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Operator: Thank you for standing by. My name is Jordan, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Spruce Power Fourth Quarter 2025 Earnings Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Julia Gasbarre, Corporate Development and Investor Relations. You may begin. Julia Gasbarre: Thank you, operator. Good afternoon, everyone, and welcome to Spruce Power's Fourth Quarter and Full Year 2025 Earnings Conference Call. Joining me today are Chris Hayes, Spruce's Chief Executive Officer; and Tom Cimino, the company's Chief Financial Officer. Before we begin, I would like to remind you that we will comment on our financial performance using both GAAP and non-GAAP financial measures. Important information about these non-GAAP financial measures, including reconciliations to the most comparable GAAP measures is included in our earnings release for the fourth quarter of 2025, which is available on the Investor Relations section of our website. Our discussion today will also include forward-looking statements that reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our earnings release and SEC filings for a discussion of these risk factors. With that, I will now turn the call over to Chris Hayes, Chief Executive Officer of Spruce Power. Chris? Christopher Hayes: Thanks, Julia. Good afternoon, everyone. 2025 was a breakout year for Spruce and our fourth quarter capped it with exceptional momentum across the business. I could not be prouder of what our team accomplished. We delivered strong growth, significantly expanded margins and fundamentally improved the efficiency and scalability of our platform. For the fourth quarter, revenue was approximately $24 million, up 19% year-over-year, and operating EBITDA exceeded $17 million, reflecting both portfolio growth and meaningful cost improvements. For the full year, revenue increased 36% versus 2024, underscoring the strength of our platform and the impact of the NJR acquisition. Importantly, this growth was accompanied by substantial operating leverage. In the fourth quarter, O&M expense declined 64% year-over-year and SG&A declined 16% as we executed on our cost optimization initiatives. These gains are structural in nature and position us to drive continued margin expansion as we scale. We saw a meaningful inflection in cash generation. Adjusted cash flow from operations was positive $5.1 million in the quarter compared to negative $4.1 million in the prior year period, reflecting both improved operating performance and the growing contribution from our portfolio. At the same time, we continued to delever, repaying $35.1 million of debt during 2025, increasing our enterprise value. The shift in our operating income underscores our breakout year. For the full year 2025, income from operations was positive $17.9 million compared to negative $50.4 million in the prior year. Operating EBITDA was $80.1 million for the full year 2025, a 49% increase versus 2024. Taken together, these results demonstrate the strength of our model, a growing base of long-term contracted cash flows, improving unit economics and a platform that becomes more efficient as it scales. Before turning to our strategy, I want to address our financing process and the going concern disclosure you will see in our upcoming 10-K. As part of our capital strategy, we made a deliberate decision to extend our existing SP1 facility to create additional flexibility as we evaluate a broader refinancing opportunity. Rather than a near-term single portfolio solution, we chose to position the company to execute a more comprehensive transaction that could include SP1, SP2 and SP3. With the SP1 extension now complete, we are moving aggressively on a more comprehensive solution. We believe this approach maximizes optionality, enhances long-term financing efficiency and better aligns our capital structure with the scale of the platform we have built. The going concern disclosure is driven by accounting requirements related to the timing of this process. It is not reflective of our operating performance or lender engagement. We are encouraged by the level of interest and support we have seen and remain confident in our ability to execute a financing solution that strengthens the business and supports future growth. Looking ahead, our strategy remains focused on 3 key growth drivers. First, acquiring installed residential solar portfolios where our platform can unlock incremental value through operational improvements; second, expanding programmatic partnerships with developers and originators, allowing us to efficiently grow our asset base; and third, scaling Spruce Pro, our capital-light servicing platform, which we believe represents a significant and underappreciated opportunity to grow revenue and expand margins without deploying capital. Across each of these areas, our operating capabilities, cost structure and experience managing distributed solar assets position us to execute at scale. In closing, we exited 2025 with strong momentum, improved profitability, solid cash position and a clear path to continued growth. We are confident in the trajectory of the business and excited about the opportunities ahead in 2026. With that, I'll turn the call over to Tom. Thomas Cimino: Thanks, Chris, and good afternoon, everyone. I'll begin with our fourth quarter financial results. For the fourth quarter 2025, revenue totaled $24 million compared to $20.2 million in the fourth quarter 2024. The increase was again primarily attributable to the residential solar portfolio acquired from NJR in November 2024 as well as higher solar renewable energy credit revenue. Sequentially, revenue declined from the third quarter, which is consistent with the seasonal pattern of solar production and customer payments, particularly during the winter months when solar generation is lower. Turning to expenses. Total operating expense was $21.8 million for the quarter compared to $26.7 million in the year earlier period. Core operating expenses, which include SG&A and O&M totaled $14.9 million compared with $20.7 million in the fourth quarter of 2024. Breaking that down further, SG&A expenses were $13 million. O&M expenses were $1.9 million. The year-over-year improvement reflects the early stages of our project streamline and its impact on SG&A as we focus on reducing recurring costs. Regarding O&M costs for the year-over-year period, both the completion of our meter upgrade activities as well as continued efficiencies and cost discipline across the business contributed to the favorable variance. Operating EBITDA for the quarter was $17 million, up from $10.8 million in the fourth quarter 2024, primarily reflecting the contribution of the NJR portfolio as well as improvements in the company's operating cost structure. Now moving on to the balance sheet and liquidity. Adjusted cash flow from operations was $5.1 million for the quarter compared with a negative $4.1 million in the prior period -- prior year period. Cash flow from operations can fluctuate quarter-to-quarter due to both seasonal solar generation patterns and timing of certain debt service payments. Despite these fluctuations, the underlying cash generation from our portfolio remains stable and continues to support the ongoing paydown of debt principal. We continue to repay debt principal, paying $10.1 million during the quarter and $35.1 million for the year. We closed the year with a total of $93.1 million in cash. That compares to $98.8 million at the end of the third quarter and approximately $90 million at the end of the second quarter. The modest sequential change primarily reflects the timing of debt service as we pay the mezzanine debt service semiannually. Total outstanding principal debt as of December 31, 2025, was $695.5 million with a blended interest rate of approximately 6.1%, including the impact of our hedge arrangements. As Chris discussed earlier, we strategically entered into an extension of our SP1 facility, which gives us maximum optionality and a runway to focus on a broader refinancing transaction across multiple portfolios. We extended the terms to January 30, 2027, with the stipulation that we have a term sheet by October 30, 2026. Looking ahead, we intend to build on the momentum we established in the second half of 2025. We look to continue to reduce costs and further improve our recurring run rate core expense profile as we fully implement our streamlined savings while pursuing modest disciplined growth. With that, I'll turn the call back over to Chris for closing comments. Christopher Hayes: Thanks, Tom. To summarize, our fourth quarter and full year results reflect continued progress executing our strategy. We remain focused on generating stable cash flow from our operating portfolio, improving the efficiency of our platform and pursuing disciplined growth opportunities through portfolio acquisitions, programmatic partnerships and the continued expansion of Spruce Pro. We appreciate the continued support of our investors and look forward to updating you again next quarter. Operator, please open the line for any questions. Operator: [Operator Instructions] Our first question comes from the line of Will Hamilton from Kestrel Merchant Partners. William Hamilton: Congrats on the strong cash flow. I just wanted to see if I could get a little bit more color on the revenue buckets. How much was SREC during the quarter and the services revenue since those have been larger growth contributors? Christopher Hayes: Yes. You got it, Tom. Thomas Cimino: Yes. Well, appreciate it. Thanks for the compliment on the quarter. The K, you'll see we break out the revenue by component. The SREC revenue for the year was $21 million and the system, either leases or PPA revenue was $78 million. But keep in mind, the SP4 revenue is consistent with every quarter. That revenue is recorded below the line as interest income, and that's just due to the accounting nuance and the requirements to record that revenue as actually interest income. But you can see it in the cash flow statement as cash coming in. So that's the breakdown. William Hamilton: Okay. And then -- on with Spruce Pro, how would you characterize like sort of the pipeline of adding new business there to grow that? Christopher Hayes: Yes. I would say, overall, we have a robust pipeline that's made up of kind of what we call a few large whales and sort of some smaller opportunities. So we've been super active in the market. Obviously, we didn't announce anything in the quarter, but we are hopeful there will be announcements in the near term and are very aggressive in that space. William Hamilton: Okay. And then last question is more on M&A, which is hard to answer, but you haven't done anything too recent. I was just wondering what is the pipeline like for that. But is it also now kind of tied to the debt consolidation deal that you're working on? Christopher Hayes: Yes. So I'll answer them separately, but talk about any interplay between the two. So we do have a super active pipeline. I mean we've done 13 acquisitions over a number of years. So having been active in the market, we get phone calls. We're always beating the bushes. We are underwriting a number of deals, whether we get to closing remains to be seen, but that is certainly the objective. As it relates to the SP1 strategic extension that we chose, no, there is not an interplay with that and either helping or hurting any strategic growth acquisitions that sort of operate independently. Operator: There are no further questions. I'd like to now turn the call back over to Julia Gasbarre for closing remarks. Julia Gasbarre: Thanks, operator, and thank you to everyone for joining us today and for your continued support. If you have any questions, please reach out to the Investor Relations team. This concludes our call. Operator: This concludes today's meeting. You may now disconnect.
Operator: Good day, and thank you for standing by. Welcome to the Innventure Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Lucas Harper, Chief Investment Officer. Please go ahead. Lucas Harper: Thanks, operator, and thank you all for joining us for Innventure's Fourth Quarter 2025 Earnings Call. My name is Lucas Harper, Innventure's Chief Investment Officer. And joining me from the company are Roland Austrup, Chief Growth Officer; and Bill Haskell, Chief Executive Officer; and Dave Yablunosky, Chief Financial Officer. Earlier today, we issued a press release announcing our financial results, which are available on our Investor Relations website, along with the supplemental slide presentation. As referenced on Slide 6, we will be discussing non-GAAP financial measures during this call. The most directly comparable GAAP financial measures and a reconciliation of the differences between the GAAP and non-GAAP financial measures are available in our earnings release and supplemental slide presentation on our website. In addition, certain statements being made today are forward-looking statements that are based on management's current assumptions, beliefs and expectations concerning future events impacting the company. These forward-looking statements involve a number of uncertainties and risks, including, but not limited to, those described in our earnings release, Form 10-K for the period ending December 31, 2025, and other filings with the SEC. The actual results of operations and financial condition of the company could differ materially from those expressed or implied in our forward-looking statements. And now I'd like to turn the call over to Roland Austrup. Roland Austrup: Thank you, Lucas, and thank you to everyone joining us today. I am Roland Austrup, Chief Growth Officer. Before I begin, I want to note that this April, we will host an Innventure CEO Call featuring deep dive commentary from Accelsius CEO, Josh Claman, AeroFlexx CEO, Andy Meyer; and Refinity's CEO, Bill Grieco. There will be more details to follow, and I strongly encourage our shareholders to tune in. Now let me start by saying something plainly. This is the earnings call we have been building toward, not because of a single milestone, not because of a single announcement, but because for the first time in Innventure's history, every part of this platform is firing at the same time, and the results are undeniable. There is a difference between a company that tells you it is going to do something and a company that has done it. There's a difference between a thesis and a proof, and what we are presenting to you today is proof. This is not one milestone. It is not one announcement we're addressing up for you. Let me give you the headline and then I'll give you the proof. The headline is this: Innventure has crossed the threshold from potential to performance. And the proof is in third-party validation, commercial bookings at scale, operational expansion, execution milestones delivered across our family of operating companies simultaneously. What you are seeing in the fourth quarter of 2025 and the opening months of 2026 is not incremental progress. It is decisive across the board inflection in the trajectory of this company. This is what an industrial growth platform looks like when it starts to run and it is what differentiates Innventure from single asset or venture style stories. Since inception, we have deployed approximately $160 million of balance sheet capital into our operating companies. That capital has generated roughly $860 million in net asset value, including approximately $460 million distributed directly to shareholders through PureCycle. That track record matters, but what matters more is what is happening now. The platform is beginning its transition from being capital funded to be commercially self-funding. And the evidence is clear. In the first quarter of 2026 alone, our operating companies generated more than $50 million in new bookings in a single quarter. That is a commercial inflection point by any measure and a powerful leading indicator of forward revenue and enterprise value creation. Across our operating companies, the momentum is unmistakable. Accelsius is scaling with the speed and urgency the AI infrastructure build-out demands backed by institutional validation from Johnson Controls and Legrand and a growing pipeline of commercial deployments. AeroFlexx has entered prestige beauty, one of the most demanding markets in the world and expanded global manufacturing capacity to meet accelerating demand. Refinity moved from formation to pilot scale validation in just over a year, demonstrating the speed, repeatability and discipline of the Innventure model. Three companies, three proof points all at once. This is not a coincidence. This is architecture, the architecture of a platform business delivering on its promise. This momentum underpins our expectation of reaching consolidated cash flow positivity in 2028, driven by Accelsius expecting to achieve cash flow positivity this year. Each operating company is now directly raising capital, we're reducing the need for Innventure's balance sheet and fundamentally changing the financial character of this business, exactly on schedule. Our model has always been well defined. I know there are investors on this call who have been patient. I know there are investors who have been waiting for us to stop talking about what we are going to do and start showing what we have done. We appreciate your patience. I want you to hear me clearly now. The waiting is over. The results are here. They are accelerating, and the best chapters of the Innventure story are the ones we are writing right now. With that, let me pass the call to Bill Haskell to walk through each operating company and provide the specifics behind this acceleration. Gregory Haskell: Thanks, Roland. I want to start with Accelsius, and I want to start with something I think people in this market is still underappreciated. The world has decided that launch artificial intelligence. Not eventually, now. Every major technology company, every sovereign wealth fund, every hyperscaler on the planet is in a race to build compute infrastructure at a scale that has no historical precedent. And here is the part that most people have not yet fully internalized. You cannot run that infrastructure without solving the thermal problem, you cannot. The chips that power AI generate heat and densities that make traditional air cooling physically insufficient. This is not an engineering preference. It is completely thermodynamics. That is the market Accelsius is scaling into. And Accelsius is not scaling into it theoretically and is scaling into it with over $50 million in contracted backlog secured in the first quarter of 2026 alone, all tied to greenfield next-generation data center development, acted by an initial order for the first deployment by DarkNX, a vertically integrated and funded AI data center developer with a healthy tenant pipeline and the ability to build the liquid cooling, ready capacity and an accelerated time line. Now I want to be honest with you about something because I think honesty on earnings calls is more valuable than cheerleading. Data center construction is experiencing real global supply chain on strengths. Our distribution equipment, switchgear, memory and milling mechanical systems. These constraints can affect the timing of delivery and revenue recognition even when customer demand and purchase orders are firmly in hand. So while we expect to recognize the majority of the contracted backlog as revenue this year, the exact cadence is difficult to forecast with precision. Our expectation today is that revenue will be heavily back-end weighted in 2026. But I want to be very clear about what that means and what it does not mean. It does not mean demand is uncertain, it does not mean our technological improvement. It means the physical world has supply chains and supply chain set constraints. The important signal is not the quarter-to-quarter timing. It is the bookings. It is the customer commitments. It is the scale of demand we are now seeing. Those are the leading indicators of long-term value creation and those indicators are unambiguous. Based on our current trajectory, Accelsius is on a path to exit 2026, cash flow breakeven defined by cash from operations. This implies a December 2026 annual revenue run rate of approximately $100 million. And importantly, we believe Accelsius cash on hand is sufficient for the company to reach this cash flow positive threshold. Think about what that means, a company that just a short time ago was still in the early field deployment is now approaching self-funded commercial scale. Let me contextualize this further. -- because the market is telling you something important that you should be paying attention to. The recent acquisitions of CoolIT and Boyd had roughly 8 to 9x revenue and nearly 30x forward EBITDA and make it unmistakable that the industry is moving decisively toward direct-to chip liquid cooling. And here is the critical distinction. Both CoolIT and Boyd remains single phase today. Accelsius is already commercially deployed in the 2-phase architecture that the market is converting toward. Two-phased cooling is not an incremental improvement on a single phase. It is a fundamental architectural advantage. Because of the phase change that occurs, it removes far more heat with far less energy, enabling rack densities and thermal performance that single-phase water systems simply cannot reach. Industry analysis consistently show that directorship cooling is one of the fastest-growing segments of the data center thermal market, with forecasts ranging from low double digits to mid-30% compound annual growth rates over the next decade. The earliest adopters are exactly where we are seeing our strongest traction today. Greenfield, high-performance computing and AI focused data centers, where air cooling cannot keep up with the heat box of modern GPUs and accelerators. But here is what I want investors to understand about the size of the opportunity. The first one is already here, new builds, HPC, AI infrastructure. But the second wave, and this is potentially even larger is legacy data centers. Even in facilities where air cooling is technically adequate today, operators are recognizing the 2-phased school income locks higher rate lease, greater compute per square foot and significant energy savings that allows them to densify and sort of expand to deploy more complete power that new construction to reduce the energy overhead of air-based cooling. We believe that the necessity of 2-phased cooling for HPC and AI workloads, combined with the compelling economics for non-HBC environment, will cause direct to chip 2-phased cooling to become the dominant architecture for both new and retrofit data centers over the next 3 to 5 years. Accelsius is now widely recognized as a leader in direct-to-chip, 2-phased cooling, a position reinforced by our strategic investors, Johnson Controls and Legrand. Their involvement is not passive. It is a strong validation of both our technology and our commercial readiness like 2 of the most respected names in global building systems and data center infrastructure. In December 2025, Accelsius closed the second tranche of a $65 million Series B investment, led by Johnson Controls and Legrand, valuing the company at approximately $665 million post money. I want to emphasize this, that valuation was set by 2 global industrial companies deploying their own capital. not paint venture, not by internal Accelsius financial models, but by external institutional investors with deep domain expertise writing real checks. That is the kind of validation that is very difficult to dismiss. Let me turn to AeroFlexx, which operates in a completely different market but demonstrates the invention model just as clearly. There is a problem in packaging that at everyone acknowledges but almost no one has solved. The world produces an enormous amount of single-use rigid plastic packaging. Everyone agrees that is wasteful. Everyone agrees the supply chain or inefficient. And yet, the alternatives have historically forced a trade-off. You could have sustainability or it could have performance in consumer appeal, but you cannot have both. AeroFlexx changes that equation. Founded in 2018 around liquid packaging technology sourced from Procter & Gamble, AeroFlexx is an integrated packaging and filling platform that improves the consumer experience, simplify supply chains reduces virgin plastic usage and enhances e-commerce economics. Its differentiation comes from delivering all of this value simultaneously. The current side recyclable package. It uses up to 85% less virgin plastic than rigid bottles, a flat back format that enables up to 10x greater shipping efficiency, lower total cost of ownership by consolidating the supply chain and consumer testing that consistently shows a clear preference versus traditional packaging. This is not a trade-off. This is a better product. As of the fourth quarter, AeroFlexx has delivered 6 consecutive quarters of revenue across pet care, baby care, personal care, household products and industrial applications. And what is notable today is that AeroFlexx is transitioning from early market validation to large-scale adoption and volume production units. During the first quarter of 2026, AeroFlexx announced a global partnership with Aveda, part of the Estee Lauder Companies. Aveda is the first global prestige brand to adopt AeroFlexx refill packaging format with select products expected to date with early 2027. Let me tell you why that matters beyond the headline. Prestige beauty is one of the most demanding markets in the world. the brand standards, the performance requirements, the aesthetic expectations is are extraordinarily high. When Aveda backed by Estee Lauder chooses our platform, that is the statement about the maturity and credibility of our technology. Aveda is 1 of 4 anchor customer relationships that now underpin AeroFlexx's commercial momentum across distinct end markets. The other anchors include a multinational consumer packaged goods company with a signed multi-brand multimillion unit agreement, a major producer of industrial fluids and packaging services where commercialization is advancing through both equipment and back sales with the first purchase order already received in production beginning next month. a large beverage and food service partnership that was made at AeroFlexx entry into fluting beverage, the largest portion of its addressable market. Taken together, these 4 anchor customers valid the platform across premium beauty, household and personal care, industrial applications in food and beverage, and each has the potential to support line extensions geographic expansion and follow-on programs as AeroFlexx becomes more deeply integrated into long-term packaging strategies. AeroFlexx near-term commercial pipeline stands at just on the $30 million including an approximately 1/3 in final negotiations. We have not provided any guidance on the timing of revenue conversion, but the realization of these opportunities is incorporated into our assumptions or AeroFlexx to reach cash flow positivity in 2028. The company's opportunity set is broader and more diversified than at any point in its history. AeroFlexx is also in the process of launching a direct capital raise at the operating company level, targeting strategic investors that also serve as commercial partners. As our operating companies mature, they are increasingly able to raise capital independently, reducing the need for parent level funding. That is the model working exactly designed. Let me turn to Refinity, and I'll tell you candidly, this may be the most compelling industrial opportunity we have ever launched. Here is the problem. The world produces hundreds of millions of tons of plastic weighted every year. A meaningful portion of that waste has no viable recycling pathway to today. It goes to landfills, they go to incinerators, it goes into the environment. At the same time, petrochemical companies are spending enormous sums buying fossil feedstocks, ethane and naphtha to produce ethylene and propylene, 200 carbons that represent a $350 billion global market and are essential to producing polyethylene, polypropylene and a wide range of specialty materials. Refinity connects those 2 problems. It takes the portion of plastic waste stream that today have no viable recycling pathway and convert it into high-value chemical building blocks, ethylene and propylene the petrochemical companies are already buying. The substitutional loan creates a compelling economic incentives and ability to hedge against fossil price swings while meeting circularity commitments. Across the value chain, circular materials command a 30% to 50% price premium with the highest premiums closest to the consumer. This is not a sustainability story that require you to or economics. This is a sustainability story where the economics of the reason it works. Refinity's primary commercialization strategy is built around integration, co-locating plants directly at petrochemical sites such as the Dow steam cracker. This eliminates testation cost feeds directly into existing infrastructure, reduces CapEx for both Refinity and the customers -- it accelerates adoption by fitting seamlessly into the way these companies already run their assets. Beyond its core ethylene and propylene focus, Refinity sees significant opportunities in producing customized circular hydrocarbon products, including specialty high-value lubricants and sustainable aviation fuel or SAF. One of our independent directors is a C-suite executive in the aviation industry, and we have come to appreciate that SAF has become one of the most critical pathways radiation to meet its Net Zero commitments with demand going far faster than supply and U.S. production expected to scale dramatically over the next decade. Refinity's recently licensed technology from a U.S. national lab for catalytic conversion of its mixed ethylene and propylene product to SAF and SAF to crystal liquids and intends to demonstrate this conversion process late this year. The SAF market alone is growing at 38% to 50% annually and is anticipated to reach $40 billion by 2034. The ability to disrupt a $350 billion commodity market while also accessing high-growth specialty sectors like lubricants and SAF underscores just how significant the total addressable market is for Refinity. Now here is the process to get your attention. Refinity was formed in December 2024. Less than 1 year later, the team produced its first metric ton of circular product from real-world mixed plastic waste yields typically above 60% to 70% with minimal chart. That compares to about 25% conversion for competing technologies. For our technology of this complexity at speed is exceptional. Since then, Refinity has filed multiple patents on a DuoZone reactor design, expanded its IP portfolio with licenses from the U.S. University and a national lab and advanced engineering toward a 10-kiloton per year demonstration plant targeted for completion in 2028. A commercial scale plant of around 150 kilotons per year is planned for early next decade aligned with the chemical industry's expected return to growth. Refinity is hitting KPIs ahead of schedule. It is solving a real cost problem for petrochemical customers and is positioning itself to scale just as the industry reentrant and growth phase. This is the Innventure model: rapid formation, accelerated validation and a disciplined progression towards commercialization in a massive market with structural economic drivers. Before Dave gets into the financials, I want to leave investors with 3 clear takeaways. First, invention awards. PureCycle approved it and Accelsius is validating it again at a faster pace. This is not theoretical, it has been demonstrated to us. Second, we are not dependent on a single operating company. We now have 3 businesses executing simultaneously, each with independent third-party validation that is diversification with conviction, not diversification as a hedge. And third, I think this is the one that the market has been slow to absorb. The platform is transitioning structurally from capital consuming to increasingly self-funded. Operating companies are raising their own capital. They're converting commercial traction in the revenue, the architecture of this business is changing and it's changing exactly the way we expected it would. I want to say something about valuation because I think it needs to be said plainly. We believe our current share price does not fully reflect the value of meta shares. The $665 million third-party valuation of Accelsius was set by institutional investors deploying their own capital, adding 2 strategic investors to the cap table and securing more than $50 million in contracted backlog. We believe the value of Accelsius alone has materially increased, and that does not include the value of AeroFlexx or energy. We're not going to complain about the market, but we are going to stay static. In fact, suggests there is a significant gap in we were our shares create and what this platform is worth. Our focus remains on execution. We believe that if we continue to execute, value will ultimately be recognized and we intend to continue executing. When we look across our family of operating companies today, our confidence in Innventure's path to consolidated cash flow positivity in 2028 is grounded in execution, not aspiration. Accelsius is scaling into production deployments in a market where liquid cooling is becoming mandatory with third-party institutional validation and a clear line of sight towards self-funded growth. AeroFlexx has moved beyond pilot programs into repeat revenue, anchor customers and global manufacturing scale while transitioning to direct capital formation at the operating company level, and Refinity is rapidly validated its core technology, established a clear commercialization road map and has become the process of funding its next days independently. Taken together, these developments reflect a platform that is structurally maturing with the operating company is increasingly funding their own growth, corporate capital requirements declining and commercial activity translating into revenue. This is exactly how the Innventure model is designed to work, and it underpins our confidence in the enterprise's long-term financial trajectory. With that, I'll turn the call over to Dave to walk through the financials. David Yablunosky: Thanks, Bill, and good afternoon, everyone. I'll walk through our fourth quarter and full year results, but let me begin with the most important thing I could tell you. The financial profile of this company is changing, not gradually, structurally and the numbers I'm about to give you are evidence of that change. 2025 was an important proof point year for Accelsius. Revenue increased from $0.3 million in 2024 to $1.6 million in 2025, driven by successful proof-of-concept deployments with early customers. At the consolidated level, Investors 2025 revenue was $2.1 million, up from $1.2 million in 2024. Fees from our management of the Innventure ESG fund along with intercompany eliminations, were $0.5 million compared to $0.9 million in 2024. But the real step change happened in the first quarter of 2026. Accelsius generated more than $50 million in contracted backlog. These are production volume orders, not pilots, not trials. This provides strong visibility into meaningful revenue scaling in 2026. And as Bill mentioned, we expect Accelsius to exit December 2026, and with positive operating cash flow, implying an annual revenue run rate of approximately $100 million. We also expect revenue to be heavily weighted to the back end of this year. General and administrative expense. Before I get into the specifics, I want to explain something about how our cost structure has evolved because it gives important context. We have included a slide in our earnings presentation that illustrates this in granular detail. Historically, prior to the operating companies reaching commercialization, Innventure funded essentially all G&A costs from the topco level: personnel expense, special services, operating expenses, all centralized, all flowing through Innventure's consolidated P&L. That's now changing. While cost at associates and Refinity will continue to flow through the consolidated financials, a growing portion of the total operating expenses will be funded directly within those businesses. rather than buy in venture. At the topco level, our focus is increasingly on a lean corporate cost structure, funding only what's required to operate Innventure topco. Now let me give you the numbers because they're significant. G&A has decreased sequentially every quarter since Innventure went public. Consolidated G&A declined from $29.7 million in the fourth quarter 24 to $11.5 million in the fourth quarter 25, a 61% reduction. That reflects disciplined cost management across Innventure, Accelsius and Refinity, as well as the tapering of noncash expenses associated with our public listing. Professional service fees shows the same trajectory; $3.5 million in the fourth quarter 25, down 42% from their peak of $6.1 million in the first quarter, $25 million as we brought key functions in-house at lower cost. At the parent company level, Innventure's fourth quarter 25 cash G&A expenses were $5.7 million, down over 55% from $12.9 million in the fourth quarter of last year. That's not noise. That's a structural change in how this business operates. Looking ahead to 2026, we expect the venture Topco G&A to follow a trend similar to the last 3 quarters of 2025. A few income statement highlights. Excluding the $347 million noncash goodwill adjustments and other minor noncash items, adjusted EBITDA for 2025 was a loss of $78.8 million. As we look forward, the combination of a significant contracted backlog, our expectation that Accelsius will reach a revenue run rate of approximately $100 million and exit 2026 cash flow positive gives us confidence that there will be a substantial improvement in the reported adjusted EBITDA in 2026. Moving to cash and liquidity. On a consolidated basis, we ended 2025 with $65.4 million of cash, restricted cash and cash equivalents, up from $11.1 million at the end of 2024. Additionally, in January 2026, we strengthened our balance sheet with a $40 million registered direct offering as Innventure became shelf eligible. Shelf eligibility is an important milestone. It gives us efficient access to public market capital on substantially better terms than what was available previously. Just as importantly, we repaid the entire remaining $5.6 million balance on our convertible ventures, which simplifies our capital structure. Let me walk through why we believe our cost of capital will improve significantly going forward. One, we believe Accelsius is now effectively fully funded and entering rapid commercial scaling with the over $50 million in contracted backlog. Two, fourth quarter '25 G&A is down 61% from fourth quarter '24, with further efficiencies expected as we take advantage of productivity improvements. Third, shelf eligibility, which reduces reliance on higher cost financing alternatives. As our operating companies, particularly at Accelsius begin generating cash, we expect this to further extend our cash runway and move Innventure towards a self-funding ever remodel. While it is too early to discuss the details of the ongoing capital needs for Refinity and AeroFlexx. The disciplined cost actions I discussed earlier gives us visibility into in ventures needs. At the Innventure level, we estimate 2026 capital needs to be materially less as our operating companies become self-funded. This reflects a near parent company structure as expenses continue to shift to the operating companies. On the balance sheet, by way of explanation, our $28.7 million in investments represents our $19.5 million equity method investment in AeroFlexx and $9.2 million in AeroFlexx debt securities. And following the goodwill write-downs earlier this year, $23 million of goodwill still remains on our balance sheet. On the cash flow statement, you could see many of the noncash items that appear in our income statement. The cash used in investing activities primarily reflects funding to AeroFlexx and capital expenditures at cells. Let me close with this. There are companies that talked about inflection forms. And then there are companies that cross them in venture is crossing born right now. rapid commercialization, a dramatically improved cost structure, efficient access to capital, operating companies that are beginning to fund their own growth. These are not just aspirations we are sharing with you. They are facts supported by every number I just walked you through it. We believe this combination positions us to scale with far greater capital efficiency and to create meaningful long-term value for our shareholders. And every investor on this call understand we are not slowing down. We are accelerating. With that, we'll open the call for questions. Operator: [Operator Instructions] And our first question comes from the line of Chip Moore of ROTH Capital Partners. Alfred Moore: So maybe if I could start on Accelsius, the $50 million plus in contracted orders here in Q1. It sounds like DarkNX is a significant chunk of that, but maybe you can talk about the types of customers in there, other customers and what you're seeing there and then pipeline as well? Gregory Haskell: Yes, sure. So I would say this, Chip, we have literally hundreds of people in the pipeline of customers in the pipeline that are all kind of moving forward through. I mean the beginning of that is starting to drop through, as you can see. So it's fairly chunky right now. But I think what you'll see going forward is we'll have a larger framework of customers. I mean we have delivered to dozens of customers to date. So I think what you're going to see is many more groups of purchase orders fall with increasing numbers as they go forward. It's tricky marketplace, as I think we all know, just because of, again, some of the supply chain issues that have been talked about on this call and people are seeing in the marketplace. So that affects some of the timing of various both purchase orders and the prospective deliveries of those. And while I'm not predicting that we'll have any material delays in delivery, it's not something within our control. I mean, ultimately, these are things that will be determined by the pace of the build-out of the various data centers and our customers' sort of supply chain constraints. So that's kind of where we stand at the moment. But we'll have a broader and broader, more diversified pipeline of contracts as we go forward is my belief. Alfred Moore: Yes. That's helpful, Bill, and it makes a lot of sense. Obviously, a lot of things out of your control like many. And I guess for the deliveries to dozens of potential customers. Would you describe that more as sort of piloting phase? And how long do you think people want to have a look at the technology before they get fully comfortable? Gregory Haskell: Yes. Well, so last year, virtual all of our deliveries were kind of one-off pilots where people were just evaluating the technology. I think we've moved past that for most all of the customers that are in the pipeline at this stage. So the way I would frame it is this: if we were sitting here a year ago, our average proposal outstanding was probably worth a couple of hundred thousand dollars and now we're not virtual -- not everyone, but most of the purchase orders are either 8 or even 9 figures in terms of scale. I would say most are probably in the 8-figure range. So that just shows you a significant transition from evaluation units to real commercial production orders. Alfred Moore: Yes. Definitely. That's helpful. And maybe just one more on Accelsius. For me, to your point, on cadence being tougher to predict near term and some of the things that did control but it sounds like you have reasonable visibility into maybe $25 million-ish of revenue in Q4 if something that your control doesn't get held up. Is that the right way to think about it based on what I said? Gregory Haskell: Yes, like you said, that's the kind of run rate we indicated that would make the company cash generative. And I think Josh came out a couple of months ago and said that was our expectation that we would reach cash flow positivity by year-end, and that is still our belief. Alfred Moore: Yes. Okay. And just one more before I hop back in queue. AeroFlexx, a lot of momentum, data, obviously, announcement recently, but now you're talking about a $30 million pipeline and some of that getting close. Just a little more detail there. And I think I heard you say that you might be looking to do arrays with some strategics there. Just any more color you can provide. Gregory Haskell: Yes. I would say this, now that we've gotten to the point where we've proven out the technology and proven out the recyclability of the AeroFlexx package, and it's gone through its own evaluation unit phase just as we did in Accelsius. Now we're starting to see, again, same thing, commercial-sized proposals that have been asked for. And so Aveda is really a framework deal that we think can be quite significant. I don't have a number of scale yet of what that can grow to but they're a very large luxury brand within Estee Lauder, as you may know. And what we believe, based on conversations we've had with lots and lots of customers is that they'll start with a product 1 SKU, I'll call it, that they'll go out and run and assuming that's successful, they will kind of broaden the reach of that packaging solution to other brands within the same platform. So again, Aveda is one, but they're a big one. And as we mentioned, it's a very challenging customer in the sense that, again, the bar is very high across the board because aesthetics is very important. And then so they want unique shape, some different kinds of packaging and labeling that is more difficult than, say, industrial where you look -- putting a lubricants and barring chain oil, which is an opportunity for us and other things of that category. Alfred Moore: Yes. No, that's great. One last one for me before I hop back in queue, I think probably more for Dave, but the transparency around G&A and some of the expenses. I really appreciate that and the slide in there. I guess the question would be, is there much more low-hanging fruit there? Do you think G&A continues to come down? And how much more optimization do you think you could see there? David Yablunosky: Chip, thanks for the question. And certainly, we're always focused on G&A. We're always looking at ways to be more efficient, more effective, get more done with less. So while I don't want to give forward guidance on where I think that might be just going to be, I can assure you, I can assure you, it's on our radar, and we're always looking at ways to operate more efficiency. But we're pretty proud of the 5 consecutive quarters since we went public. So that's how I'd add into that. Gregory Haskell: Yes. I would just amplify that a little bit, Chip, in the following way. I mean if you we talked about when we went public that we needed to be a public company ready kind of overshoot and we relied very heavily upon outside vendors to help. And now we've brought a lot of that functionality in-house. So we've weaned ourselves off some of those outside services will quite expensive, but that wasn't all realized by the end of December. There was still some carryover. So that continues to reduce which is where I think you'll see some improvements in our cost structure going forward. Operator: Our next question comes from the line of Nehal Chokshi of Northland Capital Markets. Nehal Chokshi: I think it was a well said narrative on the transition of Innventure and proof points that the unique VC model is working. So well done there. There are some questions, though, that I think need to be asked. So I got a bunch, and let me just go through them real quickly. The COGS to revenue ratio continues to inch up I understand that we're still in basically pilot base. But at what point in time -- why is it continuing to inch up? And at what point in time do you expect that to start to get normalized? Gregory Haskell: Yes. So I would say we're building some things to inventory based on projected orders, Nehal, so the cost of goods is ahead of delivery, right? So I think that's a the primary issue, right, where we have customers that know what they're going to want in terms of product mix. And so we've developed some inventory which, of course, all that cost goes in, but the revenue is yet to be realized in certain areas. David Yablunosky: Yes, I'll jump in, and that's accurate, right, really cost element to COGS as well. So you got to keep that into account. It's not all variable. Gregory Haskell: Certainly, later this year, that will -- that should even out as we start delivering at scale, you'll see all of that really flush out. Nehal Chokshi: Okay I mean when I look at the COGS relative to revenue. I mean it's roughly scaling, but it's increasing a little bit, right? It's not like a massive increase. So it almost looks like the variable cost structure is close to 100% if I were just to look at what the pure analytical lens of COGS to revenue ratio. So can you help me understand like what percent of these COGS is actually fixed versus rambled then? Gregory Haskell: Care to answer that one, Dave? David Yablunosky: I do. It gets into the margins and the cost structure of Accelsius and probably don't want to go into too many details on there. But we're amortizing intangible assets, right? So for the R&D development took place and the other things that are attributable to cost of goods sold, that amortization is going through. It's fixed. It doesn't vary with each unit produced. And the second thing is there's been a shift in Accelsius right to the higher-capacity cool units to a different MR250s and demand by the customer. So that generated a little bit more cost than just doing straight math on units and per unit cost. So those will be the 2 things I'd point you to. Gregory Haskell: But it's a very nice margin business. I'm not going to give you the projected margins at this stage later as we -- as revenues get to scale, I think we'll be able to share more in terms of that. but the margins are attractive margins in this business, in my view, on a comparative basis to kind of other vendors out there. Nehal Chokshi: Okay. And then -- so the fixed cost element within these COGS that has been going up each quarter then. Is that correct? David Yablunosky: Well, well, again, I mean I think the fixed portion is fixed. I just think there's a lot of different things happening as we're scaling as we're getting customer orders and costs are getting booked to COGS. And again, I think as we scale, then you start to see it more normalized where you could say, hey, burn units produced. This is the cost per unit you'll start to make more sense. When your number's at this level, I think you have to be careful drawing those kind of conclusions. Gregory Haskell: And we are a brand-new manufacturing facility, too. I don't aware of that in the hall, but we've opened another -- I think it's 25,000 in the facility there in Austin in addition to the -- where we had before. So we just materially increased our manufacturing footprint. So there are obviously some costs associated with that. Nehal Chokshi: Okay. Okay. still going on this slide here. Inventory was down about $5 million Q-over-Q on less than $2 million of revenue recognition in the quarter. Can you help me understand that there? David Yablunosky: Yes, I can answer that. Again, as we transition to different products, there was some inventory write-downs. And that's flowing through COGS as well. So there was a little bit of obsolescence, a little bit of manufacturing costs, some more heads allocated to cost of goods sold. It's all kind of related, but that's why you saw that inventory. Gregory Haskell: Yes. And I can give you some more to that. So this market has evolved very rapidly. And our initial belief was that a sort of 70-kilowatt rat was sort of 10x the average rack size and that was going to be kind of where the market was headed. -- really leapfrogged over that. And so we have about 150-kilowatt or a 250-kilowatt product as well. And that's really more of a sweet spot of what the market seems to warrant. So that's where the obsolescence really came in is just writing off a lot of that 70-kilowatt inventory. Nehal Chokshi: Got it. That makes a lot of sense. That's very helpful. Okay. A couple of other questions, and then I'll see the floor here. You said that DarkNX is funded. Can you give us a -- it's hard to find information on this company. Can you give us a sense as to where these funding sources are coming from for DarkNX? Gregory Haskell: Roland, do you want to fill that one? Roland Austrup: Sure, I can, Nehal. I mean all I can tell you is, I mean, coincidentally, of course, I'm in Toronto, which is where they are. So I've met with them, a handful of them already got to know them. I didn't go through the formal qualification that was done by Accelsius themselves, and I believe JCI did that as well because they're part of the chillers for that facility. All I can tell you is they are funded and they represented to me directly that they're funded, but it was formally done when they were qualified by both Accelsius and Johnson Control. A key part of that was determining that they did have funding. I don't know the source though, to tell you truth. Nehal Chokshi: Okay. All right. And then my last question, and I'll get back in the queue for the rest of my questions here. So companies are raising company capital independently, which then means that Innventure will get diluted relative to these operating companies. So does that also represent a change in philosophy on whether to fund the operating companies or not rather than just evidence of operating company maturation? I do agree that there is evidence of operating company maturation, but I'm also saying, hey, does it also represent a change in funding philosophy as well? Gregory Haskell: Yes. So let me field that one for you, Nehal. So in the early days of Innventure, most of the companies were funded not off the balance sheet of Innventure, but there was subsequent funding we had a fund that code invested within Innventure. We have some outside investors that funded a lot of those, so we ended up with relatively small stakes in each of PureCycle and AeroFlexx. When we evolved with the conglomerate model, our goal was to own more. But the balancing at the trade-off there is until we, Innventure, are cash generative at the opco level, which we projected for 2028, you'd have to take permanent dilution at the Innventure level, which would affect not only the companies that we currently have, but future companies going forward. So the thought was if these companies are in a position, you're mature enough to be able to raise capital independently, let's raise some capital for each of AeroFlexx and Refinity directly in the marketplace. And yes, we'll take some dilution there. but we saved the permanent dilution at the Innventure level for our shareholders in doing that. But when we're cash generative at the top level of veto-proper level, they would love to be able to fund as much as possible of our own balance sheet to retain full ownership. So it's kind of a trade-off between taking care of investor positions today and taking a little bit of dilution at the opco level versus kind of having to suffer permanent dilution for all future companies. And as we mentioned, certainly, Accelsius already has the requisite capital it needs to get to a cash generative position. So we're not funding anything more from there, and they're not raising any further capital. So it's really at the AeroFlexx and Refinity level. And AeroFlexx, as you know, is not a consolidated asset. We own a minority stake in it. So we're a little less sensitive to dilution at the AeroFlexx level. And we believe now that it had done this deal with beta and is seeing contraction that raising the smallish amount of capital they need going forward is imminently doable. Operator: Our next question comes from the line of Aashi Shah of Sidoti. Aashi Shah: My question is related to Accelsius and the $50 million bookings in the first quarter. They are all tied to the greenfield data center. When do you expect meaningful traction from brownfield deployments and that could accelerate adoption much quicker than greenfield in my assumption because they're going -- the growth over there is slower and riskier as to when the data centers will be ready. So any thoughts on when the brownfield deploy -- like when you start seeing traction from brownfield deployments? Gregory Haskell: Yes. It's a tricky question to answer. I'll do my best, Aashi, and thanks for the question. So we do have customers, obviously, that have the existing data centers, and some of those that would like to retrofit at least part of their data centers with a different technology. But at the moment, as you know, liquid cool data center is a relatively small number. It's, I don't know, 5% or something like that of data centers have a coin today. growing very rapidly and evidenced by a lot of the M&A activity in the sector. But we are talking to customers that have many data centers, some new builds and some existing. And the nice thing about the technology is that it drops in very nicely into an existing data center because each rack is self-contained in the sense that you have a cooling solution and a CDU all contained together with one or multiple racks. So you can replace a rack, a row whole facility or any combination thereof in a relatively straightforward way. So I don't just hard to know what the definitive answer to your question is, but I would expect some blend of that even later this year as things move forward. Just with the ones that have the most acute need of those that are mirroring up specifically for HPC and AI workloads, where they're acquiring the latest and greatest as possible. But as we migrate to agentic computing, you're going to see, I think, a big change. 2026 is really supposed to be the inflection point where we go from 80% of the computing being for training these large volume models to 80% being sort of consumer directed for generative AI. This is what's happening. People are starting to use these various AI agents, and it's a very steep curve of adoption. I mean most of it now uses it every day now, and you're going to see that continuing to grow. So if they switch over from again, these LLMs and the compute horsepower goes the other way, then it's more of a CPU game versus a GPU game. And then you're going to have clusters of large computes for CPs in, I'd say, big clusters. And that will also require liquid cooling just because of the density that they want to be able to put forth in one data center. So I mean, just in the last 2 years watching this market evolves, it's gone well ahead of the pace that it had anticipated. So I think we're going to see continue to see a shift. And I think that will drive more to the brownfield sites as trying to get back around to answer your question here because a lot of those... Roland Austrup: I can probably add to that a little bit. Gregory Haskell: Yes, go ahead. Roland Austrup: Yes. Because I mean I pretty long conversations about that with Accelsius and kind of the view I get. When you have the CEO call, I think it's a good time to ask that question exactly, by the way, to Josh. But right now, there's a need for greenfields to adopt the technology. So need drives adoption there. But in the real legacy center, really what they want to see is they want to see a mature industry develop that there's plenty of supply. And I think where you're going to see the adoption inflection point is when you see that there's a robust industry supplying or more of the greenfield developments, then the brownfields will become comfortable, I think, making switchovers. Aashi Shah: It makes sense. Understood. And another question I had was on the Aveda partnership. Can you just give us a ballpark on what the expected annual volume is going to be for that launch in 2027? And if this is going to be like a pilot program or is it a full commercial rollout? Gregory Haskell: Yes. So we've been dealing with the data for quite a long time. I don't have the direct answer to your question. I'm not ducking that, I just don't know the answer to the question. But Aveda has big brands, big luxury brands and the reason it's taken until 2027 before they roll out the scale is to figure out which particular product lines they want to use in the packaging making sure we tailor the packaging to what they want to see in the labeling and all the various things that they require. So I just don't know the answer, Aashi, but we'll be learning more over the next 6 months in terms of the details of what we would expect to see. Roland Austrup: Yes. I mean you can look at the potential, too, Aashi, I mean, there's not a lot of published data available on Aveda. But if you do any search out there, you'll find that Aveda is in the tens of millions of packages a year is what the brand is estimated to have in the marketplace. So it could be significant. But as with any brand rollout, you don't expect to get the whole thing, but it's definitely not a pilot launch. It's a global commercial launch that's targeted for 2027. Operator: And our final question comes from the line of Nehal Chokshi of Northland Capital Markets. Nehal Chokshi: Yes.So another part of the narrative here is improving corporate governance. And you guys did announce that you'll be, I think, nominating some independent Board of Directors and some existing, I guess, so-called insiders are going to be stepping down. Could you just say what percent is independent now? And what percent do you expect to be independent once these changes are made? Gregory Haskell: Sure. So today, we have 5 independent directors and 4 executive directors. And what we're targeting is to go to 7 independents and 2 executive directors. And so we have our AGM in June. So I would anticipate in that window of time that we will have migrated to 7 independents. That's the target. Nehal Chokshi: Great. Also, can you give an update on the Accelsius pipeline? I believe a quarter ago, you said it was a little bit over $1 billion. Gregory Haskell: Yes. I mean I don't have any updated information directly. I will tell you that the pipeline has a lot of different levels to it. There is, I'll call it, high conviction things in the pipeline, there's things that we think are probable, and there are things that we think are possible and then there are new things coming in all the time. So I don't have a competitive number, but we can figure that out and certainly when we do the CEO call, that's a fair question to ask them, Josh, but I just don't have the number in front me. I just haven't seen it yet. Nehal Chokshi: Got it. Understood. And then how much of the greater than $50 million of Accelsius bookings in 1Q 2026 correspond to in terms of megawatts to coal? Gregory Haskell: Say that again? Nehal Chokshi: The $360 million of Accelsius bookings in 1Q '26, what does that correspond in terms of megawatts to coal? That's a good. Gregory Haskell: Yes. I would just say this because I think we're trying to be a little bit careful about ascribing dollars per megawatt, which I think is probably where you're headed. I will say that we've part of that, a fraction of that is a small portion of the DarkNX prospective build-out, what had been announced before was 300 megawatts. And then there was another announcement saying that they had the funding for the first 2 phases of 65 megawatts each. That is not what our bookings represent today a smaller fraction of that. So again, I think when we do the CEO call, maybe we'll provide a little bit more granularity on just how many megawatts we've been contracted to roll out. But it's -- and it's going to grow. It's going to grow pretty materially between now and the next couple of quarters. again, a lot of things in the pipeline that we think will close over the next couple of quarters. But we haven't announced that some of we'll see if we can get clear information from that for the call that we do with the companies. Roland Austrup: Nehal, that's the whole point of doing a separate CEO call was that we want to have the CEOs to be able to go into greater granularity here on the earnings call, we're really just trying to sort of at the macro overview of where it's going and that we're having an acceleration across all companies and a dramatic decrease in G&A, where you can get into the technicals, I think, is going to be on the CEO call. Nehal Chokshi: Okay. All right. I'll save my additional questions for them. Operator: This concludes the question-and-answer session. Thank you for participating in today's conference. This concludes the program. You may now disconnect.
