrian was explaining before, and a very strong increase in other revenues in cargo and others with that increase is about 31%, right? In terms of EBITDAR, we -- the company delivered a very strong pro forma adjusted EBITDAR growing almost 26% to almost $2.7 billion for the full year with a margin of 27%. If you look at that number as of the fourth quarter, in particular, it had a margin of 30.6%, which is a very strong margin and reflects the great performance of bringing in GOL and the improvement of GOL's margin over the fourth quarter and a very favorable seasonality in the fourth. I would like to highlight that we are not highlighting the metrics below EBITDAR as depreciation and interest are available under our current accounting policies and therefore, kind of the year-over-year comparison is not very meaningful. However, the numbers are in the back of this deck. If we go to Page 10 and we look at the balance sheet, we have ended the year with a strong liquidity, almost $2.5 billion of liquidity, which implies a 25% ratio of liquidity over revenues for the year, which we believe is a very strong point. In terms of net debt, we had a 16.6% reduction of net debt over the year, mainly coming from the restructuring of GOL, right? That has taken our net debt to EBITDAR, the net leverage metric down from 5x before in '24 to 3.3x. And this is an important driver for us, and we will continue kind of deleveraging as time goes on. If we go to the next slide, Slide 11, you can see the performance for the fourth quarter in particular. You can see ASKs at 31.2 with a load factor of 82.6%, which has helped us deliver an EBITDAR margin of 30.6%, as I said before, and again, highlight to you the level of leverage and liquidity that we are finishing the year. Going next to Page 12 exactly. I will also I will also touch on the point of the fuel volatility. As you all know, we have been monitoring very closely the events happening in Middle East and the impact that fuel has on our operations. In general terms, in these months, a $1 increase in jet fuel price has resulted in a $70 million impact on our monthly fuel expense, which means that to compensate that, we would need to increase prices in about 10% for every dollar that has increased. What have been we doing? On the right side, you can see that we have hedged 50% of our fuel needs for the months between March and May. putting in place a zero cost collar with a call strike at $2.45. That was a very good protective measure that we took right before the war started. And we have increased that hedging recently with another 14% of the fuel needs until the end of August at a strike price higher, of course, because the market has moved up significantly. In Brazil, in particular, the fuel pricing mechanism going through Petrobras allows the companies to feel the impact of fuel with a month of delay, and that has given the company time to try to pass through some of this into price. We continue to work with -- our commercial teams continue to work very disciplinedly on price management and being able to pass prices over to the tickets and to compensate for the increases of cost. With that, I finish this section on the financial results, and I will pass it over to Gabriel so that he can cover Avianca's full year performance. Gabriel, all yours. Gabriel Oliva: Thank you so much, Manuel, and welcome you all. If you turn to Page 14, I will give you highlights of Avianca's full year performance in 2025. More on the operational level, as Adrian commented, we're pretty proud of what we achieved. We continue expanding our network. We launched 13 new international routes with 4 new, completely new destinations, reaching more than 160 routes finishing the year, 83 destinations in 27 countries. As it was commented before, we finished that reallocation of capacity, moving -- expanding our stage length, moving capacity from Domestic Colombia into international markets, driving more than 7% our stage length and a much more healthier and balanced supply-demand dynamics. We continue -- and we continue investing. We invested and we continue investing in our product and brand loyalty. Right now, we have completed our rollout of Business Class in the entire network, including all our domestic markets. We opened new VIP lounges and dedicated Insignia, which is our transatlantic business class check-in space in Bogota and strengthening our premium customer and loyalty value proposition. And in the operational level, as it was touched upon before, we delivered a very robust performance, which we are proud of, while we navigated 3 industry-wide challenges with the engines that affected most of our family types of aircraft. On the financials, we achieved at Avianca an adjusted EBITDAR of $1.5 billion, which was more than 20% growth year-over-year at 26.5% margin, more than 200 basis points growth year-over-year. As Manuel was saying, on Avianca, we continue reducing our net leverage sequentially to 2.7x and liquidity reached $1.4 billion, which is close to 25% of last 12 months revenues. And that includes a $1,200 million undrawn revolving credit facility. And our business units were very proud of the performance they achieved. Cargo, a strong performance with market dynamics supporting that, and we completed our strategy of a network redesign, refleeting our cargo network right now having 9 A330 freighters across our cargo network. And in Lifemiles, we reached 16 million members and customers by year-end, which is more than 14% growth year-over-year. And at Wamos, we delivered its full year -- first full-year performance within the group, supported by very strong widebody demand. So turning to Nico to get more into the financials. Thank you very much. Nicolas Alvear: Thank you very much, Gabriel, and good morning, everyone. Turning to Slide 15, delving deeper into financial performance. You can see that Avianca generated EBITDAR of about $1.5 billion, up 21% year-over-year, with margins expanding by over 200 basis points to 26.5%. Importantly, fourth quarter EBITDAR, which you can see in the appendix, reached $463 million at a margin of almost 30%, which is about 60 basis points stronger versus last year. So overall, this reflects the combination of disciplined capacity growth, improved network efficiency, continued cost control and higher premium revenue generation driven by the rollout of Business Class across our network and the strengthening of our loyalty program. Also, as Gabriel mentioned, our Cargo business, Lifemiles and Wamos posted remarkable performance during the quarter and the year. You can appreciate that EBITDAR generation translated into continued balance sheet strength with liquidity increasing $110 million to roughly $1.4 billion, representing about 24% of last 12-month revenue. And notably, our net leverage declined to 2.7x, down sequentially from 2.8x in the prior quarter and from 3.3x in the prior year, driven by EBITDAR growth and relatively stable net debt. Between early 2025 and early 2026, we continue to strengthen our capital structure, refinancing approximately $1.75 billion of debt, mostly our bonds to 2028, pushing out maturities to 2030 and 2031 and optimizing the use of our collateral. So overall, our operating performance is giving us greater flexibility to manage through the cycles, continue investing in our business and our customers and contribute to the broader Abra platform. And with that said, I'll turn it over to Celso to discuss GOL's 2025 performance. Celso Ferrer: Thank you, Nico. And moving forward to Page 17. I want to share the GOL highlights for 2025, which was a really transformational year for GOL, as mentioned, marked by a successful completion of the Chapter 11 process in June and strengthening the capital structure of the company, which provides a solid foundation going forward. Operationally, the focus has been on increasing capacity with discipline. We saw a strong year-over-year capacity growth in international markets, reaching more than 13 countries. Domestic growth was supported by 11 aircraft returning to service and improved fleet availability. Importantly, that capacity has been deployed where the demand is strong and where returns justify it, consistent with the strategy that GOL has outlined over the course of the year. At the same time, GOL continues to benefit from its leading position in Brazil with a strong presence in key markets such as Sao Paulo, now more than ever, Rio de Janeiro and Brazil, including slot-constrained airports that support frequency and commercial relevance. The network is a high frequency with strong connectivity that drives both cost efficiently and customer preference, supporting health load factors as capacity increases. GOL is also beginning to selectively expand its long-haul operation in international markets, including the recently announced Rio JFK service. Operational quality remains a clear strength. GOL was the #1 airline in Brazil for on-time performance for the second consecutive year, which supports both customer loyalty and commercial performance. From a commercial perspective, Smiles continue to be the core driving of earnings quality with a large engagement from its base and diversified partnerships ecosystem that supports recurring high-margin cash flow generations. In Cargo, GOLLOG continues to perform very well, supported by the addition of 2 dedicated cargo aircraft, totaling 9 aircraft at the year-end, strengthening the Mercado Livre partnership and benefiting from a strong demand in e-commerce and express logistics. So overall, what you see in GOL is a disciplined recovery, increasing capacity, maintaining strong operational quality and strengthening the business commercial and earnings profile. Julien will speak about our financial results. Julien Imbert: Thank you, Celso. Moving to Slide 18. We are very happy to report that once again, we're outperforming on our plan since emergence. So it's the third quarter that GOL has been outperforming the [ 50 ] that we had published at emergence. If you look at EBITDAR, we reached an EBITDAR of $1.2 billion, which is an increase of 32% versus last year and a margin of above 30%. This is driven mainly by our growth on capacity growth plus price growth in local currency and our continued control on our cost. Liquidity also is ever stronger at $1 billion in liquidity, representing 25% of our last 12 months revenue and a significant increase versus the position of last year with 43% increase versus 2024. Regarding net leverage, we've been able to reduce our net debt over EBITDAR to 3 turns in 2025, accelerating the deleveraging of the company and pursuing our commitment to a healthy balance sheet. We are very happy with those results that underline our purpose of being the first airline for everyone, our clients, our investors and our teams. And we continue to deliver on our plan with consistency and discipline, building an ever stronger goal. With that, I will now turn the call back to Adrian for closing remarks. Adrian Neuhauser: Thanks so much, Julien. So to summarize, and as I said, really, really proud of the network of the results we're delivering this quarter. First of all, a continued focus on customer experience, boosted by differentiation and brand loyalty as we integrate the power of the 2 brands, but also take advantage of the increased connectivity and frankly, of the know-how that each of the 2 companies brings in creating a unified customer experience. Number two, revenue growth and disciplined cost management that drove higher margins; three, adjusted strong adjusted EBITDAR and liquidity and continued balance sheet deleveraging and very, very proud of the results our business units are delivering through the year. With that, I'd like to turn it over to I'd like to turn it over to Q&A. Operator: [Operator Instructions] Your first question for today is from Mike Linenberg with Deutsche Bank. Michael Linenberg: Great way to finish up 2025. And obviously, now as we look into 2026, the high energy prices are kind of the front and center of focus. I saw that you have these hedges, clearly opportunistic. What are you currently paying for jet fuel? I mean I saw that in the context of that $4 per gallon jet fuel hedge. What are we seeing today? And then can you kind of give us a view on how you're thinking about your capacity plan for this year? I mean I know we're starting to see other carriers sort of rethink near-term growth plans as they deal with higher fuel prices. Manuel Irarrazaval: Thanks, Mike, for the question. And yes, I mean, it's been an interesting start of the year with these movements. In terms of what are we paying for fuel today, there is a certain delay in kind of the cost of fuel as kind of our suppliers have some inventory. So we are today kind of spot price today where kind of outside of Brazil, I would say, is around $4, a little bit under that. In terms of the -- that is the fuel price that we're paying without kind of taking into account the hedging, right? In Brazil, it's going to be lower. I don't have the exact number here, but it's going to be lower than that. Then on top of that, you have the compensation that is coming from the hedges, right? From March, April and May, we have -- half of our volume is capped at the $2.45 that I referred to before. So that's what we're paying. And that is mostly -- that is the fuel that is being consumed outside of Brazil, right? And Brazil still hasn't seen -- we're just starting to see kind of the new price -- the price reset now on the 1st of April, right? So you're going to start to see an effect of the price increase going forward, right? Adrian Neuhauser: And so with regard to capacity, Mike, if you were to look at our sales curves today, what you'd see is the following, right? We've started pretty aggressively passing through the increased cost of fuel, right? So we're not relying on the hedges to boost margins. We're basically using them as a way to soften the transition to new pricing as we drive the pricing up. And obviously, there's a lag there, right? If you were to look at pricing in Brazil today, we're up, and I think the industry broadly is up about 30% from where we started a little over a month ago, which if that holds, right, that's pretty much a full pass-through of [ mid-4 ] fuel. Now obviously, because you've sold lots of bookings forward, there's a mix of bookings that you sold at lower prices, bookings that you sold at high prices, and it's going to take the better part of 3 months even with the new pricing levels for your average pricing to catch up. And then the second part of that is how much of that turns into reduced demand because that will ultimately answer your question, right? What we're seeing so far is that the short end of the booking curve is holding up pretty well. And -- but you're seeing the later bookings not come in, right? And the question is, do they show up later? Or do they -- which interestingly, if you think about what later means today, later sort of means the beginning of summer high season, right? And so it's not a crazy bet to assume that they will or do they fall off, right? We've started in Brazil, in particular, thinking about some tactical reductions sort of in the single -- low single-digit percentages of ASKs. But the reality is we don't know yet, right, how elastic is that going to prove and how much we need to react to that, right? So we're looking at it constantly. And as soon as we sort of start to see near-term bookings taper off, that will be a strong sign that we need to cut back on supply, right? On the Avianca side, the pass-through has been, I'd say, less effective. It's a more complex competitive set, right? You have over 20% of your ASKs deployed into Europe. The Europeans are largely hedged. You have 35% of your ASKs deployed into the U.S. The U.S. carriers, in spite of their big talk have actually been slower at sort of driving pricing up, at least in our region [indiscernible] and they've been slow followers as well. So we're slightly under 10% increase in pricing at Avianca. And again, we need to get to sort of the mid-20s, right? So call it 1/3 of the way there. And sort of the same dynamic, right, less to no impact on the near-term bookings, which is interesting because we've been in a low season. But a pretty strong