Unknown Executive: Good morning, and welcome to the Capricorn Energy PLC Full Year Results Investor Presentation. [Operator Instructions] Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Randy Neely. Good morning to you, sir. Randall Neely: Good morning, and good morning to everyone, and thank you for joining us for Capricorn's 2025 Full Year Results Presentation. I'm joined today by our CFO, Eddie Ok; and our COO, Geoff Probert. First, let me take a moment to address the evolving situation in the Middle East, particularly the conflict involving the U.S., Israel and Iran. We are closely monitoring the developments, but our operations remain stable and unaffected. It is very much business as usual for us on the ground. But before we also dive into the presentation, I want to briefly address the recent speculation regarding a potential offer for Capricorn. I understand there may be considerable interest, but due to the takeover code, I'm unable to provide any specific information beyond what was in our statement earlier this month. To reiterate, Alamadiyaf al-Masiyyah, also known as the Cafani Group, has made multiple unsolicited nonbinding proposals for potential all-cash offer for Capricorn. Discussions are ongoing, and the Capricorn Board is actively seeking further clarity regarding Cafani's funding arrangements. Under the U.K. takeover code, they have until the 8th of April 2026 to make a firm offer. At this stage, there is no certainty that a firm offer will be made nor clarity on the terms of any such offer should one materialize. So let's get into the presentation. 2025 was a significant year operationally, strategically and the financial progress made for the company, and a number of milestones were met across our Egyptian operations. 2025 marked a pivotal year for Capricorn. I believe we may have made the turn from a turnaround story to a serious growth opportunity in the Egypt and hopefully shortly, the U.K. North Sea arena. Over the past year, accounts receivable outstanding has come down materially, which allowed a significant reduction in accounts payable as well as retiring the company's senior debt. We also received the approval from the EGPC Board for the consolidation and amendment of the 8 jointly held production sharing contracts with Cheiron, our operating partner in the Western Desert. We are now only awaiting ratification, which we expect in the near term. Following EGPC Board approval, jointly with our partner, we were able to begin increasing our development activities to arrest the production declines. This, combined, of course, with the very solid technical work of our team resulted in our achieving the higher end of our production guidance. We put this graphic into our materials over a year ago to represent our base intentions and where we're going to take the company. Hopefully, our results are showing that we meant it. We now have an almost debt-free balance sheet. We have a disciplined and rigorous approach that we operate within and project on to our partner. And to be very clear, our partner has been receptive to this and has worked very collaboratively with us over the past year plus to allow a very -- sorry, to follow a very similar approach. We are now set to take advantage of all the hard work accomplished over this past 3 years, rebuilding Capricorn. In the near term, we will look to build on our base in Egypt, both organically and through acquisitions and also look to capitalize on our geographic location and capabilities in the U.K. North Sea. I'll now turn it over to Eddie, who will walk through some of our results and guidance for 2026. Eddie Ok: Thanks, Randy, and good morning, everyone. 2025 was a solid year as we not only achieved some key structural milestones in the Egypt business, but also really cleaned up our balance sheet. Production was just over 20,000 BOEs on a working interest basis, and we preserved a 40% liquids weighting in that production base. OpEx increased slightly over the prior year at $540 per BOE, driven by our fixed cost base and the currency devaluation from the prior year, having largely worked its way through the system. We're guiding to an OpEx range of $5 to $7 a BOE for 2026. A successful capital program in 2025 of $77 million invested, drove production performance in the year and set a sustainable foundation for '26's program. We had material collections in 2025 of $217 million, resulting in us ending the year with an $86 million receivables balance on $81 million in Egypt net cash flow. With only $30 million outstanding on a ring-fenced junior facility and having repaid the senior facility early, we entered '26 with a significantly improved balance sheet. The business ended 2025 with $103 million in cash, net of facility debt, which represents a year-over-year cash increase of $80 million, and we continue lobbying efforts with EGPC to return our receivables to a reasonable level. We are encouraged by the recent press from EGPC and the minister about receivables balances for IOCs and remain confident in the ultimate collection of our outstanding revenues. For 2026, the drilling activity completed in '25 and planned '26 activity will shift overall production to a slightly higher liquids weighting at about 43%, though 2 turnarounds planned for the year will impact full year production estimates as we guide to 18,000 to 22,000 BOEs per day. Capital of $85 million to $95 million this year will prioritize liquids and ratification will be critical to unlock acreage perspective for additional exploitation and development activity. Next up, Geoff is going to take you through our operational plans for the year. Geoffrey Probert: Thanks, Eddie, and good morning, everyone. Next slide. 2025 Egypt operational activity was a year of 2 halves, with the first half primarily fulfilling legacy exploration obligations and the second, pivoting the 4 rigs to development drilling. It's worth noting here that without the EGPC agreement to merge our 50-50 concessions and improvements on the payment side, we would not have been able to support much further development drilling there post the first half exploration commitments. So the timing was excellent for all parties. Development drilling was effectively reopened on BED, which supported by the ongoing reservoir management program contributed to improved production performance and a solid year-end exit rate. The legacy exploration yields success in NUMB and encouragement in Southeast Horus with the latter sufficient to move into the next exploration phase. Next slide, please. Much of this is a reiteration of what we've said on the merged concession before with improvements in concession longevity and fiscal terms a catalyst to increase Capricorn's reserves and production with value and cash flow enhanced through increased investment self-funded from Egypt. Two bullets I'd like to highlight are first, the example, approximately $5 per BOE improvement in netbacks at $80 a barrel Brent; and second, replacement of more than 250% of our 2025 production through reserve adds with the merged concession being a major contributor to that. For EGPC, our increased and more importantly, sustained investment delivers greater production over the long term for Egypt, having the potential to be a true win-win for all stakeholders. We continue to expect customer ratification in the near future with our investments since mid-2025, consistent with the application of the new terms. Next slide. This final operational slide demonstrates the impact of the new merged concession agreement on reserves and resources underlying our business. We previously highlighted the potential to convert up to 20 million barrels approximately working interest resources and reserves into reserves with the merged concession. We've achieved that as the 277% reserves replacement ratio shows. We've already identified a resource maturation runway with a further 332 million barrels of oil equivalent unrisked working interest 2C, of which around 80 million barrels of oil equivalent has been evaluated by GLJ. With some prospective resources to chase and discussions underway to improve the ASW concession, these are a bonus. All in all, the new merged concession supported by operational excellence and regular EGPC payments has helped transform the outlook for Capricorn Energy. Thanks for your time and attention. I'm now passing it back to Randy to wrap up. Randall Neely: Thanks, Geoff. So in closing, I would like to emphasize that we are now positioned to take advantage of all the hard work undertaken over the past 3 years. We are near debt-free with net cash of over $100 million at the end of 2025, thanks in part to regular robust collections of our revenues over the past 15 months and in particular, the last 6 months of 2025. We have new terms to the bulk of our concession agreements now just awaiting ratification, which we expect to happen shortly. We have a strong and collaborative working relationship with our joint venture partner, Cheiron. Our technical team has identified significant contingent resources for the JV to mature and exploit. We continue to be laser-focused on building cash flow and shareholder value. And our plan is to do that by continuing to employ technical rigor, be focused on costs and details and by seeking out opportunities to expand our operations in Egypt and realizing on our advantaged position in the U.K. North Sea. I want to thank everyone for attending. We're going to open the floor for questions, but I'll remind you that we will not be able to make any comments on the potential offer for Capricorn as mentioned in the opening. Unknown Executive: That's great, Randy, Eddie, Geoff. Thank you very much indeed for your presentation. [Operator Instructions] I would like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A can be accessed via investor dashboard. And Diana, at this point, if I may hand back to you to take us through the Q&A session, and I'll pick up from you at the end. Thank you. Unknown Executive: Thanks very much, Alex. So we have 2 questions that have been submitted. Thank you very much for submitting them. Just to say any that aren't answered on the call will be followed up via the Investor Meet platform with a written response from the company. So to our presenters, first of all, we have the question, you mentioned M&A in Egypt and the broader MENA region. What valuation thresholds or return hurdles are you applying in the current oil price environment? Randall Neely: Well, given the recent changes in oil prices, we haven't factored any change -- long-term changes into our analysis at this stage. We do, however, always look for a reasonable rate of return on any investments. And for us, that typically means kind of starting with a 25% rate of return given just generally the business itself and, of course, the region. Unknown Executive: And then we have another question asking what production and cash flow uplift do you expect from the merged concession over the next 2 to 3 years? And what key risks could delay or reduce those benefits? Geoffrey Probert: Okay. I'll take that. In terms of the cash flow at the start, at first we don't really forecast cash flow, although we do put the CPR out there. So that's a place you can go and do your own calculations, I guess. Similar, I guess, on production as well. In terms of production, the new concession agreement is focused on giving us running room and the opportunity to grow. And I mentioned the -- not just the reserve side, but the continued resources side, which is a significant underlay to that GLJ evaluated CPR. I think in 2 to 3 years -- over the next 2 to 3 years, key risks, obviously, they're geological, but that's mitigated to a large extent by some of the improvement in the runway we have land-wise. There is the new development leases, which about our small BED concession area, apart from those concession. [indiscernible] North area, too. Plus over [indiscernible], we have with an improved gas price for incremental investments, some additional running room there. So there's a lot of broader, if I say, opportunity there to allow us to mitigate any risk from a geoscience point of view. Really, the thing that drives our investment is respect we get and we increasingly and continue to get from EGPC, our operating partner in Cairo, there in terms of being paid by EGPC is critical. So we've been very fortunate that we've been prioritized along with others in the IOC space for payments, and that really drives right into this investment we see. So that's what underpins our production. Unknown Executive: And we've got just one final question here asking what's the biggest financial risk that investors may be overlooking from Rob? Eddie Ok: Yes, Rob, I think that our annual report and the section that we publish on principal risks and uncertainties adequately captures our risk management process. And as always, within the operational jurisdiction of Egypt, receivables collections with us having one customer for our oil and gas is a sort of principal risk. But given the recent press out of the ministry as well as the minister in the past 48 hours, there's been a real commitment on the part of Egypt to ensure that IOCs are getting paid and continue to get paid. And so we look forward to continuing to invest in this jurisdiction. Unknown Executive: That's great, Randy, Eddie, Geoff. Thank you for addressing those questions for investors today. But Randy, before we direct investors to provide you with a feedback, which is particularly important to you and the company, could I please just ask you for a few closing comments? Randall Neely: Well, I think I'll just reiterate, I think the company has done a lot of heavy lifting over the past few years, and I'll spare going through the storybook, but a huge amount of work has been done over the last 3 years to put the company in this position, terrific balance sheet, great working relationships with our partners, not only Cheiron, but also the government and a great future with respect to the contract renegotiation that's taken place over the past 1.5 years. And so we're now in that position to take advantage in Egypt, and we're just sort of in the beginning to try to as I said, capitalize on our geographic and capabilities in the U.K. North Sea. So we're looking forward to expanding our operations and more to come in future months. Thank you very much for attending. Unknown Executive: Perfect. Thank you very much indeed to you all for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team, we would like to thank you for attending today's presentation, and good morning to you all.
Bjorn Theijs: Hello, and welcome, everyone, to our 2025 annual results webinar. We will start today with a presentation from our CEO, Luc Tack; and our CFO, Miguel de Potter. After that, we will give some opportunity to some of our analysts to ask live questions. [Operator Instructions] Thank you. And with this, I hand over to Luc. Luc Tack: Good morning, good afternoon, and welcome, everybody, to our annual results reporting on the year 2025. Thank you for tuning in. Boy, I must say it's been a rocky ride lately. Sometimes I started working when I was 18, so that's a little while ago. And so the way we have today within Europe, sometimes I feel even that we are in South America, where I had the crisis in the '80s and the '90s one after the other. Now we are into our third crisis in Europe. We had in 2020, we had COVID, then we had 2022, Ukraine. And now we have Iran. Each time quite disruptive to businesses causing a lot of uncomfort. Having said that, we are always with our feet on the ground. So we don't panic lightly. And in light of that, I feel that as a CEO of our company, that we will be able also to navigate this now Middle East storm. Of course, it is affecting us in our company on different fields in different ways. Sometimes it has a positive effect, sometimes it has a negative effect. Every effect that we have, we have no idea how long it will last and what it will be. And therefore, I'm sure some of you people ask questions, and we understand you ask questions but you will also understand that we don't have the crystal ball on how long the Suez Canal is going to be blocked, how long energies are going to be limited. All of that, we know as much as you know, which means nothing. But having said that, as a company, what do we focus on? We focus on what we can control. But no point in us focusing on stuff we do not control, we must focus on what we can control. Yesterday, we had a lengthy Board meeting, and we debated a lot of all of this. And at the end of the day, and that will also be the guidance that you will be getting from Miguel, et cetera. We find that last year, okay, we improved our EBITDA with EUR 22 million, which is nice. Would we like to do that again this year? Of course, but today, we cannot guide you towards that. We are guiding you more results for this year in line with last year. And then we will guide you further through the year as we see more clarity and as you will see more clarity and as everybody will see more clarity. But again, in this turbulent world, our company is fit to sail these storms and to come out of it. Anyway, that's the feeling I have. So let me kick off by telling you a little bit what we have been doing and which have been key events. So Tessenderlo Group is signing a JV to combine our collagen and gelatin business with Darling. The picture that you see here was the signature in Houston of the binding agreement. And so of course, now we are going through the regulatory stuff. And -- so we are working with authorities. So we are answering questions. And we will hope -- we hope that the transaction will close in 2026. But again, that is not in our power. We need to satisfy every authority and give them the time to answer. Of course, I'm sure you can appreciate that since this is a global business, there are many, many countries involved and some of them have different time horizon [indiscernible]. Tessenderlo Kerley opens a new plant in Ohio. I was in the U.S. up to 7 days ago. I have also been traveling. I was in Phoenix, I was in Houston, I was at different places. And I'm pleased to say that today, we get a market confirmation that the Defiance plant is a good investment. Customers are complementing us on making that investment and are also happy that the product is now locally available. I think you should never underestimate the logistics that come into our business. And by having a plant within the market where people can come and get a product is definitely further supporting our development. Then this is a minor company, a smaller company that we acquired, which is Osterwalder AG. So what is Osterwalder doing? Osterwalder is making powder presses [indiscernible] it's [indiscernible] technology because in our company, Melotte, we do 3D printing. And there, you build up a piece layer by layer out of powder. Here, the process is completely the opposite, you take power -- powder, I'm sorry, and you put a high press on it. And because of very complicated molds, you can get a gear out of it for a car or whatever. It has been a company and difficulties. It has not been an easy journey so far. And again, I'm not going to bore you too much about it but we bought a Swiss company. And 6 weeks later, we were told that we had -- I forget now how much, 40% or [indiscernible] 39% of duties shipping to the U.S., our biggest market. So this was again the perfect storm because of this -- like I said, sometimes this makes me feel like when I was in the '80s and the '90s when I was a lot younger and looking nicer than today but it still gives me the same sentiment. So -- but anyhow, that's behind us now. And so we are learning to know more about the company, where the strengths and the weaknesses are, and that will be a continuing story. Then I'm very happy to announce you the acquisition of the Metam Labels in United States and Canada Eastman. I must tell you the Metam has been the origin of our Crop Protection business by first acquisition, which must be 20 years now. And so we are further strengthening our position there in the United States. And so we are very pleased that we were able to do this acquisition. So indeed, we did a share repurchase program. Also a lot of you guys suggested us to do that. And we believe that this share repurchase program is contributing to the share price for our investors in the long term as if you buy shares, at the end of the day, future profits will be divided by less shares. So at the end, it should support earnings per share going forward. So events after the balance date. So indeed, here, we have the acquisition of the Cinis plant. So to give you a little bit background on Cinis. Cinis is a company that was launched on the stock exchange in Stockholm and that was planned to have a very bright future by taking off sodium sulfate from the multibillion dollar or euro investment of Northvolt in Sweden. Now some of you probably followed that event there, and you know how that company got into problems. And then consequently, also Cinis got into problems. So this is enhancing our potassium, which is a core business. I would like to remind everybody that potassium is the second nutrient. So the first nutrient is nitrogen. The second is potassium and the third one is phosphates. So in potassium, we specialize ourselves. We do not play where the big docks play. We are more always in specialty. And so that is what we produce, that is SOP. Most of the potassium in the world used is MOP. And MOP is put straight on the field. And then -- and that's mainly used in areas where there is a lot of rain. And as the rain drops out, the chlorides evaporate and then the potassium goes to the plant. What is SOP? In SOP, we pull the chlorides out of the potassium and this is how the SOP is meant for dry area because in dry areas, people be using would be using MOP. At the end of the day, the soil would become like concrete because of the chlorides that would remain on top of the soil. So our SOP is a perfect solution for mediterranean areas, for drip irrigations, et cetera. Having said that, of course, in the potassium world, SOP is probably maximum 10% of the volumes used worldwide where 90% of the application is MOP. We have been producing SOP for a very long time, and we are producing SOP in Ham on our Mannheim furnaces. Our Mannheim furnaces are working on the basis of sulfur, high temperature. And then we get the chlorides out, which then further valorized partially in our group to produce ferric chloride partially shipping to our neighbor plant [indiscernible]. So this is one way of doing it. Cinis is a different process. Cinis is a process which is the glyceride process, which is a minority technique in the SOP world but where we believe we can create opportunity in producing more green because the SOP from the Cinis project will be produced on lower temperature with green energy, which is available abundant in Sweden. And as a byproduct, we will have then also salts available for the market for the mainly de-icing market, et cetera. This is a new venture for our company. We have been following Cinis for years. And we also had been looking -- we had been requested to participate in capital increases and what have you last year, et cetera. We thought that was not a good idea that we -- that it was better to wait, that it would be the smart thing. Because now we are a 100% owner of the plant at a good price and can now develop this company. Then in strengthening our Board, as you know, there, we are also -- we have changed the course the last 2 years where we have decided that we must bring more industry knowledge into our Board. Before, of course, we have always had a very strong Board, very good strong Board members. But nowadays, we are choosing more with people with -- in our Board with in-depth industry knowledge. So the first gentleman that came to our Board was Sebastia Pons, who is a true agro specialist. So now we are bringing in Madam Beatrice Bruey, who has a very long career with GEA Group, a DAX 40 company in Germany. And so she is joining us as a Non-executive Director, and she's been coopted in the vacancy of Mr. Karel Vinck who decided to retire last year. So there also, we are further strengthening our Board and the respect of industry knowledge. So this is then taking us to 2025, but I will hand it over to Miguel now to explain you the results of 2025. Miguel Potter: Thank you very much, Luc, and good afternoon, good morning, everyone, on the call. Happy to be here and to present you our results for 2025. So let's go first to our key figures. Our revenues climbed by 4.4% to EUR 2.7 billion going forward in 2025. And our EBITDA grew as well by 8.5% to EUR 288 million compared to last year. You will see that we have a heavy loss for the period of EUR 80 million. Most of it is related to what we call noncash items and impairments that we have taken through the course of the year and especially in the second half of the year but I will come back to that in a moment. Our CapEx amounted to EUR 135 million, about half of which was maintenance CapEx and half of which was growth CapEx. We are basically finishing a big wave of growth CapEx with new plants. You have heard Luc saying that Defiance was fully operational since August, and we continue on that trend. The CapEx guidance for 2026 is in the same range as 2025, albeit it could be a little lower than 2025. The cash flows generating from operating activities was still strong at EUR 225 million for the year. So if we exclude FX differences, the growth in EBITDA, and this is for us the prime measurement of our financial strength is about 10%, 11% going forward. The group revenue per segment in terms of the distribution is relatively stable when you compare 2025 to 2024. Our Agro division is definitely still the strongest division of the group and also the most profitable for 2025, all the other entities remain relatively similar. When we go into the group EBITDA per segment, we see that Agro has grown its EBITDA for the year to EUR 117 million, EUR 118 million. That in Bio-valorization, we had a growth as well, but it's maybe a tale of 2 stories between PB Leiner and Akiolis. I'll come back to that. Unfortunately, Industrial Solutions was not able to materialize any growth. We've had very challenging times in the construction market, especially in Europe and in France, in particular, which is definitely difficult for the growth. And Machine & Technologies in the first half of the year, you remember that Picanol had a very strong first half of the year that is completed into these figures. For T-Power, we have a full year of revenues of RWE under the tolling agreement. So when we go into our Agro segment more in detail, and I repeat our Agro segment, these are our Kerley brands, so Tessenderlo Kerley for the international business and Inc. for the American business. And we have as well Violleau, which is our organic fertilizers. Agro segment has a very strong second half of the year, as you can see, even without -- if you take off the one-offs like the impact of Tiger-Sul, which has been contributing to the figures for the first time this year. Second half revenues growth of 13% or nearly 14% on the top line and the adjusted EBITDA, as I mentioned, of just short of EUR 118 million, which is a double-digit as we like to see in the Agro segment. We had to take also some impairments in the Agro segment. One impairment was related to some inventory of crop protection products that we have in the U.S. Our second segment, Bio-Valorization segment is -- we have 2 companies there, PB Leiner, the gelatin and collagen business as well as Akiolis, which is more our rendering business in Europe. You see here actually a tale of 2 stories. First of all, the rendering has been more positive contributing to the Bio-valorization segment this year than the gelatin and collagen. The gelatin and collagen within PB Leiner has gone through restructuring. We closed our plant in the U.K. earlier in the year, which was doing bone gelatin. So there, you see definitely a drop in revenues with less products being sold. We also had an incident in our plant in Argentina, our collagen plant in Argentina, whereby we had to stop production for quite some weeks and the plant is still not 100% operational, but only, I would say, 75% operational right now. So not fully contributing to the results as we would expect. Just as a reminder, our PB Leiner business is definitely, as Luc mentioned, now up for the merger with the Rousselot business from Darling Ingredients. Industrial Solutions segment, we have 3 brands there, DYKA, Kuhlmann and moleko. DYKA is our pipes and fittings manufacturing. We had -- while you will remember, we had a very stable first half of the year, there has been a significant decrease in the second half of the year, especially on the EBITDA. You see the EBITDA overall is minus 50% compared to the year before. Several reasons for that. The slowdown in the construction sector, mainly in France but also in other parts of Europe have weighted negatively on the results. Secondly, for Kuhlmann and moleko, the first half was not great, and it continues like that in the second half with even further deterioration of the volumes, mainly, but we were able to maintain our margin in both sectors. Machines & Technologies segments, Picanol, Psicontrol, Proferro and Osterwalder as well as Melotte are part of this segment. You will remember that we had a very strong first half of the year. The second half is in line with the previous year, so less strong, unfortunately. But it's also a tale of several stories here. While the wheel machines are currently suffering from the geopolitical environment and the crisis in textile in general, Psicontrol and Proferro, as well as Osterwalder and Melotte have been able to grow outside of the Picanol Group, meaning that they are now having much more outside revenues than intercompany revenues, while they were just suppliers of the Picanol Group, which is not the case anymore. Brings us to our last segment. T-Power. T-Power has done relatively well in 2025, relatively well because of much more start stocks and much more availability, which gets some bonus payments under the tolling contract with RWE. A lot of you will ask, hey we have the question, what will happen with T-Power after RWE? Well, unfortunately, we cannot disclose anything so far. What we can disclose is that we have several options on the table. None of these options is a binding option so far. And in the current volatile environment, we will only communicate when a binding option has been done or has been signed. But we do believe that -- and we do believe that on the 1st of July, there will be a new contract in place for the future of T-Power. Let me walk you through the adjusted EBIT to profit details. As I already mentioned, we took some large impairments and noncash items in the second half of the year. First of all, our Tessenderlo Kerley International SOP plant in Ham, it's a very vintage plant, as we call it, with still a big legacy on the phosphate when the Tessenderlo Group was still doing phosphate fertilizers. This plant needs a lot of maintenance. And our maintenance and the CapEx has been building up in the book value of the plant, but doesn't really match the value in use of the plant. So we were forced to take a EUR 26 million impairment on that particular plant. You will remember as well that when announcing the merger with PB Leiner and Rousselot, the plant of Vilvoorde was typically excluded from the perimeter of the transaction. We therefore, have also impaired a big portion of the machinery and assets on the plant in Vilvoorde, which is -- which has been up for sale since the announcement of the transaction. And then we did some other adjustments in our environmental provisions and here and there, some smaller impairment losses. This amounts to EUR 78 million in total. EUR 59 million or nearly EUR 60 million are finance costs, finance costs that are related to mainly interco loans, intercompany loans between Europe and the U.S. that we have to take on a mark-to-market basis each time we publish our balance sheet. We started with a euro-dollar rate of [ 1.03, ] and we ended up the year at EUR 1.175. So mainly the largest portion of this finance cost, EUR 54.4 million is related to that. And the rest are cash expenses. If we want to do the bridge of the net financial debt, EUR 288 million of EBITDA. What did we mainly do with that? Well, EUR 135 million of CapEx, half of which growth CapEx, half of which stay in business CapEx. So that's a big portion. We spent also EUR 21 million in 2 acquisitions, one, Osterwalder AG and the second one of the Metam Eastman contract. And we distributed about EUR 80 million in shareholders value through dividends or through share buyback. Our outlook, and Luc already anticipated our outlook, it is in the current market environment for us very, very difficult to come with very precise outlook. Do we prefer to play it safe by saying we will be in line? Remember that as from the 1st of July, the very strong tolling agreement we have with RWE will not be in place anymore. So being in line with 6 months of itself. And we never know what will happen with the straight of all with the front in Ukraine. We believe that saying that full year outlook will be in line with the current figures is already good for us. PB Leiner is fully incorporated in the 2026 outlook, where we don't know when we're going to be able to close the transaction exactly with Darling Ingredients. Please note that the transaction might also give a capital gain on the merger at some point with Darling on the basis of PB Leiner. And then we would like to bring you to another topic. We have, and you have seen that we have EUR 158 million of cash on our balance sheet sitting as of the 31st of December. So it has been the intention of the group together with the Board to do and bring a new division or business units to life. The details are still being worked out as we speak, but more an investment vehicle, whereby instead of deping cash at the bank at a relatively stable rate, we believe it is better to utilize it to do some smaller investments, not only acquisitive M&As for 100%. As you know, Tessenderlo but we would be inclined and open smaller tickets investments, maybe some in -- to the extent small that can be very liquid and others where we would take a minority position in some larger companies, whereby we would limit ourselves not to the full management of the company, but to board position maybe within those strategic companies. Then we have our financial calendar. The annual report is going to be published on April 1, that's next week. The Annual General Meeting of Shareholders is May 12, and our half year figures will be published at the end of August on the '26. And I think, Bjorn, we're going to take some questions now from the audience. Bjorn Theijs: That's correct. Let me quickly check. I will give analysts the possibility. I will put them live and then they can ask their questions. I will start with Christian Faitz the first one. I'll bring you on the screen. Christian Faitz: Yes, all the best for these difficult times. I mean you guys need to manage businesses. We just look at your shares. So a couple of questions, please. First of all, how do you see the development and availability of sulfur impacting your SOP business? I believe something like 40% of sulfur -- global sulfur volumes are passing the straight. So how do you deal with that? And maybe in combination with that also higher energy costs for your Mannheim process? That would be my first question. And [indiscernible] and if you could tell us a little bit if and potentially '27. Miguel Potter: Christian, thank you very much for your question. Yes, sulfur shortage has been around for quite a while, to be honest, especially the kind of sulfur we need. But luckily enough, we have some several types of contracts with various sulfur suppliers. Long term, we don't buy a lot of spot sulfur, and we get a guarantee of supply for our facilities around the world. There are some plants that we have in the U.S. that are directly connected to a refinery and they get sulfur actually piped through -- directly to the plant. So it is an issue. The price is definitely an issue, but the availability for us for the moment is less an issue. Well, we don't know how long the crisis will last. I was reading this morning that some vessels were still sailing through [indiscernible] they will reopen it by next week, and that would be one crisis less. But indeed, we're monitoring the situation actively. The energy cost and the energy situation in general for the group, we have several hedges positions for the coming 3 years, be it on gas or be it on electricity. All hedges and all companies and all plants have different hedging mechanism because of the various geographies. We don't hedge the same way in the U.S. as we do in Europe. And we don't hedge the same way in France as we do in Germany or Belgium for that instance. But I would say that more than half of our portfolio today is currently hedged for 2026 and about 40% is hedged through 2027. Luc Tack: [indiscernible] To add some flavor to that to be sure, so determined by the index. We are a victim of the index increases or we benefit if indexes are going down. In respect of the energy costs, indeed, energy is an important factor in the chemical industry. And since you are a chemical industry expert, I think it is important to say that we, as chemical plant do not use gas as a raw material. As other fertilizer companies on the nitrogen. Gas is there raw material. They take the gas, they make the hydrogen from the hydrogen, they make the ammonia, from the ammonia, they go on to the UAN or to the urea, right? So that is for them a completely different picture than ours. Having said, of course, your questions on visit when you came for our Capital Markets Day, we were grateful that you were there. It helps you always understand it better. It is a plant where we also have exotherm processes, meaning when we make our sulfuric acid, we have steam that is coming available, which is producing electricity. So we also have some hedge there for the consumption on our side. What is though more concerning for our Ham plant is that we are connected through a pipe system to Violleau. And Violleau is taking HCL from our plants from our Mannheim, pipe it to Violleau. They then put it into VCM, which is then going into the plastics. You may be aware or you may not be aware, but currently, Violleau is under a daughter company of ICG in Germany currently under court protection. And so that would influence our business in a way that if they cannot take our AGL that might have an impact on us. We understand that the management is hard working at Violleau to find solutions. But still, we want to highlight a little bit that we -- not only to the Middle East difficulties, we are also having these difficulties of chemical companies which are interconnected with us sailing difficult times and making losses. I'm just sharing public information here, but the losses at Violleau since 2023 have been higher. And so that for sure has an impact. So I think you will understand a little bit what has been happening to us. The impairment, why do we need to take an impairment? We need to take an impairment because earnings do not support our capital employed into the business. So we do have a problem there in respect of competitiveness of the business. Now our colleague in the Mickael Chicot, who is our Chief Transformation Officer, has also been there at the plant. We are engaging in constructive constructions also with the unions on what we need to do to increase the competitiveness of our plant in Ham. The plant can, for sure, have a good future, but having to take such an impairment is, in my mind, I see it as a kind of punishment because at the end of the day, your return is not high enough to support your capital employed. And definitely, there is a high degree of urgency there to improve the situation going forward. And there, we definitely need to call on our unions to make sure that we, as a team work together and not against each other to achieve more productivity going forward. It is important to say that our Mannheim process is more labor-intensive than general chemical plants, which run on reactors and pumps like we do on our liquid fertilizers. Here, it's more builders, it's more movement, it's more people. And I have always been an investor in Belgium, me personally, and I have always been fighting for every job in Belgium. But of course, it always takes 2 to tango, and we need the support of everybody. I must say sometimes it has been difficult to bring across that sense of urgency. It looks like now we are in a better momentum. And therefore, we hope that, that impairment will be a one-off and will not reoccur in the future because it has to be said the business still need a lot of investments, Miguel highlighted there that some of the buildings are old and antiquated, et cetera. So we will need to further invest there. And so these are tough times. Having said that, we make the best SOP in the world. I want to highlight that. We make the best, and we are also recognized as such in the market. So -- but the turmoil that we went through, you should not forget that we were sourcing for 50 years, everything from Belarussia and Russia. Now we are getting it from much further away. We're getting it in Skatchewan, putting it on unit trains from Skatchewan to Vancouver and Vancouver in through the Panama Canal, it's coming to Antwerp. I do not need to tell you how much extra logistical cost that brings with it. So I'm just trying to inform the market and all of you and also why we are kind of and giving firmer outlooks with all what's going on. Bjorn Theijs: Let me put the next one. So as the next one, I will -- Wim Hoste from KBC. Let me put you on the screen. Wim Hoste: I have a couple of questions. I would like to ask them one by one. So continuing on Agro, how is your pricing power and volumes developing at the moment? We hear that, yes, there's quite some shortage. You mentioned that sulfur indexes go up. But how fast can you translate that into your own selling prices? And yes, how are volumes doing both for ATS and SOP. Can you comment on that, please? Luc Tack: Well what we are doing, of course, we are -- firstly following all our raw material costs, which are indeed going up, right? And we are passing on price increases accordingly. So in that respect, the margin is there, and we are working with customers. And I think that needs to be said that both on supplier side and on the customer side with the exception of our MOP sourcing from Russia and Belarus, which has changed. But for all our other suppliers that we have customers, we have very long relationships. And through these very long relationships, quite often 20 years and longer, we have been working with each other and everybody understands the indexes, everybody see what's happening and everybody understands we need to adapt accordingly. So on that front, we are okay. We are also -- since we are in these long-term relationships, not there to take advantage and say play customer. That's not what we do either. So we value these long-term relationships, and we want to have these relationships in the good and in the bad times -- and so things are going as they should be going, we think. Wim Hoste: Okay. Next question would be on the capital allocation. Your share buyback program has terminated end of December. You mentioned the vision that you will build regarding investments. So what are the priorities for capital allocation going into the future? Is it a possibility to restart buybacks? Or will you fully focus on building out that investment branch? Can you maybe comment a bit on that? Luc Tack: I'd be happy to comment on that. At the end of the day, it will depend on the opportunity and on the value creation. You as shareholders, you rightly expect us to maximize earnings per share to deliver that. And we will always react into a way that will help us to create that value. So going forward, we have decided to do this investor thing. I must say that is something that I was explained and told to me some 20 years ago. 20 years ago, I bought a company Atilab from Pierre [indiscernible], the CEO at the same at the time. And he explained to me at the time how he was using his shares that he was buying in big multinational companies, which were always liquid as a little bit as his bank account, where he said, if I see a big opportunity to invest into private equity, I sell shares and I invest in private equity. And then whether a private equity fund is coming to it, I have cash coming in and I buy again in shares. So we have said we prudently use our balance sheet going forward, but always having in mind liquidity. And the difference is if you do an M&A transaction, you buy something and you have no liquidity anymore, you spend the money and you have to work within it. It can go wrong or you may need money for something else but the money is locked into it. Here, what we are trying to do is we're trying to build in more flexibility in our balance sheet where then through these positions that we take, we are able to increase or to lower according to opportunities that may arise in our core businesses that we can all of a sudden buy something, like we were buying this thing. This was not a strategy and look, we need to buy, we need to buy that. We said we like the technology, we follow it. And then all of a sudden, if you need the cash, then you sell some shares, pay for it and move on. So it is creating more optionality for our company to create more income. I think that's how you should understand it. Wim Hoste: Okay. Clear. And 2 more questions. The first one is on the outlook for Picanol given the fluctuations of the yen and rising interest rates, how are order books or what's the outlook for the Picanol business, the weaving machines business? Luc Tack: Well, I must tell you, I have also been traveling. I was in India. I was in different places. So of course, we do feel today uncertainty, which has arisen in the last 4 weeks. So I must say what is encouraging in the textile business is that the mill capacity is running quite well. So when you look with our customers, they are running quite well. What we are seeing is that machines are getting older. And I think there will also need to be replacement of machines going forward. CapEx require stability and financial stability. And of course, wars are not helping to that. I must say that I'm -- despite the short time work that we are experiencing in Heber, where we unfortunately had to lay off some colleagues last week to align the production capacity more with the demand. We still have -- how you call it, if I may say, the sample days, we still have days of... Technical deployment. Yes. So we are still doing that. I can tell you that technology-wise, our leadership is still there. And it is not just me saying it, it's even the Chinese saying it in the 5-year plan that our machines to chase the Picanol technology. So there, we are -- technology-wise, we are good. And so then it is a purpose to go through these difficult storms that we are facing. Wim Hoste: Okay. Understood. And then a final question for me would be on T-Power. I recall from the past that utilization was very low. So can you maybe -- without discussing really the options on the table or potentially on the table, can you comment on what the current utilization rate of the plant is in '25, for example? Luc Tack: Well, no, we cannot do that, but I can help you in another way, I believe. We believe that the future of gas power plants is not in the running hours. The future is in the flexibility. We are going through a change in climate and climate, I mean in power generation, which is I would like to remind everybody when the sun is shining, there is free of charge and nobody pays for the sun shining and nobody pays for the wind blowing. So when the wind mills are running, when the solar panels are producing a lot of power, then the power is not running. But what do you do if there is no wind and there is no sun? And this for a prolonged like they say in Germany, . So what do you do that? But then you need the gas plants, right? And you may need them a few hours per day. You may need them at peaks and evening, et cetera. Our power plant is very flexible to be able to help in all these situations. So this is a little bit what we can tell you about T-Power. Bjorn Theijs: I think we have 7 minutes left. So I will put on Frank Claassen. Just put you on screen. Frank Claassen: I've got 2 questions left. First of all, on DYKA, the PVC prices have also risen because of the crisis recently. Could you elaborate how you're dealing with that? And what the impact could be on DYKA? That's first. And then secondly, the CapEx, well, flat in '26, which means still half of that is growth CapEx. What are the main growth projects where you spent your growth CapEx on in '26? Luc Tack: All right. I'll take the first one. Miguel can take the second one. So on DYKA, indeed, so polymer prices are going up. We using PVC polypropylene and polyethylene. As such, we are also adapting our sales prices as we have to. But for me, the biggest problem that we have in Europe is that every politician also in Holland and everywhere is talking about the housing shortage and how we should address that. To me, that is a huge opportunity for our economies if we can unleash the construction market. And I think that's really what we need. There is a shortage of -- in every country of thousands of housing yet, the release of building permits is still coming down. Figure that one out, big shortage and building permits going down. So there, of course, there is a big appeal towards governments. By the way, unleashing permits and unleashing grounds has no budgetary problems, right? It doesn't cost the government any money. just make a decision, let's free up space, let's free up permitting. Let's make sure that permitting do not take 6 or 8 years to be granted with endless appeal periods, et cetera, so that we can get the economy moving. And then to me, that is the most important that we need. Miguel Potter: Yes. And the PVC price have been quite low for quite some years right now. And so seeing the PVC price increasing, it's not a shock. It is something that we had foreseen. There is an overcapacity of PVC in Europe in general. We talked about the situation with Lenova earlier. And so yes, they gradually increase. But okay, we are also hedging our PVC supply for. So we don't need to pass on those higher prices to the customers yet. Of course, nobody knows how long the situation will last. To come back to your CapEx question, Yes, the guidance is not lower in '26. The main growth project we still have ongoing is the expansion of our ferrochloride capacity in Kuhlmann with everything that entails higher voltage transmission lines, et cetera. And the second largest project we have is the gasification plant in [indiscernible] for Akiolis, where we convert biogas into electricity basically. These are the 2 main growth projects. And then we have got plenty of small debottlenecking projects around the world that will make most of the growth initiative for '26. Bjorn Theijs: Okay. Thank you, Frank. If I look at the Q&A box, I think a lot of questions have been covered. In the meantime, maybe we take time for 1 or 2. Miguel Potter: Go ahead. Bjorn Theijs: The first one, does the dividend payment from the available share premium mean that there will be no dividends withholding tax clients? Miguel Potter: Well, it's a very good question. And actually since the morning, I think a lot of persons have texted us to ask that question. The answer is not no. There will not be any dividend -- any withholding tax to be paid. It will depend at the exact date of the dividend payment. But for the portion that is coming out of the share premium, it is in Belgium indeed free of withholding tax. A portion will still come from the provisions for which a very smaller amount normally of withholding tax will be paid. What we can say already is that about 70% of the EUR 0.75 will be coming from share premiums and 30% from provisions. So withholding tax is expected on only 30% of the EUR 0.75. Luc Tack: I think good news for the private shareholder because the net dividend will be higher. And so that's, I think, good for people that bought shares in our company that the net dividend is higher. Miguel Potter: And some people have asked me the question, what does it entail for foreign shareholders with double tax treaty, et cetera? I don't have the answer yet, but we will look to that. Bjorn Theijs: All right. Then maybe one final question. If you're expanding the ferrochloride capacity in Kuhlmann Europe, why if volumes are lowering? Miguel Potter: Well, volumes are lowering because we made a strategic choice to keep our margins at a certain level and not to go into a big fight with competition. The volumes are lowering mainly Germany and in Belgium only so far, which is good. And we kept our margin in the larger French market and the U.K. to some extent. This was a decision because we didn't know when the full expansion and debottlenecking of the plant will be 100% ready. A big portion of it will be ready in the coming months this year. So there, we will maybe adjust our pricing policy and our volume distribution policy going forward. Luc Tack: All right. Well, thank you all for dialing in today. Be assured, we will do our utmost best to run the company as good as we can. And this -- we have a long-term perspective so that we are doing a good job on the long term and not getting carried away with the of the craziness of the day. So thank you all for joining us. Bjorn Theijs: Thank you.
Operator: Hello, and welcome to the Americas Gold and Silver Fourth Quarter 2025 Conference Call. [Operator Instructions]. I will now turn the conference over to Paul Huet, Chairman and CEO. Please go ahead. Paul Huet: Thank you, and good morning, everyone. I'd like to welcome you to our fourth quarter year-end 2025 conference call. This call will be recorded and available to watch on our website event page later today. Please note that all dollar figures will be expressed in U.S. dollars throughout this call, unless otherwise noted. We will also be referencing a slide deck that will be shared during the webcast for this call. Joining me today are Warren Varga, our Chief Financial Officer, who will walk through our fourth quarter and full year financials; and Oliver Turner, our Executive Vice President of Corporate Development. I'll start off with a few key updates before turning it over to Warren. Before I begin, I would like to remind you to review our cautionary statements regarding forward-looking information and non-IFRS measures. These statements are included in our year-end MD&A, news release and in the presentation slides. Let me start by saying how excited I am about the massive transformation we have delivered at Americas Gold and Silver throughout 2025 and into early 2026. But before I outline our progress at the mines, I would like to announce a very significant milestone for our company. Just a few weeks ago, our Galena team achieved a major safety milestone. We have completed one full year in over 550,000 man hours of work. During that year, we had no lost time accident. Nothing is more important than the safety of our miners. And I would like to congratulate the team on the culture around safety we are building at Galena and in Mexico as well, well done team. 2025 was a year of transformation for our business, and we delivered exactly that. In 2025, we achieved a massive 52% increase in attributable silver production, up to 2.65 million ounces. At Galena, this was accomplished despite a total of 20-plus days of planned shutdowns for significant upgrades to both #3 and core shafts in addition to many other derisking optimization projects that I will discuss later on this call. So a massive increase in production while we're shutting down and growing the operation is quite impressive. 2025 was also highlighted by a production record year of 1.2 million ounces set by Cosala, where our team delivered the highest annual and quarterly silver output in operation in history, while successfully ramping up the EC120 to commercial production. This is another remarkable milestone and a testament to the exceptional execution by our entire team at Cosala. Congratulations to everyone at the operation for achieving these record-breaking numbers while setting the table for a very strong future. At Galena, consistent productivity gains came alongside our focus on major capital projects and the integration of the newly acquired Crescent Mine. I'm proud of our team for advancing key operational initiatives, including the introduction of long-hole stoping. The expansion of our underground mining fleet the upgrades to #3 and core shaft, all of which position us to support increased development and accelerate mining rates moving forward. Over the course of 2025, we have made major progress in mining, infrastructure and in development at Galena, our transition to long-hole stoping is going exceptionally well. To date, we have mined 7 to 9 long-hole stope panels designed at specific width, while three new long-hole stopes are currently being developed at the moment. I think it is very worthwhile noting that in 2024, we had 0 long-hole stopes, so this is an extremely exceptional step in the right direction and where we're wanting to head at Galena. In Q4 of 2025, we accelerated upgrades by installing the new 2,250 horsepower motor and a redundant motor at the core shaft, further derisking the operation and supporting our growth plans. Phase 2 of the #3 shaft upgrades remain on track for completion in Q2 of 2026. With the arrival of all the parts coming in this month, in March and early April, needed to complete the upgrades on the braking systems and the lillies. This will bring the total hoisting capacity to over 100 tonnes per hour, representing a 160% increase compared to the 40 tonnes per hour achieved in 2024 and when we started this project. We have all seen major productivity improvement. In '25, we had about a 200% improvement on mucking operations. We're now seeing around 200 tons of ore move per ship up from around 50 tonnes of ore when we were doing conventional mining. This is through the use of remote control mucking. Other significant achievements at Galena included a new Alimak ventilation rate, new declines in place that are debottlenecking mining areas. We made major investments into our underground mining fleet replacing and upgrading a large portion of our year with more expected in 2026. Lastly, we are bringing Galena into the modern era of mining, we are currently installing a modern fiber optic communication that will allow us to remotely monitor and optimize pieces of equipment in the mine. In just 1 year, we have completed a large number of projects and upgrades to the mine, and we will continue this strong progress in 2026. At present, we're off to extremely fast start there as well with key infrastructure and equipment upgrades in place within a few short weeks of closing the acquisition in December. Firstly, we added line power to all three audits and are actively setting up the operation to deliver ore to the Galena mill later this year after commissioning the secondary egress. Our updated mineral resource estimate has shown a larger and higher grade ore body at Galena, a tremendous result in our first year of drilling. Even when excluding the historical resource at present, our 2P is over 25 million ounces; M&I over 115 million ounces; and in third is over 133 million ounces of silver. And I just want to remind folks, this is not silver equivalent. This updated resource gives us even greater confidence in the quality and longevity of our assets. I also want to note that our operations in the Silver Valley are still among some of the shallower and we know there is more silver to be found here. We are quite excited to continue drilling and exploring these previously underexplored properties, both in Mexico and in Idaho. As a company, we recently launched the largest exploration program in history, with approximately 64,000 meters of drilling planned across the Galena complex, including Crescent and Cosala. This follows the discovery of 10 new high-grade silver, copper, antimony and silver lead veins at Galena. Highlighted by intercepts of approximately 4,900 grams per tonne of silver, 4% copper over with of 1.3 meters and 2,600 grams per tonne silver and 1.4% antimony, over 0.7 meters wide. The continued discovery of these high-grade veins like 34 veins, 149 veins and the newly discovered 520 vein announced today are strong examples of the tremendous potential of Galena to continue to grow with high-grade discoveries. Something the mine has been doing consistently for well over 100 years. This February, we announced a landmark joint venture with United States antimony to build and operate a new antimony facility at the Galena Complex, creating the first fully U.S. mine to finish antimony solution and creating additional downstream value for our shareholders. Our full year antimony and copper byproduct production from the Galena Complex further demonstrates the value potential of our unique position as the largest active U.S. antimony mine. Beginning January 1, '26, we finally started receiving revenue from these byproducts under the new offtake agreement negotiated with Ocean Partners at NTEC Resources as earlier announced in June of 2025. Looking ahead, we're extremely excited about the opportunity in antimony production as we continue test work initiatives and evaluate numerous pathways to unlock the substantial byproduct value of antimony at the Galena complex. Moving forward, Americas remains squarely focused on playing a leading role in strengthening U.S. critical minerals supply chains. Finally, we introduced our formal 2026 production, cost and capital guidance. For the full year, we expect consolidated silver to be 3.2 million to 3.6 million ounces at an ASIC of $30 to $35 per ounce sold. This is yet another 30% increased production over last year. The last year, 50%, another 30% as we continue along that trend that we're heading towards over that 5 minutes. It keeps us well on track and on course to return Galena back to those historical production and record levels. These are big, big step-ups year after year. Our cost guidance reflects deliberate investments in advancing operational improvements at Galena and Crescent, including the completion and commissioning of the new surface past fill plant, as we've been discussing for some time, as well as the planned transition in our mining methods over the next few years to getting 60% to 70% long-hole stoping and a mixture of 30% under hand capital. These changes will drive higher productivity, lower cost over the medium and short-term time. Consolidated capital expenditures are targeted between $90 million and $120 million, including Crescent development while exploration capital is targeted between $15 million to $20 million. 2026 will be another pivotal year for infrastructure upgrades that Galena and our complex so desperately needs, building directly on the strong foundation we've established in 2025. Overall, I'm extremely pleased with the progress we have made over the last year, which has laid a strong foundation for a very -- for a continued growth of 2026 and beyond across both Idaho and Mexico. I'll now turn the call over to Warren for our financial highlights. Warren Varga: Thank you, Paul. This morning, we released our Q4 and full year 2025 financial results. Our audited financial statements and MD&A for the 12 months ended December 31, 2025, are available on our website and under Americas Gold and Silver profile on both SEDAR+ and EDGAR. For the full year, our consolidated revenue increased to $118 million, up 18% from $100 million in 2024, driven by higher silver production and strong realized prices. We achieved consolidated attributable silver production of 2.65 million ounces with approximately 3.4 million ounces of silver equivalent, including 9.3 million pounds of lead and 2 million pounds of copper in addition to 561,000 pounds of antimony. As for our cost structure, cost of sales per silver equivalent ounce and cash costs and all-in sustaining cost per silver ounce produced averaged $25, $26 and $33 respectively. On the earnings front, we reported a net loss of $87 million or $0.33 per share in 2025 compared to a net loss of $49 million or $0.46 per share in 2024. Our adjusted earnings loss for the year was $35 million or $0.13 per share compared to $34 million or $0.32 per share in 2024. Adjusted EBITDA for 2025 was a loss of $4 million or $0.02 per share compared to $1.5 million or $0.01 per share in 2024. We remain optimistic about the future with silver production expected to grow as we advance the restart of the Crescent mine and continuing optimizing the EC120 mine at our Cosala operations. To support this growth, we closed a $133 million bought deal financing in December 2025, which also funded the cash portion of the Crescent acquisition. With that, I'll now turn the call over to Oliver Turner. Oliver Turner: Thank you, Warren, and good morning, everyone. The past year has been an incredibly active and productive period for the entire Americas team. From completing the Crescent acquisition, delivering strong exploration successes, announcing the U.S. antimony joint venture for the antimony processing facility in Idaho and delivering strong operational results across all sites, we've made significant progress in many different areas. On the market side, we've continued to see strong institutional support and interest. The tightly held ownership of our shares has increased from just 7% in late 2024 to over 65% presently, certainly a strong signal of market support. This level of alignment continues to be a key differentiator for Americas. And over the past year alone, our team has conducted more than 400 institutional investor meetings. We've also seen meaningful index inclusions with Americas being added to the VanEck's GDXJ and SIL ETFs, along with a significant increase in the SILJ ETF shareholding. Over the course of the year, we've also added five new analysts covering our name, and we greatly appreciate their support, bringing our total coverage universe to seven research analysts. With increased generalist interest, we've also seen increased Tier 1 media interest as highlighted by recent interviews with both FOX Business and Bloomberg following our U.S. antimony joint venture announcement. Since the beginning of our transformation in late 2024, USA shares that significantly outperformed the Silver peer group, yet we still trade at a significant discount to NAV compared to our peers providing a rare combination of both silver growth and value in a single stock with nearly 80% of revenue exposed to silver, a growing antimony revenue stream, major new exploration discoveries and a strong growth profile ahead of us, we believe the market is up to fully recognize the value we are building, which makes an exciting opportunity for investors interested in investing in silver today. Looking ahead, our 2026 calendar is filled with conferences, media engagements and meetings week to week. And we look forward to keeping the market and our shareholders updated as we execute on our strategy to scale a premier Americas-focused silver and critical metals producer. With that, I'll turn the call back over to the operator for questions. Operator: [Operator Instructions]. Your first question comes from the line of Justin Chan of SCP Resource Finance. Justin Chan: Congrats on a transformational year. My first question is just on your production guidance for the year. Could you give us maybe a bit more breakdown between what you think the ranges are for Cosala and Galena? And then any guidance on sort of how to model that on a production ramping up basis as you commission the shaft, the past plan, et cetera? Paul Huet: Sorry, Justin. I think I heard the question here -- it's Paul here. I think the breakup between the guidance between Mexico and Idaho, and then the update on the shaft. Was that the question? I think that's it. Justin Chan: Yes, first the breakdown between the assets and then the cadence. Paul Huet: Yes. So look, we're going to be in the ranges, obviously. So this year is another huge step up for us, right, as we're transitioning into long haul, we did 9 stopes -- 7 to 9 stopes last year, depending on how you measure panels. We're going to be stepping that up again this year. So looking at 2026, we're looking at a range of $2.2 million to $2.6 million out of Galena and then the rest is coming out of Mexico, again, Mexico is going to have another big year as we step up about 1.2 to 1.4. So bringing us into that guidance that we put out forward with the projects we've got for the shaft, those are big steps. We've got two big projects we've got to finish up this year. And that's in order to sustain the long haul and fill the stopes property. We've got to get that batch plant in place. And that's been one of our projects from day 1, and we're expecting to have that done this year, which is another big milestone. With respect to the shaft, the parts are almost on site, actually, half of them are. Some of the parts are on site, we're going to be -- we have a -- we want to make sure everything is on site so we can make sure that we do a scheduled planned outage. We'll be planning to be down for 12 days as we upgrade the shaft. These are things that have to get done in order for us to maintain the new product, the new tipping rates that we want to do at that 100 tonnes per hour. So April, those -- those will be done. Justin Chan: Got you. So just to reiterate, so the shaft upgrade basically should be in April and model that into Q2? Paul Huet: Yes. So, the shaft upgrade done. And then the biggest -- our biggest thing is -- so that's about a 10-, 12-day shutdown. The biggest one that's the back plant in Q4. That's always been the biggest one because it allows us to fill the stopes much faster. It takes us maybe 6 to 8 days to fill a stope today. We'll be filling stopes in 24 to 36 hours once those new complexes are built. It become the site to all the construction going on for the new facilities, there's a lot of work going on at the moment to prepare for that new facility. Justin Chan: Absolutely. Another one is just with -- I guess for the balance sheet and all your CapEx plans, can you give us your capital allocation split for this year? I know 30 to 40 is at Crescent, but maybe there's more detail you can give. Warren Varga: Yes, I'm happy to just take that line, it's all over here. So on the growth side of things, total of -- so the $90 million to $120 million includes about $60 million to $80 million growth. That's growth across all assets. A significant portion of that is going into Crescent this year. We also have about $30 million to $40 million in sustaining that includes some capitalized infill, but the majority of the exploration budget is going to be expensed and will be in that $15 million to $20 million number that we talked about. Justin Chan: Okay. Got you. And then maybe just one on some of your growth projects that are maybe less into people's models right now. Do you have an update on Relief Canyon in Nevada? Do you have any plans for that. And then maybe one on the antimony JV? Paul Huet: Yes. Look, when it comes to Relief Canyon this year, we're going to be doing a pretty internal study. At the moment, we're going to be squarely focused at making sure our silver district in Idaho is running where we needed to be. Relief Canyon is going to undergo more of a study this year that we're looking at. Justin Chan: Got you. Like a scoping level study something like that? Paul Huet: Yes, it's going to be an internal study. So last year, we didn't have any -- we didn't do any studies. We want to understand some of the ore, some of the resource and some of the freight grabbing stuff. Look, a lot of that stuff is almost identical to what I had me and Mike at Hollister. That material appears to be very, very similar to what we mined before. The grades different so we want to understand it. We're going to do an internal study led by our COO, Mike Dylan, and we're going to come back to the market. And we're going to come back to our board first and decide what's the best thing to do. We're getting a lot of inbound calls on it. There's a lot of interest on it. It needs metal prices. I don't think we're ready to just give it away to anybody. It would be crazy to just give this away. There's opportunity here. Justin Chan: Got you. And then on the antimony JV, I guess are there any kind of updates or milestones that we should expect in the next, I guess, over the course of this year to account for. Paul Huet: Yes. So the team has developed. I'm actually here taking this call right now from Bolivia, and you visiting the new plant that was built, I'll be at the site in probably about 12 hours to go visit a new plant that is feeding the product already into Montana. We're building something identical to this thing. So the purpose of us being here in Bolivia is to actually see the process, understand it and see what it is we're trying to replicate in Idaho. So it's moving out of speed that it was faster than I expected that for sure. Operator: Your next question comes from the line of Nicolas Dion of ATB Cormark Capital Markets. Nicolas Dion: Congrats on the progress at both of your minds. Just 2 questions for me. I guess I'll start by following on the questions on the guidance. Does your 2026 guidance include anything from Crescent? And then second to that, how should we think about the trajectory of production and costs at Galena looking beyond 2026? Paul Huet: Yes. I'll start a bit on the Crescent, and Oliver, you can go on the cost. So Crescent what just need to be reminded that we we're going to be drilling a lot of Crescent this year. Crescent will have some very small amount, by the way, a small amount because we have to put in secondary egress. The reason this thing can't go into production yet is because the ramp's got to be connected. There's got to be raises and those take us -- it's going to take us a bit of time. At the moment, we're going to be looking at extending on all -- on the vein systems and doing like we did at Fire Creek, just extending the veins understanding the geology. But for now, this year, the tonnes are going to be low. We'll be mining just on vein, no stoping. We can't stope until the secondary gas are put in, and that's probably a third quarter thing. But we'll be getting tonnes for sure and ounces out of Crescent just smaller amounts. And then on the costs, Oliver, you can talk a bit about the future. Oliver Turner: Yes, happy to, Nick. And so just a couple of things in -- as we step into the years ahead. We've been out there talking about taking Galena back to its historical record production levels, which was, of course, in 2002, the mine did 5.2 million ounces and we said that would take us a couple of years to get there. That firmly remains in place, and that growth plan is still there, so nothing has changed there. And as we do scale production, like a bunch of the things you talked about with respect to the transition to long hole stoping we're already talking about a 70-30 split that's progressing extremely well. We've got additional byproduct credits, obviously, that are now payable with the new contract in place from tax that will also being netted out against our all-in sustaining cost numbers. So a steady decline from here onwards as we execute over these next couple of years at Galena is certainly expected in terms of where things can get, we'll put a guidance at the appropriate period of time for those numbers. But significant cost decreases as we ramp towards that historical production number. Crescent as well as Paul just talked about lots of work going on there. Once we're into full production there. We expect that to be contributing ore to the Galena mill. That historical PEA that's out there on Crescent, obviously, not RPEA the prior owner's PEA from 2015. However, that gives you a good indication of the potential of Crescent. We think we can potentially do better than that, but we need to get in there and do more work. And then, of course, down at Cosala, we're fully into EC120 now. Last year, we had a record year despite some limitations geographically in the state, which the team navigated through excellently. We expect another strong year that's going to be in line with last year at Cosala, but then what we identified here with [ Alikrane ] just north of San Rafael, San Rafael is the mine that we "depleted" last year. Well, now we've got a new discovery just north of it, which looks extremely interesting. We haven't really been able to drill to the extent that we would like to at Cosala. Obviously, we're allocating some meters there this year, and we're excited to get in there, but there's numerous targets, just similar to the Alikrane discovery that we'd like to get into at Cosala and then, of course, really get in there to evaluate the impact on optimizing mining activities. So Cosala will grow from here as well Galena. So we still expect that ramp up over the years to come. Nicolas Dion: Okay. That's helpful. And my second question was going to be on Alikrane at Cosala. Can you maybe elaborate on that discovery a bit more in terms of, I guess, the potential you see there? And how close it is maybe the San Rafael development, et cetera? Oliver Turner: Yes. So it's like it's a brand-new discovery. One of the key things that we really enjoyed in our due diligence of this company was when we went down to Mexico in 2024 during our due diligence several times, obviously, prior to taking over management of the company. We are really impressed by the exploration potential at Cosala. There's been numerous outcrops that have been drilled there. And I believe the last five of them turned into five mines at Cosala. Of course, that's not a poor projection on turning future outcrops into mines, but it certainly bodes well for the prospectivity of the region. There are 7 outcropping areas that have been identified that are just screaming to be drilled. And one of those areas in Alikrane has yielded the sort of first discovery under this team, which is a really strong start. It's only 600 meters north of San Rafael. Look at the whole district down there, it's not stretched out over a large area in terms of where these mines are, and they obviously all feed centralized milling. So that's an area as we continue to drill into it this year could potentially be feeding the milling center there in the years to come. This year we'll be focused entirely on EC 120 from a production standpoint. That's the higher grade silver copper. But other metals can come back into the mix there with exploration success like we've seen at Alikrane. Nicolas Dion: Okay. Very good. And last one, I don't know if it was mentioned, but what was the split of your exploration program between the two mines? Oliver Turner: Yes. But 3/4 of that will be spent in Idaho and about 1/4 of it we said in Mexico. So give or take, the $5 million would be in Mexico and $15 million in Idaho. And that's across both at Crescent and at Galena will be drilling aggressively. We're going to have north of 10 drills drilling across both sites there, which is a huge step up. Those sites haven't seen more than a couple of drills turning at them for many, many years now. So this is the largest exploration program in this company's history, 64,000 meters as a reminder for everyone listening. Those are all drilled from underground. So those are essentially short holes in Idaho. So you get a lot of peers points, a lot of data points for that meters there. And we've already seen some strong results with 34 Vein discovery, which went into the new resource, which helped to boost those grades. We saw a grade increase there. 149 is not yet in the resource, but we're looking to get it in there as well. And then, of course, the new 520 discovery, which is over near the core mine, which is connected to Galena underground is another high-grade discovery. And this mine has been doing this for well over 100 years and certainly looking like it's going to continue for a long period of time. Operator: Your next question comes from the line of Amanda Lewis of Desjardin. Amanda Lewis: So first, we saw a major increase in resources at Galena. Can you just walk us through what drove that change and what it applies to the long-term mine life at Galena, especially with the present integration? And then just also what drove the large grade increase at Galena. Oliver Turner: Yes, happy to. Go ahead, Paul. Paul Huet: Go ahead, Oliver. Go ahead. You go ahead, Oliver. But the one thing that as we're talking about great, I just want to remind people, one of the things that about last year in the drilling and everything we had. When I think back of 2025, and I think while we actually mined 9 stopes last year. And almost every conference I go into or all that goes into people ask us about the grades, the grades and how the impact of those 9 stopes. We're carving these things out surgically with long hole we have seen the best grade at Galena in 2 decades. The best grade this mine has seen in 20 years was last year, a record year, the best grade in 20 years while we're carving out long-hole stopes. I'll go ahead and talk about the resource, but I think I just wanted to inject that because a lot of the questions we were asked throughout the year were about how will it impact the resource? How will it impact the grade? And will we see a tremendous drop in grade because of ad evolution. The opposite occurred for us, yes, the best grade in 20 years. So go ahead on the resource. Oliver Turner: That's a very good point. I mean one of the key considerations here is as we're integrating more long-hole stopes in this mine plan, right? We're shifting from 100% underhand cut and fill or conventional mine to a blend of mechanized long-hole stoping, and there will always be some cut and fill in this mine, but about a 70-30 split. As we baked more of those long-hole stopes into the reserve, we haven't seen a major impact on grades there, right? So we're applying long-hole mining stopes there. and the grade is staying very high. Reserve grade is over 500 grams, over 520 grams actually in the silver at Galena. So maintaining very high grade. And one of the key factors for that is the fact that we're able to mine extremely narrow with these long-hole stopes. That first stope we took was 1 meter live. We've taken numerous narrow long-haul stopes there with the same basically with that we'd be able to mine with cut and fill. So that means that plan dilution is exactly the same as what we're getting with cut and fill. So really strong performance by the team there. And the mine looks well positioned. One other thing to mention here too is, Galena is in the top 5 highest grade silver mines in the world, and we're only increasing grades with these discoveries. So one of your questions there was what drove the grade increases. The 34 vein discovery, which we announced midway through last year, when we first drilled that off with that headline hold as 983 grams, well over 3 meters there and widths, triple or minimum mining width. We initially had a 1 million to 2 million-ounce target on that vein. We put another update out about a month and a bit ago, and we ended up expanding that to 6 million to 7 million-ounce target across multiple different veins plays. That vein system continues to grow. And it's just an example of what's been happening with Galena for over 100 years here and will happen well into the future. So we're quite excited about that inclusion that was included in the resource and helped drive grades up even net of depletion, even with incorporating those long-hole stopes there. We had the 149 vein, 25-kilogram hit, 20 centimeters wide, but you dilute that 5 times, you're down to a 5-kilogram intercept or cut there. That was not yet included in the resource. So there's still more great upsides to come there. And of course, the 600-gram plus hits that we've seen at 520 in the core also not included. So the good news on grade improvements in drill it's being increased with intercepts with the drill bit. That's real data feeding that that's increasing those grades, not just in manipulation of cut-off grades in either direction. So very excited about that. Down at Cosala, you also saw reclassification resources. We moved some resources into inferred from M&I, not impacting the mine life whatsoever that we have at EC120. We're going to be infill drilling those areas and bringing them back into M&I this year. We've applied very stringent controls, both in Mexico and in Idaho with this resource, and we've done this at multiple different companies before where we build our own resource. But of course, now we can build our mine plans around going forward. So strong results across the board of both and feeding it with the drill bit and look, we're going to be doing a ton of drilling this year. So excited about what that can mean for the year-end resource a year from now. Amanda Lewis: Okay. Great. That's very helpful. And then just lastly, could you just provide a bit more color on how the long-hole stoping is going? I'm specifically wondering how the mining teams are performing and what areas do you still want to work on? Paul Huet: Yes. Oliver, I can talk about that. So as we've been talking about, we've taken out depending on how you look at a 7 or 9 panels already, we are changing up a bit of the way we're drilling to make sure that we're very consistent in our blast patterns. We're this mine hasn't seen a long-hole for us. So depending on where we are in the mine, we are quickly recognizing and this is not uncommon in any of the mines I've worked out in my life. By domain, if the areas are very steep, 89, 90 degrees. We might need one less hole. So we're just improving or improving are optimizing our drill patterns, our blasting patterns, if we're down to 72 degrees, we need an extra hole. But what we're seeing is we're determining our stope height, our length. And the intent is that 70% of everything we do going forward will all be long-hole. All we're doing right now at the moment is optimizing it, though. We just continue to get better and better and better. In the first couple of stopes we have done. And the more efficient we get, we'll just be moving more tons per day using remote controls instead of drilling and blasting jackwave, which has been done forever. So long-hole is like most people understand. It's not a complicated thing. It just needs to be done right. You've got to have your top that's good. You got to have your bottoms, that's good. And we want to make sure that you can check in our case, we check our breakthroughs. So they're not in the footwall or hanging on and we don't have a lot of deviation and unnecessary additional dilution. So pretty simple game in our world, given we've done it all over the world. Operator: [Operator Instructions] Your next question comes from the line of Wayne Lam of TD Cowen. Wayne Lam: Maybe just wondering on the new discoveries, obviously, some positive elements that could support a further increase in production. Maybe if you might be able to give us some color on the new 520 vein and the time line on that and whether the core Shack upgrades put the infrastructure and positioned to be ready for production and it's just a function of drilling and development. But no actual constraints on the processing infrastructure? Paul Huet: So that upgrade we did in the core motors at the very end of December 2025 was the first time that we ever have redundant motors. So we're preparing ourselves for using that shaft. There's still some work to do in the loading pockets and other areas that we have identified. But the new vein 520 has been part of a drill program at core. So given that it's a brand-new discovery or we've got quite a few holes into it already, we're going to drill it quite a bit and see. Can we access it from the #3 shaft? Or can we access it from core? One of the advantages we have in this district is that core and #3 shaft are connected. In fact, that's our secondary egress. So we travel across to get out in the event that the #3 shaft is down. So we will be able to mine that 520 vein from the #3 shaft even when the upgrades come into the #3 shaft, this quarter in March and April as we're doing these upgrades. So once again, more drilling into it, we're going to start looking at it. How do we mine it from the best location? So it's very fresh. It's very new. We're quite excited about it. It's not going to be the only discovery we have. There will be many more. We have 10 new veins here. There's no doubt there will be more discovery. One of the biggest things we always saw about these assets, they were underexplored, and we needed money and we're drilling them now. So 520 needs more drilling. We have optionality to mine it from either shaft or #3 shaft and skipping it up either one pause a bit out there because of the work that needs to be done. Wayne Lam: Okay. Great. Yes. Sounds like a pretty big opportunity. And then maybe at San Rafael, just wondering with the higher silver price than as EC120 ramps up? Is there potential for continued mining there and to add incremental tonnage to the production profile? Paul Huet: Oliver, let you take that one, I believe. Oliver Turner: Yes. So San Rafael particularly the higher-grade upper areas, which we were mining towards the end of last year. There are still some portions there that can come into the into the mill there down at Cosala. But the majority of mill feed this year is related to the EC120. Of course, all of this subject to improvement based on drilling and exploration results. And obviously, we're not going to be putting Alikrane into there within the next 6 months or anything like that, but continued positive drilling intercepts there in the upper portions of San Rafael can add some more feed and then also continued drilling success from underground at EC120 will allow us to get into some of the higher grade areas there as well. So coastal the team executed excellently there last year with a record production for the asset. Looking for similar this year with upside pending drill success there this year? And then obviously, we'll be scaling it in the years to come. Operator: Your next question comes from the line of Heiko Ihle of H.C. Wainwright. Heiko Ihle: Most of them have been answered, but just two quick ones. The 55 170 decline, obviously, should provide a decent amount of efficiencies. When should that fully -- I assume this is already in effect, but is there like a bit of a period over when we should see those impacts? And then also just from a cash point of view, given that there is less work now getting done, is there a -- should that impact cash costs at all? Paul Huet: Sorry, Oliver, you're going to take that I'm not sure I heard the question at all. Go ahead, Oliver. Oliver Turner: No problem. Yes. So on the decline, that's currently under development. So we'd expect that to be getting those multiple access points here towards the end of the second quarter. So expect that to have an impact. I mean this is all part of our 2026 mine plan anyways. So it all based into the guidance that we have. Certainly, when it comes to cash costs, I think your -- the way that you're thinking is right there, Heiko, we do expect cost to continue to decline as we go quarter-over-quarter this year. So you'd expect more of a back-end weighting to improvement in cash costs as we ramp up ounces, but also some of these projects that we've been working on start to impact the bottom line. One of the things that we did see in the first -- what's it been 14, 15 months, that we've been at the helm here. We did highlight in the release there is on mucking efficiencies. The company was in 2024 and prior moving about 50 tonnes per shift with conventional methods. We're over 200 tonnes per shift now used employing the remote scoops that we have, haul trucks underground. This is all the new equipment that we put in place last year. And now we actually have a fiber optic system that's being laid down #3 and it's going to be developed on different levels there that will give us basically mesh WiFi and communications access all throughout the mine. It seems like something that's sort of standard in mines these days, and it absolutely is if you're building a new mine. But this mine hasn't seen any of that modern technology installed in it. So that's another very easy target and low-hanging sort of area -- of low-hanging fruit that we can target there to improve efficiencies. That will then link in to the lot of the equipment we're using and it's not just mining equipment. It's fans, it's ventilators, it's automating all sorts of parts of the mine and monitoring it in real time. We expect that to continue to improve dispatch efficiency cycle times and productivities across the board. All of that starts to be impacted once that system is in place, which again, is the second half of the year. So you're going to see steady improvements in efficiencies over the course of this year. You're going to see costs come down at the operating level. Over the course of this year, all of that kind of works in tandem as tonnes come up ounces come up costs go down, byproducts come up, efficiencies go up. So you'll see a positive trend this year, Heiko, as we execute quarter-by-quarter, and things will get even better next year, obviously, in '27. Heiko Ihle: Fair enough. And then just one quick clarification. How much do you -- would you say you spend on fuel at Galena or even across the company per month or per quarter? Just purely out of curiosity. Oliver Turner: Warren, do you want to take a stab at that one? Warren Varga: No, I wouldn't even know at the top of my head. Heiko, I'll give you a number after the call. There's not off the top of my head. Paul Huet: Yes. I mean we just feel, given what prices have been doing, but I assume the impact is fairly small. Oliver Turner: It is, Heiko. One of the things remember there, of course, is that Galena is integrated into the grid power system, of course, in Idaho. There's not a lot of diesel consumption at site. Obviously, some of our underground equipment runs on diesel. But broadly speaking, the mine is powered by grid power. So not the same impact that you'd expect to see in a large open pit in terms of diesel cost impact, but we can get you that number. Paul Huet: And remember, we have a lot of rail, right? Our rail transport a lot of our foreign waste in the mine. Operator: With no further questions at this time. I will now turn the conference back over to Paul for some closing remarks. Paul Huet: I just want to thank Oliver and Warren for helping me on the call today. And I really want to take a moment to thank you all, our shareholders. Our teams at both sites, look, we're coming up for 1 year without an LTA in Mexico as well. That doesn't happen by accident. So great job to both sites for outstanding safety commitments. And I'm looking forward to 2026. It's a very exciting year, another big step-up again for us. we continue to deliver on our operational successes. So thank you, everyone. Have a great day, and we'll talk soon. Operator: This concludes today's conference call. You may now disconnect.