drop-off in the long-term bookings, which is interestingly because -- which is interesting because those are high season bookings, right? So right now, I don't want to sound sanguine because this is obviously an unexpected sort of shock to the system, right? And it's not a positive shock. But between the hedges, between the effectiveness of our ability to pass through and between the near-term booking curve holding up even in low season, we're pretty optimistic about summer demand. You may see us pull back a little bit of capacity here and there, but we haven't yet decided to sort of make wholesale reductions, certainly not into the summer, right? If we see this dynamic holding up for a few more months and then sort of have to extend higher pricing into the much more elastic sort of post-summer shoulder season, that's a different discussion. Michael Linenberg: All right. Well, very encouraging that you guys are -- you appreciate the elasticity and are considering tactical moves if this fuel regime or environment continues, or it persists. So thanks for the thorough answer. Manuel Irarrazaval: Mike, to go back to your question around the fuel, in Brazil, in particular, the price announced by Petrobras for April is BRL 6.85 per liter, right? That translates into about $4.9 per gallon, which remember, that includes a non -- insignificant amount of taxes. And that -- so you have a reference is about a 55% increase against the price that was -- that we paid during March, right? Remember that in Brazil, the price kind of reflects the average of the previous month, right? So you're seeing -- you saw 55% increase when kind of world jet fuel prices increased kind of on spot is more, it's double, right? So it's a moderated increase by Petrobras for the month of April and then probably May, you're going to see the pull back, right? Adrian Neuhauser: And Mike, one more comment on your comment. We are cautious on elasticity. Again, like I said, we're monitoring it. The bigger concern, I think, for everybody should be less the price elasticity side, if you think. If you think about -- and this is an interesting data point, right? Because both GOL and Avianca have been pretty effective in keeping their costs in line and in driving higher loads, a 30% pass-through to fares would put 2026 fares on real terms at the same price we were charging in 2019, right? So you're actually interestingly not talking about sort of taking pricing to where it's never been, you're really sort of catching to inflation. So we are concerned about elasticity, but we're not panicked about it on the price elasticity side, right? If you have to think about what are we monitoring more long term, we're monitoring economic slowdowns and then income elasticity, right? Because that would have a much more significant impact, we believe, on demand than the fare pricing that we're passing through, in particular, when the entire market passes it through as well. Operator: Your next question for today is from Savi Syth with Raymond James. Savanthi Syth: I just -- maybe I appreciate the tactical capacity adjustments you might make. But I was wondering if you could talk a little bit about maybe the core capacity plan at Avianca and GOL this year and kind of where that kind of growth might be focused? Adrian Neuhauser: Sure. Celso, do you want to start with GOL and then we'll hand it to Gabriel for Avianca. Celso Ferrer: Yes, Adrian, I can. Savi, thanks for the question. And we have -- as I mentioned, 2025, we were like catching up the capacity that we lost during the pandemic. And basically, by creating connectivity, design the new network with the entire Abra team focused in regions where GOL used to be strong, but we see even higher potential for the company right now. I can give you two examples. One is Rio, the other one is Salvador that we are -- that both concentrates more than 86% of our growth in 2026. In Rio International, we have created a very strong position, high frequency where we believe if we need to do some tactical reductions, we will be able to recapture most of the demand as the whole industry continues to be and follow the rationalization. So we are monitoring very close. As Adrian mentioned, no decision, and we are not looking for restructuring of the network. We are confident. You saw our results, I mean, with ASK growth and unit revenue growth. So we are, I mean, monitoring close and doing these adjustments so far, okay? Gabriel Oliva: Sorry, Celso, go ahead. Celso Ferrer: No, no, please Gabriel. Please, go ahead. Gabriel Oliva: So on the Avianca side, as we commented and we were talking last year, we did this capacity shift to have a more healthy supply and demand balance, right? We extended the stage length more on the international side, and we did some adjustments in Domestic Colombia. As we think about 2026, our initial plan was a modest growth within the mid-single digits, right? And that comes on really not getting so much narrow-body fleet this year. So adjusting the network throughout the same pattern, but not a high growth. And on the wide-body side, it's really, as I said before, and we commented before, right, last year, we had this -- all these disruptions due to the wide-body engines that we commented on the last call. So it's more about putting our network on the wide-body side that getting all the [ 78s ] and all the 2 A330s that Adrian commented. So in a nutshell, we were not thinking on a high growth in the network this year, and it's basically keeping kind of the same pattern that we were having last year into this year. Operator: [Operator Instructions] Your next question for today is from Pablo Monsivais with Barclays. Pablo Monsivais: Just a quick question in terms of OpEx and CapEx. At this point, are you thinking of any measures to reduce the cash outlays, assuming the situation continues with a very high oil price? Manuel Irarrazaval: Pablo, thank you for the question. We are always looking at ways to optimize our OpEx and CapEx in particular, where kind of the amount of the CapEx around engines has turned to be more significant. We're also looking at ways, Pablo, of taking advantage of facilities or kind of using local facilities to be able to fix engines in Brazil, for example, which would give us also some kind of support in terms of being able to finance those. But yes, we are, of course, working on optimizing the CapEx and the OpEx plans. Operator: Your next question for today is from Guilherme Mendes with JPMorgan. Guilherme Mendes: I appreciate the comments on the first question about the demand outlook. Just following up into that, if you can break it down between different segments, think about leisure and corporate and domestic and international. When you say that you're increasing prices by 30% in Brazil and roughly 10% in Colombia, is this across the board for different segments? Or there's a difference between leisure and corporate and domestic and international? Adrian Neuhauser: No. What I'd say, we can dig into this more, right, offline. But what I'd say is, look, conceptually, it's across the board, right? We've tried to increase across the board. Obviously, there's some self-segmentation, right? If we're saying the shorter end of the booking curve is holding up very strong, the longer end of the booking curve is where we've seen some still TBD, if it's reduced demand or simply delayed demand. The shorter end of the booking curve tends to be more business focused, right? So we're passing through on everything. But what you're seeing is the leisure customer not book up as early as they would. And that's sort of natural, right? You'd expect the people that they thought the summer ticket was going to cost X, right now it's costing 1.3x. They look at it and they say, well, let's wait a bit before we book it and see if it drops, right? So I think there's some sort of self-selection there that's not us segmenting where we raise prices and where we don't, but sort of how people -- how different parts of the market react to changes in our pricing curves. In Colombia, as I said, it's a little different because even though we raise fares across the network and we intend and push for our pricing to go up and hope that our competitors will follow. The nature of the network means that you've got different competitive sets, right? So when you say international, again, our U.S. fares, we've been through -- don't quote me on this, but 3 or 4 price increases. I'd say 3 have stuck and we've had to pull back. And it has to do with whether competitors follow or not, right? And that has to do with sort of the competitive set you're playing against, right? In Europe, the European carriers have been much less willing to raise fares. I think that the position they're taking is they're more hedged and they're using that to try to capture market share. They're also driving some pretty extraordinary margins on their Far East routes, right, as connectivity sort of goes through Europe and avoids the Middle East, that's also giving them some incremental margins and allowing them to not pass through as quickly on the Americas route. So in those cases, we're probably 25% of the way passed through instead of 30%, right? So it depends more on who you're competing against than us segmenting international versus domestic versus what have you. Does that make sense? Guilherme Mendes: Very clear. Operator: Your next question for today is from Gavin McKeown with Amundi. Gavin McKeown: Just last question I have is in relation to the additional hedge that you mentioned. Can you give us any color as to whether or not that was at GOL or at Avianca? Manuel Irarrazaval: No. Look, the hedges themselves, we take them at Avianca, which is the company that has less -- has a more direct impact from changes in fuel prices, right? And of course, the company that has more ease to find with banks and other things, right? So -- but yes, they're being taken at Avianca today. Operator: Your next question for today is from Nicolas Fabiancic with Jefferies. Nicolas Fabiancic: Just had a few quick questions here. On GOL, if you could please expand a little bit about liquidity, especially when we look at liquidity without the credit card receivables, any thoughts there in terms of alternatives, things you could do with the intercompany loan or any contemplated reshuffling of the GOL capital structure at this stage? Regarding Abra, similar question. We have the '29s bond. I see that it's callable in October. So just any updated comments around liability management or refinancing for the Abra '29s or the term loan? And then at Avianca, you've made great progress with the refis there. There is the stub left over for the '28. If you could give us an update on liability management at Avianca. And also, I just wanted to ask about Avianca, the CapEx plan if you could give a little bit more detail on CapEx for 2026. Manuel Irarrazaval: Listen, let me -- thanks, Nicolas. Let me start by addressing Abra in general, and then we can go into the different points, right? The liquidity position that we have across each of the companies is very strong. In the case of Avianca, we have -- we finished the year with $1.4 billion of liquidity. That includes the revolving credit facility. At the level of GOL, we have about $1 billion, which includes the receivables, which, as you know, in Brazil, is a fairly liquid asset that you can get -- you can sell off. It's like having a revolving credit facility. Now in terms of kind of you're asking about the capital structure of GOL itself, there is no plans today to do anything around that. The company is in a strong position and has been deleveraging over time. Of course, we are looking at CapEx and OpEx and kind of how do we make sure that we keep our liquidity levels and our cash levels, in particular, at a reasonable amount going into this. But there is no plans or kind of things that I would comment on doing liability management at this point, right? And that's in general for the group. I think that given kind of the market environment today, I think liability management are not in discussions today. Same thing with Avianca, right? In Avianca, if you remember, we did a couple of refinancing at the beginning of the year. We brought down -- we repaid a big part of the '28 notes with a bond that we did at the beginning of the year and recap that we did in later in January. And there's about $400 million of the '28 notes outstanding. We have no plans on doing anything with those in the short term, right? And our financings at Abra, yes, we're approaching kind of the end of the non-call period, but that's a bigger question. In the market that we have today, I don't see that we're doing anything in the short term. And just to be clear, on the GOL liquidity that you see and the cash that you have there, that is real cash and liquid facilities, right? I mean, and liquid assets. So it's not -- we're just showing you there the cash and the factorable receivables. Anything -- any kind of receivables that is not factorable, we will not include there. Operator: [Operator Instructions] We have reached the end of the question-and-answer session, and I will now turn the call over to Adrian for closing remarks. Adrian Neuhauser: Thank you, everyone, for the time you spend looking at us. Again, really proud of the quarter we've delivered of the evolution of the company as we put it together in a very short time. The synergies we're driving, the growth that we've driven, the margins that we think are second to none in the region. We're really proud of what we've delivered. We're working through the fuel situation, as you can see, pretty effectively, the hedges have put us in a great position to work through it and pass through pricing as we head into summer high season. So all in all, even with the geopolitical backdrop that we're dealing with, very, very excited for what the year will bring. So again, thank you all for spending the time, and we'll be talking to you shortly. Manuel Irarrazaval: Thank you very much. Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
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: 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 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.