Operator: Greetings, and welcome to the PDS Biotech Fourth Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mike Moyer with LifeSci Advisors. Thank you. You may begin. Mike Moyer: Thank you, operator. Good morning, everyone, and welcome to PDS Biotech's Fourth Quarter 2025 Results and Clinical Programs Update Call. I'm joined on the call today by the following members of the company's management team: Dr. Frank Bedu-Addo, Chief Executive Officer; Dr. Kirk Shepard, Chief Medical Officer; and Lars Boesgaard, Chief Financial Officer. Dr. Bedu-Addo will begin with an overview of the company's recent highlights and its clinical development program. Dr. Shepard Will review the data and rationale behind the amendment the company recently adopted to its Phase III VERSATILE-003 trial, and Mr. Boesgaard will review the financial results for the quarter ended December 31, 2025. Following management's prepared remarks, we will open the call to questions from covering analysts. As a reminder, during this call, we will be making forward-looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Any such statements should be considered in conjunction with cautionary statements in our press releases and risk factors as discussed in our filings with the SEC, including our quarterly reports on Form 10-Q and annual report on Form 10-K and cautionary statements made during this call. We assume no obligation to update any of these forward-looking statements or information. Now I'd like to turn the call over to Dr. Bedu-Addo. Frank? Frank Bedu-Addo: Thank you, Mike, and good morning, everyone. It's our pleasure to speak with you again and to provide this brief update on our progress in advancing our clinical programs. The fourth quarter of 2025 capped a period of important progress for PDS Biotech, marked by meaningful advances across our clinical programs, along with financial discipline and expansion of our intellectual property portfolio. Building on the compelling top line data from our VERSATILE-002 Phase II trial, we believe the VERSATILE-003 protocol amendment we've adopted has the potential to create a more efficient path to accelerated approval. shortening the trial's duration, reducing costs and accelerating our time line to regulatory submission, while preserving overall survival as the basis for full approval. For patients living with HPV16-positive head and neck cancer, a disease with significant and growing unmet need, we believe PDS0101 represents a genuinely promising treatment option, and we remain focused on advancing it as efficiently as possible. In recent weeks, we also announced early results from the National Cancer Institute-led trial investigating PDS01ADC, our investigational IL-12 tumor-targeted immunocytokine at the American Association for Cancer Research, AACR, Special Conference on Prostate Cancer Research. In patients with metastatic castration-resistant prostate cancer, the majority of whom had failed at least 2 prior treatments, the combination of PDS01ADC and standard of care docetaxel demonstrated encouraging and durable median progression-free survival or PFS of 9.6 months and a median prostate-specific antigen or PSA decline of 40%. 6 of 16 patients achieved greater than 50% PSA decline. These findings reinforce the potential of PDS01ADC as an immunocytokine that may be used to activate the immune system against multiple solid tumor types. We are encouraged by the progression-free survival and PSA declines observed in this difficult-to-treat population, and we remain focused on advancing PDS01ADC as a key component of our immuno-oncology pipeline. Since we last spoke with you, we also strengthened the intellectual property estate for PDS0101 with new patents granted in the United States and Japan. The new U.S. patents, combined with anticipated biologics exclusivity for PDS0101 extends our market protection into the 2040s. The Japanese patent adds broad composition of matter claims to existing protections across major markets. To elaborate on progress with our VERSATILE-003 trial, in particular, the data and rationale behind the decision to amend the study protocol, I'll turn the call over to Dr. Kirk Shepard, our Chief Medical Officer. Kirk? Kirk Shepard: Thanks, Frank, and good morning, everyone. As most of you know, last August, we announced completion of our VERSATILE-002 trial with the final data further supporting the durable clinical benefit of PDS0101 in HPV16-positive recurrent and/or metastatic head and neck cancer. The strength of this final data and of the data in the sub-analysis, we announced in September led to our strategic decision to seek an amendment to our VERSATILE-003 trial to include progression-free survival or PFS as a primary endpoint. As you will recall, the VERSATILE-002 trial evaluated PDS0101 plus KEYTRUDA or pembrolizumab in patients with HPV16-positive head and neck cancer. A total of 53 patients were enrolled. The final data showed median overall survival was 39.3 months in patients with PD-L1 combined positive score or TPS of more than or equal to 1. The lower limit of the 95% confidence interval was 23.9 months and the upper limit was not yet estimable. The VERSATILE-002 trial is the first of patients in recurrent metastatic head and neck cancer population to report a median overall survival of almost 40 months. The PFS and survival results had important implications for the original design of our Phase III VERSATILE-003 trial. In the original trial protocol, as recommended by the FDA, median overall survival was the primary endpoint and progression-free survival was a secondary endpoint. It should be noted that the median overall survival relies on the occurrence of death events and that if a drug works well enough to prevent patient death, it may take a long time to get to the critical data readout. With further increase of the final median overall survival readout from 30 months to 39.3 months in the VERSATILE-002 trial and demonstration of the robustness of the PFS results, we felt we had an opportunity to revise the clinical design to enable a potentially faster readout and opportunity for accelerated approval using PFS as a primary endpoint. To address the potential for an extended trial duration while also abiding with the FDA's recommendation to use median overall survival as a primary endpoint, we approached the FDA to amend the protocol to convert PFS to an earlier interim primary endpoint. Following a productive dialogue with the FDA, we were pleased to announce that following the FDA's standard 30-day wait period since filing, the FDA raised no objections, and we are clear to proceed with the amended protocol. We believe this amendment provides us with an important opportunity to potentially shorten the time to regulatory submission while maintaining median overall survival as the endpoint for full FDA approval. Additionally, we also believe this approach may also accelerate the availability of this promising treatment to the rapidly growing population of HPV16-positive patients in dire need of effective therapy. For added context, I'll point out that some additional factors that help explain why we and our investigators are so excited about our current path forward. First, PDS0101 is the only subcutaneous injection product currently in late-stage development for recurrent and/or metastatic head and neck squamous cell carcinoma, which is more convenient for the patient. Additionally, PDS0101 in combination with KEYTRUDA is the only late-stage head and neck squamous cell carcinoma therapy that requires only 5 doses. Most therapeutic approaches require over 20 doses. Our approach also presents convenient dosing intervals of 3 weeks and 6 months after the fourth dose. These characteristics of PDS0101, together with the reported tolerability and survival reported to date, make PDS0101 a compelling option for patients. It is, therefore, not surprising that several KOLs and investigators involved in our study and many of the institutions such as the Mayo Clinic, Dana-Farber and Yale Cancer Institute continue to voice their strong support for our approach. HPV16-positive cancers are rapidly increasing in the U.S. and EU due to the poor uptake of the human papillomavirus vaccine and other factors. Along with the unique pathogenesis, physiology of the HPV16-positive cancers and the absence of approved targeted therapies, there is a significant unmet need, we believe that PDS0101 is uniquely positioned to address. With that, I'll turn the call back over to Frank. Frank Bedu-Addo: Thank you, Kirk. To Kirk's comments, I would add that as stated by Merck, the subcutaneous version of KEYTRUDA, which was recently approved by the FDA, can be administered by a health care provider in as little as 1 minute. So a potential combination with subcutaneous PDS0101 may shorten administration time and be more convenient for patients. We are excited about the potential of this therapy for head and neck cancer patients. We are, therefore, confident in the potential of our HPV16-tailored approach and the potential of PDS0101 to ultimately provide a well-tolerated treatment without chemotherapy as an option for the growing population of HPV16-positive patients who currently have no effective therapies for this deadly disease and who will soon become the majority of head and neck cancer patients. Now I will turn it over to Lars for a review of our financial results for the 2025 fiscal year. Lars? Lars Boesgaard: Thanks, Frank, and good morning, everyone. Net loss for the year ended December 31, 2025, was approximately $34.5 million or $0.74 per basic and diluted share, which compares to a net loss of $37.6 million or $1.03 per basic and diluted share for the year ended December 31, 2024. Research and development expenses for the year ended December 31, 2025, were $19 million compared to $22.6 million for the year ended December 31, 2024. The decrease of $3.6 million was primarily attributable to decreases in manufacturing costs of $2.5 million and personnel costs of $1.8 million. And those decreases were partially offset by an increase in clinical costs of $0.7 million. General and administrative expenses for the year ended December 31, 2025, were $12.5 million compared to $13.8 million for 2024. The $1.3 million decrease was primarily attributable to a decrease in personnel costs. Total operating expenses for the year ended December 31, 2025, were $31.5 million compared to $36.3 million for 2024. Net interest expense was $4.1 million for the year ended December 31, 2025, compared to $2.2 million for the year ended December 31, 2024. The change was primarily due to noncash expenses related to extinguishment of debt as well as lower interest income on our cash balances. The company's cash balance as of December 31, 2025, was $26.7 million. And with that, operator, we can open the call to any questions. Operator: [Operator Instructions] Our first question comes from the line of Joe Pantginis with H.C. Wainwright. Joshua Korsen: This is Josh on for Joe. So now that you have the amended protocol cleared, could you share what the revised enrollment target is going to look like and how that reduction compares to the original design? Frank Bedu-Addo: Josh, thanks a lot. I'll hand it over to Kirk to answer your questions. Kirk Shepard: Yes, certainly. With the revised protocol, and also the increased median survival and robustness of the PFS in 002, we had a meeting with the FDA, which was a very good dialogue. And at that, we were able to shorten the trial to as much as a year as far as getting the final results. And of course, the PFS will be the interim analysis that will first be available most likely in a period of about 1.5 years. That will allow us to get an accelerated review, as you know, to make the drug available to patients. So with the decrease in the end as well as the increased results from the final analysis of the VERSATILE-002, we were able to shorten the duration with this -- a smaller end for the trial. Joshua Korsen: Great. And so now with this amended protocol, how should we expect R&D to be for 2026? Do you expect that to be a little bit lower than 2025 now with the smaller trial design? Frank Bedu-Addo: Lars, I'll hand over to you. Lars Boesgaard: Yes. So I think as far as the R&D expenses, we're not providing financial guidance per se. However, of course, once we reinitiate the trial, we do expect cost to pick up. The pickup will be commensurate with the amount of sites that we opened and patient enrollment and so forth. So it's tricky to forecast right now. Operator: Our next question comes from the line of Mayank Mamtani with B. Riley Securities. Mayank Mamtani: Could you touch on your plans to handle patients already enrolled prior to the 003 pause as part of your interim analysis and wonder if you remain blinded to those sort of patients? I assume they're continuing to dose on active drug and placebo. And then my follow-up question to the prior question was anything you've learned last year from the execution of Phase III that could inform the enrollment pace from here? And sorry if I missed that, did you say what the sample size -- what the new sample size for the Phase III is? And are you willing to share any more details on the 2 -- it looks like you have the 2 PFS interim analysis. So I don't know what they are designed to hit on the first versus the second? If you can give any more details, that would be great. Frank Bedu-Addo: Thanks, Mayank. Kirk, do you want to start? Kirk Shepard: Yes. Certainly, I'll [ do ]. There were many questions asked there. Well, we -- first, the patients who were started on the trial, they will all continue their treatment as indicated by the protocol. It was discussed with the FDA, and they said it was up to us as far as whether to include or not include these patients in the trial. They just wanted to be stated ahead of the protocol restart. But these patients will be on the trial as the treatment indicated. They will most likely be put in a special subset of the data that will be included for safety in the intent-to-treat data trial. So they will continue to receive their therapy. Let's see the other parts of the study. Sorry, could you repeat something else what Frank [indiscernible]. Mayank Mamtani: Yes. enrollment pace based on what you saw last year, and I believe there's no competitive trial now enrolling given the other trials that were accepting HPV16-positive are fully enrolled maybe. And then if you can share with us the sample size of the new -- of the study and the interim analysis, PFS analysis that -- what are the underlying assumptions of separation between the 2 arms? Kirk Shepard: Yes. So the enrollment pace was very good and will continue to be good because we've had a very positive response from the sites that we've gone to, to run the study. As you've mentioned now, there's less competition than was when we first began the trial. so that we have a robust recruitment of sites. And we're happy to say, too, even with the pause we had while talking to the FDA, we didn't lose 1 site. They're all excited by this therapy and ready to begin again. So we're very happy about that. Also the fact that we figured out our time lines by looking at the VERSATILE-002 study, which was done at a certain rate. And now we expect even increased rate because most of the sites came back so that the VERSATILE-002 sites are now going to be involved in the 003 study, which is good because they know the workings of the protocol and the product, and we expect to have pretty brisk recruitment of the patients. Frank Bedu-Addo: Got it. Mayank, I hope that answered your questions. Mayank Mamtani: I -- sorry to push you, if you can share with us the powering assumptions for the interim PFS and the new sample size for the Phase III. Frank Bedu-Addo: No. So we haven't made the sample size public yet, but the PFS, again, powered it high power to detect changes in -- statistically significant changes in PFS, 1 at completion of recruitment and the other about 6 months later. So both provide high power to detect statistically significant differences between the 2 arms. Operator: Ladies and gentlemen, that will conclude our question-and-answer session. I'll turn the floor back to Dr. Bedu-Addo for any final comments. Frank Bedu-Addo: Thank you, operator. Combined with early data from our PDS01ADC program and expanded patient protections extending into the 2040s, we believe we have meaningful opportunities ahead as we continue to execute against our priorities in 2026. We look forward to updating you on our progress. Thank you very much. Operator: Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.
Operator: Good day, ladies and gentlemen. Thank you for standing by, and welcome to CBAK Energy Technologies Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now I will turn the call over to Irina Tian, IR specialist of CBAK Energy. Ms. Tian, please proceed. Xiujun Tian: Thank you, operator, and hello, everyone. Welcome to CBAK Energy's Earnings Conference Call for the Fourth Quarter and the Full Year of 2025. And joining us today are Mr. Zhiguang Hu, Chief Executive Officer of CBAK Energy; Mr. Thierry Li, Chief Financial Officer and Company Secretary; and [ Yvonne ], who will help with our interpretation during the Q&A session. We released our results earlier today. The press release is available on the company's IR website at ir.cbak.com.cn as well as from the Newswire Services. A replay of this call will also be available in a few hours on our IR website. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Also, please note that unless otherwise stated, all figures mentioned during the conference call are in U.S. dollars. With that, let me now turn the call over to our CEO, Mr. Zhiguang Hu. Please go ahead, Jason. Zhiguang Hu: Hello, everyone. Thank you for joining our earnings conference call for the fourth quarter and the full year of 2025. The fiscal year 2025 was a definitive transitional period for CBAK Energy, characterized by our comprehensive structural upgrade of our product portfolio, aggressive capacity expansion and deliberate pivot toward next-generation form factors. Despite the short-term bottom-line pressure inherent to some massive capacity transitions, our top line growth demonstrated positive momentum. In the fourth quarter, our consolidated net revenue surged by 131.80% year-over-year to $58.80 million. For the full year, consolidated net revenue reached $195.19 million, representing an 11% increase over 2024. Let me detail the structural transition driving our core business. At our Dalian facility, our customers are actively transitioning away from our legacy 26-series battery product line with over a decade of history and 1 gigawatt hour capacity to our newly introduced highly advanced Model 40135 cells. To support this paradigm shift, we successfully commissioned a new 40135 product line with 2.3 gigawatt hour capacity at the end of 2025. The market reception has been truly unprecedented. Demand for the 40135 cells currently far exceeds our available supply. Meaning, we are selling every single unit we can produce, and our order book heavily outpace our current ramp-up trajectory. Similarly, at our Nanjing facility, to alleviate the severe supply shortage for our highly sought after model 32140 cells, we successfully added 2 new production lines at our Phase II facility at the end of 2025. This expansion adds 3.0 gigawatt hour of much needed capacity to complement the 1.5 gigawatt hour already operational in Phase I. And we expect these 2 new high-speed lines to reach full capacity by early 2027. Both our Dalian and Nanjing expansion are currently in an intensive capacity ramp-up phase. While this initial phase carries higher unit cost that have temporarily suppressed our gross margin and the short-term profitability, we view this as a necessary and highly strategic investment as our customers complete their transition to the model 40135 and our Phase II facility complete its ramp up by early 2027. We anticipate a dramatic and sustained resurgency in our top line revenue. Furthermore, to present the value chain, starting in 2025, our wholly-owned subsidiary, Nanjing BFD initiated dedicated battery pack integration operation by assembling individual cells into complete plug and play battery system, which bypass intermediate integrators to serve end user directly. Currently, these manufactured pack units are predominantly engineered for the light electric vehicle battery swapping infrastructure throughout the African market. In 2025, we officially forged a deep strategic partnership with SPIRO, 1 of Africa's largest 2-wheeler battery swapping enterprises. I'm thrilled to report that SPIRO has rapidly scaled to become 1 of our top 5 customers. We are incredibly proud that our advanced battery cell technology is providing the essential momentum for Africa's new energy transition. To deepen this relationship, we are actually exploring further collaborative models, including the potential establishment of a dedicated corporate entity within the Africa region to directly assist and accelerate SPIRO's localized business expansion. This African success is mirrored across other key international markets, driving our explosive global growth where revenue from REV's skyrocket by 252% year-over-year to $36.36 million for the full year. In India and broader global market, our institutional client base has expanded significantly. We have established deep collaborations with highly prestigious international blue-chip customers, including Anker Innovation, Scania, which became our direct ordering entity following its acquisition of Northvolt business unit that originally procured our products, now operating under [ Posida ] as well as Ather Energy, Schneider ACE Battery and Inverted Energy. The endorsement from these global Tier 1 enterprises provide the strongest possible validation of our product reliability and safety. Similarly, in Vietnam, we have forged a tight knit partnership with a key client DAT as DAT business volume has skewed our shipment volume in the Vietnamese 2-wheeler sector has experienced exponential growth. As investor may be aware, the PRC government have initiated a phase out policy for export tax rebates, reducing the rate for lithium-ion battery from 13% to 9%, with further reductions to 6% by April 2026 and a complete elimination by January 2027. To proactively establish a dialectical hedge against this macroeconomic headwind and protect our international margins, we moved decisively to localize our global supply chains. We have already incorporated our Malaysian subsidiary on April 30, 2025, and are actively pushing forward with physical construction of manufacturing facility there within this year to offer diversified tariff-insulated sourcing option for our top-tier international clients. We also anticipate signing and announcing additional contract with major international clients win, which we believe will serve as strong catalyst for our shareholders. Our raw material segment, Hitrans, delivered a powerful turnaround, benefiting from an ongoing upward cycle in raw material price. Hitrans experienced a sharp operational rebound beginning in the third quarter of 2025. Full year revenue for this segment surged 123% year-over-year to $89.21 million. As the raw material pricing cycle continues its robust upward trajectory, we confidently anticipate Hitrans will reach new performance highs. To structurally capture this momentum, Hitrans is aggressively expanding its proprietary infrastructure, including the ongoing construction of new 10,000 metric ton cathode manufacturing plant slated for full operation in the first half of 2027, alongside a massive 37,000 metric ton precursor facility. This strategic capacity injection will decisively elevate Hitrans' revenue [ starting ] in 2026 and beyond. Strategically, we are also advancing our corporate structure. Our stockholders have approved a redomicile merger to change our place of incorporation from Nevada to Cayman Islands. This move will allow us to streamline operational and administrative efficiency while similarly aligning our corporate structure with our aggressive international expansion strategy. Driven by the insatiable demand for our new 40135 and the 32140 battery cell, the pending completion of our capacity ramp-ups, the continued strength of Hitrans and our expanding footprint across global LEV market, we project with absolute confidence that our consolidated sales will hit a record high in 2026, delivering explosive growth. Now let me turn the call to our CFO, Thierry Li, for a deeper dive into our financials. Jiewei Li Thierry: Thank you, Jason. 2025 demonstrated the resilient dialectical nature of our vertically integrated business model. While our Battery segment faced margin compression due to the aggressive ramp-up of our new production lines and rising raw material costs, our Hitrans raw materials segment capitalized on this exact macroeconomic environment. Looking at our fourth quarter results. Consolidated net revenues reached $58.80 million, a 131.8% increase compared to Q4 2024. This hyper growth effectively decoupled from the temporary bottom line pressures caused by our ongoing capacity transactions. Within this, our Battery Business revenues were about $30.82 million, an increase of 35.8% year-over-year. Despite a 10.6% decrease in energy storage sector caused by the phaseout out of legacy Model 26650 cells at Dalian, we offset this decline through explosive growth in the LEV revenues, which skyrocketed by 524.2% to $12.92 million in the fourth quarter. Our Hitrans segment generated $27.98 million in Q4 2025, a massive 944.1% surge from Q4 2024, directly reflecting the escalating upward cycle of raw material pricing and robust downstream order placements. Our gross profit for Q4 2025 was about $4.28 million, representing a gross margin of 7.3% compared to 13.1% in Q4 2024. This sharp margin compression was fundamentally driven by the transactional friction costs, suboptimal yields and disproportionately high fixed cost absorption inherent to the initial ramp-up phase of the new Model 40135 in Dalian and Phase 2 Models 32140 lines in Nanjing. Consequently, operating loss for the fourth quarter was about $8.01 million, and the net loss attributable to shareholders was $7.38 million. For the full year 2025, net revenues were $195.19 million, up by about 11% year-over-year. Hitrans contributed $89.21 million, up by 123%, while the Battery Business contributed $105.98 million. Gross profit for the year was about $18.42 million, representing a margin of 9.4%, down from 23.7% in 2024. Operating expenses increased to $36.86 million, up 12% year-over-year, driven by a 21% increase in R&D to $15.8 million. This deliberate expansion directly funded our next-generation technology road map, specifically accelerating the development of our advanced large-format cylindrical models such as the 60115, 60135 and 60150 as well as highly specialized sodium-ion chemistries engineered for the extreme low temperature resilience and fast-charging capabilities. We also increased by 16% in G&A to $16.20 million, reflecting increased headcount for our new production lines. Our full year operating loss was about $18.44 million, and the net loss attributable to shareholders was about $9.38 million. However, analyzing the bottom line requires a dialectical view of our risk management framework. First, our other income surged to $8.27 million, fundamentally bolstered by a highly lucrative $5 million compensation payment we strictly enforced and successfully collected from a canceled customer order. This underscores the robust legal and contractual protections we secure in our commercial agreements. Second, to proactively shield our margins from global volatility, 2025 marked our inaugural deployment of a substantiative financial hedging structure. We systematically executed foreign currency forward contracts, options, swaps and commodity contracts. While this proactive risk mitigation resulted in a calculated noncash derivative fair value loss of approximately $0.44 million, it effectively neutralized extreme macroeconomic fluctuations and provided essential cash flow predictability to -- for our supply chain. Turning to our balance sheet and liquidity. Our financial foundation remains robust and highly liquid. As of December 31, 2025, we held cash and cash equivalents and restricted cash of $75.68 million, an increase from $60.79 million at the end of 2024. Notably, despite reported net loss, our net cash provided by operating activities was extremely strong at $48.55 million for the year compared to $39.70 million in 2024. This powerful cash generation was primarily attributable to disciplined working capital management, including a $63.66 million increase in trade and bills payable. We allocated $44.65 million to capital expenditures in 2025 to fund aggressive construction and equipping of our new production facilities across Dalian, Nanjing, Zhejiang and Anhui. In summary, the temporary margin squeeze is calculated byproduct of scaling next-generation capacity with the Hitrans segment providing dialectical hedge in the raw material cost, our battery capacity ramp-up scheduled for the completion in early 2027, and our deeply integrated global expansion progressing rapidly, we are structurally positioned for massive operational turnaround and record-breaking sales. Thank you, and we will open the floor for the Q&A session. Operator, please go ahead. Operator: [Operator Instructions] We will now take the first question, question is from the line of Brian Lantier from Zacks Small-Cap Research. Brian Lantier: Fantastic news to see Hitrans suddenly turning things around. I wonder if you could talk a little bit about where you see gross margins in the Battery Business? And when you think they might normalize as you ramp up capacity? Jiewei Li Thierry: Thank you, Brian. Let me answer your question. So I think it was back in Q3 and Q4 when our Nanjing Phase 2 and our Dalian operations and new products kick in, our gross margin was affected severely. So right now, we are in a phase of ramping up capacity. And we believe that the Dalian facility ramp-up would be completed in the first half of this year, which we have already received way enough orders for these new products. And for Nanjing Phase 2 because it's much bigger, so our time line is for early 2027, but we have confidence to try our best to catch up the time line. So our target would be also the second half of 2026, but the reasonable timetable will be early 2027. So ideally, in the second half of this year, our gross margin will gradually revolve. And I believe in the full year of 2026, the gross margin number at least looks better than right now. Brian Lantier: Great. And could you describe a little bit more about the cell packing business? And do you see that becoming a growth opportunity for the company, particularly in the LEV market? Jiewei Li Thierry: I will answer the question first and then, Yvonne, please help with the interpretation for Jason, and Jason I think can add some points. So we have received a substantial order from one of our major African customers who actually originally from India, and starting early 2025, this substantial order kick in and they use most -- I think all the cells purchase were from Nanjing 32140. And in order to do that, we have already set up a battery pack assembly unit within our structure, and this unit is dedicated to purchase cells from our Nanjing factory and put the cells into a battery pack and sell it to the African customer. And this customer has already become 1 of our top 5 customers as of 2025. And we are also looking forward to a much deeper and more comprehensive collaboration with each other. Maybe in the future, our collaboration will extend beyond the area of LEV into energy storage sector. So I think this is what I want to add. Please Jason, see if anything you want to add? Unknown Executive: [Foreign Language] Zhiguang Hu: [Foreign Language] Jiewei Li Thierry: There's only 1 thing that Jason would like to add, which is the advantage of our battery cell use in the LEV market. So this has already been demonstrated in the Southeast Asia market and Indian market. So our product, no matter our cell or battery pack, are -- performs really well in high temperature. This is very critical to this kind of application. So we think we may meet the same success as we already did in the Southeast and Indian market. Brian Lantier: Great. That's really helpful. I guess 1 final question. Are you seeing anything on the energy storage front as it relates to grid storage best companies? And is that impacting your R&D plans for new cell formats that could come out at the end of the decade? Jiewei Li Thierry: I think that's a question for Jason. Unknown Executive: [Foreign Language] Zhiguang Hu: [Foreign Language] Jiewei Li Thierry: So currently, for the ESS market, I think we are only focusing on the home ESS, balcony ESS and also portable ESS, so which are all like smaller size. But in addition, we are also in research and development of our big prismatic cell, which can be used in what you just mentioned, the grid size energy storage system. So that will be like one of our like target product for this. Operator: [Operator Instructions] We will now take the next question, this is from the line of [ Charles Nemec ], Individual shareholder. Unknown Analyst: Now I've reviewed the 40135 ramp-up data and the margin compression. And I have a structural and validated solution for the thermal wall and charging limitations impacting you daily in production. Now I submitted a brief to your executive inbox, and I sent one to your engineer as well, and I'm just wanting to confirm that you've received that. And if we could make a time to discuss those matters in a private forum? Jiewei Li Thierry: Which engineer or which e-mail address you contacted through? Unknown Analyst: The e-mail I sent it to is -- let me find it here, ir@cbak.com.cn. Jiewei Li Thierry: Okay. There are just -- daily, there are thousands of e-mails coming in, so maybe in the junk box or maybe it just be in [ filtered ]. So can you just resend the e-mail and we'll make sure that related personnels would just look into it. Unknown Analyst: Okay. I can resend them all. I sent them on the 28th early in the morning, but I can resend them. There's one to the CEO, the second in command and your engineer, all of you got a copy through that e-mail and I tagged you call. Jiewei Li Thierry: Okay. We will just review it. Operator: Seeing no more questions in the queue, so let me turn the call back to Jason for closing remarks. Zhiguang Hu: Thank you, operator, and thank you all for participating in today's call and for your support. We appreciate your interest and look forward to reporting to you again next quarter on our progress. Operator: Thank you all again. This concludes the call. You may now disconnect.
Operator: Good morning, ladies and gentlemen. Welcome to Sigma Lithium's 2025 Fourth Quarter Earnings Conference Call. We would like to inform you that this event is being recorded. [Operator Instructions] There will be a replay for this call on the company's website. [Operator Instructions] I would now like to turn the conference over to Anna Hartley, Vice President of Investor Relations. Please go ahead. Anna Hartley: I'd like to welcome you to our 2025 earnings conference call. Joining me on the call today is Ana Cabral, Co-Chair and CEO of Sigma Lithium. Our earnings press release, presentation and corresponding documents are available on our website. I'd like to remind you that some of the statements made during this call, including any production guidance, expected company performance, update on mining operations, the timing of our projects and market conditions may be considered forward-looking statements. Please note the cautionary language about forward-looking statements in our presentation, MD&A and press release. Before turning the call to Ana Cabral, we will be showing you a short corporate video as we think the pictures will paint a thousand words about what's happening at Sigma. [Presentation] Ana Cabral Gardner: Hi, everyone. Well, thank you, Anna, for showing us this video of our operations. As you can all tell, we're very, very proud of what we built here in Vale do Jequitinhonha. So without further ado, I'll go straight into the fourth quarter 2025 earnings release presentation, which covers the entire full year 2025 annual financial results. We're going to make quite a lot of forward-looking statements, and we would like to encourage you to read the disclaimer of this presentation that's going to be posted on our video. Sigma is the largest industrial mineral producer in the Americas. We've delivered operational excellence. We are a low-cost operation, and we are executing a high-growth strategy for 2026, 2027 and 2028. This is because we are a management operator company where our interests are fully aligned with the interest of our shareholders, which are to build long-term value. Our main competitive advantage is our resilience, which comes from operational efficiency. Our efficiency is, again, driven by the fact that the management is owner of the company. More importantly, we are located in a country in Brazil, which is a politically stable traditional mining jurisdiction, where we have a very low-cost operating environment. On sustainability, we are 100% sustainable. We have the Quintuple Zero lithium, which starts with 5 points. We do not have tailing dams, so 0. We do not use drinking water, 100% of the water is reused and recycled from sewage, 0. We use 0 hazardous chemicals in our operation. DMS is basically a physics-based process, so third zero. We use 100% clean energy, so 0 dirty energy. And we have had 0 accidents with lost time for almost 3 years. Again, a picture is a thousand words. Here's a picture of our waste tailings before and after the artificial germination program. It's blended into the landscape. It's basically stacked up rock, fully geotechnically stable. And we went through the sustainability initiative of actually planting the rock into a green mountain. So what you see now is essentially the picture below. We are 100% sustainable. We produce the Quintuple Zero lithium. We have zero tailing dams. We have 0 drinking water. We have zero hazardous chemicals. We have 0 dirty power. 100% of our power comes from clean electricity. We have had 0 accidents for 2 years and 7 months, 5 zeros. At the bottom, a picture is a thousand words. You see the before and after of our waste tailing piles, which are basically the rocks removed from the pits. Rocks, very stable, geotechnically stable. But more so, we have planted the face of those rocks with artificial germination. We basically did what we call proactive regeneration and the picture shows how it looks like now just a year after those piles were created. So geotechnically safe, sustainable, blended into the landscape, which further enhance the environment. We have built the fifth largest industrial mineral lithium producing complex in the world. So in the picture, you can see that we have a state-of-the-art industrial plant, integrated into a mine. But the plant is not just an industrial plant, is a state-of-the-art clean technology lithium processing facility where we achieved 70% recovery of the lithium, which is amongst the highest in the sector, and it compares with processing methods, which are a lot less sustainable. Sigma is the economic engine for developing the valley of Jequitinhonha. We lifted the valley towards prosperity. That is a key region of Minas Gerais, which is the second richest state in the Republic. We created 1,000 jobs, 11,000 indirect jobs and 21,000 beneficiaries from our social programs of microcredit and small-scale agriculture. We also have granted drinking water access to 18,000 people. 85% of our workforce is regional. 50% of the economically active population has benefited from our social programs. We have renovated, created and built schools that put over 500 children in after-schools or school programs. We have been instrumental in delivering 6.8% of GDP growth for the whole state of Minas Gerais. And still, every year, we serve 3 million meals so that the new waves of people keep coming to help build this lithium valley. So we have a built to last company. It's a resilient business that's been thriving throughout lithium cycles. That's what we have achieved in 2025, and that's what we will continue to deliver in 2026, large scale, low production costs and traceability. We have had 0 accidents for 2.7 years. We uphold the highest health and safety standards in the world, top ranking amongst all companies in metals and mining. But more importantly, we have demonstrated speed of execution, low CapEx to build and to restructure operations, such as what we've done with mining. And we are in a low-cost operating country, which supports us to achieve all of that. So now I'm going to go through the operational and financial highlights of 2025, and I'm going to give you a preview of the first quarter 2026 estimated. We have had unparalleled resilience throughout the last year to date. We have generated cash flows across 2025 lithium volatility. Our business was built to last and to endure the cycles. Four key examples, we signed $146 million in offtake agreements with very robust intrinsic values. Intrinsic value is the advancement we receive from clients for the right to have deliveries of tonnage throughout periods. First offtake agreement was basically to fund working capital. It was signed in '25 for deliveries throughout 2026. The total is $96 million for 70,000 tonnes of deliveries. The second was a $50 million typical offtake prepayment that was signed for 40,000 tons of annual deliveries throughout the next 3 years commencing in 2026. Second, we have been the demonstrators that a commercial strategy well executed can actually yield actual results even in this market, even throughout volatility. We have been tracking seasonality, and we have achieved $67 million in net sales in the fourth quarter of '25 and the first quarter of '26, solely a result as this sound commercial policy. First, we monetized lithium seasonality to by basically receiving price adjustments in the fourth quarter, working with our clients to time the deliveries and the final sales, resales of their products throughout the contract season of 2025. That has resulted in the revenues for the fourth quarter. More importantly, we have generated cash flow from a whole new line of business, which is selling the lithium fines, high-purity lithium oxide fines that we have reprocessed through our industrial plant out of our dry stack tailings. That happened initiated in 2025 and then throughout 2026. We've deleveraged our balance sheet and we repaid debt. That was our third highlight. 60% of our short-term debt has been repaid. 35% of our total debt has been repaid in the years such as 2025. On top of that, number four, we have upgraded and restructured our mining operations completely for safety, for efficiency, for low cost, for cadence and for better delivery. We transitioned from an outside contractor to full operational control, and we are poised to demonstrate those efficiency gains and cost optimizations throughout the next quarters. Here are pictures that, again, a thousand words. It just shows the lithium fines piles being moved across to the shipping halls already at the port. The result of those sales have actually monetized what we used to call green premium, which doesn't really exist. But the fact that we actually created this new line of product out of the dry stack tailings definitely delivered to our investors what we call a sustainability premium, meaning actual financial results from the investment we made on a dry stack unit for the Greentech Plant. This is a page with our offtake agreements. The offtake agreements single-handedly enabled our mining upgrade, our long debt repayment and the capacity expansions. We have an announcement. We signed a 40,000 tonne a year typical offtake agreement that is going to net us $50 million in a true prepayment to be closed within the next 3 months. That amount is equivalent to 120,000 tonnes to be delivered over the next 3 years. The use of proceeds will be for our growth strategy. We also announced and signed the 70,500 tonne 1-year offtake agreement for a total of $96 million. That offtake agreement is for deliveries throughout 2026 and the purpose of it is for working capital. That's the working capital that enabled the mining upgrade and some of the debt repayments. Now in 2026, we have two more offtakes to conclude. First, we're going to amend our contract for the equipment leases of the mining upgrade large-scale machines that have been backed by an offtake for 3 years. Initially, it was for 11,000 tonnes. The number probably will increase depending on the scale of machinery that we are able to secure in the second quarter. So again, the continuity of the mining upgrade to better, more efficient, more cost-efficient and safer operation. The second offtake that we're about to close is the 80,000 tonne a year for 3 years that is going to net us $100 million in a typical prepayment. That conventional offtake will have used proceeds to pay down the long-term debt that currently is sitting in our balance sheet as short-term debt because it matures in December of 2026. That was a 4-year shareholder that has been gracefully given us by our shareholders in late 2022 to enable us to have working capital to commission our plant. So that debt will be replaced by an offtake, which is a very sound and very logic operational move for Sigma. On this page, we again demonstrate how the competitive advantage of low costs create resilience from the price pressures that lithium has undergone this year, especially coming from new regions, sometimes not necessarily compliant or traceable product, but more importantly, from the constant refining innovation that the main markets have demonstrated by bringing the ceiling of this industry constantly lower. The ceiling for, for instance, lepidolite that once was $20,000 to $25,000 per tonne is now around $17,000 to $18,000 per ton, but going lower to a target of probably $15,000 per ton. It doesn't matter. Irrespectively, we are actually working below the floor of the industry, which is product coming from the African new supply regions. So long as we are sitting exactly where we are in the cost curve, we have the resilience of operations that allow us to, for instance, sign offtakes without floors and continue to deliver excess returns every time prices are in the current levels. On the left, we demonstrate the resilience with our total cash cost, which are all-in sustaining costs plus interest. On the left in green, we show the full year achieved all-in sustaining costs plus interest and the guidance. So we're pretty much in the same ballpark. And as a result, we felt comfortable to put in the guidance of $532 for all-in sustaining costs plus $60 for interest for 2026. In the next slide, we show the numbers of how we are able to bring our people safe to their families every single day, day after day. And this is what we work for. We have never had a fatality in 13 years of operations. We have been producing for almost 3 years. We have never had a fatality. But more importantly, we're getting to almost 2.7 years with 0 accidents with lost time. So our people go home every day and come back to work the following day. That is the highest operational global safety standard in the entire battery materials industry, but more so, we sit at the top of the ranking across all metals and mining companies. We have had 1,600 employees here. We now have 1,000 employees. It's a large operation, and we still achieved that, 966 days consecutively without accidents. We're very, very proud of it. So here is to the numeric operational excellence. A number is a thousand words. The unique resilience and robust cash flows can be demonstrated by each and every one of the main items of our 2025 and first quarter '26 estimated operational performance. First, offtakes. We had signed a $96 million offtake prepayment in '25 that enable us to receive working capital by having our production paid in advance. Then we just signed a $50 million traditional offtake for 3 years of 40,000 tonne deliveries totaling 120,000 tonnes to be delivered over the next 3 years. But in advance, up until June this year, we're going to receive $50 million, traditional typical offtake. Irrespectively, we have managed to repay debt to a magnitude that is significant considering the volatility in low points lithium prices reached in 2025. We paid 60% of our short-term debt and 35% of our total debt. That was basically because of cash flow generation. This company was built for cash flow generation. We are a cash machine. In the fourth quarter of '25, we generated $31 million of cash from operations. In the third quarter of '25, the previous quarter, we generated $23 million. So we increased our cash flow generation in 35% from third quarter to fourth quarter of 2025. More importantly, the lithium materials production has had a decrease in volumes because of the full restructure we conducted in mining. But given that we are an industrial operation, we delivered another source of revenues. In fact, we built another business, which was reprocessing the dry stack tailings into what we call low-grade lithium fines. So ultimately, we had equivalent of 70,000 tonnes of the main high-grade product in revenues sitting as inventory accumulated throughout the last years. And that material became this new line of business of what we call high-purity lithium fines. So for the full year of 2025, we produced 183,000 tonnes of high-grade premium lithium oxide. For the full year of 2024, we produced 240,000 tonnes of high-grade premium lithium oxide. So our annual production decreased in 24%. However, how did we generate so much cash flow? How did we accomplish so much repaying debt? By basically creating a new line of business, which is what we call the sustainability monetization, the green premium in numbers. We reprocessed the lithium contained in our lithium fines in our dry stack piles, and we created a whole new business, which is selling high-purity lithium fines, which have a lower grade, but in monetary value, it's equivalent to 70,000 tonnes of the high-grade premium lithium oxide. So all in all, we're not even solving for volumes. We're solving for cash flow and cash flows were delivered, and debt was repaid. And here are the numbers, which speak for a thousand words and do not have an opinion, numbers are numbers. What we want to show on this slide is, again, the quantification and a pictorial of how commercial successful strategy actually helped us to deliver revenues in the third quarter of '25 and in the fourth quarter of '25. We have fantastic clients who are commercial partners. So we sell them the material. We do a final sale and they take the risk. That sale takes place using a provisional price. So we take some of the risk, but we also gain some of the upside. In other words, when our clients resell their product, resell to their clients, we have a profit sharing gain or a profit sharing loss. Last year, we had a loss. This year, we had a substantial gain. Again, this was achieved by mapping seasonality and seasonality in this industry is pretty clear. It happens in the restocking period that takes place after September. It's called contract season. So our commercial partners worked with us to basically execute their final resales mostly after October of 2025, which allowed us to reap the benefits of a much better pricing environment than what was experienced throughout the whole year because of the tariff volatility in the metals market. So when you look at the greens, you can see the resales by our clients. When you look at the red, you can see the sales from Sigma to the client. And you look at the line, you see the lithium prices and the tremendous volatility that happened throughout the year. In partnership with our clients, we captured not only the first peak of volatility, which happened in August, but also the subsequent curve of price increases that happened throughout contract season beginning in October 2025. That helped us book over $20 million in final price adjustments in the third quarter of 2025, and it helped us book over $14 million in final price adjustments in the fourth quarter of 2025. These are substantial revenues, so that's a quantification of what a sound commercial strategy is. On this slide, I'll go very slowly because we have quite a lot of information to unpack. But again, it's the financial discipline that generated the high operating cash margins. High operating cash margins are the source of the cash flow we posted. In 2025, if you compare the fourth quarter of '24 with the fourth quarter of '25, we have substantially increased our operating cash margin. If you compare the full year 2024 full year and 2025 full year, our gross margins have decreased, yes, because the pricing environment in '25 was very challenging. But what is interesting is that the cash margins and the cash flow generation came from one thing and one thing only, we were able to reduce our costs faster than the decrease in our revenues. So despite the mining restructuring, despite price volatility, we were focused on what we could control and what we can control and on what we always control, which are our costs. So if you look at the bottom of the page, you can see that the quarterly comparison between fourth quarter '24 and fourth quarter '25 shown a 77% reduction in costs. That's way more than just variable costs. When you look at the annual cost reduction, you can see that full year '24 to full year '25, we've had a 21% decrease in costs. So when we talk about these operating costs, we had operating costs, SG&A, ESG plus all others. So it's truly an achievement of financial discipline. We're always cutting what we control. We're always optimizing costs. So with that, we can go back to revenues. In other words, when you look at net sales revenues on a quarterly basis, we've had fluctuations, which again just demonstrate how volatile lithium prices were. More notably, from the third quarter to the fourth quarter, when we restructured mining operations, we had a 41% decrease in net sales revenues. However, when we look at the first quarter 2026 estimate, we more than compensated for that decrease. Why is that? Because we not only opened this new line of lithium fines, which were the low-grade high-purity business that we created out of our dry stack tailings, but also all the work we've done in mine restructuring began to show results. So on an annual basis, the revenues decreased 27%. And so when you look at the bigger picture here, what is actually visible that, yes, revenues decreased 27% on an annual basis. Cost decreased 21% on an annual basis. So costs decreased less than revenues on an annual basis, but we were very quick to compensate that and to fix it in the fourth quarter, where we cut costs and we decreased costs in 77%. So this is how financial discipline is demonstrated with numbers. In this slide, we show the quantification of the financial discipline, but now on balance sheet optimization. We have significantly deleveraged despite all the price volatility, despite all that happened with revenues. From fourth quarter '24 to the fourth quarter '25, we lowered our short-term debt in 60%. From the fourth quarter '24 to the estimate of first quarter '26, which is actually the numbers that we have closing, we lowered it by 68%. So the work continued. We didn't stop. Then when you look at the third quarter '25 against current, we lowered the debt in 49%. That's a complete restructuring in the way we fund ourselves, in the short term, in a way we look at working capital even, meaning clients are now funding our operation because of our successful commercial partnerships with our clients. We make it win-win so that it cost us less in working capital and we deleverage our balance sheet. This slide, I'll go very slowly on it because it shows our cash flow generation outlook. It's quite simple. It's quite straightforward. And again, it just demonstrates how Sigma is a cash machine. Why? Because we have high margins. We are built for cash flow generation. We have estimated that in the next 12-month period for Phase 1, we're going to probably have 240,000 tonnes of production. As we've shown before, for the year, we're going to deliver 200,000 tonnes. Now because of our optimum cost efficiencies, we are going to be yielding an all-in sustaining cost, including interest of $592. That's our estimation for the next 12 months, as we've shown you in guidance. That creates cash flows no matter what. If lithium retrocedes to $1,500 a tonne, we're going to be generating about $158 million in free cash flow after interest, free cash flow. If lithium stays around where it is now between $1,800 and $2,000 a tonne, we can generate anything between $218 million to $260 6 million of free cash flow just with one phase. As we double capacity, which will be in place by the end of next year, capacity and we prorate production as we commission, you can sharpen your pencils and you can do the math of how much cash flow we're going to have with two plants. More importantly, as we calculate all-in sustaining costs and all-in cash costs, the only optimization we've done were on G&A and ESG. You don't need 2 of me or 2 of most of our personnel to run these businesses on the administrative side and interest because we're going to cut interest in half, given that the interest is on the total debt that we are going to contract precisely to build plant 2. So we have not factored in the actual operational scale gains that come from running 2 plants using infrastructure that is built and utilized now for 1 plant. So the infrastructure sharing of 2 plants are probably going to bring more cost gains, which are not here in these cash flows. But just with this conservative analysis of doubling operations and having some synergies on G&A and interest, we're bound to generate basically $600 million in free cash flow if prices stay where they are. If prices retroceded to about $1,500, that's okay, too. We'll generate $384 million in free cash flow, meaning after interest at those levels. What becomes really interesting is when we build a third line, which could be done concomitant with the second line. That means that at 770,000 tonnes of production, and again, we're just calculating efficiencies here on G&A, ESG and interest. And we flattened the interest. We haven't cut interest further. We just cut G&A further because, again, to be a commercial person or to be an administrative person, you don't need to triple your numbers when you have triple plants. So interest is flat, but G&A and ESG was the only number that was reduced. What does that mean? Our all-in cash sustaining costs, including interest, goes down to $495 per tonne with 3 lines. So if prices retroceded to $1,500 by the end of '28, when we plan to have this capacity in place, we could be generating $581 million in free cash flow. If the prices stay where they are, we could be generating $900 million in free cash flow. That's a significant amount. And it just shows how building long-term value means building a company that is geared to generate operating efficiency, operational excellence and quite a lot of free cash flow to shareholders. As management operators, our interests are 100% aligned. We're building a business to last. We're building a business to create shareholder value for all of us, management and outside shareholders. So this slide shows the cash flow bridge, the cash bridge with its respective explanation. So again, more numeric demonstration that the disciplined execution that we have delivered in '25 and continue to deliver throughout '26 has created this operational resilience despite the very volatile market conditions. We have had operating cash generation. This is why we didn't raise capital because we were able to generate the amount of cash to deliver and to execute on plan, on target. So let's start at the end of the third quarter of '25. We had $6 million in cash. As forecasted and as discussed in those materials, and I encourage you to go back to them, we continued on the trend to deliver cash flow from operations. So on a net basis, we delivered $31 million in cash from operations, mainly final price adjustments from transactions from sales that had taken place on a provisional price basis as we discussed earlier. Then we had our cash operating costs. We have executed CapEx towards the mining upgrade, and we had $26 million of debt repayment and interest repayment as we've shown in #1 and #2. Debt repayment was just debt repayment, amortization of principal. Interest expense was the annual cash expense for the $100 million of long-term debt we've had in our balance sheet. So we had a flat cash position between the third quarter '25 and the fourth quarter of '25. This is financial discipline. We conserve cash. We burned 0 cash. So with the knowledge that there was a whole new business of lithium fines coming on stream, which, again, we flagged during our third quarter presentation, we had inflows in the first quarter '26, which were the cash sales of those lithium fines that we affected and closed on the beginning of the year. So we achieved $30 million on the sales of the lithium fines, and we achieved $5 million on the sales of the premium high grade. That was the beginning of sales resulting from our mining restructuring. Then we had a $24 million CapEx bill for the mining upgrade, mining restructuring and all that we had to do. But as we conserve cash and as we generate cash from that new line of business, which was reprocessing dry stack tailings, we were able to not only pay our CapEx for mining restructuring and upgrade, but also to continue to do debt principal repayment. So we paid down another $5 million in debt, which means we increased our cash position in the first quarter of 2026 by 100%. So we doubled the cash position. So this is, again, numbers. Numbers don't have an opinion. And it's very much in line with the strategy for cash flow discipline that we have laid out in the third quarter '25. We're giving you an advancement here or a preview as we call it. We have another $14 million of cash sales from the -- we call lithium fines business, the reprocessed dry stacking tailings. Then we have another $50 million of a true long-term offtake agreement prepayment that is poised to close by the end of the second quarter. And then we have about $32 million of the first installment of the $96 million offtake that we signed just in 2025 for the high-grade premium lithium, which is the 70,000 tonnes that we are planning to deliver in 2026. So again, we closed the first quarter '26 with $12 million in cash, and we have a significant amount of cash coming our way in the second quarter of '26, having executed pretty much most of the mining upgrade, as you can see in the CapEx bill for $24 million we paid in the first quarter of '26 plus the $4 million we initiated in the fourth quarter of 2025. Now we're going to do a bit about the operational work we have done to restructure our mining operations. This was done for, again, the construction of long-term value for shareholders. We had to do this. We had to take control of our mine because without that, we would not be ready to deliver the cadence that was necessary to affect the capacity expansions of the second and third industrial plants. Just to recap, we are a fully integrated industrial mining operation. We have this proprietary cleantech technology that produces what we call the clean lithium. That means we have a mine that's integrated into an industrial facility. And again, stopping the mine doesn't mean the industry stops. Obviously, what we want is having a mine at full tilt and then the plant receiving fresh rock. But the plant can do many things given that we have dry stack materials. But once we think about doubling capacity and tripling capacity, we mean that our mines need to operate at full tilt and in perfect cadence so that our plant can deliver on the 70% recovery levels it actually is -- it has demonstrated it can achieve in the fourth quarter of 2024. Think of it as a blast furnace. If we turn it on and off, it will not maintain those levels of efficiency. So if the same amount of material is not fed into that dense media separators per hour, it won't achieve 70% recovery. And for that, we need mine planning, mine execution that delivers piles or delivers fresh rock to the ROM pad on the same quantities regularly, at least on a weekly schedule. So this is kind of the overall concept of 100% vertically-integrated operation. Here is a picture of a Greentech Plant at night, unquestionably a beautiful, beautiful industrial installation. This is what we've done with the Greentech plant that allow us to get to the 70% recovery. We had a 2.0 version of the plant, which was the version we operated from July '23 until November 2024. That was not recovering 70%. It was recovering anything between 50%, low 60s, almost 60%. The dry stack tailing units was not working as we wanted anyway. We actually invested a significant amount of CapEx to get the plant to what we call the current stage, which is the 3.0 version that we plan to double and triple, meaning we're building another one of this and then we're building a second one of this. But in order for that to happen, as we said earlier, we need mine and plant to work in cadence. How did we get to the 70% recoveries? We automated industrial operations. We have software, we have scatter, we have algorithms. We have detection of anomalies automatically. We have correction recommendations automatically. It's self-learning metallurgy, self-learning for mineralogy. It's a bot that basically keeps on getting better and better and better when it's fed the same mineralogy. This is a picture of our fully automated control room. Then we have the mine. The mine had quite a lot of work to be done. It was using less than efficient small equipment. It was using too many pieces of equipment. At one point, there were 48 small 40-tonne trucks trafficking through the mine. So a lot had to be done there. First, we had to fix geometry. It had to be widened. And here on the picture, you already see the result of widening the geometry. So we've done intermediary strip with the objective of widen geometry and increase the mine life and increase access and open other areas with ore that were closer to surface. So what we've done, we basically open additional mine fronts now to accelerate the ramp-up. How did we do this? By using larger equipment, larger fleet to remove strip faster. So larger equipment increases efficiency on the excavators, on trucks across the board. In parallel, while we did that mostly in the fourth quarter, the Greentech Plant continued to operate. So we reprocessed the lithium materials from the dry stack tailings during the fourth quarter '25 and the first quarter '26 with superior recovery, not the 70% recovery, but it enriched it enough to create decent cash flow to create a decent sale value, a decent value added so that it could generate the cash flow and the revenues we achieved both in the later fourth quarter, but also throughout the first quarter. So what we're hoping to happen, and we've seen happening already now in March was that recoveries get closer to 70% as we resume delivering fresh rock to the plant. Now this is how we're going to bring all that software knowledge to the plant. We started and we continue. So we have fast mining implemented in process for mine planning. We have the same software implemented for fuel control. We have fatigue automatic software detection. We have a cost control app sitting on iPads and iPhones for all the mine operators. So we have loading and blasting simulations for optimal results with minimum loads, minimum vibrations. So we're bringing the same software technologies, the same intelligence to the mining operation. And that is starting in the control room for mining, which is here, as you can see in the picture. This is a picture of the first wave of larger equipment. The equipment is going to get bigger and bigger. This is the kind of the small large equipment. So -- but more important than that, we own production control. We drive production control. Mine planning is ours, blasting control is ours. We hired a third-party driller for blasting. So we're managing different contractors with our own in-house mining team. That allow us to gain confidence on deploying larger equipment, on investing in larger equipment and on basically doing the calculated analysis of where should we be blasting for safety, for optimal geometry, but also for efficient ore recovery. Now I'm going to talk about how we're going to continue to expand. We are resuming the construction of Plant 2 this year. So we're going to double industrial capacity for the high-grade premium lithium oxide. And we're not that far. In other words, once we get to it, we're going to go from the 240,000 tonnes that we're guiding to 520,000 tonnes, and that is not that far away. More importantly, there's the potential that we may build 2 and 3 sequentially. So we are never going to decommission the construction crews, given that the CapEx involved here is actually very little and the CapEx efficiency is very high, meaning it's going to cost us $80 million to conclude the second plant, and it's going to cost us $100 million to build a third plant. So with $180 million we are able to take our production from 240,000 tonnes a year to 770,000 tonnes a year. That's a substantial increase, and that's one of the most efficient CapEx ratios in the whole industry. So this demonstrates what can happen when we double and then triple production. We run the fifth largest industrial mineral complex in the world. We are the largest lithium mineral producer in the Americas. But here, we have all of our peers. We have the lithium producers in the Americas that produce from the lakes in Argentina, and that includes the Chilean and the American producers. We also have the producers from Australia, and we have the producers from Africa. So although we are the fifth largest industrial mineral complex in the world, and we're the largest industrial mineral producer in the Americas, we are the eighth ranked producer in the world as a whole. Now look what happens when we double and we triple. When we double, we go from #8 to #6 or #5. Then when we triple, we go to # 4. All of these companies have valuations substantially higher than ours. In fact, we're valued as a nonproducing company. So the effect of doubling production and tripling production is not just numeric, it's also a clear demonstration that we can be up there in the rankings with a concomitant valuation. And that is what it means for us to build long-term shareholder value. And this is what we're planning to do. This is a slide that shows how close we are to getting there. We have made a decision in the fourth quarter '24 and in the first quarter '25 of accelerating the construction of Plant 2. And unfortunately, because of tariff volatility, lithium prices collapsed in more than 50%. So we deployed CapEx and we deployed our liquidity in the fourth quarter '24 and in the first quarter '25 towards the construction. Well, that is not the so good news. We managed, we delivered throughout '25 as we've shown. We overcame because the business was structured to generate cash flows and live through organic cash flow generation. But here's the good news. We're almost there. We've almost finished civil foundations. So what is missing really? Ordering equipment and assembling equipment, and that can be done quite rapidly. In the first plant, we were able to order equipment and assemble equipment in much less than 12 months. So this is how finishing building the second plant is actually a very expedited exercise in construction, managing procurement of equipment and managing assembly of equipment. And that's it. This is a fully licensed construction, fully licensed operation is just within our control to do this. So Sigma is very well positioned to deliver substantial returns to shareholders in 2026. And here, we're going to show why. This slide demonstrates how Sigma continued cash flow generation, production cadence in '26 and growth by building Phase 2 that will yield 520,000 tonnes of lithium will certainly position us for a re-rating of our stock. Why is that? When you look at our peers that produce lithium industrialized oxide from minerals in Australia, they have a larger nameplate production and a significantly larger cash flow. However, as we increase production, that means our cash flow will much more than increase because we have this competitive advantage of high margins, low cost and operational resilience. So our increase in nameplate production will bring a disproportionately larger increase in cash flow generation. More so, that happens irrespectively of pricing environment because of our low-cost operational resilience. The next slide just shows how we're going to get there. We've demonstrated operational discipline. We delivered on all fronts in '25. That's what we've seen on the right. We deleverage and repaid debt, we increased operating cash margins. We built a new line of revenues. We're now selling lithium fines high purity from our dry stack tailings. We increased mineral reserves by 40%, which shows we can operate for 66 years with 1 line for over 25 years with 2 lines and most likely for over 25 years with 3 lines. We strengthened commercial strategy by basically capturing seasonality. We monetized final prices in line with contract seasonality in the fourth quarter. And we closed 2 significant offtakes, almost $150 million in offtakes, $96 million to fund our working capital throughout 96 (sic) [ '26 ] to fund our upgrade and restructuring of mining operations and then a $50 million typical offtake that will basically be invested in building Phase 2. So how are we going to continue to deliver in all fronts in 2026? We're going to resume steady-state production from the mining operations, that integration mine plant cadence that we've shown before that will resume the cadence of what we call the premium high-grade lithium. We're going to close financially on the offtakes transaction signed, and we're going to close on 2 more offtakes as we disclosed when we discussed offtakes here. We're going to receive the development bank disbursement for the funding we already spent on Phase 2, and we are in discussions with several other banks for Phase 3. We're going to repay $100 million of shareholder debt funded by one of the offtakes that are in negotiation, 80,000 tonnes per year for 3 years. And we're planning to commission the Plant 2, the Greentech 2 by the end of 2026. So with that, I close -- very proudly close the full year results of 2025, where we crossed the Rubicon of probably one of the most volatile lithium environments this industry has seen. And we're entering 2026, awash in significant cash generation coming from numerically delivering operational efficiency. So with that, I close this presentation for the full year of 2025. We're very, very proud of our team. We're incredibly proud of how we work, how hard we work to cross the Rubicon of one of the most volatile lithium pricing environments I have ever seen, and I've been here for 10 years as a C-level executive. We've done it without raising capital. We've done it without a hiccup in our operations. We're entering 2026 in a much strengthened position. Why? We have the resilience that's basically quantify. We already earned our revenues by building a completely different product line. We resumed production cadence at the end of the first quarter, and we're entering '26 with roughly $48 million of quarterly revenues, which is a significant accomplishment considering we're just coming out of a volatile 2025. All of that without raising any dollars of new capital, pure organic, disciplined cash generation. And that is the quintessential competitive advantage of this company. This operations efficiency delivered and quantified in the numbers we've shown you. We're very proud of our team, and I want to thank all of our clients and stakeholders who have been there with us, holding hands and helping us cross '25 and enter '26 in this very strengthened position. Operator: [Operator Instructions] Our first question comes from Fortune Era. The company has indicated a production target of 520 kt in 2027. Does this imply that Plant 2 is expected to reach full capacity by the end of 2026? More specifically, when do you currently expect Plant 2 to begin commissioning? And how long do you expect the ramp-up to full capacity to take? Ana Cabral Gardner: We are going to have another presentation on plant construction, but we'll tell you what we're planning to do now. As we've shown in the slide previously, what there is between us and new production is essentially resuming ordering equipment, assembling equipment and commissioning that plant. That can be done quite rapidly. If we use the timetable from the previous plant, it could be easily done in under a year. We are going to order equipment in the summer after the close of the second quarter. The reason being the offtake we just signed will be the main driver for us to deposit and prepay the equipment that we need to build Plant 2. We believe that it will take us anything between 8 to 12 months to actually build and commission that line. So Plant 2 will be fully commissioned early 2027. And as a result, the guidance for '27 is not a guidance for production, it's a guidance for installed production capacity, and we will be further updating the market as that unfolds. But what we can say is we're almost there with three-fifths of our timetable accomplished in the construction of Plant 2. And what stands between us and that level of production is purchasing, building and commissioning, which we've shown we can do quite rapidly. Operator: A follow-up question. In the guidance section titled cash flow forecast at various realized lithium prices, could you please clarify whether the price assumptions of $1,500 and $1,700 refer to Sigma's expected average realized selling price for its concentrate or the benchmark SC6 China FOB price. For Sigma's concentrate grade of approximately 5.2% to 5.5% lithium oxide, what is the typical realized price as a percentage of the SC6 benchmark price? Ana Cabral Gardner: So we are using -- we're not using the gross prices. We're using adjusted prices. So when you think about the nameplate price, we take nameplate price from SMM. And then we typically ship 5.2, 5.3 lithium oxide grade product. So the adjustment is done dividing that level of oxide by SC6 in older contracts. In the newer contracts, we divide by 5.5. The results are kind of the same. So when you look at the prices on that table, they are net prices. As you probably are all aware, gross prices have reached $2,400 just 2 days ago. So $1,800 and $1,500 are far below the current level of nameplate prices at Shanghai Metals Market. Operator: Our next question comes from Lamartine Gomes. Question for Ana Cabral. Can you give us your directional sense of how much each plus USD 10 per barrel increase in oil prices impacts the demand for lithium? Ana Cabral Gardner: Unfortunately, I don't have that number, and I am not really an oil expert. What we can say, though, is 15% to almost 20% of the fossil fuels we use here are just the fuels that power the trucks that run around our operations. In other words, every liter of diesel in Brazil has mandatorily 15% of biodiesel. Now that percentage is slated to increase. So we actually are, let's put it that way, 20% less impacted by the increase in diesel prices than any other country in the world because we have this fantastic, we call, biofuels program in the country, which was actually created 30 years ago during the last oil crisis for this exact reason for energy security of Brazil. And we are the beneficiary of that when it comes to our emissions. So our trucks generate 20% less emissions because the fuel by law has 15% and we're putting 20-ish percent biofuels for every liter of diesel. Operator: Our next question comes from Robert Cook. Please detail the timing of Phase 2 and 3 to completion both 2028. Anything more specific? Ana Cabral Gardner: Well, I was mentioning what we're going to do on Phase 2. And again, we're going to keep giving the market updates pretty regularly on that. Phase 2, by the summer, we're going to be ordering equipment. So close second quarter order equipment. As we demonstrated, that will be funded by the growth offtake we signed, $50 million or more than enough to prepay or deposit towards the equipment we need. To be specific, now what's between that order equipment and production is essentially assembly. In the previous plan, we had 1,000 man on site assembling that plant, that line. That was done in 8 months. We use what we call air procurement for some of the parts that were delayed so that we could cut short delivery times. We use a lot of what we call acceleration techniques, which in this budget are factored in. If we use the accelerated timetable, it means we're going to spend another $7 million for extra man, extra shifts and air freight for some of the equipment. What does that mean? It means that we could have a built plant by the first quarter of 2027, assuming we start in the summer. And then there's commissioning. What is the advantage of doing a plant that is a carbon copy of a plant we've been operating by then for almost 4 years. That is the plant we really know. And as a result, we believe we can cut commissioning times significantly. And more importantly, start benefiting from the get-go, begin with the same levels of recoveries instead of going through the curve of going -- starting with 50% recoveries up to 70% recoveries we underwent from the 2.0 version of the plant to the 3.0 version of the plant. So without being more specific, we're quite confident that we're going to have Plant 2 by any time in the first half of next year. But that's the reason why we're making a clear distinction between installed production capacity and production. Production is dependent on the commissioning, and we're going to keep the market vastly updated as we go along. Now Plant 3. Plant 3 is what we're very proud of actually because given our operational success, given our cost resilience and given our strength as a business throughout cycles, what we've shown basically in 2025 has not gone unnoticed by the main development banks throughout the world, by the main players throughout the world, by the main financiers throughout the world. So we do have dialogues going on for building Plant 3. Building Plant 2 and 3 together is not new. In fact, in December '22, when we filed our DFS for expansion, that was the plan. So much so that we invested in building infrastructure for 3 lines. The goal was to do 1, 2 and 3 sequentially and maximize what we call construction synergies. Unfortunately, lithium took a tumble in '24, and we quickly aborted that plant, and we stuck to just the first plant. By the end of '24, we resumed Plant 2, and we went all in, again, with the volatility of tariffs in '25, we aborted that plant and we stuck to Plant 1. But doing 1, 2, 3 is actually what we have been designing this industrial complex for. Why? We spent the money in the infrastructure, and that was not a small feat, meaning we have the water to feed 3 lines. We licensed to feed 3 lines. We have the sewage inbound treatment station to feed 3 lines. We have the power substation to build -- to feed 3 lines. So from an infrastructure point of view, we are ready for 3 lines. And this is why we're delighted to actually say that, that has not gone unnoticed. And we have, let's say, no shortage of choices from where to get funded with the appropriate kind of debt, development financing debt to build these 3 lines. Operator: Our next question comes from David Feng with CICC. Can we have some color on how Sigma would mitigate any potential fluctuations in fuel costs and power costs? What percentage does diesel costs account for in your cash cost or AISC? Ana Cabral Gardner: I don't have the number by heart, but I can talk about power. It will have 0 effect in power. In other words, when you think about power, our power is fixed at $2 per kilo -- $0.02 of $1, meaning $0.02, $0.02 of $1 per kilowatt hour. This is fixed. One important point, power is renewable here in Brazil. So it's coming from a hydroelectricity dam. And we have a 5-year agreement, which is set to expire 2.5 years from now. So we're going to be good with power. Diesel is the element that is a little bit less straightforward to explain. First, because we got biofuels on the mix, and that is mandatory by law. Secondly, because our oil company is state-owned, and they have what we call a diesel compensation account, which works like a shock absorber during oil crisis. In other words, the diesel costs don't go straight to the consumer as they increase globally. Petrobras absorbs some of that shock initially using what we call the oil compensation account and then it releases in the market. And that was created because all transport in the country mostly is done by trucks so that -- and trucks are individual entrepreneurs so that they have time to plan to actually send that cost into their customers. So we're going to revert back to you on the percentage of diesel in our costs with that knowledge. Operator: This concludes the question-and-answer section. I am returning to our CEO, Ana Cabral, for her final remarks. Ana Cabral Gardner: Well, I want to thank you all of you. And in fact, everyone watching us for the trust. We have gone through 2025, which was one of the most volatile years in lithium, delivering exactly as we said we were delivering resilience, demonstrating operational excellence and executing to plan. We already started '26 on a fantastic note because of what we've learned in 2025 as far as becoming more and more and more resilient. So that's the effort, the collective effort of our management team, of our workers, of the team here in Vale do Jequitinhonha, essentially working like what we call racing horses. We lowered the flap, we focus on our lane and we raised our own race without looking to the sides, focusing on the target. And that's how we've been running this business, and this is why we achieved these results. So once again, I want to thank on behalf of our management-operated shareholders here that work at the company and control the company, we want to thank all of our outside shareholders and reiterate our interest cannot be further aligned. There isn't another company in the sector that's management-owned, management-operated, where employees are shareholders. So for all of you watching, we're in this together. And I want to thank you for staying our shareholders because we crossed 2025, and we are incredibly well positioned to deliver stellar 2026. Operator: Thank you. Thus, we conclude the fourth quarter of 2025 conference call of Sigma Lithium. For further information and details of the company, please visit the company's website, www.sigmalithiumresources.com. You can disconnect now.