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: Welcome to the 2025 Annual Results Presentation of Singamas Container Holdings Limited. First of all, I'd like to introduce you to our management of the company, Mr. S. S. Teo, Chairman and Chief Executive Officer; Ms. Winnie Siu, Executive Director and Chief Operating Officer; and Ms. Rebecca Chung, Executive Director, Chief Financial Officer and Company Secretary. Mr. Teo will now present the company's annual results. All the financial figures in the presentation are in U.S. dollars, unless otherwise stated. Mr. Teo, please. Siong Seng Teo: Thank you. Good afternoon, friends, ladies and gentlemen. Thank you for joining us this afternoon. We will go through the presentation by looking into Singamas' corporate profile, industry dynamics, financial and business review. As an established container manufacturer, leasing, logistics and depot service provider, we currently operate 5 factories in China. Our total annual capacity is now at about 270,000 TEU of dry freight and ISO specialized container and about combined capacity of 21,000 units of tanks and customized containers. For leasing business, we currently own a fleet of about 180,000 TEU containers. Singamas is also operating 8 container depots across 7 major cities in China and 1 logistic company in Xiamen. This slide shows the ongoing upgrade of our Huizhou and Shanghai manufacturing plant designed to enhance capacity and capability of energy storage system ESS container orders. At Huizhou plant, the upgrade is aimed at boosting overall production capacity. The facility has been equipped with advanced robotic and automation application to meet the rising demand for ESS containers. At our Shanghai plant, we have expanded dedicated production line for high-value customized containers, including Battery Energy Storage System, BESS containers and AI Data Center containers. This has enabled elevated development of our integrated business. In year 2025, annual capacity for customized container at Shanghai plant has increased to 7,200 units. The next 3 slides, Slide 7 to 10, cover our product ranging from traditional dry freight and ISO specialized container to innovate customized container include customer containers for ESS, data center, car racks, housing and more. And we also provide a full range of container solution services. The core product of Singamas' customized container is ESS, energy saving system. This container facilitate efficient electricity storage and release, benefiting users by allowing electricity consumption at lower period. ESS container ensures stability in new energy power generation and are designed to withstand extreme condition for normal operation in challenging environment. Green Tenaga is our wholly owned subsidiary in Singapore, dedicated to accelerating the journey towards net zero emission and carbon neutrality. Through its BESS solution, it form a pivotal element in our commitment to delivering comprehensive green energy solution worldwide. In 2025, Green Tenaga partnered with Singapore A*STAR ARTC to co-develop an analytic power energy management system that enhanced battery health, energy efficiency and intelligent sustainability energy solution for BESS. In our collaborated in a collaboration with the Institute of Technical Education to co-develop an ESS training program for the youth in Singapore. With this program, Singapore Singamas contribute to its ESG goal through fostering new energy talent development, enhancing ESS safety standard and supporting low-carbon economy transition. Next, for our leasing business. Significant growth was recorded for the business this year. By the end of 2025, we own a fleet of about 18,000 TEU leasing containers, 18,000. Singamas is a major operator of 8 container depot in China. We maintain strong tie with key port operators in the countries and foster relationship with major global shipping and leasing company. Our logistics service business focused on enhancing warehousing capability, integrating multimodal transport resources, improving digital operational capabilities for efficiency and collaborating with service provider to expand network coverage. This slide shows Drewry's analysis of global dry freight container production and pricing trend of January 2026. For the year 2025, worldwide dry freight container production was 6.5 million TEU, far exceeding the initial market expectation. However, it has led to significant surplus worldwide. As the market is expected to regulate the surpluses in years to come, Drewry forecast the industry production for the year 2026 will decline sharply to 3.6 million TEU. On pricing, the average price of a 20-foot standard dry freight is expected to reach USD 1,710 for the year 2026, a year-on-year increase of 2.6%. This trend highlights a market transitioning from over production to caution rebalancing. According to Drewry, long-term lease rate for all standard dry freight containers dropped sharply during 4Q 2025, and leasing rates are projected to remain subdued in the next few years. This forecast from Drewry Q1 2026 provide a solid baseline for market stabilization. However, they were made before the major disruption from the Middle East war, including rerouting around the Cape of Good Hope, elevated fuel and insurance costs. These emerging factors or rather disturbing factors may affect short-term leasing rates and recovery trajectory in ways not reflected in the current forecast. That means the war in Middle East have created many issues, and this may affect what we forecasted. This chart shows Singamas' average selling price trend of 20-foot dry freight container and related steel costs over the years. Despite better-than-expected global trade volume and ongoing new container vessel order, U.S. tariff and trade policy continue to create market uncertainty, leading to softer container demand in the second half of 2025. Consequently, the average selling price of 20-foot dry freight container dropped 12% to USD 1,752 in 2025, meanwhile, container steel average cost dropped about 11%. Now let's move on to the financial review section. Revenue decreased by 17% to USD 481.5 million due primarily to soft market demand and overproduction in previous year. Consolidated net profit attributable to owners of the company decreased by 48% to USD 17.4 million. Basic earnings per share was USD 0.0073 for the year compared with USD 0.0143 in 2024. Net asset per share was USD 23.30 as a year of 2025, almost the same as previous year. We have decided a final dividend of HKD 0.02 per share proposed for the year 2025. Together with the interim dividend of HKD 0.03, total dividend for this year was HKD 0.05 per share, representing a payout of about 88%. Let's move on to business review section. First, manufacturing. It shows the performance of our manufacturing and leasing business. This segment achieved revenue of USD 447.8 million, which accounted for about 93% of our total revenue. Segment profit before tax and noncontrolling interest was about USD 18.1 million. This slide shows the breakdown of container units sold under different product categories and accordingly, the respective revenue generated. The table on the left shows that Singamas sold over 147,000 TEU of dry freight container during the year. The pie chart on the right shows that the sales of this dry freight container made up of 57% of the segment revenue compared to 72% in the previous year. For customized container, more than 13,000 units were sold during this year. As global interest in solar energy grows, revenue contributed by our ESS continued to increased drastically from 16% of 2024 to 33% in 2025. Leasing revenue accounted to 8% of the group total revenue during the year. Finance lease Finance lease interest income was USD 4.1 million, up 47% year-on-year, while operating lease income was about USD 15.6 million, up 176% year-on-year. This slide shows the performance of our logistics service business. Its revenue was USD 33.8 million and segment profit before tax and noncontrolling interest was USD 8.7 million. This slide represents our marketing and operating synergy strategy in the years to come. The political and tariff issue between U.S. and other countries, especially following the outbreak of the Middle East war will impact our operating environment. We believe many carriers will once again choose to avoid the Strait of Hormuz and the Suez Canal. While this rerouting could initially stimulate demand in dry freight container market, the current sizable dry freight pool of 55 million TEU is likely to temper the overall impact, leaving demand for dry freight container unpredictable in the first half of 2026. At the same time, the ongoing crude oil crisis is expected to accelerate global transition to new energy infrastructure, which could translate into further growth in market demand for our ESS containers. Faced with unpredictable demand in dry freight container, we maintain strict cost control and cautious capital expenditure. On the maintenance side, our focus remains on enhancing safety and environmental protection of our plants. On the growth side, we invest on high-growth customized container project and automation -- short payback automation initiative. This balanced strategy keep us agile, cost disciplined and well positioned to capture any new opportunities in this challenging market. The following appendices that show our income statement and the data of our factory and depot for your further reference. That concludes my presentation. If you have any questions, Winnie, Rebecca and myself will be happy to answer. Thank you very much. Operator: [Operator Instructions] Unknown Analyst: [Foreign Language] Siong Seng Teo: [Foreign Language] New energy container [Foreign Language] Unknown Analyst: [Foreign Language] Siong Seng Teo: [Foreign Language] tank container [indiscernible] ESS. [Foreign Language] Unknown Analyst: [Foreign Language] Siong Seng Teo: [Foreign Language] barrier of entry is higher [Foreign Language] Unknown Analyst: [Foreign Language] Wai Yee Siu: [Foreign Language] renewable energy [Foreign Language] Siong Seng Teo: [Foreign Language] sustainable energy [Foreign Language] Unknown Analyst: [Foreign Language] Wai Yee Siu: [Foreign Language] 170 out of 481.. Pui King Chung: [Foreign Language] specialized container [Foreign Language] Unknown Analyst: [Foreign Language] Siong Seng Teo: [Foreign Language] weekly service [Foreign Language] Unknown Analyst: [Foreign Language] Siong Seng Teo: [Foreign Language] solar farm -- solar energy farm [Foreign Language] Unknown Analyst: [Foreign Language] Wai Yee Siu: [Foreign Language] Unknown Analyst: [Foreign Language] Siong Seng Teo: [Foreign Language] Unknown Analyst: [Foreign Language] Wai Yee Siu: [Foreign Language] Siong Seng Teo: [Foreign Language] finished product like quality [Foreign Language] Unknown Analyst: [Foreign Language] Wai Yee Siu: [Foreign Language] economies of scale, productivity [Foreign Language] Siong Seng Teo: [Foreign Language] Singapore, Green Tenaga [Foreign Language] Unknown Analyst: [Foreign Language] Siong Seng Teo: [Foreign Language] Unknown Analyst: [Foreign Language] Wai Yee Siu: [Foreign Language] million dollar question [Foreign Language] Siong Seng Teo: [Foreign Language] Bangladesh, Sri Lanka [Foreign Language] it's not free, there's a cost involved. [Foreign Language] Operator: [Foreign Language] Thank you, everyone, for joining. Thank you Mr. Teo, Winnie and Rebecca.
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: Ladies and gentlemen, thank you for standing by. My name is Christa, and I will be your conference operator today. At this time, I would like to welcome you to the TOYO Co Limited Second Half and Full Year Results Financial Results Conference Call. [Operator Instructions]. I would now like to turn the conference over to Crocker Coulson, Investor Relations. Please go ahead. Crocker Coulson: Thank you, Christa. Hello, everyone. Thank you for joining us to review TOYO's 2025 second half and fiscal year results. This morning, TOYO posted both the earnings release and a related investor presentation to our website and you can find it in the Investor Relations section, investors.toyo-solar.com. With us on the call today are Mr. Onozuka, TOYO's Chief Executive Officer; Raymond Chung, the company's Chief Financial Officer; and Rhone Resch, TOYO's Chief Strategy Officer, whose appointment was announced just this morning. We also have Simon Shi, who will be available during the Q&A portion. After the prepared remarks are concluded, we'd like to open this call up for your questions. But before we begin, I want to make you aware that some statements in this teleconference are forward-looking within the meaning of federal securities laws. Although we believe the statements are reasonable, we can provide no assurance that they will prove to be accurate because they are perspective in nature. During this call, we'll also discuss certain non-GAAP financial measures, such as adjusted net income and adjusted EBITDA. We believe these measures provide meaningful supplemental information regarding our operational performance, by excluding noncash items and onetime charges that may not be indicative of our core business. Please refer to the reconciliation tables in our press release and SEC filings for the most directly comparable GAAP measures. Actual results could differ materially from those we discuss today and therefore, we encourage you to carefully review the most recent report on Form 20-F and other SEC filings for risk factors that could materially impact our results. As I mentioned, the earnings release is available today on our website at investors.toyo-solar.com. With those formalities now out of the way, it's my great pleasure to turn this call over to Onozuka-san, our Chief Executive Officer. Onozuka-san, please go ahead. Takahiko Onozuka: Thank you, Crocker. 2025 was the year of decisive action for TOYO. We doubled our operational scale while navigating one of the most volatile trade environment in decent memory. By strengthening our position as a particularly integrated solution provider, we have built a resilient foundation capable of navigating persistent market headwinds and rapidly shifting regulatory landscape. Our record-breaking revenue of over $427 million, a 142% increase over 2024 is a clear validation of our strategic pivot toward high demand and compliant manufacturing hubs. The primary engine of this growth was the rapid ramp-up of our 4 gigawatt Ethiopia facility, which was completed in October 2025 and is now running at full nameplate capacity. During fiscal year 2025, we successfully shipped 2.3 gigawatts from Ethiopia to our U.S. end customers while an additional 1.9 gigawatts of solar cells were dispatched from our Vietnam facility to international markets. As we entered 2026, Ethiopia has provided our U.S. utility scale customers with high efficiency, policy-compliant solar cell technology and we are on track to deliver 4 gigawatts of solar cell from this facility in the coming year. In the fourth quarter of 2025, we launched commercial operation at our new 1 gigawatt module facility in Houston. Last year, we delivered 249 megawatts of module, inclusive of American-made module and those supplied by our OEM facility overseas. By scaling our domestic module production, while maintaining our global reach, we ensure that TOYO can provide the right mix of products our customers require from the right location with 0 lead time friction. Our intent is to scale up production continuously in 2026 and invest to expand capacity in Houston to 2 gigawatts by 2026. In September 2025, we acquired the well-established VSUN brand from our sister company, a strategic move to streamline and unified TOYO operation by bringing the VSUN plans fully under our umbrella. We have successfully migrated the VSUN sales and marketing team, IP, brand and the certification to TOYO, and we are now innovating all existing customers to become direct customers of TOYO as we complete clarification. Acquiring the VSUN brand has allowed us to accelerate TOYO growth and gives our clients flexibility to choose the sourcing that best fits their individual needs. This acquisition was made without any dilution to TOYO shareholders, while the production assets being with VSUN. Looking ahead, we will continue to work closely with our industry partners to migrate the sourcing of key components to the U.S. wherever possible, further strengthening our supply chain and laying forth our commitment to American manufacturing. I will now turn the call over to our CFO, Rhone Resch, to review our strategy for 2026. Rhone Resch: Thank you, Onozuka-san. It's a great honor to be joining TOYO, and I look forward to meeting our shareholders over the coming months and quarters. As you know, this was a challenging year for many solar companies. To be able to more than double our revenue while dramatically increasing gross margins, EBITDA and adjusted net income validates that TOYO has the right strategy in place, combined with exceptional execution capability. Turning to our strategic road map for 2026. TOYO is entering a phase of significant operational scaling designed to meet the accelerating demand in the U.S. solar market. For the full year 2026, we are initiating shipment guidance of between 5.5 and 5.8 gigawatts for solar cells and 1 to 1.3 gigawatts for solar modules. This growth is supported by a robust order book and a favorable domestic policy environment that continues to prioritize high-efficiency traceable technology. Our primary operational focus for 2026 is maximizing our existing infrastructure. Our Ethiopia cell facility is now positioned to run at full nameplate capacity, providing the high-efficiency solar cells that are the backbone of our utility scale offerings. Simultaneously, our Houston module facility is aggressively ramping up its initial 1 gigawatt of module capacity to meet localized demand. To further solidify our domestic footprint, we plan to add an additional 1 gigawatt of module capacity in Houston during 2026, which will bring our total U.S. module capacity to 2 gigawatts. The next phase of our U.S. expansion involves building out a domestic cell production. We are currently in the final stages of the planning process and anticipate disclosing further details regarding