Operator: Hello, and welcome to the Americas Gold and Silver Fourth Quarter 2025 Conference Call. [Operator Instructions]. I will now turn the conference over to Paul Huet, Chairman and CEO. Please go ahead. Paul Huet: Thank you, and good morning, everyone. I'd like to welcome you to our fourth quarter year-end 2025 conference call. This call will be recorded and available to watch on our website event page later today. Please note that all dollar figures will be expressed in U.S. dollars throughout this call, unless otherwise noted. We will also be referencing a slide deck that will be shared during the webcast for this call. Joining me today are Warren Varga, our Chief Financial Officer, who will walk through our fourth quarter and full year financials; and Oliver Turner, our Executive Vice President of Corporate Development. I'll start off with a few key updates before turning it over to Warren. Before I begin, I would like to remind you to review our cautionary statements regarding forward-looking information and non-IFRS measures. These statements are included in our year-end MD&A, news release and in the presentation slides. Let me start by saying how excited I am about the massive transformation we have delivered at Americas Gold and Silver throughout 2025 and into early 2026. But before I outline our progress at the mines, I would like to announce a very significant milestone for our company. Just a few weeks ago, our Galena team achieved a major safety milestone. We have completed one full year in over 550,000 man hours of work. During that year, we had no lost time accident. Nothing is more important than the safety of our miners. And I would like to congratulate the team on the culture around safety we are building at Galena and in Mexico as well, well done team. 2025 was a year of transformation for our business, and we delivered exactly that. In 2025, we achieved a massive 52% increase in attributable silver production, up to 2.65 million ounces. At Galena, this was accomplished despite a total of 20-plus days of planned shutdowns for significant upgrades to both #3 and core shafts in addition to many other derisking optimization projects that I will discuss later on this call. So a massive increase in production while we're shutting down and growing the operation is quite impressive. 2025 was also highlighted by a production record year of 1.2 million ounces set by Cosala, where our team delivered the highest annual and quarterly silver output in operation in history, while successfully ramping up the EC120 to commercial production. This is another remarkable milestone and a testament to the exceptional execution by our entire team at Cosala. Congratulations to everyone at the operation for achieving these record-breaking numbers while setting the table for a very strong future. At Galena, consistent productivity gains came alongside our focus on major capital projects and the integration of the newly acquired Crescent Mine. I'm proud of our team for advancing key operational initiatives, including the introduction of long-hole stoping. The expansion of our underground mining fleet the upgrades to #3 and core shaft, all of which position us to support increased development and accelerate mining rates moving forward. Over the course of 2025, we have made major progress in mining, infrastructure and in development at Galena, our transition to long-hole stoping is going exceptionally well. To date, we have mined 7 to 9 long-hole stope panels designed at specific width, while three new long-hole stopes are currently being developed at the moment. I think it is very worthwhile noting that in 2024, we had 0 long-hole stopes, so this is an extremely exceptional step in the right direction and where we're wanting to head at Galena. In Q4 of 2025, we accelerated upgrades by installing the new 2,250 horsepower motor and a redundant motor at the core shaft, further derisking the operation and supporting our growth plans. Phase 2 of the #3 shaft upgrades remain on track for completion in Q2 of 2026. With the arrival of all the parts coming in this month, in March and early April, needed to complete the upgrades on the braking systems and the lillies. This will bring the total hoisting capacity to over 100 tonnes per hour, representing a 160% increase compared to the 40 tonnes per hour achieved in 2024 and when we started this project. We have all seen major productivity improvement. In '25, we had about a 200% improvement on mucking operations. We're now seeing around 200 tons of ore move per ship up from around 50 tonnes of ore when we were doing conventional mining. This is through the use of remote control mucking. Other significant achievements at Galena included a new Alimak ventilation rate, new declines in place that are debottlenecking mining areas. We made major investments into our underground mining fleet replacing and upgrading a large portion of our year with more expected in 2026. Lastly, we are bringing Galena into the modern era of mining, we are currently installing a modern fiber optic communication that will allow us to remotely monitor and optimize pieces of equipment in the mine. In just 1 year, we have completed a large number of projects and upgrades to the mine, and we will continue this strong progress in 2026. At present, we're off to extremely fast start there as well with key infrastructure and equipment upgrades in place within a few short weeks of closing the acquisition in December. Firstly, we added line power to all three audits and are actively setting up the operation to deliver ore to the Galena mill later this year after commissioning the secondary egress. Our updated mineral resource estimate has shown a larger and higher grade ore body at Galena, a tremendous result in our first year of drilling. Even when excluding the historical resource at present, our 2P is over 25 million ounces; M&I over 115 million ounces; and in third is over 133 million ounces of silver. And I just want to remind folks, this is not silver equivalent. This updated resource gives us even greater confidence in the quality and longevity of our assets. I also want to note that our operations in the Silver Valley are still among some of the shallower and we know there is more silver to be found here. We are quite excited to continue drilling and exploring these previously underexplored properties, both in Mexico and in Idaho. As a company, we recently launched the largest exploration program in history, with approximately 64,000 meters of drilling planned across the Galena complex, including Crescent and Cosala. This follows the discovery of 10 new high-grade silver, copper, antimony and silver lead veins at Galena. Highlighted by intercepts of approximately 4,900 grams per tonne of silver, 4% copper over with of 1.3 meters and 2,600 grams per tonne silver and 1.4% antimony, over 0.7 meters wide. The continued discovery of these high-grade veins like 34 veins, 149 veins and the newly discovered 520 vein announced today are strong examples of the tremendous potential of Galena to continue to grow with high-grade discoveries. Something the mine has been doing consistently for well over 100 years. This February, we announced a landmark joint venture with United States antimony to build and operate a new antimony facility at the Galena Complex, creating the first fully U.S. mine to finish antimony solution and creating additional downstream value for our shareholders. Our full year antimony and copper byproduct production from the Galena Complex further demonstrates the value potential of our unique position as the largest active U.S. antimony mine. Beginning January 1, '26, we finally started receiving revenue from these byproducts under the new offtake agreement negotiated with Ocean Partners at NTEC Resources as earlier announced in June of 2025. Looking ahead, we're extremely excited about the opportunity in antimony production as we continue test work initiatives and evaluate numerous pathways to unlock the substantial byproduct value of antimony at the Galena complex. Moving forward, Americas remains squarely focused on playing a leading role in strengthening U.S. critical minerals supply chains. Finally, we introduced our formal 2026 production, cost and capital guidance. For the full year, we expect consolidated silver to be 3.2 million to 3.6 million ounces at an ASIC of $30 to $35 per ounce sold. This is yet another 30% increased production over last year. The last year, 50%, another 30% as we continue along that trend that we're heading towards over that 5 minutes. It keeps us well on track and on course to return Galena back to those historical production and record levels. These are big, big step-ups year after year. Our cost guidance reflects deliberate investments in advancing operational improvements at Galena and Crescent, including the completion and commissioning of the new surface past fill plant, as we've been discussing for some time, as well as the planned transition in our mining methods over the next few years to getting 60% to 70% long-hole stoping and a mixture of 30% under hand capital. These changes will drive higher productivity, lower cost over the medium and short-term time. Consolidated capital expenditures are targeted between $90 million and $120 million, including Crescent development while exploration capital is targeted between $15 million to $20 million. 2026 will be another pivotal year for infrastructure upgrades that Galena and our complex so desperately needs, building directly on the strong foundation we've established in 2025. Overall, I'm extremely pleased with the progress we have made over the last year, which has laid a strong foundation for a very -- for a continued growth of 2026 and beyond across both Idaho and Mexico. I'll now turn the call over to Warren for our financial highlights. Warren Varga: Thank you, Paul. This morning, we released our Q4 and full year 2025 financial results. Our audited financial statements and MD&A for the 12 months ended December 31, 2025, are available on our website and under Americas Gold and Silver profile on both SEDAR+ and EDGAR. For the full year, our consolidated revenue increased to $118 million, up 18% from $100 million in 2024, driven by higher silver production and strong realized prices. We achieved consolidated attributable silver production of 2.65 million ounces with approximately 3.4 million ounces of silver equivalent, including 9.3 million pounds of lead and 2 million pounds of copper in addition to 561,000 pounds of antimony. As for our cost structure, cost of sales per silver equivalent ounce and cash costs and all-in sustaining cost per silver ounce produced averaged $25, $26 and $33 respectively. On the earnings front, we reported a net loss of $87 million or $0.33 per share in 2025 compared to a net loss of $49 million or $0.46 per share in 2024. Our adjusted earnings loss for the year was $35 million or $0.13 per share compared to $34 million or $0.32 per share in 2024. Adjusted EBITDA for 2025 was a loss of $4 million or $0.02 per share compared to $1.5 million or $0.01 per share in 2024. We remain optimistic about the future with silver production expected to grow as we advance the restart of the Crescent mine and continuing optimizing the EC120 mine at our Cosala operations. To support this growth, we closed a $133 million bought deal financing in December 2025, which also funded the cash portion of the Crescent acquisition. With that, I'll now turn the call over to Oliver Turner. Oliver Turner: Thank you, Warren, and good morning, everyone. The past year has been an incredibly active and productive period for the entire Americas team. From completing the Crescent acquisition, delivering strong exploration successes, announcing the U.S. antimony joint venture for the antimony processing facility in Idaho and delivering strong operational results across all sites, we've made significant progress in many different areas. On the market side, we've continued to see strong institutional support and interest. The tightly held ownership of our shares has increased from just 7% in late 2024 to over 65% presently, certainly a strong signal of market support. This level of alignment continues to be a key differentiator for Americas. And over the past year alone, our team has conducted more than 400 institutional investor meetings. We've also seen meaningful index inclusions with Americas being added to the VanEck's GDXJ and SIL ETFs, along with a significant increase in the SILJ ETF shareholding. Over the course of the year, we've also added five new analysts covering our name, and we greatly appreciate their support, bringing our total coverage universe to seven research analysts. With increased generalist interest, we've also seen increased Tier 1 media interest as highlighted by recent interviews with both FOX Business and Bloomberg following our U.S. antimony joint venture announcement. Since the beginning of our transformation in late 2024, USA shares that significantly outperformed the Silver peer group, yet we still trade at a significant discount to NAV compared to our peers providing a rare combination of both silver growth and value in a single stock with nearly 80% of revenue exposed to silver, a growing antimony revenue stream, major new exploration discoveries and a strong growth profile ahead of us, we believe the market is up to fully recognize the value we are building, which makes an exciting opportunity for investors interested in investing in silver today. Looking ahead, our 2026 calendar is filled with conferences, media engagements and meetings week to week. And we look forward to keeping the market and our shareholders updated as we execute on our strategy to scale a premier Americas-focused silver and critical metals producer. With that, I'll turn the call back over to the operator for questions. Operator: [Operator Instructions]. Your first question comes from the line of Justin Chan of SCP Resource Finance. Justin Chan: Congrats on a transformational year. My first question is just on your production guidance for the year. Could you give us maybe a bit more breakdown between what you think the ranges are for Cosala and Galena? And then any guidance on sort of how to model that on a production ramping up basis as you commission the shaft, the past plan, et cetera? Paul Huet: Sorry, Justin. I think I heard the question here -- it's Paul here. I think the breakup between the guidance between Mexico and Idaho, and then the update on the shaft. Was that the question? I think that's it. Justin Chan: Yes, first the breakdown between the assets and then the cadence. Paul Huet: Yes. So look, we're going to be in the ranges, obviously. So this year is another huge step up for us, right, as we're transitioning into long haul, we did 9 stopes -- 7 to 9 stopes last year, depending on how you measure panels. We're going to be stepping that up again this year. So looking at 2026, we're looking at a range of $2.2 million to $2.6 million out of Galena and then the rest is coming out of Mexico, again, Mexico is going to have another big year as we step up about 1.2 to 1.4. So bringing us into that guidance that we put out forward with the projects we've got for the shaft, those are big steps. We've got two big projects we've got to finish up this year. And that's in order to sustain the long haul and fill the stopes property. We've got to get that batch plant in place. And that's been one of our projects from day 1, and we're expecting to have that done this year, which is another big milestone. With respect to the shaft, the parts are almost on site, actually, half of them are. Some of the parts are on site, we're going to be -- we have a -- we want to make sure everything is on site so we can make sure that we do a scheduled planned outage. We'll be planning to be down for 12 days as we upgrade the shaft. These are things that have to get done in order for us to maintain the new product, the new tipping rates that we want to do at that 100 tonnes per hour. So April, those -- those will be done. Justin Chan: Got you. So just to reiterate, so the shaft upgrade basically should be in April and model that into Q2? Paul Huet: Yes. So, the shaft upgrade done. And then the biggest -- our biggest thing is -- so that's about a 10-, 12-day shutdown. The biggest one that's the back plant in Q4. That's always been the biggest one because it allows us to fill the stopes much faster. It takes us maybe 6 to 8 days to fill a stope today. We'll be filling stopes in 24 to 36 hours once those new complexes are built. It become the site to all the construction going on for the new facilities, there's a lot of work going on at the moment to prepare for that new facility. Justin Chan: Absolutely. Another one is just with -- I guess for the balance sheet and all your CapEx plans, can you give us your capital allocation split for this year? I know 30 to 40 is at Crescent, but maybe there's more detail you can give. Warren Varga: Yes, I'm happy to just take that line, it's all over here. So on the growth side of things, total of -- so the $90 million to $120 million includes about $60 million to $80 million growth. That's growth across all assets. A significant portion of that is going into Crescent this year. We also have about $30 million to $40 million in sustaining that includes some capitalized infill, but the majority of the exploration budget is going to be expensed and will be in that $15 million to $20 million number that we talked about. Justin Chan: Okay. Got you. And then maybe just one on some of your growth projects that are maybe less into people's models right now. Do you have an update on Relief Canyon in Nevada? Do you have any plans for that. And then maybe one on the antimony JV? Paul Huet: Yes. Look, when it comes to Relief Canyon this year, we're going to be doing a pretty internal study. At the moment, we're going to be squarely focused at making sure our silver district in Idaho is running where we needed to be. Relief Canyon is going to undergo more of a study this year that we're looking at. Justin Chan: Got you. Like a scoping level study something like that? Paul Huet: Yes, it's going to be an internal study. So last year, we didn't have any -- we didn't do any studies. We want to understand some of the ore, some of the resource and some of the freight grabbing stuff. Look, a lot of that stuff is almost identical to what I had me and Mike at Hollister. That material appears to be very, very similar to what we mined before. The grades different so we want to understand it. We're going to do an internal study led by our COO, Mike Dylan, and we're going to come back to the market. And we're going to come back to our board first and decide what's the best thing to do. We're getting a lot of inbound calls on it. There's a lot of interest on it. It needs metal prices. I don't think we're ready to just give it away to anybody. It would be crazy to just give this away. There's opportunity here. Justin Chan: Got you. And then on the antimony JV, I guess are there any kind of updates or milestones that we should expect in the next, I guess, over the course of this year to account for. Paul Huet: Yes. So the team has developed. I'm actually here taking this call right now from Bolivia, and you visiting the new plant that was built, I'll be at the site in probably about 12 hours to go visit a new plant that is feeding the product already into Montana. We're building something identical to this thing. So the purpose of us being here in Bolivia is to actually see the process, understand it and see what it is we're trying to replicate in Idaho. So it's moving out of speed that it was faster than I expected that for sure. Operator: Your next question comes from the line of Nicolas Dion of ATB Cormark Capital Markets. Nicolas Dion: Congrats on the progress at both of your minds. Just 2 questions for me. I guess I'll start by following on the questions on the guidance. Does your 2026 guidance include anything from Crescent? And then second to that, how should we think about the trajectory of production and costs at Galena looking beyond 2026? Paul Huet: Yes. I'll start a bit on the Crescent, and Oliver, you can go on the cost. So Crescent what just need to be reminded that we we're going to be drilling a lot of Crescent this year. Crescent will have some very small amount, by the way, a small amount because we have to put in secondary egress. The reason this thing can't go into production yet is because the ramp's got to be connected. There's got to be raises and those take us -- it's going to take us a bit of time. At the moment, we're going to be looking at extending on all -- on the vein systems and doing like we did at Fire Creek, just extending the veins understanding the geology. But for now, this year, the tonnes are going to be low. We'll be mining just on vein, no stoping. We can't stope until the secondary gas are put in, and that's probably a third quarter thing. But we'll be getting tonnes for sure and ounces out of Crescent just smaller amounts. And then on the costs, Oliver, you can talk a bit about the future. Oliver Turner: Yes, happy to, Nick. And so just a couple of things in -- as we step into the years ahead. We've been out there talking about taking Galena back to its historical record production levels, which was, of course, in 2002, the mine did 5.2 million ounces and we said that would take us a couple of years to get there. That firmly remains in place, and that growth plan is still there, so nothing has changed there. And as we do scale production, like a bunch of the things you talked about with respect to the transition to long hole stoping we're already talking about a 70-30 split that's progressing extremely well. We've got additional byproduct credits, obviously, that are now payable with the new contract in place from tax that will also being netted out against our all-in sustaining cost numbers. So a steady decline from here onwards as we execute over these next couple of years at Galena is certainly expected in terms of where things can get, we'll put a guidance at the appropriate period of time for those numbers. But significant cost decreases as we ramp towards that historical production number. Crescent as well as Paul just talked about lots of work going on there. Once we're into full production there. We expect that to be contributing ore to the Galena mill. That historical PEA that's out there on Crescent, obviously, not RPEA the prior owner's PEA from 2015. However, that gives you a good indication of the potential of Crescent. We think we can potentially do better than that, but we need to get in there and do more work. And then, of course, down at Cosala, we're fully into EC120 now. Last year, we had a record year despite some limitations geographically in the state, which the team navigated through excellently. We expect another strong year that's going to be in line with last year at Cosala, but then what we identified here with [ Alikrane ] just north of San Rafael, San Rafael is the mine that we "depleted" last year. Well, now we've got a new discovery just north of it, which looks extremely interesting. We haven't really been able to drill to the extent that we would like to at Cosala. Obviously, we're allocating some meters there this year, and we're excited to get in there, but there's numerous targets, just similar to the Alikrane discovery that we'd like to get into at Cosala and then, of course, really get in there to evaluate the impact on optimizing mining activities. So Cosala will grow from here as well Galena. So we still expect that ramp up over the years to come. Nicolas Dion: Okay. That's helpful. And my second question was going to be on Alikrane at Cosala. Can you maybe elaborate on that discovery a bit more in terms of, I guess, the potential you see there? And how close it is maybe the San Rafael development, et cetera? Oliver Turner: Yes. So it's like it's a brand-new discovery. One of the key things that we really enjoyed in our due diligence of this company was when we went down to Mexico in 2024 during our due diligence several times, obviously, prior to taking over management of the company. We are really impressed by the exploration potential at Cosala. There's been numerous outcrops that have been drilled there. And I believe the last five of them turned into five mines at Cosala. Of course, that's not a poor projection on turning future outcrops into mines, but it certainly bodes well for the prospectivity of the region. There are 7 outcropping areas that have been identified that are just screaming to be drilled. And one of those areas in Alikrane has yielded the sort of first discovery under this team, which is a really strong start. It's only 600 meters north of San Rafael. Look at the whole district down there, it's not stretched out over a large area in terms of where these mines are, and they obviously all feed centralized milling. So that's an area as we continue to drill into it this year could potentially be feeding the milling center there in the years to come. This year we'll be focused entirely on EC 120 from a production standpoint. That's the higher grade silver copper. But other metals can come back into the mix there with exploration success like we've seen at Alikrane. Nicolas Dion: Okay. Very good. And last one, I don't know if it was mentioned, but what was the split of your exploration program between the two mines? Oliver Turner: Yes. But 3/4 of that will be spent in Idaho and about 1/4 of it we said in Mexico. So give or take, the $5 million would be in Mexico and $15 million in Idaho. And that's across both at Crescent and at Galena will be drilling aggressively. We're going to have north of 10 drills drilling across both sites there, which is a huge step up. Those sites haven't seen more than a couple of drills turning at them for many, many years now. So this is the largest exploration program in this company's history, 64,000 meters as a reminder for everyone listening. Those are all drilled from underground. So those are essentially short holes in Idaho. So you get a lot of peers points, a lot of data points for that meters there. And we've already seen some strong results with 34 Vein discovery, which went into the new resource, which helped to boost those grades. We saw a grade increase there. 149 is not yet in the resource, but we're looking to get it in there as well. And then, of course, the new 520 discovery, which is over near the core mine, which is connected to Galena underground is another high-grade discovery. And this mine has been doing this for well over 100 years and certainly looking like it's going to continue for a long period of time. Operator: Your next question comes from the line of Amanda Lewis of Desjardin. Amanda Lewis: So first, we saw a major increase in resources at Galena. Can you just walk us through what drove that change and what it applies to the long-term mine life at Galena, especially with the present integration? And then just also what drove the large grade increase at Galena. Oliver Turner: Yes, happy to. Go ahead, Paul. Paul Huet: Go ahead, Oliver. Go ahead. You go ahead, Oliver. But the one thing that as we're talking about great, I just want to remind people, one of the things that about last year in the drilling and everything we had. When I think back of 2025, and I think while we actually mined 9 stopes last year. And almost every conference I go into or all that goes into people ask us about the grades, the grades and how the impact of those 9 stopes. We're carving these things out surgically with long hole we have seen the best grade at Galena in 2 decades. The best grade this mine has seen in 20 years was last year, a record year, the best grade in 20 years while we're carving out long-hole stopes. I'll go ahead and talk about the resource, but I think I just wanted to inject that because a lot of the questions we were asked throughout the year were about how will it impact the resource? How will it impact the grade? And will we see a tremendous drop in grade because of ad evolution. The opposite occurred for us, yes, the best grade in 20 years. So go ahead on the resource. Oliver Turner: That's a very good point. I mean one of the key considerations here is as we're integrating more long-hole stopes in this mine plan, right? We're shifting from 100% underhand cut and fill or conventional mine to a blend of mechanized long-hole stoping, and there will always be some cut and fill in this mine, but about a 70-30 split. As we baked more of those long-hole stopes into the reserve, we haven't seen a major impact on grades there, right? So we're applying long-hole mining stopes there. and the grade is staying very high. Reserve grade is over 500 grams, over 520 grams actually in the silver at Galena. So maintaining very high grade. And one of the key factors for that is the fact that we're able to mine extremely narrow with these long-hole stopes. That first stope we took was 1 meter live. We've taken numerous narrow long-haul stopes there with the same basically with that we'd be able to mine with cut and fill. So that means that plan dilution is exactly the same as what we're getting with cut and fill. So really strong performance by the team there. And the mine looks well positioned. One other thing to mention here too is, Galena is in the top 5 highest grade silver mines in the world, and we're only increasing grades with these discoveries. So one of your questions there was what drove the grade increases. The 34 vein discovery, which we announced midway through last year, when we first drilled that off with that headline hold as 983 grams, well over 3 meters there and widths, triple or minimum mining width. We initially had a 1 million to 2 million-ounce target on that vein. We put another update out about a month and a bit ago, and we ended up expanding that to 6 million to 7 million-ounce target across multiple different veins plays. That vein system continues to grow. And it's just an example of what's been happening with Galena for over 100 years here and will happen well into the future. So we're quite excited about that inclusion that was included in the resource and helped drive grades up even net of depletion, even with incorporating those long-hole stopes there. We had the 149 vein, 25-kilogram hit, 20 centimeters wide, but you dilute that 5 times, you're down to a 5-kilogram intercept or cut there. That was not yet included in the resource. So there's still more great upsides to come there. And of course, the 600-gram plus hits that we've seen at 520 in the core also not included. So the good news on grade improvements in drill it's being increased with intercepts with the drill bit. That's real data feeding that that's increasing those grades, not just in manipulation of cut-off grades in either direction. So very excited about that. Down at Cosala, you also saw reclassification resources. We moved some resources into inferred from M&I, not impacting the mine life whatsoever that we have at EC120. We're going to be infill drilling those areas and bringing them back into M&I this year. We've applied very stringent controls, both in Mexico and in Idaho with this resource, and we've done this at multiple different companies before where we build our own resource. But of course, now we can build our mine plans around going forward. So strong results across the board of both and feeding it with the drill bit and look, we're going to be doing a ton of drilling this year. So excited about what that can mean for the year-end resource a year from now. Amanda Lewis: Okay. Great. That's very helpful. And then just lastly, could you just provide a bit more color on how the long-hole stoping is going? I'm specifically wondering how the mining teams are performing and what areas do you still want to work on? Paul Huet: Yes. Oliver, I can talk about that. So as we've been talking about, we've taken out depending on how you look at a 7 or 9 panels already, we are changing up a bit of the way we're drilling to make sure that we're very consistent in our blast patterns. We're this mine hasn't seen a long-hole for us. So depending on where we are in the mine, we are quickly recognizing and this is not uncommon in any of the mines I've worked out in my life. By domain, if the areas are very steep, 89, 90 degrees. We might need one less hole. So we're just improving or improving are optimizing our drill patterns, our blasting patterns, if we're down to 72 degrees, we need an extra hole. But what we're seeing is we're determining our stope height, our length. And the intent is that 70% of everything we do going forward will all be long-hole. All we're doing right now at the moment is optimizing it, though. We just continue to get better and better and better. In the first couple of stopes we have done. And the more efficient we get, we'll just be moving more tons per day using remote controls instead of drilling and blasting jackwave, which has been done forever. So long-hole is like most people understand. It's not a complicated thing. It just needs to be done right. You've got to have your top that's good. You got to have your bottoms, that's good. And we want to make sure that you can check in our case, we check our breakthroughs. So they're not in the footwall or hanging on and we don't have a lot of deviation and unnecessary additional dilution. So pretty simple game in our world, given we've done it all over the world. Operator: [Operator Instructions] Your next question comes from the line of Wayne Lam of TD Cowen. Wayne Lam: Maybe just wondering on the new discoveries, obviously, some positive elements that could support a further increase in production. Maybe if you might be able to give us some color on the new 520 vein and the time line on that and whether the core Shack upgrades put the infrastructure and positioned to be ready for production and it's just a function of drilling and development. But no actual constraints on the processing infrastructure? Paul Huet: So that upgrade we did in the core motors at the very end of December 2025 was the first time that we ever have redundant motors. So we're preparing ourselves for using that shaft. There's still some work to do in the loading pockets and other areas that we have identified. But the new vein 520 has been part of a drill program at core. So given that it's a brand-new discovery or we've got quite a few holes into it already, we're going to drill it quite a bit and see. Can we access it from the #3 shaft? Or can we access it from core? One of the advantages we have in this district is that core and #3 shaft are connected. In fact, that's our secondary egress. So we travel across to get out in the event that the #3 shaft is down. So we will be able to mine that 520 vein from the #3 shaft even when the upgrades come into the #3 shaft, this quarter in March and April as we're doing these upgrades. So once again, more drilling into it, we're going to start looking at it. How do we mine it from the best location? So it's very fresh. It's very new. We're quite excited about it. It's not going to be the only discovery we have. There will be many more. We have 10 new veins here. There's no doubt there will be more discovery. One of the biggest things we always saw about these assets, they were underexplored, and we needed money and we're drilling them now. So 520 needs more drilling. We have optionality to mine it from either shaft or #3 shaft and skipping it up either one pause a bit out there because of the work that needs to be done. Wayne Lam: Okay. Great. Yes. Sounds like a pretty big opportunity. And then maybe at San Rafael, just wondering with the higher silver price than as EC120 ramps up? Is there potential for continued mining there and to add incremental tonnage to the production profile? Paul Huet: Oliver, let you take that one, I believe. Oliver Turner: Yes. So San Rafael particularly the higher-grade upper areas, which we were mining towards the end of last year. There are still some portions there that can come into the into the mill there down at Cosala. But the majority of mill feed this year is related to the EC120. Of course, all of this subject to improvement based on drilling and exploration results. And obviously, we're not going to be putting Alikrane into there within the next 6 months or anything like that, but continued positive drilling intercepts there in the upper portions of San Rafael can add some more feed and then also continued drilling success from underground at EC120 will allow us to get into some of the higher grade areas there as well. So coastal the team executed excellently there last year with a record production for the asset. Looking for similar this year with upside pending drill success there this year? And then obviously, we'll be scaling it in the years to come. Operator: Your next question comes from the line of Heiko Ihle of H.C. Wainwright. Heiko Ihle: Most of them have been answered, but just two quick ones. The 55 170 decline, obviously, should provide a decent amount of efficiencies. When should that fully -- I assume this is already in effect, but is there like a bit of a period over when we should see those impacts? And then also just from a cash point of view, given that there is less work now getting done, is there a -- should that impact cash costs at all? Paul Huet: Sorry, Oliver, you're going to take that I'm not sure I heard the question at all. Go ahead, Oliver. Oliver Turner: No problem. Yes. So on the decline, that's currently under development. So we'd expect that to be getting those multiple access points here towards the end of the second quarter. So expect that to have an impact. I mean this is all part of our 2026 mine plan anyways. So it all based into the guidance that we have. Certainly, when it comes to cash costs, I think your -- the way that you're thinking is right there, Heiko, we do expect cost to continue to decline as we go quarter-over-quarter this year. So you'd expect more of a back-end weighting to improvement in cash costs as we ramp up ounces, but also some of these projects that we've been working on start to impact the bottom line. One of the things that we did see in the first -- what's it been 14, 15 months, that we've been at the helm here. We did highlight in the release there is on mucking efficiencies. The company was in 2024 and prior moving about 50 tonnes per shift with conventional methods. We're over 200 tonnes per shift now used employing the remote scoops that we have, haul trucks underground. This is all the new equipment that we put in place last year. And now we actually have a fiber optic system that's being laid down #3 and it's going to be developed on different levels there that will give us basically mesh WiFi and communications access all throughout the mine. It seems like something that's sort of standard in mines these days, and it absolutely is if you're building a new mine. But this mine hasn't seen any of that modern technology installed in it. So that's another very easy target and low-hanging sort of area -- of low-hanging fruit that we can target there to improve efficiencies. That will then link in to the lot of the equipment we're using and it's not just mining equipment. It's fans, it's ventilators, it's automating all sorts of parts of the mine and monitoring it in real time. We expect that to continue to improve dispatch efficiency cycle times and productivities across the board. All of that starts to be impacted once that system is in place, which again, is the second half of the year. So you're going to see steady improvements in efficiencies over the course of this year. You're going to see costs come down at the operating level. Over the course of this year, all of that kind of works in tandem as tonnes come up ounces come up costs go down, byproducts come up, efficiencies go up. So you'll see a positive trend this year, Heiko, as we execute quarter-by-quarter, and things will get even better next year, obviously, in '27. Heiko Ihle: Fair enough. And then just one quick clarification. How much do you -- would you say you spend on fuel at Galena or even across the company per month or per quarter? Just purely out of curiosity. Oliver Turner: Warren, do you want to take a stab at that one? Warren Varga: No, I wouldn't even know at the top of my head. Heiko, I'll give you a number after the call. There's not off the top of my head. Paul Huet: Yes. I mean we just feel, given what prices have been doing, but I assume the impact is fairly small. Oliver Turner: It is, Heiko. One of the things remember there, of course, is that Galena is integrated into the grid power system, of course, in Idaho. There's not a lot of diesel consumption at site. Obviously, some of our underground equipment runs on diesel. But broadly speaking, the mine is powered by grid power. So not the same impact that you'd expect to see in a large open pit in terms of diesel cost impact, but we can get you that number. Paul Huet: And remember, we have a lot of rail, right? Our rail transport a lot of our foreign waste in the mine. Operator: With no further questions at this time. I will now turn the conference back over to Paul for some closing remarks. Paul Huet: I just want to thank Oliver and Warren for helping me on the call today. And I really want to take a moment to thank you all, our shareholders. Our teams at both sites, look, we're coming up for 1 year without an LTA in Mexico as well. That doesn't happen by accident. So great job to both sites for outstanding safety commitments. And I'm looking forward to 2026. It's a very exciting year, another big step-up again for us. we continue to deliver on our operational successes. So thank you, everyone. Have a great day, and we'll talk soon. Operator: This concludes today's conference call. You may now disconnect.
Operator: Greetings. Welcome to the HireQuest Inc. Fourth Quarter and Year-End 2025 Earnings Conference Call. [Operator Instructions] A question-and-answer session will follow the formal presentation. [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to your host, Walter Frank of IMS Investor Relations. You may begin. Unknown Attendee: Thank you, operator. I would like to welcome everybody to the call. Hosting the call today are HireQuest's CEO, Rick Hermanns; and CFO, David Hartley. I would like to take a moment to read the safe harbor statement. This conference call contains forward-looking statements as defined within Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. . These forward-looking statements and terms such as anticipate, expect, intend, may, will, should or other comparable terms involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Those statements include statements regarding the intent, belief or current expectations of HireQuest and members of its management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those described in HireQuest periodic reports filed with the SEC and that actual results may differ materially from those contemplated by such forward-looking statements. Except as required by Federal Securities Law, HireQuest undertakes no obligation to update or revise forward-looking statements to reflect changed conditions. I would now like to turn the call over to the CEO of HireQuest, Rick Hermanns. . Richard Hermanns: Good afternoon, and thank you for joining our call today. As we've spoken to on previous calls, the macro environment has driven a challenging time for the staffing industry. . That said, we remain solidly profitable and executed well in 2025. As many of you already know, we acquired MRI network, our global executive search and permanent placement brand back in 2022 as a way for us to tap into the increasing demand for executive search and permanent placement staffing offerings. Since we acquired the business, hiring for both executive search and permanent placement have slowed and that dynamic impacted our ability to scale and grow MRI. MRI network had two components of its business, a permanent placement executive recruiting piece and a contract staffing piece. After careful consideration during the fourth quarter, we announced our strategic decision to change the ownership structure of MRI network by divesting the permanent placement piece of the business into a new entity in transitioning majority ownership to a newly formed leadership group made up of current and former franchise owners. We believe this is a positive strategic shift for MRI network and the future growth of the brand. By restructuring ownership and aligning MRI's leadership with experienced franchise owner operators, we're making sure the network is being guided by the people who live its mission every day. This reset is focused on growing and strengthening client partnerships to unite a global network of executive staffing and permanent placement offices into a cohesive, high-performing organization. Importantly, HireQuest remains fully committed to MRI network, and we'll continue to retain partial ownership and support the brand with the essential infrastructure purchasing power and shared services across our staffing and recruiting network. So what that means for HireQuest and you as shareholders of HireQuest is that as of January 1 of this year, the permanent placement portion of MRI is operating under this new entity in which HireQuest has a minority ownership stake in. And HireQuest continues to operate and have full ownership of the contract staffing piece of the MRI business, which is the part that more closely aligns with our other franchise offerings. In another development, we announced in December that HireQuest Board of Directors had approved a share repurchase program that authorizes the company to repurchase up to $20 million of its outstanding shares of common stock. We believe that a share repurchase program is currently an efficient use of our capital, reflects our commitment to prudent capital management and deployment and reinforces the confidence that the Board and management team have in HireQuest long-term strategy while also returning capital to our shareholders. Prior to the close of the year, we surveyed over 400 offices across our HireQuest direct, [ snelling ] and MRI brands to get a better sense of the overall job market and hiring trends as we headed into 2026. The data we collected points to a studying market with fewer extremes and early signals of reallocation across industries. In other words, while we don't expect 2026 to be defined by hiring boom or bust, we do expect more balance in the labor market that appears to be stabilizing around new priorities including flexibility, fit and the kind of skilled work and labor that can't be automated by AI. Some key statistics from the survey include 68% of offices surveyed set time to fill for open rolls steadied in 2025, while 35% saw increases. This is generally considered to be a clear indicator of market stability. 61% of recruiters expect the time to fill to remain stable in 2026, while 15% expect improvement as candidate supply normalizes. On average, employers are moving faster to secure top candidates in full-time roles, demonstrated by the late 2025 hiring urgency uptick. Looking ahead, we expect several trends including AI and automation, reshoring and tariff relief and economic and political shifts to be key forces that will shape 2026, that 2026 hiring landscape. HireQuest is keeping a close eye on the many markets in which we operate, and we believe that we're well positioned with our franchise staffing model to benefit from a stabilizing market and to meet the shifting demands of employers in 2026. Lastly, I'd like to acknowledge that on March 3, snelling our nationwide temporary and direct hire recruiting service celebrated 75 years of continuous operation, placing it among the longest running staffing firms in the United States. On behalf of all of HireQuest, we congratulate them on 3/4 of a centric of success and look forward to many more years as a leader in their respective markets. With that, I'll now turn the call over to David to provide a closer look at our fourth quarter and full year financial results. C. Hartley: Thank you, Rick, and good afternoon, everyone. I appreciate you all joining us today. I'll now provide a summary of the fourth quarter and full year results. Total revenue in the fourth quarter of 2025 was $7 million compared with revenue of $8.1 million in the prior year, a decrease of 13%. For the full year, total revenue was $30.6 million compared to $34.6 million in 2024. Our revenue is made up of two components: franchise royalties, which is our primary source of revenue and service revenue, which is generated from certain services and interest charge to our franchisees as well as other miscellaneous revenue. Franchise royalties for the quarter were $6.6 million compared to $7.6 million for the same quarter last year. And for the full year 2025, franchise royalties were $29 million compared to $32.7 million in 2024. Underlying franchise royalties are system-wide sales, which are not a part of our revenue, but are helpful contextual performance indicator. This wide sales reflects sales at all offices, including those classified as discontinued. In the fourth quarter of 2025, system-wide sales were $122.3 million compared to $134.8 million in Q4 2024, a decrease of 9.3%. And for the full year, system-wide sales were $500.2 million compared with $563.6 million in 2024, a decrease of 11.3%. Service revenue in the fourth quarter was $392,000 compared to $428,000 last year. And for the full year 2025, service revenue was $1.6 million compared to $1.9 million in 2024. Selling, general and administrative expenses in the fourth quarter were $4.5 million compared to $5.1 million in the fourth quarter last year. SG&A for the full year was $20.7 million compared to $21.4 million for the full year 2024. Included in SG&A expense is net workers' compensation expense, which totaled $89,000 for the full year compared with about $2 million in the full year of 2024, a decrease of $1.9 million that demonstrates the progress we've made to reduce the impact of this expense on our business and lower it back to historical levels. Core SG&A, which includes the impact -- which excludes the impact of workers' comp, MRI ad fund expenses and any nonrecurring operating expenses was $4.1 million for the quarter and $8.5 million for the full year. We provided a table in the press release issued earlier this afternoon with a detailed reconciliation of core SG&A to SG&A, along with tables for the non-GAAP profitability metrics, net income to adjusted net income and net income to adjusted EBITDA, which I'll discuss shortly. Net income after tax was $1.6 million in the fourth quarter or $0.11 per diluted share compared to net income of $2.2 million or $0.16 per diluted share last year. For the full year, net income was $6.3 million or $0.45 per diluted share compared to $3.7 million or $0.26 per diluted share in 2024. Adjusted net income was relatively flat year-over-year for both the fourth quarter and full year 2025. And in the fourth quarter of 2025, adjusted net income was $2.7 million or $0.19 per diluted share compared to adjusted net income of $2.6 million or $0.19 per diluted share in Q4 2024. And for the full year, adjusted net income was $10 million or $0.71 per diluted share in 2025 compared with $9.9 million or $0.71 per diluted share in 2024. Adjusted EBITDA in the fourth quarter was $3.4 million compared to $3.8 million last year. And for the full year, adjusted EBITDA was $14.1 million compared to $16.2 million in 2024. Given the size of noncash operating expenses running through our P&L, we believe adjusted EBITDA and adjusted net income are both relevant metrics for us. So now moving on to the balance sheet. Our total assets as of December 31, 2025, were $88.2 million compared to $94 million at December 31, 2024. Current assets included $3.9 million in cash and $39.3 million of net accounts receivable while current assets at 2024 year-end included $2.2 million of cash and $42.3 million of net accounts receivable. We ended 2025 with about $33 million in working capital compared to $25.1 million at the end of the year in 2024. The biggest driver for the increase in working capital is that we ended 2025 with $0 drawn on our credit facility, down from $6.8 million drawn at the end of 2024. So at December 31, 2025, we had $40.3 million in availability, assuming continued covenant compliance. We have paid a regularly -- regular quarterly dividend since the third quarter of 2020. Most recently, we paid a $0.06 per common share dividend on March 16, 2025 to shareholders of record as of March 2. We expect to continue to pay a dividend each quarter, subject to the Board's discretion. And with that, I will turn the call back over to Rick for some closing comments. Richard Hermanns: Thank you, David. As always, we'd like to thank our employees and franchisees for their hard work and commitment, and we look forward to speaking with you again when we report the first quarter results in May. With that, we can now open the line to questions. Thanks. . Operator: At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Kevin Steinke with Barrington Research. Kevin Steinke: Rick and David. I was just wondering about the environment you described in terms of stabilization and some clients moving more quickly. If you see that benefiting any of your divisions or brands more than the other, thinking of HireQuest direct versus snelling? Richard Hermanns: Kevin, I appreciate the question. I would say that it hasn't necessarily been more pronounced in any particular division, but it's very apparent, and it's carried through into the first quarter. So the market has definitely, throughout the quarter, it is definitely seems to have found its bottom. And again, I don't want to contradict what we just said, which means it's certainly not going to -- doesn't seem like it's setting up to be a boom year. But after three years of a steady decline, we're pretty hopeful that, that's over with. Kevin Steinke: Okay. And circling back to the MRI transaction. Can you maybe just give us a sense of quantification of how we should think about that affecting the numbers as you move forward in terms of just the revenue and expense impact from the ownership change in that business as it flows through your income statement. Richard Hermanns: Yes. I'm going to leave that question to David, other than as far as getting into some of the specific numbers, I will say, generally speaking, the -- about 35% to 40% of, let's say, from 2025 of what we had in MRI has been retained via the contract staffing. So there will be a decline from that portion that makes any sense. Now realistically, the perm placement division was breakeven at best. So from an actual income standpoint, the effect will literally be nothing should be nothing. But David, if you have any more on that? C. Hartley: Yes. So in 2025, the executive search portion of MRI contributed about $65 million of system-wide sales and just a touch under $2 million for royalties. And like Rick said, from an expense side of things, it was, it was breakeven to this past year, slightly down a little bit in terms of profitability. So -- so those are kind of -- that's kind of what we should see as things start to normalize in 2026. Operator: Kevin, do you have an additional question? . Kevin Steinke: Yes. Just quickly, you didn't mention acquisitions or the acquisition pipeline, just wondering if you had any update there. Richard Hermanns: Well, thanks for that question. We had in the middle of the fourth quarter, we had one that we were hopeful, and I would have -- if you'd have asked me in November, I would have said there's an 85% chance we were going to close on that thing. And then they got cold feet and they got cold feet. So look, we're all -- again, we're always looking for it. However, clearly, we've had a bit of a dry spell in finding any decent ones. And at the end of the day, we're just simply not going to chase a deal just for the sake of having it. It just doesn't really -- doesn't really help us. And so I would say what we're finding more than what we want is ones with like client concentrations. And so we try to avoid. We try avoiding those because those are the ones that tend to fall apart when you buy them. And so we've had probably a bit less activity than really what I would expect because of the fact that we've had three years of a down market, I would have thought there would be more that are there. But -- the only thing I can say is after doing this for 35 years, it's just when I say that, that all of a sudden, some nice deal will fall in our lap. So we're just -- we're always out there working, working, working the phones and trying to get deals. And so that said, right now, we don't have anything right now. Operator: [Operator Instructions] Okay. We currently have no questions in the queue. I'd like to turn the floor back to management for closing remarks. Richard Hermanns: Well, I want to thank everybody for joining us today. I think that again, the results presented just further our contention that the HireQuest model is a very stable profit-centered proven method to be resilient in difficult circumstances. The fact that we went from nearly $7 million of debt to debt free, for example, in a year that was really by any macro sense of things was down, again, just indicates sort of the strength of our model. And so again, we just -- thank you for joining us today and look forward to presenting our first quarter results here in, I guess, in about six weeks. Anyway, thank you, and have a good day. Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
Xia Yangfang: Dear investors, analysts, friends from the media, good morning. CMB 2025 Annual Result announcement will now begin. I am Head of the Office of the Board of Directors of China Merchants Bank, Xia Yangfang. We have released the 2025 annual results last Friday. And this conference will be carried out both offline and online webcasting. Now please allow me to introduce the attendee of today's on-site meeting. Sitting on the podium, they are Mr. Miao Jianmin, Chairman; Mr. Wang Liang, President; Mr. Peng Jiawen, Executive Vice President, CFO and Secretary of the Board of Directors; Mr. Xu Mingjie, Executive Vice President and Chief Risk Officer; Mr. Zhou Tianhong, Chief Information Officer. Joining on-site and online, we also have Non-Executive Director, Mr. Zhu Liwei; Independent Director, Mr. Tian Hongqi, Mr. Li Chaoxian, Ms. Li Jian, Mr. Wong Yuk Shan, and Mr. Lu Liping, and also relevant Heads of Department of CMB. On behalf of CMB, I would like to extend a warm welcome to your participation, and thank you for your long attention, support and investment in CMB. Today's meeting will have 2 sessions. One, we will invite Mr. Miao, Mr. Wang to introduce the bank's 2025 result, which takes around 30 minutes. And the second part is the Q&A session, which takes around 1 hour and 30 minutes. The meeting will be provided with Chinese to English simultaneous interpretation. Now we will have the floor to Chairman, Miao; and President Wang on CMB's 2025 performance. Jianmin Miao: Dear investors, analysts, friends from the media, good morning. Welcome to CMB's 2025 Annual Results Announcement. Today's results announcement will be introducing contents of 3 parts. First, I will introduce group's 2025 annual results. And then I'll give the floor to President Wang to introduce the operational information and then I will briefly introduce our outlook and strategy for the year 2026. In 2025, we seek to quality, efficiency and scale, coordinated development and strive to build a world-class value creation bank and speed up our transformation towards the full initiative development and promote high-quality development, maintain good operations amid stability and strong resilience and innovation vitality, which was reflected in 5 parts. First, we remain steady in terms of our operation, and we cope with the downward trend of the interest rate in sufficient demand and growth pressure. Our revenue and profit realized both dual growth ROAA and ROAE maintain a leading in the industry. Net operating income RMB 337.2 billion, up by 0.05%. Net profit attributable to the bank's shareholder RMB 150.2 billion, up by 1.21%. ROAA, 1.19%; ROAE, 13.44%, down by 0.09 ppt and 1.05 ppt year-on-year. Net interest income, RMB 215.6 billion, up by 2.04%. NIM was 1.87%, down by 11 bps year-on-year, with a narrower reduction and maintain a leading level in the industry, influenced by the fluctuation in the bond market. Non-interest net income, RMB 121.7 billion, down by 3.31% year-on-year, among which net fee and commission income increased by 4.39% year-on-year, which is recording the first positive growth since the year 2022. We seek to refine management and continue to promote reduction in cost and maintain a cost-to-income ratio of 32.01%. Secondly, we maintained growth in asset and liability and maintain our advantages in low funding cost. Assets exceeding RMB 13 trillion; total loans and advances, RMB 7.26 trillion, up by 5.37%. General loan RMB 6.94 trillion, up by 6.57%. Total liability, RMB 11.79 trillion, up by 7.98%. Total customer deposit RMB 9.84 trillion, up by 8.13%. Demand deposits daily average balance account for 49.4% remain at a high level. Interest-bearing liabilities average cost ratio 1.26%, down by 38 bps year-on-year, and we maintain our advantages in low funding costs. Thirdly, we consolidate our structural advantages and have strong capital strength. Non-interest income accounts for 36.08%, maintained leading in the industry. Net fee and commission income accounts for 61.85% of the total non-interest income. Retail finance makes over half of the contribution. Its net operating income and pretax profit account for 56% and 50% of the total. And we also maintained quite good level of CAR under the advanced measurement approach. Core Tier 1 CAR, Tier 1 CAR and CAR were 14.16%, 16.51% and 18.27%, down by 0.7, 0.97 and 0.81 percentage points compared with the end of last year. Under the weighted approach, the core Tier 1 CAR, Tier 1 CAR and CAR were 11.92%, 13.9% and 15% down by 0.51, 0.73 and 0.73 percentage points compared with the end of last year. All levels of CAR's decrease was mainly influenced by the interim dividend payout and the reduction of OCI. Fourth, asset quality remained stable and risk compensation capability remained to be robust. NPL balance, RMB 68.2 billion, up by RMB 2.6 billion. NPL ratio, 0.94%, down by 0.01 percentage point. Credit cost 0.6%, down by 0.05 percentage points. Allowance coverage ratio 391.79%, down by 20.19 percentage points. Loan loss reserve 3.68%, down by 0.24 percentage points, maintaining a high level of risk compensation capability. Fifthly, we strive to build a digital and intelligent CMB and actively practice ESG philosophy. We focus on AI, increased IT input and talent reserve. In 2025, our IT input was RMB 12.9 billion, accounting for 4.31% of the bank's net operating income. R&D personnel exceeded 11,000 people accounting for over 9% of our total employees. We have an open mindset and embrace cutting-edge technology rollout and implement application and strive to build up our AI systematic advantage. We construct a leading, intelligent, computing infrastructure, model performance and computation efficiency continue to increase. Our core computing rate, our token cost has reached an industry-leading level. Our average token throughput has increased by 10.1x compared with that of 2024. Our bank-wise large model developers exceed 10,000 people, and we continue to introduce the cutting-edge model and implement domain-specific model as many as 183. Our average iteration cycle significantly shortened as well. We deeply implement this technology into our business ecosystem and implement over 800 applications and realize both tech and business value. We build our intelligent era, organizations and teams and construct talent pipeline that are cross functional. We promote deep integration of technology and business and build such intelligent organizational ecosystem. We incorporate ESG philosophy into the bank's development strategy and decision-making and promote sustainable development. We promote the development of green finance and enhance our green operation capability. Green loan, green leasing balance grew by 21% and 23.89%. We assist enterprises to issue nearly 100 ESG bonds and raise their firms to support energy conservation, clean production, clean transportation and other industries. We attach great importance to green investment. Our companies and subsidiaries are holding more and more balance of green loans, green bonds and ESG products. We continue to strengthen our green operation and deepen the carbon emission reduction and enhance our own carbon management refined level. We continue to enhance the quality and efficiency of serving real economy, tech, green, inclusive and manufacturing loan balance have taken up more and more proportion. And mentioned, MSCI ESG rating has received the highest level of AAA rating for 2 consecutive years. This is my brief overview of the 2025 result. Now I'll give the floor to President Wang on the bank's operational information. Ying Wang: Thank you, Chairman Miao. Now I'll introduce the bank's 2025 operational information. The year 2025 is an extraordinary year facing multiple challenges under the leadership of the Board Directors, we have with good pressure, maintain determination and promote the international comprehensive, differentiated and intelligent transformation and maintain a good trend of operational results and our business are moving towards new and better direction and building up our own strength and competitiveness, which were mainly reflected in the following 5 parts. We continue to consolidate our customer base and our business development are both directing towards good volume and quality. We remain customer-centric and strengthen high-quality customer acquisition and strive to build our -- build ourselves into clients' principal bank and first bank to approach. Retail customers totaled 224 million, up by 6.7%, among which Golden Sunflower and above clients, 5.93 million, up by 13.29%. Customers holding wealth products amount to 64 million, up by 10.15%. For corporate customers, it was totaled 3.62 million, which was up by 14.4%, among which corporate customers newly acquired reached 657,000 serving tech clients as many as 350,000. And for corporate withholding customers, their amount was 1.53 million. We also optimized category asset allocation. Total loans and advances account for 55% of the total asset. Retail loan accounts for 51% of the total loans and advances and investment assets accounts for 31.77% of the total assets. Interbank assets account for around 7.36%, down by 0.02 percentage points. Bill discounting account for 4.43%, down by 1.09 percentage points. We continue to strengthen liability management and enhance the proportion of high-quality liability. Total deposits account for 83.43% of the liability, up by 0.12 percentage points. Core deposits daily average balance account for 87% of the total customer deposits daily average balance, up by 1.17 percentage points. Interbank deposits grew rapidly. Its demand deposit account for 93.77%. Customer deposit cost ratio 1.17%, down by 37 bps. Interbank deposit cost ratio, 1.02%, down by 29 bps. Secondly, our 4 major segments are developing in a balanced and coordinated manner, and we are showing stronger development resilience. First, we secured a dominant position of retail finance and our leading advantage were further consolidated. Retail AUM balance exceeded RMB 17 trillion, up by 14.44%. Year-round increment reached RMB 2.16 trillion, hitting a record high. Retail customer deposits totaled RMB 4.5 trillion, up by 11%. Retail demand deposits, daily average balance accounts for 47% of the total. Retail loan, RMB 3.72 trillion, up by 2.07% market share growing steadily. We strive to overcome adverse factors such as weak demand and consumption, our credit card business continued to grow in their market share. Active credit card users surpassed 70 million, developed against the trend. The transaction value was RMB 4.08 trillion, down by 7.62%. Credit card loan amounted to RMB 939.1 billion, down by 0.92%. The credit card transaction value and loan balance remain leading in the industry. And secondly, we speed up to build our characteristic in corporate finance and build up our strength in specialized segments. The FPA balance was RMB 6.73 trillion, up by 11.08%. Corporate loan balance, RMB 3.22 trillion, up by 12.29%. We focus on modern industrial system. We prioritize our loan granting in tech, green, inclusive manufacturing and other industries and increase our competitiveness. Corporate deposit balance RMB 5.34 trillion, up by 5.46%. Corporate deposits are accounting for 50% of the total. And retirement finance improve in both quality and efficiency. Annuity and trust surpassed RMB 300 billion pension fund under custody RMB 1.55 trillion. Private pension accounts exceeded RMB 15 million and contribution was among the top in the industry. Transaction banking focused on the trade finance and treasury management needs of the corporate customers. The number of customers using treasury management cloud further specialized. Third, Investment Banking and Global Market business further specialize and innovate. FPA contributed by IB business grew by 10.38%. The bank, as lead underwriter that instrument was RMB 579.16 billion. Number of clients in GM business of client flow trading and transaction volume both grew. RMB bond investment transaction value grew by 1.96x. Bill discounting business grew by 12.89% ranking second in the market. Fourth, wealth management and asset management continue to expand. We enhanced asset allocation capability grasp opportunities arising from the capital market and the wealth management business experienced robust growth. Three asset allocation clients was amounted to RMB 11.76 million, up by 13.31%. Retail wealth management product balance grew by 12%. Agency distribution of non-money market fund, trust scheme and premium -- insurance premium grew by 18.13%, 150.65% (sic) [ 155.65% ] and 25.93%. (sic) [ 25.96%. ] Corporate wealth management product balance reached RMB 524.9 billion, up by 31.28%. Asset Management business totaled RMB 4.71 trillion, up by 5.13% as a custody scale, it ranks among the top in the industry, reaching RMB 26.09 trillion. Extensive wealth management income grew by 16.91%, top for the past 3 years and accounting for 52% of the total fee and commission income and increased by 5.78 percentage point. Fifth, we speed up the business development in key regions and enhanced the contribution brought by the branches in these areas. We have 16 branches in key areas and their customer base, AUM, core deposits and other key indicators are having higher level of growth than the average level of other branches. And retail AUMs proportion increased by 0.79 percentage points, and the corporate loan balance account as proportion was up by 0.12 percentage points. Third, for international and comprehensive development, we actively build up our new strength. We actively serve Chinese enterprises going global and resident needs of making global allocation of their assets enhance our service capability. The overseas contributions are making more and more contribution. Their total asset grew by 12.88%, and the net operating income grew by 33.78%. Institutions in Hong Kong grasp opportunities and make good performance. Their total assets grew by 13.84%. Net operating income grew by 36%. Net income grew by -- net profit grew by 63% and CMB Wing Lung Bank's retail AUM grew by 22.14% for CMBI. The number of Hong Kong IPO underwritten and sponsored actually ranked #2 and #4 respectively. For cross-border business, it shows strong momentum. Number of corporate customers in respect of international BOP exceeded 100,000 and the volume of international BOP grew by 12%. We deepened our comprehensive development and subsidiaries delivered various performing highlights. Their total asset was RMB 952.8 billion, up by 11%. Their operating income accounted for 12.26% of the group's total, up by 1.96 percentage points. Net profit, RMB 16.38 billion, up by 41%. CMB leasing focused on new energy, new infrastructure, new tech, new mobility, and new intelligent manufacturing and new material, aka to 6 new industries to build their service mechanism. Their total asset was RMB 325.3 billion, up by 5%. CMB Wealth Management's product scale, RMB 2.64 trillion, up by 6.88%, maintained the top in the industry and equity-related products actually increased in their market share. CMB Fund has managed a total scale of RMB 961.5 billion, up by 9.29%. CIGNA & CMAM insurance found under Fiduciary Management RMB 223.3 billion, up by 23%. CMB Investment commence operations, and we make new breakthrough in the layout of our comprehensive development. Fourth, we upheld bottom line of risk and compliance, enhance risk management capability and have an even stronger solid foundation for development. We strictly classify assets and fully expose risks, actively resolve risk assets and maintain a good management of credit, market, operational liquidity and compliant risks and other type of risks. Our asset quality remains stable. Special mention loan ratio 1.43%, up by 0.14 percentage points. Overdue loan ratio, 1.25% down by 0.08 percentage points. NPL to loans overdue for 60 days ratio was 1.18%. NPL formation ratio, 1.03%, down by 0.02 percentage point. As we are facing with the profound adjustment of the real estate market and rising individual risk, some mismatch in supply and demand in some industries, we seek to risk-oriented approach and dynamically adjust risk strategy and resolve risk in key indicators. Corporate NPL ratio, 0.89%, down by 0.17 percentage points. Property NPL ratio 4.78%, down by 0.16 percentage points. Manufacturing NPL ratio, 0.43%, down by 0.06 percentage points. Retail NPL ratio 1.06%, up by 0.1 percentage point. Residential NPL ratio was -- residential mortgage NPL ratio 0.51%. Retail SME NPL ratio 1.22% and credit card loan NPL ratio, 1.74% and consumption loan NPL ratio, 1.02% all remain at a relatively low level in the industry. Fifth, we strengthen the management and innovation to promote a high-quality development and we have strong core momentum for future growth. First, on one hand, we consolidate our foundation and conduct refined management. We consolidate our management to strengthen asset liability, forecast, operations, service and team management so as to guarantee our high-quality development. On the other hand, we continue to promote our innovation capability and maintain a leading technological capability. We consolidate our technological foundation. The overall accessibility or availability of the cloud has surpassed 99.99%. We use hybrid deployment, elastic scaling and other technologies to increase the input/output ratio of cloud. Big data service has covered over 76% of the business personnel. We have been implemented large model in 4 business scenarios and saving 15.56 million men working hours and effectively enhance our efficiency. We upgrade retail Xiao Zhao, intelligent service and construct AI Xiao Zhao service for the corporate clients. We speed up to build our AI organization. Over 98% of the personnel has already passed the preliminary level of competency certificates and adapt to the change of the technological risk condition in the AI era. The above mentioned is the major operational information of the year 2025. Now I'll give the floor to Chairman, Miao, on the 2026 outlook and operational strategy. Jianmin Miao: Now I will briefly introduce the company's outlook and strategy of 2026. Looking into 2026, for the banking industry, challenges and opportunities coexist. On the one hand, the external environment are exerting greater impact. And we see a pricing risk and in geopolitical condition, the world economy are sluggish, multilateralism, free trade are under severe threat. The new and growth driver continue to switch, and there are strong imbalance between supply and demand. The market expectations tend to be weak, and the bank are continuing to face with the 3 lows: low interest rate, low interest spread and low fee rate, and they are taking pressures in their profitability. On the other hand, for Chinese economy, the supporting condition and the future condition has not changed, that the economy will continue to be developing in a good momentum, along with more proactive fiscal policies and monetary policies, we seek to make domestic demand in the dominant position, build up strong domestic market, and we believe that there will be more favorable factors for the operation of commercial bank. In the year 2026, we will stick to our value creation bank strategy and continue to promote our 3 capabilities of wealth management, digital and intelligent technology and risk, expand our moat and explore a new layout of high-quality development. Firstly, we will maintain our strategic determination and follow the developing principle of the banking industry focusing on high-quality tech self-reliance, strengthening the domestic market and high level of opening up and other key areas to seize opportunities and seize the customer need, strengthen the capability of innovation and promote professional differentiated, comprehensive financial service to clients and maximize our value that we can bring to customers, employees, shareholders, partners and the society. Secondly, we will focus and sell through the cycle and maintain our competitive edge. In the low interest rate cycle, we will make sure that we will pay more attention to stabilizing the NIM and maintain industry-leading level. Secondly, we will build up our strength and make up for what we are not good at and strengthen our asset allocation capability, maintain our strength in wealth management business. Third, we pay special attention to the pricing and risk management of credit assets and maintain good asset quality. Fourth, we will promote the reasonable growth of RWA, optimize the capital allocation and maintain high level of CAR. Thirdly, we will seize opportunity to speed up the transformation of the 4 initiatives and build up the new strength, speed up international development and promote overseas institutions to achieve high-quality development, build up our cross-border business and help enterprises going global, promote the comprehensive development of our subsidiaries and increase their contribution to the bank. So to build up our differentiated competitive edge, consolidate our systematic advantages in retail finance and speed up to form a new growth pool in key areas. And we will also speed up our digital and intelligent transformation, stick to AI-first philosophy and build up an intelligent bank, realize the model upgrade and construct our new mode in the new era of AI. Fourth, we will build up our resilience to promote the balanced and coordinated development of the 4 business segments. We'll consolidate the dominant position of retail finance, build up our strengths in corporate finance and promote a stronger and better IB and Global Markets business and speed up the development of Wealth Management and Asset Management business and promote these 4 segments to promote each other and support each other in a higher level and construct a more resilient and competitive business development layout. Fifthly, we will guard our bottom line to consolidate a fortress-style risk and compliance management system. We will stick to prudent and steady risk culture, enhance our capability to judge -- to understand the market, prevent credit risk, market risk, operational risk, liquidity risk and other risks and strengthen AML and internal control management to make sure that CMB could remain steady and resilient in the path of high-quality development. Thank you. Xia Yangfang: Thank you, Chairman and President. Now we will enter into the Q&A session. We will have the questions from the investors and analysts first and then from the media. As we have many participants today, please follow the instruction given by the operator to raise your question, and please limit your question to 1 only. Please raise your name and the agency you represent before having the question. Operator: Now we'll have the first question. [Operator Instructions] The first question, please, from this gentleman. Richard Xu: I'm Richard Xu from Morgan Stanley. And congratulations first for the brilliant results that you have achieved in 2025. And also you have achieved very good results in retail even within this very turbulent external environment. So my question is for the Chairman first. So this year is the start year of the 15th 5-year plan. And what is the plan or strategic vision or expectation from the Board to China Merchants Bank. And nowadays, we have seen very same very fierce competition among the banking sector. So against this backdrop, how can Board ensure the market-oriented mechanism of China Merchants Bank so as to expand its advantage -- competitive advantage? Jianmin Miao: Currently, I think the banking sector is still in a downward cycle. So banks are facing very down mounting challenge. And during the 15th 5-year plan, our requirement from the Board to China Merchants Bank is to stick to the high-quality development and accelerate innovation. It means the high-quality development and stay to the true course. It means to be professional to be market-oriented road. And this is a key to the high-quality development. And also, at the same time, need to have innovation so as to consolidate our strength and also to be differentiated from the peers, and also to accelerate the transformation so as to responding to the challenges, which has been brought out by the downward cycle of the market. And also, what we have seen is to be internationalized and to be more comprehensive operation and also digitalization intelligent banking and also to be differentiated from the peers. These are very 4 key elements of the banks. In terms of internalization, we have achieved quite obvious results in the past 2 years. In terms of the comprehensive operating management, the subsidiaries of the banks are contributing more to the bank's operating income. So this is a very good advantage of CMB as well. And differentiated positioning is also CMB's advantage. From the Board, the business model for CMB will be, that we have advanced business model and also innovation driven and also to have the distinctive feature and also to be the first-class bank, which can create value for -- create value. So this is very important also the moat for CMB. Finally, there will be the digitalization and an intelligent bank. In the past, we have been advanced and also better than peers in terms of technology. Now our -- we want to build up the first digitalization bank among the industry. And later on, we will have our Chief Information Officer, who can supply more. So, market-oriented mechanism is the backbone of CMB. And I think that the reforms of the remuneration system will not affect CMB's market-oriented system. So for CMB, the gene or internet is the corporate culture of CMB. So this is the moat of CMB. And in the past, some of our analysts and also customers are expecting or thinking that different -- have CMB has different moats such as the low cost income -- low-cost funding source, some say that is the retail. But I think the very basic one of our moat is the customer-centric culture, and this has been our corporate culture and is the key our foundation of our business, because we are customer-centered and customers have good experience with the bank. That is why they want to bank with CMB, also deposit with CMB. And the deposit with CMB doesn't mean that they only want to put some money in CMB, but they want to do the financial trading and financial asset management with the CMB. That is why we have the lowest funding cost among the banks. We have the highest demand deposit ratio among the banking peers. So the Board's requirement is to deepen reformation and accelerate internalization and also differentiation. And these are to be intelligent and to be comprehensive operation. So this is very important for CMB. And then I would like to invite Mr. Zhou to supply more for the intelligent banking. Tianhong Zhou: So for the past years, we -- one of the very key issue strategy for CMB is to have technology leading bank. And from last year, we also have made a plan for the next 5 years technology development. So -- and we have fully arrangement plan for the next 5 years. And I think in the next 5 years, the key is to be technology-leading is one of our key strategy. And we all know that AI has been a very important trend. And from -- at the end of 2022, the Chairman has a requirement for CMB is to build ourselves into one of the first intelligent bank among the industry. So we have made quite a lot of efforts on that front. Now in terms of large model, we have made quite good achievement in 2024. We have more explorations and have experience -- has gathered experiences. And Mr. Wang Liang put out the idea of the AI-first strategy, saying that among the whole bank to expand the application and also the mindset of the AI-first strategy. So firstly, we have upgraded our organization and team, which are more applicable to the AI era. And especially large model is a very big breakthrough in the technology history. But it cannot substitute fully the human intelligent. And to some extent, it can be replaced. So we have a kind of analyze about what people are more good at and what AI models are better at and how AI can assist or to be separately work together with our human staff. We have analyzed around 1,580 projects and to analyze how AI can assist on how AI can help with the work. And we have quantitative data on that and some are, say, high-value projects and some are mid-value and some are low value. So, for those high-value projects, which AI can assist more, then we will have more resources to put on. So 69% of them have been already implemented. Altogether, there will be 856 projects that have been implemented or we can call it a scenario that have already been applied among the whole bank. And just now we have in the results announcement brief, the Chairman said we have already implemented this AI application in 856 scenarios. And now we are accelerating the place, so as to analyze and improve the important business procedures. And secondly, I think that AI development is very -- have a very big difference to the traditional software engineer software. So it means that there will be high uncertainties where we are upgrading AI model. So for CMB's experience that we think that 6x of upgrading before we can really put the large model into practice into real work or into real practice. So last year, we have made quite good results in the application of the large model. The upgrading period has been shortened to around 8 days of this model. So -- which means that it's faster for us to apply this large model. And for 2025, so we have achieved quite results in 2024, which shows that for the large model application in CMB, the depth and the width of the application of AI has been expanded in a very fast manner. And I also would like to share with you why important data in this regard. In 2024, the daily throughput of the token is around 10.1x of what we have in 2024. So it's a very fast speed. And daily average token throughput is RMB 25.6 billion. And in important areas, the AI large -- the application of the large model has already exerting -- have taken effect is serving around 10,000 Sunflower customers. And we have over 10,000 assistants for our Sunflower relationship manager and also for how our corporate manager help them to improve the customer recharge ratio by around 14%. And and also for corporate credit loan business and also the AI model is also helping them before loan granting and during the loan lending and also after that, especially for micro loans, around 82% of the micro loan, loan submission and also credit approval is done by AI and large model. So -- and they also -- and also accelerated the approval process of the micro loans, which is 44% faster than what we have last year. And also in the past, for the -- how we can implement the credit approval, approval conclusion in the past that has been done by human beings by the human staff, but now it's assisted by the AI at large model and the system will kind of follow how the credit approval conclusion has been really implemented. And also, it has speed up of our early warning system that is also better than our human staff. And I think the early warning is 42 days faster than what we have in the past. So which you can see that it's both helping us in all fronts, improving business development quality and also improving efficiency. In terms of improving efficiency that for the whole year, it has saved around 15.56 million human -- working hour, has saved that. So this is efficiency improvement of the efficiency. But we all know that AI is improving or is kind of upgrading in a very fast manner, but there is illusion. There's forge that the models are doing. So banks are the area that is highly regulated and need very prudent risk management. So we are fully kind of alert to the illusion of the AI. So and controlling risk is a very important aspect of AI. So, very importantly, we need to be very prudent in developing AI models, which can be reliable and also we have achieved quite good results in 2025. In 2026, I think we will move on and doing more efforts in this regard, better to implement our digitalization and intelligent banking strategy. Xia Yangfang: Thank you. The second question, please. Meizhi Yan: Yan Meizhi from UBS. First of all, congratulations on the very good results in 2025, especially against this very complex environment. And last year, our operating income and profit are both have recorded positive growth is very good. My question is, if we look into 2026 or even forward, how we can expect the growth rate of the operating income and the profit growth such as to be accelerated to around 3% to 5%? And also another question is about our ROE. I know, CMB's ROE has been higher than other banks. Last year, it's around 13.44%. The average banking level is around 9% to 10%. So in the past years, for the ROE side, we are seeing the ROE has been declining for CMB as well. So if we look ahead for the next 2 or 3 years, how will you expect the ROEs bottom? So will be the bottom be around 10% to 11%? So my question is for Mr. Wang -- Mr. Wang Liang. Thank you. Liang Wang: Thank you for your confirmation in our -- of our 2024 results. Before going into your question, I think this year is the 20th year when we first IPO-ed in H-share. We have financed around RMB 31.3 billion in our H-share market raised fast fund. And our total dividend payout is around 2.6x of the fund financing that we have got in the H-share market. And the total CAR ratio of the share pricing is around 15.07%. So I think that even though there is volatilities of our share price, especially during the financial crisis, I think for long-term investors, I think you can make quite a good return from CMB and also we continue to be very firm in creating value for our customer and also to have the return for the investors. And thank you for the long-term trust and long-term investment for our -- for the shareholders in CMB. And that is why we can see our H-share's PB is higher than our A-share's PB. Thank you very much for the overseas investors, especially for our H-share investors. And just now your question was about how we expect the operating and profit growth of our -- in 2026. I think that for the past years for operating income, we have been facing very big pressure over the past years. And this year is 0.01% growth rate. It's kind of the first time that we have recorded a positive income from 2023 and 2024. Finally, it's a positive growth, even though it's a very small growth, but it's a very hard earned one. The small growth can also illustrate or demonstrate that we have been very resilient in our business growth. And this year, why we are facing such a big challenge or pressure? I think, one of that is that, while our traditional advantage lies in retail, but retail business has been affected -- highly affected by the policy side and also highly affected by the external environment. So we try to make up the shortfall from the retail sector by moving up or have more growth on the other business sectors. And this year, we have a slight positive growth this year. But whether we can continue to have the 3% or 5% growth in the next years, I think from the business indicators, we will be very proactive and to make efforts to achieve growth and also such as for the customer base growth and also asset and liability growth as well as especially AUM growth. So these are the preconditions for how we can make growth on the financial data. And in terms of the financial data for this year, our expectation is that -- we think that stable -- we will have stable growth. And also, we want to make improvement. We will try to make improvement in the stable growth, whether we can achieve that goal. It's hard to tell, but we will make efforts to own that, such as in the NIM sector, last year, we stood at 1.87%, 11 bps year-on-year decline. And this year, I think that the year-on-year decline of the NIM will be stably -- will be stably declined, but the magnitude of the decline will be smaller than last year. Last year was a year-on-year decline of 11 bps. This will -- the decline will be smaller than that. The main reason is that from the policy side, I think that we are expecting more rate cuts and also the RRR cut this year. If there will be more rate cut, it means that it will affect our asset yield as well. And the second reason is that when we are looking on the credit side, we are seeing that quite weak credit demand. There is very fierce challenge or competition for the credit. So people are trying to grow more volume. Banks are trying to grow more volume to make up the shortfall from the decline in interest rate. That is why we cannot see the end to a rebound of the interest rates. So this will also pose a challenge to our NIM to our interest income. And the other sector is on the -- factor is on the liability side. On the liability side, last year, the funding cost has been down by 38 bps. Last year funding cost is already one of the lowest among banks. But among the peers, the room for us to further decline will be smaller, and that is why we are still facing pressure on the NIM side. And in terms of the non-interest income, last year, we have seen fast growth on the wealth management fee income so as to make up the shortfall from other non-interest income. But this year, we'll continue to see other fee rate cut policies on such as a mutual fund. So this will also affect our fee income from the agency sales of mutual funds and challenge, that is also a challenge on the fee-based income. And also the third uncertainty comes from risk sector. For the corporate sector is under control and also stably declining. But still, we are facing mounting pressure on the retail side, especially for micro loan consumption loan. So we try to control the risk so as to reduce the credit cost and to maintain a stable profit growth. These are the negative factors that we are facing. And why I say that growth on the operating income and also profit side, we are still under pressure. But last year, we are trending into a better direction. It's more kind of contributed by our active -- where we have active believe we tackled the challenges, how we have responded to that. So we have quite good results last year, which is -- you are seeing it stably turning to a better trend. And as for the question about -- you also asked about the ROE, like this year, we have slower profit growth, but the growth rate for our equity and after the dividend payout, we still have quite a big volume of the equity, which is supplemented to the existing one. That is why equity is -- growth rate is faster than the profit growth rate, which lead to a decline on our ROE side. And ROE this year is 13.44%. And from the Board and also from the senior management, we highly emphasize the level of the ROE. As long as we have high ROE, we can have a relatively stable return to our shareholder. We are strengthening the management on our ROE to improve the return on our capital. But my judgment is that, still we are facing the pressure on ROE decline or the trend will continue. Whether it will bottom out at around 10% or 11%, I think we will control the speed of ROE. I think 10% will be depending on the future external circumstances and also interest rate, I think the 10% will be a bottom for us to have a better control of our ROE because I think a bank if can maintain ROE of 10%, it means a good return for the shareholder. But we also compare that our bank's ROE and also the advanced banks in the world, we think that CMB is still in a leading position. So I think that we will try hard to maintain a sustainable ROE. Jianmin Miao: And for 2026 and for the next few years, I would like to conclude what we have Mr. Wang has just said. The first one is that the cycle is the same, namely the CMB's business cycle is the same, in line with the sector cycle, but we are -- the marginal performance of CMB is better than peers. No matter it's in a downward cycle or upward cycle, I think we are trending toward a more a better trend. And thirdly, we still have our existing advantage during this cycle, even though our business cycle is in the same trend with the sector trend. But marginally, we can see we are improving and also, we have a very obvious advantage. This is a conclusion of our performance. This is my conclusion for CMB's performance in 2026 and continue forward. Xia Yangfang: We'll have another question from the on-site participant. Jia Wei Lam: I am Gary from HSBC. I have a question about NIM outlook. We noticed that in the fourth quarter, your NIM was experiencing quarter-on-quarter growth, which is for the first time for the past 3 years, I would like to learn from the senior management. Do you expect the trend to be continuing in 2026? And when do you expect the turning point of NIM to be up here? How do we understand that? Jiawen Peng: Thank you for your question. So just now President Wang has mentioned a bit about the judgment about NIM. I fully commit that the direction is correct. In 2025, our NIM was 1.87%, down by 11 bps. To see from quarter-on-quarter change, quarter 1 -- 1.91%, 1.86% and 1.83% and 1.83% in quarter 1, 2, 3, 4. There are some characteristics of our NIM. The declining trend continue, but the magnitude actually shortened. In 2025 the reduction was 70 bps. In the annual operation of our NIM, we see some rebounds in the fourth quarter. But there are 3 bps up on quarter-on-quarter change. And for the group-wise, that was 2 bps. You can also see from our external change of the interest rate environment, there are some contribution given by these factors about our NIM. So there are quarter-on-quarter increase for the bank wise in terms of the NIM in the fourth quarter, in asset and liability management of the bank, we have made great achievement. In pricing, we have been quite following the self managing mechanism, and we have strictly followed the principle to give the loan pricing. So generally, we have improving the loan pricing condition. The second perspective is that we have made achievement in improving our structure. We have increased the proportion of assets that are earning higher asset yields. Even though in the demand side, we are experiencing some pressure, but we strive our best to promote the growth in assets, and it has also contributed to the final results. In the fourth quarter, for instance, for some low earning assets, for instance, like bills, we have been reducing its proportion. So all-in-all, that factors contribute to the rebounds of our NIM in the fourth quarter. You just asked about us whether this trend will be continued in the year 2026. So generally, I think my -- our judgment of the development of 2026, we believe that NIM will still decline, but we are having this wish. And we are having this judgment that the magnitude of decline will be smaller. I think this is a trend for the past several years as well. You may expect to see the first quarter data that also was the beginning of the year. But when it comes to our judgment, generally speaking, the NIM will be somewhat lower than that of the quarter 4 indicator. The mainly influencing factors are still those external factors such as weak demand in assets, and it further leads to the declining in the loan pricing. And there are also some technical reasons behind. Last May, there are some LBR cut, and we have some floating pricing loans that will be repriced in the first quarter. That accounts for around 78%. There are around 78% of the loans that are to be repriced in the first quarter. So in the first quarter, it will be a concentrated period of time when we see the most amount of loans to experience repricing. The other part is that deposits. The deposit repricing has not yet complete for the past year. But just now, President Wang also mentioned that deposit repricing for CMB, we should not neglect that CMB has quite a high proportion of demand deposit. We have not that much room to further decline in our deposit cost. So that in the liability side, the cost reduction will attribute less comparatively speaking. In 2026, NIM will continue to reduce, decline, but the magnitude of decline will be better than that of the past year. We will take further measures of liability and asset management. We have made a very accurate and very comprehensive management. We have been asked by our Board to maintain a leading level in NIM and we aim to achieve these goals in the year 2026. The first is to realize the magnitude of decline of NIM to be smaller than that of the past year. And the second is to achieve the stability of NIM as soon as possible. We wish that we could achieve this goal in the second half of the year. And third, we can maintain a leading level in the industry about our NIM. Thank you. Xia Yangfang: Thank you. President, Peng. Let's just wait a second, and we have also got some questions from online. And I think the next question will be given to an online participant from Guotai Haitong Security, Zhu Chenxi. Zhu Chenxi: Can you hear me? I have a question for President Wang. You have just mentioned that CMB has been listed for over 20 years. And you have taken us go through the history, for the past 20 years, such a long period of time, CMB is actually begin to develop -- think about its development model ever since the financial crisis in 2006. I think by that time, you actually penetratedly choose Retail and Wealth management as your development priority. And as we take a look back, this choice has made CMB a leading position ahead of our peers around 1 decade. We have deeply plotted our choice to deeply develop retail finance. And we have experienced a glory brought by the retail strategy in the year 2017 to '21, which was also shown in the evaluation in the capital market. We have also experienced some pressure due to the change in the external environment. Standing in this time point and looking into the future, we are now in a new phase of economic development. How do you consider -- how does CMB consider a new competitive edge for yours in the future? Liang Wang: Thank you for your question. As you say, CMB has been listed -- has been adopting the retail strategy since the year 2004. We have forge our systematic strengths. And this strategy has bring us a lot of contribution in our overall development and retail finance has made over half of the contribution for us in terms of net operating income, in terms of profit and et cetera. And of course, we have overcome some difficulties and experienced some pressure. The retail credit and the credit card business, they are all under external environment pressure and Wealth Management business, the agency distribution of fund management and about insurance policies, we are also experiencing challenges brought by the fee reduction. So this year for CMB, how to adjust ourselves, how to adapt to this new environment and maintain sustainable development, we need to have some new mindset. So on one hand, we have been developing a coordinated and balanced development of the 4 major segments. The 4 major segments are Retail, Corporate, Investment Banking and Global Markets and also Wealth Management and Asset Management. So by consolidating the systematic advantages brought by retail finance, we will consolidate its contribution to CMB and speed up to build up our strength in corporate finance and corporate finance, especially for cross-border finance, manufacturing finance, tech finance and et cetera. They have all made good achievements. For IB and Global Markets business, they are becoming our new growth pole. Asset Management and Wealth Management business, they are all showing good growth momentum. So these 4 major segments, they are coordinated and balanced and supporting each other. And for the second aspect, we will speed up our four initiative development, especially for the international development. For CMB, we propose to develop cross-border business overseas business, FX business. These 3 businesses will be the pillar of our cross-border finance development, our international development. In comprehensive development, we will give full play of our full licensed characteristic and enlarged our subsidiaries development and to make sure that these subsidiaries are the top players in their areas. We have also made good results in these fields. Fourth, we will -- we are also sticking to our differentiated regional development philosophy. Beijing, Shanghai and Shenzhen used to be the 3 core cities that makes the most contribution to us. We will be driven by these 3 core cities and to and transform into the 3 major regions: Yangtze River Delta, Greater Bay, and the Bohai Rim, the 3 key regions will serve to be the new 3 core regions of our business development so as to make us more sustainable in development. We can make sure that by developing these 3 regions, the business in these 3 regions, we can maintain a good momentum in the future development. I think by leveraging on these several aspects, we can transform from the previous retail-driven strategy to a multi-segment balanced and coordinated development of our new development model so that they can support each other, promote each other. For the past 2 years, all our domestic and overseas branches, our subsidiary branches have both -- have all realized product making and our business tend to be more balanced, more sustainable, and we are walking towards an era with multiple contribution given by different sources of revenue. And to answer your question, I think -- these are the measures that we have been taken and what are the positive results that we have achieved. Xia Yangfang: We have a question from on-site participants. Shuo Yang: I am Yang Shuo from Goldman Sachs. I noticed that you have been experiencing fast in retail finance. I noticed some risk in the retail finance -- retail loan business. For the second half of 2024, you have quite a fast growth rate of the non-mortgage loan. And I would like to understand the risk about this part of loans? And could you further elaborate? And could you also provide more details about the provision in these part of loans? Xu Mingjie: Thank you for your question. So just now President Wang have mentioned that the retail credit asset quality. Since 2019 after the pandemic happened, credit card risk begin to arise. And then until the year 2022, we observed that the corporate property loan risk begin to expose and then it continues to rise in terms of its risk. Excluding the credit card loan, the rest of the retail loan, for instance, the mortgage, the consumption, the micro loan, ever since the year 2024, we also see their risk begin to rise. Until now, the rising pace of their risk tend to be slower. So for some specific number, I think I will leave it behind. But for special mention, NPL and overdue loan, their balance and the ratio both increased in terms of micro loan. For consumption loan, its NPL ratio, it decreased a bit compared with the end of last year. Special mention loan ratio rise a little bit. Well, in terms of the future outlook, in the short run, property market is still under a deep adjustment so that the residents income, whether or not it could be improved for consumption, for micro finance loan, they are still under pressure. Well, along with the path that the government are playing a bigger role in terms of their proactive fiscal policy and monetary policy and with the external environment tend to be trending towards a good direction ever since this year, micro finance loan and consumption loans, this NPL balance increment are now tend to be slower marginally. In the low interest rate environment, some profit-making products, they're actually experiencing some slowdown in the profit-making level in their risk variance level. So in the following pace, we will further optimize our structure and stick to a collateral-based business, especially for consumption loan. And consumption loan, we will strictly got our bottom line of onboarding these clients and further optimize our customer structure, which will have early warning, early risk exposure and take proactive measure to lower the risk of arising from retail credit and to guarantee that the retail assets tend to be good -- maintain good in its asset quality. For allowance -- for allowance and provision for the past year, the allowance coverage ratio was down by 20 ppts compared with that of last year. The main reason is the NPL balance increased. The NPL balance increased by RMB 2.5 billion, a growth rate of 4%. The provision balance tend to be lower. So the numerator decreased and the denominator increase so that the allowance coverage ratio decreased for personal credit, but for personal loan, in classification, we tend to follow our strict manner. In the overdue days, entering into the doubtful level into the subdue level, we still keep our very strict classification management. In provision, we are making the provision one case by one case. The main reason is that the overall balance of the personal loan continue to increase, and the allowance, the provision tend to decrease. That is the major reason. So looking into the future, the major reason is that the NPL balance need to decrease, so that our allowance coverage ratio could be better. So actually, this indicator is quite sensitive to its numerator. If CMB under this external environment, if we can control our balance of retail NPL, we could maintain a good condition of this allowance coverage ratio. We are still under challenges in the year 2026. Retail credit risks are a market problem or an industry challenge that every banking peers are facing. The retail assets are under pressure so that it's not just CMB are facing this question. By responding to this challenges, we will maintain and take proactive measures to guarantee the retail asset quality to be stable. We will conduct very strict asset classification and make very adequate and accurate provision. Our allowance coverage ratio is now 391%, which is 20 percentage points lower than that of the previous year, but the absolute level of this indicator is still higher than that of our peers. We will maintain a very steady and prudent provision strategy and make sure that we have abundant coverage of our NPL to guarantee that we are having a good provision level compared with our peers. Xia Yangfang: Next question, please. Shuaishuai Zhang: I'm from CICC, Zhang Shuaishuai. My question is about the intelligent -- follow-up question. Just now I think Chairman and also President and also Mr. Zhou has already have very specific answers on that. And I see that we have more disclosures on the intelligent part. So my question is, from the financial data, how we can evaluate the effect from the application of the investment into AI because you have put a lot of resources in AI? And another question is that you want to build up into the first intelligent bank. So how we can evaluate that, how we can compare you with other Chinese banks? Now CMB want to do more, AI want to be best among the banking industry. How we can -- we evaluate the advantage of CMB in this spectrum? Tianhong Zhou: As for the large model from its birth to now it's 3 years. So it's not a long period. The application of this technology and every day, we are -- we can see news from the media that is improving. And I think the real impact of the technology on the society is still in the process. Currently, the very -- the industry, which have been deepened reform by the AI technology don't have much. We don't have much industries on that. But overall, we can say there's not many industry that have been deeply reformed by the AI technology and banking sector is quite a different sector and the regulator's attitude towards the application of AI in banks, not only the Chinese regulator, but the overseas regulators such as Singapore regulators, they are quite prudent on that front. And as well as -- such as the Singapore authority, they have also made very strict regulations on the application of AI. So for the Chinese regulator, the requirement is that the apply of the AI technology should be taken account from the human staff. So it means that the application of the AI among the banks should be human staff plus AI application is a requirement from the regulator as well. And from CMBs, we think that in the width and depth of the application of AI, we are faster than peers. But currently, for 45 kind of the areas, we have analyzed what human staffs are doing. For the projects that human staffs are doing is around 3,400 done by human staff, but amounted around 1,500 could be assisted by AI. So it's a dynamic process that we are kind of analyzing and also improving. And from a very macro perspective, we see that AI is taking effect in many areas. But I know that the question you have raised is also something that I'm thinking about. And what changes or big changes that the AI application has been done to CMB. I think there are some changes but still in the process. There's changes in the macro side, such as for the Sunflower customer, the customer reaching out ratio has been improved by 14% for our relationship manager. So it's taking effect. And for customer transaction volume has been increased by 20%. So it's also quite a good number. So overly, I think it's taking effect. But from this kind of up -- so we think that the technology is still improving and moving forward, there's great potential on that. And we are firm in this AI-first strategy. This is to your first question. Second question is, well, how can we say that -- how can we evaluate intelligent back? This is something we are done. And I think that we are starting what are the indicators that can evaluate -- how we can evaluate digital intelligent bank? The first intelligent bank in terms of -- I think that from these aspects such as for the application of the large model like the research technology and research capability in terms of the application, we can -- we are ahead of the peers. And also, we need to improve the efficiency of the usage of chips. And in China, we are more use the domestic chips and how we can better improve the efficiency and how we can improve the computing efficiency. We're still improving, but it's not very mature yet. And it relies on the entity that is using the chips. We are very strong in terms of cloud, and we have around a team of 300 people, who are engaging in the cloud technology. And also, we have a reasoning platform as well. And for the computing around 35% are done by ourself is quite the level of the top Internet companies is like 19% of us to make use of a cluster of chips and responding very fast and do not have much delay. There are many difficulties in technology, but we have done quite well. And the width of the application, we have already applied large model to 859 scenarios and more of them are contributed -- concentrated in the high-value scenarios. So we have a