our operational road map in the near future. Financially, we are targeting a 2026 adjusted net income of approximately $90 million to $100 million despite increasing very substantial investments in R&D and technology this year. These costs are a deliberate choice. They align directly with our core commitment to establish a robust technology leadership position within the United States. We aren't just building capacity we are building the IP foundation that will define the next generation of American solar energy. TOYO is now uniquely positioned with the domestic capacity, the traceable supply chain and the technical IP to lead this transition profitably. I will now turn the call over to our CFO, Raymond Chung, to review our financial results. Raymond? Taewoo Chung: Thank you, Rhone. So for full year 2025, revenues were $427 million, representing 142% year-over-year increase from the prior year. This growth was primarily driven by $241 million increase in solar sales and a $7.6 million increase in module sales. For the full year 2025, cost of revenue was $331 million, a 113% increase from $155 million in the prior year. Cost of revenue grew at a slower pace than revenue, driven by a higher mix of sales to U.S. end customers with stronger average selling prices. Gross profit increased by 340% to $96.3 million in 2025, up from $21.9 million in 2024. Gross profit margin expanded to 22.5% from 12.4% in 2024. Margin expansion was driven by a higher proportion of sales to U.S. end customers with stronger pricing. For full year 2025, operating expenses were $37.3 million compared to $30 million in the prior year, representing an increase of 186% year-over-year. Selling and marketing expenses were $5.9 million compared to $1.6 million in 2024. The increase was primarily driven by higher sales commissions in line with revenue growth. General and administrative expenses were $31.4 million an increase from $11.4 million in 2024. The increase was primarily due to $13.7 million in noncash share-based compensation issued to management, directors and consultants. Administrative costs also rose as the company scaled its workforce and infrastructure to support the full activation of our Ethiopia and Texas manufacturing plants. EBITDA was $95.8 million in 2025, representing a 40% increase from $68.2 million in the prior year. This was driven by record shipment volume and enhanced operational scale across our global facilities. Non-GAAP adjusted EBITDA, excluding share-based compensation and changes in fair value of contingent consideration payable to earnout shares was under $110.8 million for 2025, up by 228% compared to $33.8 million for the same period in the prior year. Net income was $37.2 million for 2025 compared to a net income of $40.5 million for the same period last year. Adjusted net income, excluding share-based compensation in 2025 and changes in fair value of contingent consideration payable related to earnout shares in 2024 was $52.2 million compared to $6 million in 2024. Earnings per share basic and diluted was $0.98 compared to earnings per share, basic and diluted of $1.09 in the prior year. Adjusted earnings per share, excluding share-based compensation in 2025 and changes in fair value of contingent consideration payable related to earn-out shares in 2024 was $1.48 per share in 2025 as compared to $0.20 per share in 2024. Turning to our balance sheet. As of December 31, 2025, the company had a $58.9 million in cash and restricted cash in total, compared to $17.2 million as of December 31, 2024. In 2025, TOYO generated cash flow from operations of $133 million with $92 million of CapEx invested across our Ethiopia cell facility and U.S. module operations. This level of cash generation provides us with a strong financial flexibility to invest in continuing to expand our fully integrated production platform in the U.S. as we expand our Made in America for American strategy. For 2026, we expect adjusted net income to reach approximately $90 million to $100 million. With that, we will be happy to address your questions. Operator: [Operator Instructions]. Your first question comes from Amit Dayal with H.C. Wainwright. Amit Dayal: Perhaps a fairly strong performance of '25 and a positive outlook for 2026. Just in the context of gross margins, can you provide any color on how we should think about gross margins now that a share of revenues could potentially come from the U.S. market? Crocker Coulson: [ Saska ], you want to translate that? And then I don't know if Simon or Raymond wants to take that question. Unknown Attendee: [Foreign Language] Takahiko Onozuka: [Interpreted] Right. So we are not currently providing our gross margins hold for the year. But as the Ethiopia facility has come to operate at full capacity and our U.S. factory has come online. We believe that we will be able to continue to achieve very competitive margins in the market. Crocker Coulson: Simon, any color you want to provide on that? Simon Shi: Sure. Thanks, Amit, for the question. I think for 2025, we achieved a cross-border average gross margin around 25%, and we -- we do hope to at least maintain these gross margin across group gross margin level going forward. And also just a remark to our -- like our CEO just mentioned, we don't really provide a breakdown of our gross margin for different markets. But we think our gross margin -- our gross margin level is higher than the overall industry number. And also the numbers we have indicated through our -- either historical number -- historical financials and in the 2026 guidance, they are pre -- they are pre the 45x, meaning the $0.07, 45x supposed to receive from -- for our manufacturing are actually not taken into account in the guidance or in the historical financials. Amit Dayal: Yes, that was I was going to ask about the credits in the U.S. market. So for 2026, will you potentially be receiving credits for the at capacity or potentially 2 gigawatts capacity? Just any color on that would be helpful. Simon Shi: Sure. Actually, we are running cautious on giving out the guidance for our Houston production. As mentioned, we are currently running -- sorry, 1 gigawatt capacity over there. And we are hoping to achieve at least 60% to 70% utilization of the capacity in Houston based on the current nameplate capacity. And the additional 1 gigawatt, as mentioned by our CEO, this is a new investment plan that's happening in progress in our Houston facility. Now we are hoping to see a pilot production for the extra 1 gigawatt from third quarter or latest the fourth quarter of this year. So that could be an actual contribution to the delivery from Houston. However, we are not taking that into account for our guidance for the moment. Amit Dayal: Okay. Understood. And just maybe last one for me. Will you be sort of hosting quarterly earnings call going forward? Or will this be sort of every 6 months? How should investors think about sort of reporting and just engagement with the investor community going forward now that the business is most sums in place to provide a little bit more comment to investors more frequently, I guess? Simon Shi: Yes, sure. Thanks. That's very helpful. Yes, Amit, the short answer is, yes, we are planning to report quarterly from this year. So hopefully, we can get our first quarter number released May of this year. And on a going forward basis, where we will continue to report quarterly starting from this year. Operator: We have no further questions at this time. Crocker, I'd like to turn the conference back over to you. Crocker Coulson: Yes. Let's just give one more chance for people to ask questions, operator. And then if we don't have further, I'll wrap it up. Operator: Absolutely. [Operator Instructions]. We have no questions -- and we have no questions. Crocker Coulson: Great. Thanks, Christa. So we appreciate everyone taking the time to join us on the call today. As you can tell, the whole team is very excited about what's ahead for TOYO in 2026 and in the years beyond. We're also thrilled to have a strengthened management team going into this year with Rhone Resch joining us, and he'll be based primarily in the U.S. So we will be more available to meet with investors going forward. If you have questions you'd like to ask that you didn't have a chance to get to on this call, please reach out to me, and I'm happy to either respond or arrange a follow-up call with management or a visit next time that we have a future trip to the U.S. Thank you, everyone, and have a fantastic day. Operator: Ladies and gentlemen, this does conclude today's call. Thank you for joining, and you may now disconnect.
Operator: Good morning, and welcome to JBS Fourth Quarter and the Year of 2025 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. Any statements eventually made during this conference call in connection with the company's business outlook, projections, operating and financial targets and potential growth should be understood as merely forecast based on the company's management expectations in relation to the future of JBS. Such expectations are highly dependent on the industry and market conditions, and therefore, are subject to change. Present with us today, Gilberto Tomazoni, Global CEO of JBS; Guilherme Cavalcanti, Global CFO of JBS; Wesley Batista Filho, CEO of JBS USA; and Christiane Assis, Investor Relations Director. Now I'll turn the conference over to Gilberto Tomazoni,, Global CEO of JBS. Mr. Tomazoni, you may begin your presentation. Gilberto Tomazoni: Good morning, everyone. Thank you for joining us today. We closed 2025 with a consistent performance and our continued progress in building a stronger, more efficient company. In the fourth quarter, we recorded a revenue of $23 billion with an EBITDA margin of 17.4%. For the full year, revenue reached $8 billion, a company record with a consolidated EBITDA margin of 7.9%. This scale and the diversity of our multi-protein and multi-geography platform remain our greatest strength, allowing JBS to navigate industry cycles or any disruption while capturing structural growth in protein demand. In both the fourth quarter and the full year, JBS delivered record sales with positive consolidated results, reflecting the resiliency of our global platform. Net income totaled $415 million in the quarter and the $2 billion for the year, representing year-over-year growth of 15%, earnings per share of $1.89 per year. Free cash flow was $990 million in the quarter and $400 million for the year. Return on equity reached 25%, and the return on investment capital was 70%. Our leverage ratio at the end of the fourth quarter was 2.39x in line with our long-term target. We also maintained a very strong debt profile with an average debt maturity of approximately 15 years and average cost of the debt of around 5.7%. No significant maturity in the short term. These strong results reflect our consistent performance in a year marked by a challenging environment in some global protein markets. In the United States, the cattle cycle remains under pressure with a limited supply and high cost. This is expected to continue in the coming quarters. Despite this environment in U.S. beef sector, our global results remained positive reflecting the resilience of our diversifying platforms. Australia was one of the highlights of the year. With a strong EBITDA growth and margin expansion as well as the top line growth of 30% year-over-year in the fourth quarter. Our Australian business benefit from the currently imbalance between global supply and demand of beef. Combining with a strong execution and support solid profitability and reinforce the role of region in balancing our global results. In Brazil, the beef business operates with a historical margin range supported by strong export and steady domestic demand. The fourth quarter was particularly strong with the top line sales growing 26% year-over-year. At the same time, livestock productivity continued to improve. Country recorded highest beef processing volume in its history at around 42 million heads. This reflect a total gain in production and reinforce and Brazil growing role in a global supply. In this context, Friboi delivered solid results. with growth in both export and domestic sales volume increase in key international markets, including Mexico, Europe and United States. While the business also strengthened its presence in Brazil, programs such as Friboi+ continues to deepen client relationship and support growth in the domestic market. At Seara, we continue to advance our strategy and strengthening brands and expanding high value-added products. In recent years, Seara has expanded its portfolio entering new categories and strengthen in connection with the consumers. The business is now one of its strong moment in brand perception supported by innovation, execution, a more differentiated product mix. In the United States, our chicken business continued to benefit from the strong demand in both retail and food service. Pilgrim's delivered volume growth above the industry average in segments such as case ready and the small bird. The big birds segment also improved performance through better yields, mix and cost efficiency. Brand diversification continues to progress and Just Bare surpassed $1 billion in retail sales reflecting the strength of our brand strategy and the significant opportunity we see to capture further growth across our modern high-value prepared foods portfolio. In U.S. Pork business, performance remained stable, and the business closed the year with solid margins, supported by disciplined operation and balance supply and demand. Also, in 2025, we completed the dual-listed process, a milestone at the company's history and became a nice listed company and strengthened our capital market position. Since then, we have seen a clear improvement in how the market values the company. Our trading multiply and expanded reflect greater visibility and investor confidence although we still trade at a discount to our global peers. Liquidity also has increased significantly with average trading volume up approximately 3x compared to the prior listing levels. At the same time, our shareholder base has become more global and diversified. U.S.-based investors now represent nearly 70% of the company free float. Overall, this change reinforced our position in global capital market and support the next phase of growth. Global protein consumption continues to grow, supported by demographic health awareness and demand for balanced diets. JBS is well positioned to meet this demand across markets and channels. Our structure remains clear. We will continue to strengthen our brand, expand our value-added portfolio and develop solutions that make protein more accessible and more convenient everyday life. Thank you again for joining us today. And now I will turn the call over to Guilherme, who will walk through our financial results in more detail. Guilherme Cavalcanti: Thank you, Tomazoni. To the operational and financial highlights of the fourth quarter and fiscal year of 2025. Net sales reached a record of $23 billion in the quarter and $86 billion in 2025. Adjusted EBITDA in IFRS totaled $1.7 billion, which represents a margin of 7.4% in the quarter and $6.8 billion in 2025 with a margin of 7.9%. Adjusted EBITDA in U.S. GAAP totaled $1.5 billion which represents a margin of 6.5% in the quarter and $5.8 billion in 2025 with a margin of 6.7%. Adjusted operating income was $1.1 billion with a margin of 4.7% in IFRS and 4.8% in U.S. GAAP in the fourth quarter. In 2025, adjusted operating income was $4.5 billion in IFRS with a margin of 5.2% and $4.4 billion in U.S. GAAP with a margin of 5.1%. Net income was $415 million in the quarter and an earnings per share of $0.39. For the year, net income was $2 billion and earnings per share of $1.89. Excluding the nonrecurring items, adjusted net income would be $500 million and earnings per share of $0.47 in the quarter and for 2025, $2.2 billion with an earnings per share of $2.10. Finally, return on equity was 25% and return on invested capital was 17%. Free cash flow in fourth quarter 2025 reached $990 million compared to $906 million in the fourth quarter 2024. The main positive drivers were related to the deferred livestock, particularly in U.S. and inventories, reflecting strong revenue growth during the period. Despite an $850 million in working capital consumption in 2025 the cash conversion cycle remained resilient and in line with prior year's levels. For the full year, free cash flow totaled $400 million. When we visited free cash flow breakeven, IFRS EBITDA exercise for 2025, the initial estimate EBITDA to a breakeven level was around $6 billion. However, considering the actual results, the EBITDA breakeven would be approximately $300 million lower. The main difference came from working capital, as mentioned earlier, mainly reflecting the deferred livestock effect and a decrease in inventories. On the other hand, CapEx came in about $100 million above estimates as we executed $1.1 billion in expansion CapEx during the period. We also saw a higher number of biological assets, largely driven by the increasing livestock volumes and prices, while the remaining items came in broadly in line with our estimates. Finally, the higher cash tax paid in 2025 were mainly related to the tax payments associated with the results of 2024. For 2026 and for the purpose of the EBITDA cash flow breakeven exercise, we can assume capital expenditures of $2.4 billion of which $1.3 billion is for expansion and $1.1 billion is for maintenance, interest expenses of $1.15 billion and leasing expenses of $500 million in a consolidated effective tax rate of 25%. Just to highlight, it is still too early to estimate the variation in working capital and biological assets as there are many factors beyond our control. such as grain and lifestyle prices. However, if you consider the same amount of working capital consumption in biological assets of 2025, EBITDA cash flow breakeven would be $5.7 billion, in line with 2025 numbers mentioned above. On Page 24, we present our historical free cash flow breakdown to help analyst forecast. Our leverage ended the year at 2.39x, in line with our long-term target of keeping net debt to EBITDA between 2 and 3x. In 2025, we also strengthened our balance sheet by extending our debt maturity profile, reaching an average debt term of approximately 15 years and an average cost of 5.7%. We have no significant debt maturities until 2031. The coupons of our debt are below treasury until and including 2032 maturities with 32% of our gross debt maturing beyond 2052 and approximately 90% of the total debt is at fixed rates. It's worth mentioning that despite the 8% increase in net debt in the last 3 years, net financial expenses remained at the $1.1 billion per year. Our $3.5 billion in revolving credit lines and $4.8 billion in available cash provides us the flexibility to continue executing our expansion CapEx, value creation products and shareholder returns while maintaining a healthy and robust balance sheet. For this reason and given our strong cash position and leverage, we announced last night, the payment of $1 per share in dividends to be paid in June 17. With that in mind, I would like to turn the operator for a question-and-answer session. Operator: [Operator Instructions] We have our first question from Lucas Ferreira with JPMorgan. Mr. Ferreira, you may go ahead. Lucas Ferreira: I have 2. The first one, if you can give us an update on the business environment for PPC, especially in the U.S., but there were some renovation works at the Russellville plant wondering if those are completed. If operations remain fine, if this could be an issue at all for the quarter as well as any update you see in the market regarding crisis. It seems that we are in an environment of a bit more supply than the first quarter of last year. So if you see how robust is the market and how balanced the market today? And the second question is on the U.S. beef operations. We saw a pretty steep recovery in beef spreads over the last few weeks. So to what you attribute this, obviously, demand remains strong, but there have been some capacity rationalizations in the industry. Any updates on the Greeley situation will also be welcome with regards of what -- how that impacts your business and how you see the market for U.S. beef for now? Gilberto Tomazoni: Lucas, thank you for your question. And I will start here to talk about update in terms of Pilgrim's and after that, Wesley will give us the perspective of beef in U.S. As you mentioned before, we completed the transformation of 3 plants of Pilgrim's already completed it. One, we transformed from big bird to case ready because we have a strong demand in the retails, and this strategy will support the retail growth of the demand of chicken. In the other 2 plants, in reality is not a transformation. It's adequate to produce the raw material for our prepared business. Before we sell -- we sell the breast to the market because we are not able to deliver the appropriate cuts that our prepared food needs. Now we invest in machines and we are not need to sell and buy and rebuy the raw material. Now we deliver direct to our prepared business. This, of course, we catch the margin of the third party I think and we are keep best quality and be able to react quickly in case of the increasing demand. And I understood that as a second point that you mentioned about supply/demand. I can say to you, the demand for chicken meat in U.S. is not just in U.S. It's a global demand is very high across all the chains. And if you take in consideration in U.S. the chicken placement in the beginning of the year, grew around 3% and the price of chicken breast increased in the market. But this shows that a balance in supply and demand because we increased 3%, the placement of chicken and at the price of the breast increased. And if you -- USDA forecast for this year is that it will be 2% growth in chicken supply. If we grow 3% in the price market increase, we can anticipate if the forecast 2% will be a very good year for Pilgrim's in U.S. I think this is 2 components. The verticalization of our raw material production, we get more margins in prepared. In the growth of our prepared business in Pilgrim's Just Bare have a strong demand and we are investing in new factories. We see that this year will be a good year for Pilgrims. Wesley Mendonça Filho: Lucas, fourth quarter was a pretty good quarter given the market conditions on the beef side. It's common knowledge that given the market data that first -- at the beginning here of the first quarter has been really tough, really, really difficult, very challenging. Probably the most challenge we've seen in this industry in a very long time. I don't know if there is any other time that we had such, actually a negative spread for January and February ever. And it seems now that current data shows that March is showing that it's going to be a little bit -- it's going to become better, sharply better than where we were from January and February. But let's see what comes out of that. When we are -- one of the things that has happened in this scenario that we have very low cattle availability and very low processing volumes is that the market has become more volatile than we're used to in this market. You see big fluctuations in cutout, big fluctuations in cattle, more so than what we're used to. So that's just an effect of having such a small volume. If you -- if the volume is a little bit higher, it has a big impact and it's become a little bit more volatile. When it comes to the striking really, it's very difficult to forecast how that a strike would go on. We have a very good deal in front of that local. We actually just did a national deal with 14 other unions in red meat -- 14 other locals from the same union in red meat, and it's a historic union company deal. We have a variable pension plan. That's the first time in forever that the industry has brought back pension, something like that for people when they retire for our team members. So we have a very good deal, actually, even -- I think I would say it's probably one of the most innovative deals that we've had in a long time in this industry. So let's see. We think that we hope this gets resolved as soon as possible. Operator: Ladies and gentlemen, we have Mr. Gustavo Troyano from Itau would like to ask a question. Gustavo Troyano: My first question is on Seara and related to chicken supply here in Brazil. We acknowledge that discussions on the supply side should always be on a relative basis to demand, which seems quite strong at this point. But just wanted to get your updated thoughts on the balance between chicken supply in Brazil, what to expect going forward as we move into the second quarter of 2026, if you guys are expecting the chicken supply increase to outpace demand in a way that we could see some profitability compression going forward. So that would be the first question. And the second one, still on U.S. beef and a follow-up on the first question actually is, would you say that the current balance between slaughtering capacity in the U.S. and demand and cattle availability will imply some capacity adjustments going forward from other players or even from you guys. So what could you say on further capacity adjustments going forward because cattle availability is restricted right now. So just wanted to get your updated thoughts on that as well. Gilberto Tomazoni: Thank you, Gustavo. Talking about chicken in Brazil and Seara and after that Wesley will complement the answer about beef in U.S. When you chicken in Brazil, the balance between supply and demand for chicken is still not very clear to us. In one hand, we have strong and growing international demand and new cases of poultry farming influenza in several countries with culture that produce as a competitor of Brazil. And this could boost demand even further. The other hand, we have 2% to 3% increase the chick placement up to February. This is as a reasonable limit for growth in Brazil. There is some news that chicken breeder stock has increased. In this scenario, it's difficult to predict the unfolding events if production of exceed market capacity. But in this case the industry, the sector, the industry has many of tools to manage this. For example, we can export more fertile eggs, we can reduce the average age of the breeding stock. We can reduce the weight of the birds among others, means that so far, the market is very balanced in the market, and we see a strong demand in the international market. If -- because if you look for the breeders can increase more the volume domestic market, each industry needs to take its own decisions. But they have a lot of ways to manage of this supply because chicken is not still in the farm. It still place it. It is in the genetic I can say -- I can talk to you about what -- in our side, how we are -- what we are doing. We are focused on strengthening our export leadership. We have -- and enriched our value-add mix in domestic market. I think it's the both strategy we have. We have well positioned in international market and well positioned domestic market, and we are at value and be more innovative in terms of the way that you present the product to the consumers. Wesley Mendonça Filho: Gustavo, on the U.S. beef, this question about capacity adjustments, it's very difficult for me to answer about, especially when it's something that's not related to our business directly, right? So it would be a competitor. It's very difficult for me to respond on that. . It's clear that there is more capacity in the U.S. than there is kind of available in the U.S., not too many years ago, 4 years ago, had processed 33 million head, and now we're going to be below 27 million. So we're around 27 million, sorry. So that itself shows that yes, there is excess capacity. Having said that, it's very difficult for me to respond about something that's regarding other companies. Operator: Our next question comes from Lucas Mussi with Morgan Stanley. Lucas Mussi: My first one is related to Brazil beef in Australia. If you could talk to us a bit about how you're thinking about the export environment in the context of Brazil and also Australia eventually reaching the limit of the export quota to China? How are you thinking about how volumes are going to behave, perhaps in the second half of this year? What are you thinking about your options here and potential impact to the business divisions and the second one, one for Guilherme. If you could share more details on derivative lines on your P&L that went a bit lower this quarter, that would be helpful. And also, I know that there's still -- we're still a bit early to talk about concrete working capital expectations for this year. But if you had to evaluate looking at where commodity future is today or grains for livestock. What would be your assessment on working capital potential as things stands today for the year, maybe a little bit below 2025, in line with 2025, if you have any on working capital. Gilberto Tomazoni: Thank you, Lucas, for your question. Let me to separate. I think in Australia and Brazil, that is a different scenario. Australia, we are not seeing any challenge in terms of the -- after the quota of Australia to China because Australia is a strong market demand and has a very strong presence in Japan and Korea and all of the Asian markets and U.S. as well and Europe, then Australia is easy to manage the volume for each one of these markets that we are not really worried about this situation. In Brazil, may be more complicated. But our I will talk related to that. But our Friboi team is very confident that they will be able to deliver in this year 2026, this resulting with the line that the last year. Why we are confident on that. Global demand for protein is high, especially for beef. China's quota, if you talk about -- we are expecting to end by the midyear. And in reality, we don't know how China will manage this volume restriction. I believe that some countries will likely not be able to complete their quotas. But this is -- we cannot speculate, but this is a fact. Regarding this situation, Friboi has developed a new international market, new sales chain and investing heavily in value-added and combined with customer service. An example of this strategy is the program of Friboi+ now I think last week at the supermarket conventional in Rio de Janeiro, Nielsen, you know Nielsen, gave a presentation comparing a store with a regular butcher shop to one with Friboi+ and the results showed that the start with the program has a higher revenue and 40% higher overall sales, not just the butcher area, the overall sales, that it's a strong program to support the growth of our customers. And at the same time, the retailers now face a challenge because they need to improve the quality of the sales in the stores because this shift for more protein, this program, what GLP1 and so on, that is booming the consumption of protein they need to enhance the portfolio in the retail. And in our program is, I think it fits perfect with this trend in the necessity of the supermarket. The other point, I believe in the second half of the year, when the supply of feed lot in Greece, this coinciding with the end of quota of China, which is large -- and we know that China is the largest pork selling channel, the price of cattle will likely be affected. I think this will be correlation because of that we are so confident that we are able to deliver this year and results in line with last year. Guilherme Cavalcanti: So on the derivatives line, what you saw there is any sort of derivatives that's not related to the operations. And the recent volatility in currencies and other commodity prices make this number higher despite we have a very limited VaR for those type of derivatives. Now on the working capital side, so far, what can I say, it's only about the -- what we've seen in the first quarter. So first quarter 2025 we have a slightly lower working capital consumption than in the first quarter of 2024 despite the $200 million higher impact of the deferred livestock. So again, it's too early to say for the whole year. But if considering just the first quarter, we had a little lower consumption of working capital. It doesn't mean a lower cash consumption, given that the operational side is slightly worse. Operator: Our next question comes from Thiago Duarte at BTG. Mr. Duarte? Thiago Duarte: Yes, two follow-up questions going back into U.S. beef and then Seara. Wesley mentioned the strong quarter considering the circumstances that you had. But I'm still wondering what do you believe justifies that performance? I mean, Q-over-Q margin rebound, it's not something typically happens considering the seasonality in Q4 and even looking at the industry cut out spread. So my question, you mentioned the volatility has been something that's even higher than usual and maybe that has something to do with a particularly good quarter in Q4, but if you could elaborate a little bit more on what you think justifies that in this quarter in particular. And a follow-up question on Seara. I think Tomazoni talked a lot about chicken demand and protein demand in general. So my sense is that what really drove this very good margin at the Seara division in the quarter was really related to chicken, fresh chicken in natural chicken exports as opposed to the domestic prepared food portfolio. So my question is really if that understanding is accurate in terms of, again, natural margin versus prepared food margins for Seara in the quarter? Wesley Mendonça Filho: So especially when the market has such a volatility in cattle prices and cut out values it's very possible, especially when you look at just the quarter, right, that you have a quarter that you position yourself really well and other ones that you position yourself a little bit worse. And between quarters, you could have those -- just from a positioning perspective, it could be either have a very good -- look really good or look a lot worse than you expect? And just given this such intense volatility that more than we were expecting, I saw some reports maybe question a little bit about if there was any hedging or derivatives there, there was nothing significant from that perspective. I think it's just when markets are more volatile, and you make position selling out -- selling product upfront and all of that, sometimes you get good position sometimes could get worse. I would -- I think the best way to look at performance is look at overall longer term than just one quarter, one quarter could kind of misleading positive or negative either way in this sort of business, especially with the sort of volatility that we've been having on cutout and cattle price. Yes, that's in that foundation. Gilberto Tomazoni: Thiago, let me make some assessment position about what you said, if the margin, if you understood well, you asked for the margin of prepared foods in domestic market and versus to export chicken -- commodity chicken to international market. If you take just in consideration, the margin, yes, the margin of international chicken was higher than the margin of prepared in domestic market. But say that, we improved the margin of the prepared food and domestic market. If you remind some quarters ago, I mentioned that we are advancing as a process to improve our price management in order to get the real value of the brand in domestic markets. And this is a continuous process. We are now focused on taking the advantage of we have the perception of the brand, we have Seara in the market. The penetration of the brand and the rebuy of the brand from the consumers. And we are strengthening our process in order to get this value. And because of that, we are continuously improving the margin in domestic market. But yes, you are right. If you compare this quarter, the margin of international market for chicken was higher than the margin of prepared in domestic market. Wesley Mendonça Filho: Thiago, just to complement something on beef that I meant to say and I forgot. For sure, this comparison quarter-by-quarter could create some -- a little bit of that when it comes to position, positioning of how you sell forward and how we buy and all of that. But having said that, we are very satisfied with the way we are operating. There are still opportunities for sure. There's things that we're working on. But when we compare our operations, just the things that -- how we are running our plants and how we are running our sales strategy, our procurement strategy, compared to a few years ago, we think we've made a lot of progress, and I think we're doing a lot better than we've been doing in the past. Operator: Next is Isabella Simonato from Bank of America. Isabella Simonato: First, on the working capital for the quarter, right? You mentioned the deferred payment of livestock as well as inventories. Can you just give a little bit more details on the inventory performance and versus where you were expecting, right, when you mentioned in Q3 for the remainder of the year. What changed? And what can -- how can that -- if there is any impact to be postponed or translated into 2026 performance? And second, on Seara, you were mentioning right, Tomazoni, about the margins in Brazil. Can you comment how you're seeing Brazilian consumers behaving in the beginning of the year if there is room to increase a little bit prices and if volumes have picked up, we noticed that retailers were running with lower inventories in the end of 2025, and there was any significant change in behavior in the beginning of the year? And finally, if you could give us a brief overview of how are your grain inventories and how you're seeing feed costs for the remaining of the year? Guilherme Cavalcanti: So on the working capital cycle, Isabella. So every fourth quarter is a quarter that we decrease inventories, and we'll review them in the first quarter. And the same happens to the livestock, which we postponed payments from 1 year to the other. Between 2024 and 2025 and '26 we postponed this year $600 million in livestock. Last year, we had postponed $400 million. So we had a $200 million better impact on the fourth quarter. That will be a $200 million worse impact in the first quarter that I mentioned in the previous question. And that is in the inventory side, the same thing. We are seeing the same level of inventory rebuild that we saw in the last years. Gilberto Tomazoni: Isabella, thank you for your question. When you look for -- we have two separate questions. One is, if I understood well, one is related to the behavior of the consumer and domestic market with Seara. We see that the market starts a little bit weak in the beginning of the year in January but they're back, now we are -- when we look for our sales, we are growing the sales compared to the last year but deep with different mix with a value-add mix growing much faster than the low -- the traditional and low value-added it's difficult to say what is value added or not value-added it's prepared. But say, look, the traditional, they are selling less than the innovation. We have a huge growth in the innovation line with high-protein products, air-fry products designed for air fryers, clean label product, this kind of innovation. They grow much faster than the other ones. But average, when we compare this year with the last year, we are growing, even some challenge and some different chains, but it's growing. But it start as just to be clear, we start very tough, very tough in the beginning and recover. Now we are -- our sale is higher than the last year for prepared. And when you talk about the cost, I think you will talk about grains because there is a lot of consideration. We have different views in terms of corn and soybean meal with these 2 key elements for our feed. In the corn market, we see an upward trend. We should expect higher costs in 2026. And due to -- if you look for reducing the global stock and solid demand, increased crude oil price that boost in ethanol margin as well the cost and availability of fertilizers. U.S. acreage at risk given the soybean ratio. And the second crop in Brazil, in face of some climate risk. That we are, I think, is we expect higher costs for corn. In the soybean mill, we see price stability and do the -- if you look for the crush margin, they are positive and as the crush margin positive, we result in as abundant supply. And in the other part, weak Chinese demand to the tight pork margin in the market. But I think it's for soybean meal, we need to monitor U.S. acreage issue in the biofuel policy. But anyway, our outlook remains bearish. Operator: Our next question comes from Henrique Brustolin with Bradesco. Henrique Brustolin: I have 2. The first on U.S. beef Wesley, if you could comment about the Mexico cattle imports, right? They have been shut for a while now. Maybe this could be a discussion the reopening could be a discussion amid the higher prices in the U.S. So it would be great to hear your thoughts in how relevant that could be in shaping the outlook for 2026 if we saw a reopening of the animal imports from Mexico to the U.S.? That will be the first one. And the second is a quick follow-up on Seara but Seara has been through a very big investment cycle over the past few years. It would be great just to hear how those investments have already ramped up and what would you expect for volume growth into 2026 as probably you complete the ramp of some of those plants? Wesley Mendonça Filho: Henrique, so on Mexico, it's difficult to tell when that's going to reopen. I mean it's very meaningful. It's 1.2 million to 1.5 million head per year. So it's more than the size of a double-shift plant, right. So it's a big bottom and it's very important, especially to the south of the U.S. I mean the USDA is doing -- I mean, it's doing a good job in doing all we can to keep the disease outside of the U.S. They are working on the sterile flies and all of that. And Mexico, obviously, is also trying to get this result as soon as possible. But for me to be able to tell you like I hope that this would get resolved within the year, but I have no way to forecast and to even have an indicator of if that's going to really happen anytime soon. But it's really important is probably the most important short-term change that could happen to this whole beef supply and demand equation. The most relevant in the short term for sure, it's this whole Mexico thing. It's very important, especially for the south of the U.S. But again, it's very difficult for me to tell you a forecast. I hope it opens this year or as soon as possible, but very difficult forecast. Gilberto Tomazoni: Henrique, about the investment of Seara, all of them will be completed this year. And when completed the additional capacity will be around 10%, 13%. I will say 10%, 13%, but can depend on the mix. There's some mix that is less volume, high value, but it depends on that. But you can consider 10%, 13% in terms of volume capacity growth. Operator: Your next question comes from Benjamin Theurer there with Barclays. Benjamin Theurer: Yes. Just following up real quick on the CapEx side. I think you said about $1.4 billion for expansion. I mean, I know there is a lot that Pilgrim's Pride has part of that and share of it with their outlook in terms of CapEx. But could you remind us a little bit about some of the other projects you're currently talking and working around as it relates to capacity expansion aside from what Tomazoni just mentioned on Seara. That would be my first question. I have a quick follow-up as well. Guilherme Cavalcanti: Ben, so basically, the Pilgrim's Pride expansion on the prepared food parts on the rendering facilities, the pork sausage plant in Iowa. But the ones that we announced. Also the Oman project, we also announced a plant in Paraguay. Cactus, Texas, also on the beef side, so everything that we've been announcing. And of course, all these capital expenditures are phased out throughout the years, and that's the portion for 2026. Benjamin Theurer: Okay. Perfect. And then as you kind of like look from just general capital allocation, I mean, obviously you announced the $1 dividend per share in the very large CapEx program. We're seeing a bit more activity right now as it relates to M&A activity within food companies in generally but particularly between European and North American companies. So just wanted to get your latest as to your willingness or the opportunities you might be seeing on growth through M&A, which obviously has always been part of JBS's DNA to grow . Guilherme Cavalcanti: We're always looking at opportunities through our plan everywhere in the world, but there's nothing that we are looking very keen at the moment, and that's the reason that we increased our organic growth because we are not seeing many opportunities on the acquisition front. So I think that I would say there's nothing that we could say that we expect to announce or anything in terms of M&A. So that's why we were -- we increased expansion CapEx, and that's why we are returning capital to the shareholders. And given that our net interest expenses continues to be at the $1.1 billion level, we are very comfortable with this capital allocation. Operator: Our next question comes from Thiago Bortoluci with Goldman Sachs. Thiago Bortoluci: Congrats on the results. I have two follow-ups. The first one this is on volumes, right? Tomazoni, you have been very vocal on the solid momentum for global protein markets. And to be honest, when I look over the last few quarters. Obviously, a lot of debate on the margin cycles, but volumes and top line has been consistently surprising everyone to the upside. And I think it might be a continuous source of upside going forward. It's difficult to break out for us your sales component between volume and pricing. But internally, from a volume perspective, could you please share with us what business unit segments and destinations are the ones that are contributing the most with your growth and which regions make you more excited with the opportunities for 2026. Particularly, if you could also comment on the opportunities in Africa. I know you announced a few things last year. Just an update here, and then I can follow up with my second question. Gilberto Tomazoni: Thiago, thank you for your question. If I understood well, you talk about Seara or you talk over about... Thiago Bortoluci: Volumes. Overall. Gilberto Tomazoni: Okay. Overall. Okay. Overall, we see that the demand, when you say all of the market, it's not just because we try to simplify, but it's the reality. We have a strong demand in Europe. Friboi increased a lot of the sales of red meat in Europe as Seara increased in volumes in Europe. And the demand in chicken in Europe mainly is driven by some influence in some countries. And the demand for beef is because the beef production in Europe decreased. And I think it's not just Brazil, sell more in Europe and Australia sell more. And in Australia and the U.K., now they have a new agreement. And this is -- the demand is -- we are expecting to grow the demand from beef in Europe. The other part, we see demand in all of the Asia. Take China out of this the component of Asia, but all of the Asia, the demand is growing for chicken. And for beef as well, we see the demand and the market -- this is not new markets. We open a lot of new markets, but in traditional markets like Japan, like Korea, we increased the volume from the market. And I believe this is the trend. It's not a trend because price. It's a trend because the demand decrease in the local production decreased, decreased because of the cycles there or because of some disease in the market. We see Middle East now we are facing a war there, but the flow of the product to the market didn't change so far. They changed the logistic of vessels there, the logistics of internal logistics, we need to change port and when you change port, we need to use trucks to deliver the product to the customer. But the flow is still there. The demand is there. Because of this, we are investing in the Middle East, new factory opened some months ago in Jeddah and the investment we have announced in Oman because the demand is strong. The U.S., there is a strong demand for beef as Australia, Brazil, sell a lot streamers and from U.S. When we say a lot more than before, I would not say compared to the production in the matter. Sales compared to what previous forecast. If you look, we are not seeing that one market is the restriction. We see the demand for all of the markets. Even in Brazil, the demand in Brazil for protein is high. Look for what is the -- how Brazil have grown in terms of the number of fed processed in Brazil is amazing. And what is this? This is because the global demand for protein because there is a reason we have been talking before about that. There is a trend it's not a trend, it's a structural change in the demand of the market because of regulatory guidelines in U.S., they change the guidelines and they put -- they need to add more protein to need to go to 1.1 grams per kilo per 1.62 grams per kilo. You can manage how much we need to produce to fulfill this market that we -- that there is a lot of the health habits that for young generation for old generation, there's a new medicine technology, this GLP-1. And combined all of this, the demand is very high, very high. I don't know if I answered your question, Thiago. Thiago Bortoluci: Perfectly, Tomazoni. This is very helpful. On the second one, still talking about the conflict in the Middle East. Obviously, this is an ongoing situation. But could you help us framing the impact so far in your freight expenses -- and by freight, I'm mentioning seaborne freight, but also truck freight in Brazil and maybe a sensitivity of how this could impact your profitability if sustained going forward or how you plan to pass this along? Gilberto Tomazoni: Thiago, I think I just mentioned before, the flow, the product to go to the market didn't change. Didn't change from Brazil. Didn't change from Australia and any of the other markets didn't change. We keep supplying the market. We have -- what we saw the growth -- the cost, we have a contract with the marine agents and they put extra cost because of the risk to navigate in these regions. And this is one of the cost. The second cost is the cost that we need to change the port -- some -- the destination of the product, some destination will change from one port to the other port. And when we change the destination for the different part, we need to have the truck transportation because to there is not -- there is no closer to the customers, then we need to have this cost of transportation. But so far, this -- all of these costs was beared by the market. We not see impact in our results. Thiago Bortoluci: This is also true in Brazil. Tomazoni, with diesel prices. Gilberto Tomazoni: No. In Brazil, we see the increase of price of diesel. And we see that increase in terms of the cost of freight. I talk about the Middle East, but when you look for Brazil, yes, you are right, increase the cost of the freight. I think if the crude oil keep this price and depends on how far the development of this war, I believe that other costs will be increased, the cost of packaging and what is depend on the oil will be increased as a raw material. I think this will be the impact, I think, the fertilizer will be impacted, and then it could be -- then I mentioned before, when they talk about the cost of the corn because the fertilizer will be higher, the availability of fertilizers, maybe the use of fertilizer will be reduced and then the productivity of the crop will be low. But it's -- I believe it's too early to predict. Too early because you don't know how will be the end of this war. I think this is -- I saw this impact in the short term, but could be back if they end the war. I think it would all be back. It is -- I think this is a situation that we are -- how we are looking and act in this situation. Operator: Mr. Benjamin Mayhew from Bank of Montreal would like to ask a question. Benjamin Mayhew: Can you hear me okay? Yes. Gilberto Tomazoni: Yes, good morning. Benjamin Mayhew: So a lot has been covered already, but I'd like to ask a high-level question to begin. So in looking at 2026 versus 2025, just across your global segments, where do you see pockets of improved market fundamentals and where do you see pockets of maybe not so strong fundamentals throughout the year? So we'll start there. Gilberto Tomazoni: Ben, thank you for your question, Ben. I think it's a rule of improvement we've seen in all of our business units because we have a methodology that mapping the gaps. It's a one of the model that we work. All business units need to understand, need to know very well, where is the opportunity to improve, then we call mapping the gaps and when you look -- when you have the budget, we go there and see the gaps, and we forecast in our budget, some gap up in the -- each one of the operation. And it's not just for the business, but -- we got the business because we deploy each one of the process and subdivisions of the business. That is when you look -- if you look it's a huge opportunity we have yet because that new technology, a new way to do the things. We are closing the gap. We open a bigger gap, and this is the way that we see -- or get operational excellence. I think this is the mentality and the mindset for all of the business. But if you go to a structural, we see that Brazil is 1 of that has a huge opportunity for growth in terms of meat, beef in Brazil, I think, is if you compare Brazil and U.S., brazil has more than double of the [indiscernible] than U.S., more than double. And we produce just this year or last year, Brazil produced a little bit more meat than U.S. It means that -- if we are able to get the same productivity in the U.S. or can double the production in Brazil of meat. Then we see Brazil in terms of red meat huge opportunity in the future for growth. But it's not just for growth [indiscernible] all of the protein produced in Brazil is very competitive because we are grain competitive in terms of the cost of the grain. We are very competitive. We have good quality management. And I think it's -- Brazil is one. We see U.S. good opportunity. Chicken U.S. performed so well, and we see that demand in the U.S. for chicken grow before U.S. export a lot of red meat [indiscernible]. Now I think it's a huge chunk of the volume for red meat is [indiscernible] in the market because they start to appreciate the product made by red meat from chicken, say, leg meat. This is I think in U.S. is an opportunity for growth for chicken for pork demand. In U.S., we have -- if you look for the result of our pork business, they are a very consistent results for a long period of time, well managed business. And we see that we can grow in our pork business because U.S. is very competitive to produce chicken and pork. So look, it's difficult for me because I'm booming in all of the markets that we are present. Australia, we see -- we are very excited with the pork business there. We are delivering a great result there. The Australia import -- Australia now import pork meat but Australia export grain. When you export grain, the price of grain is international price, that does not make sense that you export grain in pork meat. You can produce meat there. And we are investing in our pork business, build farms and improving the operation, the productivity of the operation. Then we are so, so excited with the opportunity for Australia. And our salmon business, we have announced an investment to improve more than 50% of our capacity of salmon in Tasmania. So we see Europe. Europe, I think, is an opportunity of our growing chicken, mainly in chicken and value-added. We are excited because we are in a segment, in a sector that is growing. It's a protein. And we -- we have our global platforms that we can easily meet this demand, I think is -- we have a good situation an advantage to take the opportunity and transform this opportunity result to the company. And I think it is -- I don't know if I answered your question . Benjamin Mayhew: Yes, you did. And I really appreciate all the detail. That's very helpful context. So my second and last question would just be around the beef cycles. Just wondering if you're seeing a little bit more progress on U.S. heifer retention. So wondering about that. Also, curious about your thoughts on the durability of the Brazil cycle and then, of course, the Australian cycle. So if you could just kind of summarize that quickly, that would be amazing. Wesley Mendonça Filho: Thank you, Ben. So yes, we are seeing the herd review more actively in Canada. We're seeing that in the dairy business as well in the U.S., which also obviously impacts the overall supply. When I look at the USDA data, it shows that I think we are retaining heifers, but it's relatively slower than we expected. But I think it's -- all the economics are there, everything should be there for us to be doing that. Actually, I have an information that's pretty interesting is the beef cow slaughter in 2025, for full year, we processed 2.3 million head. In 2022 was 3.9 million heads. So we're almost half of what the beef cow slaughter was in 2022. I think those things -- that information is important, and it shows that if it wasn't for -- to keep more females for breeding, we wouldn't see such a sharp decrease in -- it's almost half of what it was in 2022, not too long ago. So I think that there is some information that kind of makes us more optimistic, but obviously, it's lower than we would wish. Gilberto Tomazoni: Then related to Australia, we see we are in the middle of the cycle in Australia. And back to Brazil. Brazil, we see that the reduction of production in terms of the number of cows but the other side, we have a different force. The Brazilian -- if you look Brazilian and compared to U.S., or compared to Brazilian -- cannot need to compare to U.S. You can compare it for the high level of productivity in Brazil producers and the average of Brazil. The average of Brazil, they bring to harvest if at 4 years age in -- but the good producer or the modern farmers. They live 2 years to get the product finished, to get the cattles finished means that at the same time, we have a reduction in the age of the cattles. And this combined with increased a lot of feedlot in Brazil. The feedlot in Brazil was not well developed. Now you can see a lot of feedlots in Brazil. And the other part, we have an improvement in genetic improvement nutrition the Brazilian ethanol, corn ethanol industry, now they deliver good byproduct from the ethanol that is DDG, it is support a lot to grow the growth of improvements in feed. We see that we are -- I think Brazil will be able to manage this situation and postpone the cycle, the cattle cycle, that is normal cattle cycle. Operator: Our next question is from Heather Jones with Heather Jones. You may now go ahead and Mrs. Jones. If you're trying to speak you might be on mute there, Mrs. Jones. For the moment, we'll move on to the next question on the list, which is Leonardo Alencar from XP Investimentos. Mr. Alencar? Leonardo Alencar: I'd like to go -- wanted to talk back to U.S. beef discussion. And then we mentioned many points on the supply side. I wanted to focus probably more on the demand side. So if we can get -- First, a view on the resilience of beef prices. We've been seeing some amazing beef prices in the beginning or even before the spring season. So just to understand if you -- this is this is feasible or even if it's possible for us to expect higher price throughout the next few months. There was an interesting change in choice and select spreads. I don't know if there's any signal that point, if you could provide us with more information. And this discussion on the product of USA label, I understand it's really new. But if you have any early -- any views on that would be interesting as well. And then on the second point, maybe more like an exercise here. I understand that we've been discussing value-added products and processed goods and that U.S. is the main focus for that. But you already have a lot of revenue on that channel. If we split that from the commodity business in U.S., would you say the performance for -- even from the end of 2025 or 2026, maybe better than the commodity business. It is possible to do that exercise? Wesley Mendonça Filho: So demand is -- it remains pretty strong for beef. Obviously, supply is pretty short. But it seems like beef continues to be very resilient. It seems like ground beef is especially ground beef. We've always measured ground beef versus chicken breast versus pork loins. And it seems like the demand for beef in general, just there is -- obviously, there is a little bit of a substitution with other proteins, but the demand for beef stays still remains and remains pretty strong. So we see that going forward. And all these labor requirements and all that, it's something that we're always -- whenever something changes, we discussed with our retailers and see what our customers and see what are the impacts and cost of that. But it's not something that I'm super concerned right now. Leonardo Alencar: Okay, in the value-added products? Wesley Mendonça Filho: Sorry, that value-added question was about which business unit? Sorry, I missed that. Leonardo Alencar: Exactly not related to a business unit. If you could split, remove or suggest value-added products and remove from the commodity business, would you say 2026 is expected to be better or not on that part of the business? Gilberto Tomazoni: Look, our focus is to increase value-added, in brand is the focus that investment, if you look for an investment we have done in the past, we prioritize the value-added product. And because it's we take the advantage of verticalization of the product. And the second 1 is a higher margin and more stable market that value add is one of our priorities. Leonardo Alencar: Okay. And just 1 more follow-up here. On this split up deal that was being discussed in the U.S. government, I understand it's more noise than anything, but any comments here? Wesley Mendonça Filho: It seems like it doesn't have a lot of support in the -- so right now, it's not something that we're concerned about, Leonardo. Operator: We have Mrs. Heather Jones back online, if you would like to go ahead with your question Mrs. Jones. Unknown Analyst: Are you able to hear me now? Gilberto Tomazoni: Now, yes. Operator: Seems we have some connection issues on Mrs. Jones' side, so we'll continue for now with our next question from Guilherme Palhares with Santander. You may go ahead, Mr. Palhares. Guilherme Palhares: Over the last couple of years, one of the main points here of the investment thesis of JBS has been a bit of the geographic diversification, right? And you do report each of the businesses individually in terms of Australia, Brazil, the U.S. I just wonder if you could share a bit what is -- I think U.S. is a good indication there. In terms of the supply to the market, how much of beef meat in the U.S. is being sold through JBS. Do you know a bit how much do your selling today that it's coming from Brazil and Australia? Just to give the point here is a bit of food security, right? So having this geographic diversification, how much you can maintain supply even when the cycle conditions are not there. So if you could give us some color there, I think it would be appreciated. And the second question here, Tomazoni, over the last 2 years, you guys entered in a new protein, which is table eggs, of course, you still have a minority stake on the investment there. But I just want to hear a bit your thoughts going forward with this year behind you? What is your impression there? And how much -- how big is the opportunity there? Wesley Mendonça Filho: Sure. It's very relevant to have access to import meat from the Australia from Brazil when -- especially in periods of time when there is a shortage of beef in the U.S. So that does help, and it's I mean, and obviously, the volumes at Brazil and Australia produce are significant. So it's -- so it's -- there is not -- there isn't a supply problem when it comes to that. Having said that, the U.S. is a very, very, very competitive place in the world, probably one of the most competitive places in the world the American rancher is one of the most -- are among the most capable in the world to produce beef and high-quality beef. And so obviously, the shortage is a situational thing right now, but the U.S. it's a country that doesn't need to import in the long run, it doesn't need to depend on import. It doesn't need to have imports to be able to supply its own demand. It should be able to, in the long run, to be able to have its -- for the domestic production to supply its domestic market and actually be an important exporter of beef, like it's always been. Obviously, in the short term, we have the situation that we're importing a little bit more beef than usual. But -- and it's useful to have that when there is a shortage because the demand is still there. But the U.S. is a very, very productive place and doesn't need -- for beef and it doesn't need doesn't -- in the long run, shouldn't depend on imports. Gilberto Tomazoni: And Guilherme related to table eggs, we are -- we enter in the segment because it's -- we see that the affordability of the protein, so one of the more affordable protein in the market in and we before to enter we study these categories, and we are excited the first impression, the first movement we have done is to buy a company in the U.S. and to -- we are building farms in Brazil, we are excited with the business. This is one of the businesses you want to grow. Guilherme Palhares: Okay, Tomazoni. And just one follow-up there. You guys are also entering in the U.S., right? So what is also out there that you want to do on table eggs that you think it is a relevant market that you can play and make a difference. Gilberto Tomazoni: Look, we just buy this farms in U.S., and we are without I would say that the population of the chick. Now we are populate our farms and we are excited with this. I think is this -- we are on their strategy with both with Mantiqueira because Mantiqueira has the know-how and this accelerate all of our lands in the market. Operator: Our next question comes from Pooran Sharma, you may go ahead -- with Stephens, you may go ahead, Mr. Sharma. Pooran Sharma: Can you hear me okay? Gilberto Tomazoni: Yes. Pooran Sharma: A lot of good content covered. So maybe I could just focus on the first question, maybe just on your U.S. pork business. We've been hearing from U.S. hog producers that they expect disease impacts to be the same, if not worse than last year. I was just wondering if you can kind of share what you've been hearing regarding hog disease pressure in the U.S. and if you would expect that to weigh in on margins in FY '26? Wesley Mendonça Filho: Yes, it could be. And the margin impact -- it's not necessarily that it's -- it depends on how and when it does impact, it doesn't necessarily mean that it's actually a negative impact. It could actually -- we could have a short term -- obviously, we're not expecting disease, and we don't want disease. And we do everything we can not to have them. But in the short term, you actually could have actually a higher -- given a shorter supply, you could actually have a better margin if that happens. Pooran Sharma: Okay. I appreciate the color there. And my follow-up, maybe just wanted to further on some of the comments you made about the listing on the NYSE. You mentioned stock has seen some liquidity and valuation benefits but that you're still expecting to get more. And in the past, you all have talked about, I think, index inclusions and the potential for -- to get into some of those and the timing to get into some of those. So I think as we're looking in FY '26, I was just wondering if you could maybe give us an update on what's out there in terms of inclusion on some of these passive indices? Guilherme Cavalcanti: Okay? So on the multiple side, if you look at our enterprise value EBITDA forward-looking, we are trading higher than we used to trade before the listing. So there was a multiple expansion already, but we still traded at a discount to our peers. One of the reasons is also the index inclusion. There was a research that was sent last -- yesterday from Stephens. Saying that according to what we released on our financial statements in terms of information of revenues and assets breakdown. We should be included in the Russell, which is next June, and it could bring around 14 million shares demand from passive funds. But it's out of our control. We cannot guarantee that but that's what is in the short term. On the longer term, at some point, most likely beginning next year, we will start to find -- to make files of 10-Ks and 10-Qs instead of 6-K in order to be eligible to the S&P family. So then I think 2027. So I think this year, Russell is the plan. Next year, the plan is to be on the S&P family. First on S&P 400. And once we reach it $22.7 billion market cap, that's the threshold for the S&P 500, although, again, it's not in our control. It's their committee decision for shares inclusion. Also worth mentioning that our average daily trading volume is 3x higher what it used to be before the listing. And the Brazilian investors fell to 10% of our free float. And the U.S. investment today, it's already 70% of our free float. Operator: And our next question comes from Ricardo Boiati from Safra. Ricardo Boiati: One. My first question goes to Wesley. I wanted to circle back to the U.S. business. You, in fact, already answered part of my question here, which related to the competitiveness of the U.S. ranchers, right? We are seeing very favorable conditions, right, for a faster herd rebuilding in the U.S. with the beef prices, the cattle prices. My question here would be exactly when you look from the ranchers' perspectives, right, we see some concerns that labor, even succession plans could be an issue for the ranchers longer term. You expressed a very strong positive outlook for the U.S. beef industry, which is very, very good. So I would ask you to elaborate a little further on the drivers for the industry especially from the ranchers' perspective, right? Is there anything that could prevent a more robust business expansion for the ranchers, anything that could be a risk in the horizon? So that would be the first question. And the second one, just more broadly looking at the current market environment. the risk environment globally. Does this situation here of increased volatility could imply an even more conservative approach when it comes to the balance sheet of the company? It's quite clear that the balance sheet is very strong. I mean, in terms of leverage, in terms of debt maturity, you already showed this in details. But the very short term, the current environment, does it imply an even greater conservativeness from your side or nothing relevant so far? Wesley Mendonça Filho: Ricardo yes, there is -- obviously, there is issues that are very relevant, succession is always very relevant, and labor and all that. But at the end of the day, I have a pretty simple view of this. It's the -- and obviously, like interest rates are relevant as well when it comes to herd rebuild, right, because you have to carry more working capital and livestock and all of that. But at the end of the day, I think it's pretty simple. The U.S. has the nature, has the culture, I mean in nature, I mean, like just environment, right, just the natural resources to do it, to have a thriving beef production, it has the culture to do it. It has the infrastructure like no other countries. So at the end of the day, we remain very optimistic about it in the medium long run. Guilherme Cavalcanti: In terms of balance sheet, I think it's worth mentioning that sometimes you should not look at the net debt absolute value itself. But not even on the net debt to EBITDA, I think it's where I mentioned that in the last 3 years, we increased our net debt in 8%. However, financial expenses stayed the same. So through like big management exercises, we've been able to despite increases in net debt to keep the same level of interest expenses. So our capacity of debt repayment didn't change. So as long as we have this comfortable debt capacity repayments, we have no -- not been needed any restrictions in terms of our return to shareholders or our growth given that we have discovered. And also, as I mentioned before, we don't have significant maturities in the next 5 years. which gives a lot of comfort that we don't need to go to the market at any interest rates. Our cash position is also -- we ended the quarter with $4.8 billion which is around $1.5 billion higher than what is our minimum cash given our cash conversion cycle. So again, we have a lot of questions that currently, we don't need to be restricted in any of our initiatives. Operator: Our next question comes from Igor Guedes with Genial. Igor Guedes: Can you hear me? Gilberto Tomazoni: Yes. Igor Guedes: Okay. I would like to talk a little about Seara. Regarding the first part of the question, this quarter, we saw a resumption of shipments to China after several months of suspension due to avian flu last year. I'd like to understand how the resumption went for you guys? The resumption happened around November. So it didn't cover the entire quarter for Q1 '26, should we expect an even stronger quarter in terms of volume? Is this recovery gradual? Or do you believe the full effect has already being captured in 4Q? And the second part of the question, I'd like to understand from the perspective of breaking down the positive impact -- we have volume growth as well as price improvements realized through premiums paid on certain chicken cuts standard for China, such as chicken feet, given the increase in volume, there is also an effect of improved fixed cost dilution. So my question is, if you could break it down a bit, what we saw in terms of margin improvement what influenced it the most? Was it the increase in volume, the price improvement or the fixed cost dilution? Gilberto Tomazoni: Igor, is not a simple answer for you. If you talk about the volume to China, when opened this helped a lot in terms of profitability because we have the best market for chicken wings and for chicken feet is China. Then we increase in terms of -- we -- feed don't produce were not market to deliver all of the production. But then we do open the markets, they improve volume and improve price. And about wings, they improved the price because the value of the wings in China is higher than the other markets, means that we are -- we got part of the benefit because it was in November, I think it was October, November, and now we have got the benefit in the -- in this first quarter of all of the benefit. When you talk about what is important, the cost of dilutions of price, of course, the impact of the feed, it's a huge impact in terms of profitability because these represent 60% of our cost of chicken goes to feed, around 50. This is huge that is more than to get increased the volume to compensate this is, of course, volume compensate but not able to compensate all of these costs. Operator: Our next question comes from Priya Ohri-Gupta with Barclays. Priya Ohri-Gupta: Great. I hope you can hear me. A lot of questions have been asked at this point. I would just like to ask 2, first, around just the capital allocation. You've already announced the $1 dividend per share that's going to be paid in June. That works out roughly to what you've been indicating for some time now around the ability to consistently pay about $1 billion to shareholders. Is that sort of how we should think about the dividend for the entirety of the year? Or is there room to potentially increase that with a second payment later in the year? And then relatedly, how should we think about share repurchases? Just given that you guys did do about $600 million in '25. And then I'll ask my follow-up. Guilherme Cavalcanti: Priya. So at this moment, we are sticking to what we will try to do as long as our leverage ratio allows to have the $1 billion per year in dividends. So I think this $1 billion is what we plan to pay this year. And then depends on how much excess cash or cash flow generations, then we can reevaluate a share repurchase again or not. But that do depend on the cash generation in the next quarters. Priya Ohri-Gupta: Okay. Great. And then I know you're pretty clear just now about not having any maturities in the next 5 years or so, and so you don't have any real need to come to market. But some of your bonds do become callable later this year and into early next year. Is there a scope for you to think about addressing those or consider other liability management? Or is this the rate backdrop that -- or would this rate backdrop not necessarily went? Guilherme Cavalcanti: Now the callable bonds, they have very low interest rates. So it's not worth it. The coupons are below treasury. But there's opportunities to decrease interest rates and extend maturities on the '34 and '33 maturities. So maybe I think -- it could be -- liability management could be targeted on those 2 bonds, '33 and '34 which has high coupons and higher than what we could be issued today at 30 year, for example. Operator: And next, we have Mr. John Baumgartner with Mizuho. John Baumgartner: Two for me on North America. First, on the value-add side. I mean traditionally, there's been a focus on value-add through M&A. More recently, you've gotten involved in CapEx to build the Italian meats business. But I am curious, alternatively, I know you had a relationship with Wendy's. You had done some test marketing of Wendy's burgers last summer. I'm curious what you sort of learned from that test market? And how you think about maybe licensing third-party brands to get those value-added brands in-house in lieu of making expensive acquisitions or even investing to build brands from scratch? Wesley Mendonça Filho: So look, we're looking at we obviously look at every option. For us, greenfield has made more since recently just because of valuations and the price of building some of these things. And actually, some of these businesses that we did greenfields. It's better to do to have a new plant instead of buying old assets. And so that was very specific to those greenfield acquisitions or greenfield projects, sorry. The project we won is what was very interesting was very -- it worked out well, and it's great partners. But it's an option as well, but it's not -- we'll look at that, too. But we've seen that it's not necessarily, as you mentioned, expensive as kind of prohibited to build brands. Look at what we've done at just there, right? It's we never had an the earnings call or Pilgrim's hasn't had an earnings call that they said that they were -- had invested -- the results were good for 1 reason, had a negative impact because we were building brands, right? We build brands as we build the business and it was sustainable in itself. So nowadays is a $1 billion brand. So it's in revenue. So I think it's possible to do those 2 things at the same time. John Baumgartner: Okay. And a follow-up also in North America. Guilherme, I think you mentioned there's really no imminent M&A on the horizon here, but I am curious on the egg industry, seeing where prices are for eggs, I'd imagine there's a fair amount of distressed profitability in the industry. I'm curious, looking at producer capitalization, that business specifically relative to beef, pork, other species, where you've made acquisitions at the down trend -- the down point in the cycle. How do you think about this profitability issue in eggs right now, maybe accelerating your ability to build out and maybe be opportunistic and acquire some assets in eggs. Guilherme Cavalcanti: John. So basically, it all depends on having the opportunity at the asset price. So sometimes it's not related to the current egg price and we're always looking at opportunities. So it's difficult to say and then that's our approach. It has to be an accretive acquisition. Operator: Ladies and gentlemen, there being no further questions, I would like to pass the floor to Mr. Gilberto Tomazoni. Gilberto Tomazoni: I would like to thank everyone for joining us today and all JBS team members for their dedication, the commitment to deliver the results. Let me close with 3 key points. First, though, we delivered record revenue of $86 billion and 13% growth for the prior year, reflecting the strength of, and the consistent of our global platform. Second, return, we continue to operate with a strong capital discipline with return on equity at 25% and return on investment cut out at 17%. Third, earnings per share, EPS reached $1.89, up 15% year-over-year, growing faster than net income and reinforce our focus on shareholder value. As we look ahead, we haven't changed our focus, execution, efficiency and disciplined capital allocation. That is what allowed us to deliver consistent results and build long-term value. Thank you. Operator: This is the end of the conference call held by JBS. Thank you very much for your participation, and have a nice day.