very big width on that. And for CMB, we have a special area even compared with advanced banks in the world, we have a very good fusion of technology and business. And technology could be better applied to business. So CMB has done quite well in the fusion integration of business and technology. And there are some concerns that maybe AI can substitute human being. So I think the people who will be phased out in the future are the ones who cannot use AI. So, we are encouraging our staff to use AI. So that is why we can see a very fast speed of the usage of token. And people are -- staff in our bank have very -- have been very open-minded, and they're trying to use the new technology. So we are ahead of the peers in this regard. But what can we say about the, what is -- what is intelligent bank. I think we are still studying how we can evaluate that. And just now, I mentioned about the illusion elution and these are also challenges where kind of input more -- to put more investment on that. And what we are trying to do is to reduce the illusion and to build a more reliable agent. And for CMB, we think there are some top companies like the AI, OpenAI and Anthropic. They are not open sourcing and they do not say anything about that. So how we can limit the illusion of AI application, and there's -- let's talk on that. It means that we need to input by ourselves, and we have made quite good progress on that, especially in the past 6 months. And also, we have made quite a good target on that. Thank you. Liang Wang: From the investment and output perspective, because if you want to build an intelligent bank, there will be much impact for CMB. Our investment into the -- investment is to optimize the resources allocation. It's not the same as other companies. Other banks may have not invested in this regard and need to increase a lot of CapEx in this regard. But for CMB, we have been continuously increased resources into that. So we are optimizing resources. It doesn't mean to increase much capital investment into that. So it doesn't have much impact on the cost side. So banks, IT -- I can see that we are -- in terms of business perspective, we have already built up our advantage. So next phase, we are building our advantage and our moat in the technology area, so that CMB can have a long-term and sustainable competitive edge. Jianmin Miao: And I have one more -- one more point, point to that. I think a good question is better than a good answer. This is the same question that I asked Mr. Zhou. So today, I think that he has answered my question before, but it's not a very, very good point and doesn't satisfy me. Today, I think he made quite a good point today. Feifei Xiao: Just now, for the retail -- my question is about the retail business for this year, both for asset size and also for asset quality. And CMB is regarded as the best retail bank among the industry. How you can continue to grow your retail business and also consider the change of the environment to upgrade your retail business. Could you please explain from the perspective of retail credit and also for the retail credit business, how you can -- what is your short-term and mid- and long-term change and also how you can arrange that? Jianmin Miao: Thank you for your question. And as you mentioned, that just now I mentioned that CMB's retail business is facing quite big challenge, and we have made -- we have tried to be more comprehensive operating as to make up the shortfall. But even though we are growing our other business, we didn't forget the retail. Retail continue to be our strength and can be our advantage. So everyone in the CMB talks about retail and knows about retail and trusts retail business. So this is a culture has been embedded into CMB -- embedded in the mind of everyone of CMB. So we will continue to expand our advantage on the retail front. So for this year, the retail contribution to our income has been quite stable. It's not growing very fast, like in the past. But the business actually have changed. In terms of structure, such as you can see the customer base, like that we have a very big retail base to 224 million, especially the high-end customer growing faster. Secondly, our AUM is growing very fast last year, reaching around RMB 17 trillion and up by RMB 2.6 trillion. So the growth rate is a high ratio. In the past years, annually increment is around over RMB 1 trillion, but last year, it's over RMB 2 trillion. And thirdly, even though we have seen a quite a big decline in the growth rate of our retail credit growth. But last year, we are continuing to see more market share in the market share in terms of the retail credit. So this shows that the strength of our CMB's retail business is actually expanding. In order to consolidate our strength of our retail business, we continue to expand the customer base; secondly, to improve the product system; thirdly, to upgrade the service system like we are combining online and offline service channels, so as to improve the customers' experience with us; and also fourthly, distribute our ecosystem, such as we work with the mutual funds and also trust companies as well as asset management companies to build up our friendship with the ecosystem. So we have more better products that we can provide to our customer and create value for the customer. And fourthly, very important, is to prevent risk to improve our system kind of strength in the retail side so that we can see the contribution from the retail side is still around 50% to our operating income and also profit. Just you also mentioned about the retail credit and also the Wealth Management business. For retail credit, we have the credit card, we have a mortgage. We have consumption loan and micro loan, the 4 major projects -- products. So last year, we have negative growth on credit card. But our strategy is that we maintain a stable and low volatility trend to prevent the risk. So we think that some of the decline in our revenue or the business growth in order to maintain a stable asset quality last year, the credit card's NPL ratio is around 1.74%. It has been stable over the past years and be better than the peers. In terms of mortgage, we continue to grow the secondary housing facing the decline in the demand side. And so that is why we have slight growth on the mortgage side. The growth rate cannot be compared with a fast growth rate in the past. So for micro loan, we are doing inclusive financing. And -- so inclusive financings and also micro loan, 80% of them have collateral with the property as a collateral. So the risk -- overall risk is under control. And consumption loan, we think that we are centered on the retail customer that we have already salary payout and also AUM. And this kind of short-term demand for us. So it's -- the asset quality is also stable. So for our total retail credit, quality totaling around RMB 3.6 trillion and around 50% of our total asset. So it's continued to be an important area that we allocate our credit resources for. We will continue to namely to kindly to take advantage of the -- advantage of retail credit and its small ticket size and also the risk is more diversified. These are the advantage of the retail credit card -- retail credit business. In terms of Wealth Management business, I think that we will seize the opportunity brought by the capital market, especially people's demand for -- to allocate more of their assets to the financial products. And so for product side, we need to be more advanced, and we have mutual private fund and also for precious metal and also overseas investment, and as said and also Wealth Management products, we have different product lines. And also, we need to upgrade our product system to better satisfy our customers' needs. And secondly, very important is how we can improve the service -- so how we service our customer. Online together with the offline is combining them together, very important. This year, we are more allocating our offline relationship manager service the high-end customer, and this is a better resources allocation of the relationship manager. So in terms of Wealth Management, we will continue to maintain our fast growth strength. So the total income of the Wealth Management can also continue to grow. And I have a goal for CMB, namely for a restart of the retail business and also faster growth of the corporate business. So for Retail, it means that Wealth Management should be strong and also continue to build, maintain the -- one is to improve the asset quality and secondly is to maintain the solid advantage of the funding source and also to strengthen our advantage in Wealth Management. Xia Yangfang: We'll have next question from an on-site participant. Lincoln Yu: I am Yu Lihan from JPMorgan. I have a question regarding the capital. We have noticed that in 2025, CMB's RWA growth rate was 10%, which was faster than the 8% asset growth rate. I would like to understand the underlying reason behind. Is that a one-off reason? Or is a normalized influencing factor that will continue? Looking ahead, how do we look at the RWA growth rates as a loan growth rate for the future 1 to 2 years? And what is the trend of the CAR? Will we continue to face downward pressure? What's the influence to return of the shareholder and also the cash dividend payout? Liang Wang: Thank you for your question. I will answer first on RWA. So every year, when we are discussing about RWA, we have been emphasizing that we aim to lower the volatility and maintain stability. So for many years, our RWA, the level of it was around 9% to 8%. And it's overall stable, but we will adjust it a little bit according to the external environment. It's more or less around 9%. So just now you mentioned that in the year 2025, the RWA growth rate, 8.8% under the weighted approach, 9.5% under the advanced approach. Generally, it's following our philosophy. Compared -- but compared with our asset growth, you might think that it would be a little bit higher. So I would like to explain more a little bit. So I think the influencing factors are, in the year 2024, the swift from the new capital regulation is actually conserving some capital for us. So that, that will be having a low base effect comparing the year '24 and '25. And the second reason is that when the credit loans are under pressure, the corporate loans are taking higher proportion and these type of loans are having higher risk weights. So to some extent, it will enhance the RWA. And then the 3 influencing factor is that as we have quite strong capital strength, we could use it to support some off-sheet business, for instance, the bill discounting business and et cetera. And the fourth reason is that, in bond investment, we have enhanced our bond investment and enhanced the market risk assets. So these 4 reasons above mentioned, generally contribute to our higher growth rate of RWA. But I once again want to emphasize our philosophy. We would like to lower the volatility of our asset allocation. And I think it's also a capability to help us to sell through the cycle. We will maintain our mid-level of RWA growth to 9% to 10%. And there will be some slight changes according to the external environment. We have also noticed that our CAR experienced some slight decrease, but the reason is mostly about some one-off reasons. For instance, we have had 1 interim dividend payout in the year 2025. And last year, due to the market volatility, we have experienced some volatile influence in our OCI account. This is also another factor influencing our capital strength. But excluding this factor, our CAR continued to be stable. But when our CAR tend to be more and more abundant and when we are facing more and more pressure from the capital, it's quite difficult for us to see a continuous increase in the CAR. But even though I still wish that we can leverage our own efforts to achieve a balance in business development, capital growth and et cetera. So I think that for the dividend payout question, I have also just answered that we tend to be stable. I think it's a triangle balance that we aim to achieve that is business development, dividend payout and capital strength. Xia Yangfang: We will have another question. Leon Qi: I am Qi Leon from CLSA. I have an asset quality question. We noticed that in the fourth quarter, CMB's NPL formation has been increased. I would like to understand the reason behind. Is it because of the micro or consumption loan you mentioned before? Is it about some quarterly reasons? And we also noticed that President Xu, you have mentioned about the decrease of the allowance coverage ratio and our principal to manage this indicator. I would like to understand that how do we balance the product growth and allowance coverage ratio? How to achieve the balance between them two? Xu Mingjie: So for the fourth quarter, our NPL formation was RMB 21.1 billion. There are some slight increase compared with the third quarter, an increment of RMB 5.9 billion, mostly from corporate loan, that is RMB 4.6 billion. So corporate loan NPL formation saw an increment of RMB 4.3 billion compared with that of the third quarter. And for retail loans, the NPL formation was around RMB 6.3 billion. And for credit card, the new formation is RMB 10 billion. So generally, the fourth quarter, the increase in the fourth quarter in terms of NPL formation are mostly from corporate loan. So the corporate loan -- so these NPL formation loans are mostly from corporate property industry. Some existing risk identified risks. And there are some exposure of individual cases and individual clients. And some individual event cases or clients risk exposure, they will cast influence on the NPL formation for a single quarter. So there will be some fluctuation during quarter-on-quarter indicator. But overall speaking, if you take a look at our corporate NPL loan, we are experiencing some improvement. So for us, since the year 2022, we begin to expose risk in the real estate sector. Ever since the year 2022, the real estate NPL, NPL formation tend to decrease. And in the year 2025, our real estate NPL formation continue to decrease. And it's also at the lowest point for the past 5 years. To see from the first quarter of 2026, the corporate loan and asset quality remains stable and they are in order. For those risks that have already been exposed, especially for those real estate groups, we have made quite adequate and abundant provision. So the average level of LRR was 3x higher than the average level of those of the general corporate loan. You have mentioned about the allowance coverage ratio. In the year 2025, the figure is 391%, which is 20 percentage points lower than that of the previous year. The fourth quarter NPL, we have made some provision, 14.14% higher than that of the previous quarter. But you can still see that the absolute level of our allowance coverage ratio is still quite leading in the industry. So making provision is being influenced by many factors. We would make provision case by case, and we should take several factors into consideration. First, scale, the product structure, the corporate loan and the retail loan were different in terms of their weighted risk and customer quality and customers' internal ratings are still factors that will influence the provision we made, including how do we take a look at the external macro environment. If we consider the external environment tend to be stable or do we expect there are more uncertainties in the future, we will also consider this factor into consider -- make this consideration and then to make a relevant provision. One very important factor is that during the phase of the post-pandemic era and the deep adjustment of real estate property, these 2 periods of time are the major reason why we have been making abundant provision. So generally speaking, these 2 adverse factors, they are fading out. The real estate market are hitting the bottom -- are in the process of hitting the bottom. So we don't see the necessity to make even more provision for this industry. You can also take a look at our absolute level of the provision. It's quite abundant. In the year 2021, the figure was RMB 37 billion. And for the last year, the level was RMB 42.6 billion. But compared with our loan scale, the ratio experienced a slight decrease. The allowance coverage ratio is not a figure that we used to balance profit. It is calculated based on our expected credit loss, based on our loan scale, based on our internal credit rating. So we will still make very abundant provision. But if the NPL balance increase, it will cash influence on our provision. If one day, our NPL balance stop to increase, I think we will see some uptick in our provision and in our allowance coverage ratio. Xia Yangfang: In order to ensure the rights of the individual participant, we have collected beforehand through e-mail about their questions. And as most of the questions actually overlap with what we have also discussed previously, so we will have 1 representative questions read out by our staff. The question is CMB last year have received approval to establish AIC. I would like to understand what is the major business of this company. And except for debt-to-equity transfer business, do you consider to make equity investment? What is the function of this company's role in CMB's comprehensive development? Jianmin Miao: Thank you for the question. Last year, approved by the regulator, now we have set up our investment company, namely the AIC. And last year, we have opened the AIC successfully. And this is a very important milestone of our comprehensive operation in order to have a better integration of investment banking, and also commercial banking to better service those start-up companies. And now we have a more -- we can provide more comprehensive service and have coordinated business in terms of investment banking and also commercial banking. According to the regulator that want this to -- in 2018, there is a policy that -- in 2018, there was a batch of the AIC company that have been set up to do the business, namely to convert the debt into equity. And nowadays, business are also changing. So more are doing toward the equity investment directly. So CMB's AIC will be both for the debt conversion to equity business and also at the same time, equity investment services. So for Commercial Banking doing equity investment is kind of a very big transition of the business model. So we need to have the right person and right business model in place and right purpose in place. So from the regulators' perspective, they are For newly opened AIC, the regulator need to have new approval for the business qualification on that. And we are also have a conversation with the regulator and communicating with the regulator because we have very good foundation in terms of equity investments, like we have the CMB International and also CMB International Capital. We have done equity investment in the past. We have around a team of 200 people. We have many successful investments in the past. And many of the enterprises have been successfully IPOed. So -- and have done quite good results. So for equity investment, if we can get the approval from the regulator, then means that AIC together with CMB Leasing can have a better integration of the business and to -- based on the business foundation that we have and the team that we have to better have a development of our AIC. Xia Yangfang: And now for second section for a question from the media. Yes, please. Unknown Attendee: I'm from the Security Times. My question is for the Chairman. Just now you mentioned about the moat. You have mentioned that for many times. And also in your speech, in our annual report, you also said we need to have a differentiated moat. So a follow-up question about the moat is that, in the past, people are talking about retail service and brand name. These are the moat also funding source of CMB. So entering into the new era, what will be the difference of the new moat for CMB. Will that be technology, talent or ecosystem? If you have some key words to conclude CMB's next 5 years core competitiveness, what would you quote, which keywords will you use? Jianmin Miao: So the so-called moat is the core competitiveness. What we are -- in which area that we are stronger than other people and which we are far ahead of other people. So just now I mentioned in the past, the moat for CMB, many people are saying, is retail is the moat and fintech was the moat. But I think the real moat is that our philosophy, namely customer-centric, which has been integrated already internalized into our corporate culture and has become a routine of our staff. This is the biggest difference between CMB and other enterprises. If you go to the other branches of CMB, after the working hour, if you -- after working hours, you go to the branches there. You see -- you can see the difference between CMB and other people. Our staff never off work on time. Just now before the results, I asked the office of the -- office of the Board. So after the results announcement, they have passed the information to me about the information they get for the communication between them and the investors. So I think this is the culture, and this is the biggest moat that we have. And no matter is the concept, no matter is the philosophy of all technology. So by -- it's all done by human beings even without this culture, without this dedication spirit to work, other moat is nothing that will be fall down. This is a keystone that support our moat that CMB is customer-centric is the most that we have built up. No matter it's talent, no matter it's technology or other co-committees. I think the keystone is the culture. As long as culture is there, then we have moat. So one day, we changed our culture, customer-centric culture, then I think the other moat will also be diminished. So in the past, in the downward cycle of the banking industry, why we also have seen some downturn, but still, we are better -- continue to have a better performance than the peers. This relies on the culture of CMB. Xia Yangfang: The next question. Unknown Attendee: I'm from the 21st Century. My question is about -- for the deposit movement. Many -- there are many institutions saying that in 2029, there will be around RMB 5 billion to RMB 7 billion deposits mature in 2026. Some may go to Wealth Management, fixed income and other products. So from the liability perspective, whether you are facing some pressure. So when this kind of term deposits mature, what is your observation? Whether they will be go to other aspects? Just now you mentioned about your subsidiaries and how you can get the deposits which are mature in 2026? Jianmin Miao: Thank you for your question. Recently, there's a lot of talks and discussions on that. My understanding on that is currently for the matured term deposit, the outflow of the matured term deposits, there will be 2 key elements, how much will mature and second, whether there will be an outflow. For the media have calculated an amount. And for CMB, for the amount that will be mature, the term deposits this year will be a little bit higher than what we have in the last year, but it's not an extraordinary number. I think it's still in a normal range. And I think more people are more caring about in this low interest rate environment, if the deposit rate cannot satisfy customers' demand on the asset yield, so how -- where the deposit will go. And some say, it may go to the capital markets, some say it may go to Wealth Management and also mutual fund products. There are many discussions on that. So for the outflow of deposits, I think from a different angle is that, from the customers' perspective, if the deposit outflow, where it will go. If it goes to the wealth management or mutual fund products, then we think that we can provide service to maintain the AUM with CMB. Maybe it may not be shown as a liability, but it's still the customer funds is with us. So we can see an outflow of deposits based not an outflow of customer. And that is why we emphasize the definition of AUM. So that is why you see last year, our AUM is up to RMB 17 trillion and a growth rate of 14%. So this is also a way of retention of the deposit and we are not worried about that. And the second angle that can provide is from the funding perspective. Some funding are going from the deposits go to capital market as the stock, which in return can be deposit as a third-party deposit with us. So these are recorded as interbank deposit for us. So from a funding perspective, if we can provide a service and then can continue to have an inflow from the interbank market, it means that outflow of deposits, but funding is not outflowing. So from this perspective, we think from these 2 perspectives, outflow or maturing of the term deposit is not a terrible thing. The first one what we are trying to do is not to prevent an outflow of deposits, namely to have abundant products in place and also to prevent the deposit outflow. Secondly if deposit really outflows, then we have product in place to retain the customers' AUM with us. Just now you mentioned about the subsidiary of CMB, we have Wealth Management subsidiary. This is also a test of the professionalism of our subsidiary and it means that taking the funding to continue to be within the bank. And secondly we will service our financial institution customer, namely the fund can return inflow into CMB from the capital market. And fourthly, very important. And I think the outflow of the deposit is also a reshuffle of the banking sector for -- if we can use our advantage and service and product to retain or regain the market share with us to have more funding from our -- from the market. This is something that we are working for. Xia Yangfang: Next question? Unknown Attendee: I'm from [ Xinda ] report. My -- the first one is for cross-border business in 2025 for CMB has actually has the funding between the CMB and also the overseas margin can have a connection on that. So what is the plan for CMB's plan for the Bay Area? In 2026, how you can use the platform in Hong Kong to have a better cooperation with the institution in Hong Kong? Secondly, is for Wealth Management. My question is for Mr. Peng. Wealth Management is regarded as an area of the growth of CMB. So how do you expect the fee income from Wealth Management and also that overall fee income for 2026. Jiawen Peng: I will answer your first question. Just now I mentioned that CMB is highly emphasized on the cross-border business and highly emphasized in the Bay Area busines -- economic integration of the Bay Area, and we want to have a bigger play in the Bay Area. So CMB's headquarter is in Shenzhen. And for the mid- and large-sized enterprises, we are the very few banks that have headquartered in Shenzhen. And secondly, in Hong Kong, we have Wing Lung Bank. We have CMB International. We have CMB branch. And also in Macau, we also have our branch. So we have covered major cities in the Bay Area. This is our geographical advantage. And thirdly, we -- from the national policy also support the growth of the Bay Area and to improve the influence of the Bay Area and to have a better connection between the 3 cities in the Bay Area, especially the funding connection between the cities. And it means that we can have more business in this area, such as for the Wealth Connect and our market share of the Wealth Connect of CMB is leading. And also, we are promoting the capital market and to strengthen such as Hong Kong is improving, stance and positioning as a financial center. So we are strengthening our cooperation with the financial institutions in Hong Kong. So there are many Hong Kong -- many China domestic enterprises are going IPO in H-share. So our CMB International is playing a bigger role on that, such as for IPO and IPO underwriting, and IPO sponsor, they are leading the market. And also for commercial banks, we have Wing Lung bank. And also Wing Lung Bank can also be a collection bank for the IPO. So this -- the comprehensive service that we can provide to the enterprises that go into the overseas market. And also domestic residents are having more investments, investment in Hong Kong because Hong Kong, the overseas products have a better yield for customers. Some of the customers would like to allocate, have some overseas allocation, and we are strengthening our capability in this regard. And I think that these are also paying off and taking quite good results. So -- these are the advantage that we have taken from the external environment and also from what we have our own institution, I do think that in the future, there will be a very big opportunity, especially in our major Bay areas in the world that will be tough in financial institutions, which will merge. In Bay Area, there are already some very leading financial institutions among the Bay areas. CMB even though have only a history of 39 years old, but I think we have the advantage in terms of geographical advantage and we have a coordination between the domestic and also overseas platforms. So we will have a better play in this regard to support the integration of the Bay Area to support the prosperity of Hong Kong. A brief answer to your second question. Last year, fee income was up by 4 -- or over 4%. This is mainly driven by wealth management products. which is up by 21%. The contribution is from the agency sales of the wealth management, up by 19% and 40% for mutual funds. And also, we have seen growth on other agency sales of the trust products. There's a small decline on the agency sales fee of the insurance products is mainly because of the change of our product structure. If you look at the premium, it's up by 27% up. But due to the structural change, the realization of the fee income that we get from -- of insurance products is changing namely from -- we are -- that is what have led to a decline on that front. So I think the external environment has been quite beneficial to the fee income of wealth management. So in 2026, we are more optimistic on that, especially the -- from the national policy also regarded regarding consumption is very important, have played a key role in the future. So these are the positive factors for fee income, but there are also challenges as well as you can see geographical conflicts having quite a posting risk to the economy. And also secondly, there's a policy side for fee rate card for mutual fund as well. And also thirdly, from the consumption side, even though there are major policies, but still depending on the real effect, whether you can drive -- whether you can drive our credit card fee income or not. So we think that the fee income from the -- we hope that it will be better than last year, but there are also structural problems like the credit card is so facing great pressure on that. We hope that the decline of our credit card magnitude will be better than last year. And also for fee-based income, we hope that it can continue to have a good growth. Thank you. Xia Yangfang: Due to the time constraint, I think the last question from the media. Unknown Attendee: Dear senior management, I am Shanghai Securities. [indiscernible] I have a question for Mr. Wang. In such a backdrop of narrowing NIM, you proposed a value creation bank strategy and deepened 4 initiative transformation, I would like to understand these strategies, what changes have it brought for CMB in specific business development? Liang Wang: Thank you for your question. So in the interest rate declining environment, fee reduction and narrower NIM, these challenges have brought pressure for our development. We proposed a value creation bank strategy and that is our philosophy to create value for customer, shareholder, partners and the society and to realize common prosperity of all. This is a philosophy. It's also a guiding principle for us, to serve as an underlying principle to create value instead of expanding scale separately. It requires us to provide better service to our clients to increase volume, increase value to make a good judgment of what business is good business and how to cash our business development into return to the society. So this will contribute to the bank's sustainable development. So value creation bank strategy is bringing changes for us in our methodology, in our philosophy of operation. We are more reasonable, and we tend to respect the principle of banking operation. In international development, in comprehensive development, we all see contribution brought by these initiatives. In financial indicators, the full initiatives have also contributed to our capability of making sustainable development. I think digital and intelligent development and comprehensive development, these will help us to find our strength and to make up for what we are not good at. So the full initiative bring us business returns, but also enhance our capability. Xia Yangfang: Thank you, President Wang. Due to time limit, we have now conclude today's meeting. For more information and details, you may refer to the annual report we released online. If you have more questions or comment, you are more than welcome to contact the CMB IR team. Thank you again. Goodbye. [Statements in English on this transcript were spoken by an interpreter present on the live call.]
Zhiheng Wang: Ladies and gentlemen, good afternoon. I'm the President of ABC. Welcome to the annual results announcement of ABC. It's a great pleasure to meet with the friends, online, offline investors and analysts and friends from the media. I'd like to take this opportunity to express my appreciation for your support, trust and interest in the development of ABC. With that, I'd like to present to you the management of ABC. Mr. Lin Li, [indiscernible] Vice President of ABC and Mr. [indiscernible] Vice President of ABC and the Board Secretary, Mr. [indiscernible]. And some of the senior management are participating from a meeting online. With that, I'd like to present to you the business performance, business strategies and the outlook for 2026 of ABC. In terms of the business highlights, which you are interested in, 2025 is the last year of the 14th 5-year plan. It is a year for the new progress for ABC. In the past year, we guided by the thought on socialism with the Chinese characteristics and strengthen overall leadership of third party and implement the relevant decisions, arrangement of the CPC Central Committee and the State Council, deeply practiced the political and people-oriented nature of financial work and firmly grab main line of preventing risks, promoting high-quality. Development, made overall efforts in our aspects, providing more powerful and effective service to the real economy, achieving steady progress in business, achieving steady progress in business operations with the high effective service, main characteristics of our business, our steady improvement and steady progress in the business operations. First, stable profits, ABC's net profit and operating income continue to maintain a double-digit growth, reaching RMB 292 billion and RMB 725 billion, respectively, a growth rate of 3.3% and 2.1%, respectively. Compared to first -- 3 quarters, growth rates increased by 2 bps and 0.1 points, respectively. Net NIM, 1.28% among topping the peers and average return on total assets, 0.63%. Weighted average return on net assets at 10.16% with a capital adequacy ratio of 17.39% with excellence of our business. Total assets reached RMB 48.8 trillion with a growth rate of 12.8%. New loans and financial investment in local foreign currencies totaled RMB 4.7 trillion. In sensitive of economy is a leading industry and the loan growth rate was 8.9% liability, business continued to maintain a good development with a deposit growth rate of 7.7%. An average daily increase in RMB deposits ranked first among the comparable peers. Daily deposits is consistently improving and duration of local foreign currency deposits in the end of last year was 0.58%, best among the comparable peers. We are the only bank to achieve a positive growth in RMB loans for 7 consecutive years with high-quality loans. NPL ratio of domestic banks declined for 5 consecutive years and further decreased by 3 basis points in 2025, remains a relatively low level of 1.7% -- 1.27% industry. And provision -- the special mention loan ratio, 1.39% and overdue loan ratio 1.25%. The difference between the NPL and overdue loan ratio was registered a negative growth and which was also the only bank in comparable peers with exhibited a loan ratio lower than the nonperforming loan ratios. ABC loan balance is continued to above RMB 1 trillion, an increase of RMB 39.6 billion over the previous year. Provision coverage ratio was 292.5% with both indicators of the balance of loan provision and provision coverage ratio ranked among the first among the comparable peers. The fourth return is very high. Since its listing in 2010, considering the comprehensive return of stock price increase and the dividend, the annualized average returns of investors in A shares and H shares reached 12% and 10%, respectively. In the next 3 years, that is from 2023 to 2025, and it reached to 48% and 41%, respectively. In terms of dividends, the Board of Directors proposed a distribution in final dividend for 2025 with a rate of RMB 1.3 per share and tax included. Inclusive together with the dividend already distributed in the range the total dividend of the whole year amounts to HKD 2.495 per share and RMB [indiscernible] per share tax included. Dividend payout ratio was 30%. We'll have a more resilient and more sustainable development. Last year, we did the work in the last following 5 aspects. First, we stick to our main businesses that is providing service for the agriculture, that is agricultural rural areas and farmers. We consolidated the foundation for business development and improve the quality and efficiency of providing service rural-related areas and build a differentiated competitive advantages and the loans from the country level regions balance reached RMB 1 trillion for 4 consecutive years and the balance reached RMB 10.9 trillion, and the balance accounted for more than 40% of the total loans. And the balance in the county levels has doubled during the 14th 5-year plan period. And deposit balance was 14.3 trillion, an increase of RMB 1.23 trillion over the end of the previous year and contributed more than [indiscernible] to the increase of deposits of the whole bank. Specifically, our channels for serving clients have been further improved among the 22,800 branches of the bank, 56% are located in county-level cities and rural towns or townships. ABC is only a large state-owned bank with a full coverage of county-level outlets. In recent years, we have further shifted the focus of our service to the grassroots levels existing the reach of our services continuously improving, completing them. And we have [indiscernible] 61 services, namely our physical outlets, self-service machines, mobile banking, rural service stations, mobile service, [indiscernible] and remote banks to form them into one, which continuously enhance our service capabilities to provide service to every villages and household. And last year, we moved another 179 outlets to townships built 1,742 rural service stations enrich our product shelves. And also, we have also made great efforts to build a product and service system to 10 major financial areas, including green finance and targeted property, alleviation finance, innovated and promoted inclusive products such as agric park loans, technology loans and professional farmer loans specifically serving the differentiated diversified financing needs of agricultural areas and farmers. And we can develop -- we have developed 43 products across all industries and 208 regional characteristic products and dedicated products to cover key areas of rural revitalization. By leveraging technological means, we have continuously optimized the loan application process for farmers, actively promoting on-site and remote work mode, further enhancing the convenience and accessibility of rural financial services with the balance of the reaching RMB 1.84 trillion. Fourfold increase during the 14th 5-year plan period. And grain and important agricultural products have been increased. Long industries [indiscernible] road development and related fields grew by 20.3%, 19.5% and 9.6%, respectively, and 832 property stricten counties and 160 key counties for rural revitalization have seen faster loan growth than the average growth rate of the entire bank. Second, we sticked to the essence of finance and building new advantages in business development by implementing national strategies and serving the rural economy. We insist on serving the real economy as our fundamental purpose sees the trend of new and old driving forces transformation and industrial upgrading, continues to optimize allocation of financial resources while serving the high-quality development of the rural economy also strive to promote our own high-quality development. In 2025, the loan balance of ABC reached RMB 27.13 trillion, an increase of RMB 2.23 trillion over the end of the previous year. Among them, personal loans, inclusive loans and private enterprise loans took the lead exceeding RMB 9 trillion, RMB 4 trillion and RMB 7 trillion, respectively. Our financial investment was RMB 16.3 trillion, an increase of RMB 2.47 trillion over the previous year. We made every effort to serve the stable investment and consumption with the supporting of financing were too heavy, that is implementation of national strategy and the key areas in ensuring national strategy projects. We also are going in the front and the projects are ranked among the best in the comparable industry, increase of growth rate of the consumer loans were also ahead of the peers. Personal consumption loans, including credit cards, have a growth rate of 9% and the balance reached RMB 1.45 trillion. We continue to strive the Five Priorities of finance, promote more financial resources, invest in the productivity, green development, inclusive finance and provide loans to the SMEs. Other key areas was strength in the key areas and weak claims. The balance of the technology finance loan, green finance loan, inclusive finance loan reached RMB 4.7 trillion, RMB 5.93 trillion, RMB 4.35 trillion, respectively, growth rate of 20.1%, 18.7% and 20.9%, respectively. A number of inclusive known clients ranked the first among comparable peers. Total supply of inclusive finance is the largest with the widest service coverage, further consolidating the leading bank's position with the strongest sustainable development capability. In the field of pension finance, the number of physical and electronic social security card users ranked first among peers and the number of clients and the amount of individual pension service are also among the best in the comparable peers. The loan with the pension industry reached RMB 23.16 billion and were 108.5%. We actively serve higher level of opening up, introduce a work plan to stabilize foreign trade and investment active supports the cross-border use of RMB and helps to diversify the trade markets and integrate domestic and foreign trade. Third is to focus and put the client first, expand the new space for business development while enhancing client service capabilities. Clients are the foundation of our bank. We always take client development as a fundamental and strategic task. We will press ahead with the project to expand the client base, improve service for corporate clients with a group and tiered management personal loans, improve the service model driven by digital plus model and continuously enhance refined and comprehensive client service. Client base has been expanding, reaching 896 million for personal clients and remaining the largest in the industry. Nonbanking -- nonbank financial assets on AUM for personal clients amounted to RMB 24.7 trillion, an increase of RMB 2.4 trillion and end of previous year with 13.29 million corporate clients, an increase of 1.16 million clients from the end of previous year and ranked among the top in the peers. We had 609 million personal mobile banking clients with over 276 million monthly active users and over 292 million monthly active users. Our mobile devices maintained industry-leading growth rates on both metrics. The quality and efficiency of customer service continue to improve with a focus on better meeting customers' financial needs. We continuously enrich and expand our product offerings and portfolios in areas such as deposit credit, wealth management, strengthen service, synergy between commercial banks and investment banks and domestic foreign currencies, financial and nonfinancial service and advancing rural service project, we have been steadfast in promoting customers' rights and interest, making our customer service more diverse and personalized. We have strengthened our professional service capabilities. We have improved our employee training system, provided classified professional training to strengthen the team on wealth management and providing solid support for client service. Our total number of wealth management advisers have reached 119,000 increase of 6,000 from the end of last year. Fourth, we have deepened the reforming and innovation by deeply integrating business technology data. We have created a new impetus for business development. We have actively embraced the new round of technological revolution, deeply advanced construction and smart banks, intensified data empowerment and AI applications striving to transform technological innovation, a key variable into the greatest increment for high-quality development, making the application base for technological innovation more solid, accelerating the building of AI plus capability systems such as data technology, security, providing strong support for the large-scale and inclusive application of AI, making the approach of digital operations more mature, effective reducing the burden and workload empowering grassroots outlets become more significant. First, strengthen bottom line thinking and thickening and strengthen the safety cushion and buffer for business development. We also take risk management and control as our longstop task and continuously enhance professional capability in building risk management serve the ballast for maintaining financial stability. We continue to improve the comprehensive risk management system, strengthen forward-looking risk identification and enhanced risk disposal response in key areas and consolidating foundation of internal control and compliance management. And third, an outlook for 2026. We have confidence from 2 sources or aspects. First, the economic performance -- macroeconomic performance is stable and growing, creating a favorable macro environment for the development of ABC. The outline of our 15th Five-Year Plan have provided a guideline for our development. And in China's economy is has a solid foundation with many advantages and a strong resilience and long-term positive support conditions and basic trends with great potential have not changed. With the implementation of the supporting measures of the 15th Five-Year plan are gradually implemented, the economic growth rate will continue to maintain within a high reasonable rate. And we will continue to have the strong foundation. This has led a solid foundation for us to make further breakthroughs. Over the past 5 years, we have thoroughly studied and implemented General Secretary Xi Jinping's important expositions on the financial work, and we have actively pursued this path of financial development with Chinese characteristics. And we have also expanded our product and service quality and also optimized our team building capacities and also cemented our risk control efforts. This has given us a very good starting point. Dear friends, ABC's defining feature is agriculture. This year marks our 75th anniversary. During the past 75 years of ups and downs, we have always been resonating with our national strategy and also standing in unity with billions of customers and sharing value with broad investors. 2026 is the first year of the 15th plan. And the new era calls for new responsibilities and also the new journey requires new actions. ABC will continue to strengthen our party leadership and uphold a correct view of achievements. We will continue to lay a solid foundation and contribute to the starting chapter of the 15th Five-Year plan and create more value for shareholders, customers and investors in all sectors of society. Next, let's head into the Q&A session. I would like to invite the Secretary of BOD, Ms. Liu to be the moderator. Qing Liu: Now the first question, please, on site. lady on my left, first row, please. Unknown Attendee: I'm from Xinhua News Agency. After hearing the introduction, we can see that even though the overall external environment has been quite complicated, but ABC has reaped very good operating outcome and especially in the capital market, I'm just wondering what is the outlook of ABC in next year, such as in NIM and also in the net profit? What are the main driving forces? Li Lin: Well, I will take that question. I have just shared with you in 2025, even though we have a very complex business environment, our revenue growth has remained resilient and also operating income has maintained positive growth for 2 years running. Our net profit has also been maintaining positive growth as well. And also, it is now on an upward trajectory for better growth. If we look this over the long term, the performance or the financial performance of ABC is quite good and also remarkable. Our net profit growth has been leading the industry for 6 years and operating income has also been leading among our peers, creating new historical highs. And this has shown the growth and the bonus of the market. And we believe that the 15th Five-Year plan has given us even more confidence. I have just shared with you that the senior management is quite confident about better operating performance in 2026. So from the performance of the first 2 months of 2026, where operating income or overall operations have maintained stable growth and also positive trend. Our physical loans increased by RMB 1.1 trillion, achieving a year-on-year growth and NIM has -- or say net interest income has also turned positive year-on-year, which is an inflection point in the first quarter. This has further confirmed that our operating income will continue to be put on an upward trend, laying a solid foundation for the profitability across the entire bank. In the next phase, we will keep our strategic focus while providing better financial services. We'll continue to coordinate our pricing strategies while deepening our efforts to drive down cost and improve efficiency and continue the current solid momentum, and we will focus on the following 3 aspects. First of all, we will continue to drive the positive growth of net interest income, and we also strengthen our efforts to make sure that we have a positive growth in net interest income. In terms of scale, we will continue to issue more loans and also contribute to the real economy, and we will also optimize the structure of our assets and also strengthen refined management and improve the marginal returns of the assets. We will continue to consolidate our customer base and flexibly arrange our next efforts in driving down cost of deposits. And secondly, we'll continue to expand the growth space of net interest income. We will leverage the consumption policies and try our best to satisfy the diverse demands of our customers and seize the opportunities of the capital market and amplify the service supply for wealth management products. On the other hand, we will also strengthen our analysis of the market and flexibly determine on our trading or transaction strategies as well as the allocation of different categories of assets. And thirdly, we will better control risks and cost to better coordinate development and security and ensure that we put credit risks under control and try our best to drive down risks and cost. We will also strengthen our intensive and refined management model to reduce nonessential expenses. Anyway, we will try to achieve higher profits at better cost. So we are fully confident about the performance in 2026. So much from me. Qing Liu: Thank you so much, President Wang. Next question, please, on the right, please. Unknown Analyst: Thank you so much senior management members. I would like to ask a question about loans. In 2025, the credit loans has increased pretty fast. And in retail and country level loans, we have seen very good growth. Could you walk us through the plans or, say, the growth target for credit loans in 2026? And what are the key areas that you will focus on? Zhiheng Wang: I will continue to take your question. In 2025, we have actively implemented important major strategies at the national level. We have aligned ourselves with demands of the real economy and the overall volume of loans has shown better structure and also bigger volume. In terms of the total amount, I've shared with you that we have a total of RMB 2.23 trillion newly added loans. And in terms of structure, we have invested more in agriculture-related loans as well as rural revitalization services. And we have also injected greater momentum into 5 priorities and improving quality and efficiency. This year is the starting year of the 15th Five-Year plan. And in the government work report, we have a GDP growth target of 4.5% to 5%. And we also want to build a strong domestic market to achieve technological self-reliance and also [indiscernible]. There are a series of supporting projects as well as measures for rural revitalization. I believe that these are opportunities for commercial banks in credit placement. We will maintain our current intensity of credit to support the real economy and the average growth rate would be roughly the same as last year in the first 2 months of 2026, where economy is now rebounding. So we will seize the opportunity to focus on our national major strategies and credit deployment or credit placement has also achieved a very good start. By the end of February, our bank-wide physical loan growth has achieved year-on-year positive growth. And also, this is a sign of good momentum for sure. Our green technology where agriculture-related loans have registered positive growth, maintaining at average levels for comparable peers. And -- in the future, we will continue to highlight the agriculture and rural areas and also farmers-related fields. We will focus on improving the large area grain yield improvement and also ensure that we produce new quality productive forces and strengthen financial services for links across the whole [indiscernible] field chain, focus on specialty industry and key sectors and also big customers and important projects. We will make it bigger and better, especially in financial services, such as the issuance of farmer loans to ensure that we have stable growth in loans in 2026. And secondly, we will focus on 2 different areas such as domestic demand. We will continue to lend more support to major projects on transportation and energy, ensure that we have supporting financing services for a new round of policy, financial tools or instruments. We will also align our efforts with traditional consumption models and also emerging new consumption models such as green consumption. And we will implement the physical policies to maintain a leading growth momentum for consumer loans. And thirdly, we will support the construction of a modern industrial system such as we will sort out the customer list and then cultivate new quality productive forces, step up or speed up our technological innovation to support or contribute to emerging industries development. We will also focus on industry green transformation, green development, low carbon and green transition of energy and other key sectors. This will mean that we will improve the credit placement in green sectors and also the proportion of green loans. And fourthly, we will focus on inclusive SME loans and establish a work coordination mechanism. We'll continue to increase the support for SMEs and coordinate development and security, consolidate our leading advantages in inclusive finance and make sure that we cater to the demands of our residents in education, health care and so many others. Qing Liu: Thank you so much, President Wang. Next, I would like to ask for the gentleman on the right, the lady on the right for a question. Unknown Analyst: I know that commercial banks are under pressure, but ABC has maintained very stable asset quality. What measures have you taken in order to manage and prevent risks? And I would like to know about the NPL formation rate as well as your key focus in both retail and also corporate sectors. Qing Liu: So Vice President Lin, please take the question. Li Lin: Thank you for that question. From the perspective of a commercial bank, in the future 2 to 3 years, I think that the watershed should lie in the ability of risk management because the products can be very homogeneous and also the services can also be quite similar. And even AI models can be pretty much the same in the future, but there will be definitely differences between commercial banks in risk management and provision efforts. So that's why we think that we should do a good job in risk provision and management. For ABC, what did we do in that regard? Well, I think that it can be summarized in the following points. Generally speaking, it can be summarized as really doing hard work and getting our feet on the ground. ABC has placed risk prevention and management as an internal theme of our financial work. And we have been building our strong foundation and also cementing the current base for risk management. We have been quite prudent in our operations. We think that we can't say that the commercial banks are too careful or too much careful in their operations. And also, firstly, we have highlighted the role of quality and efficiency. And fourthly, we have to be problem oriented. And fifthly, we have to uphold our bottom lines. By integrated risk management and control and also with a forward-looking reflection capabilities, we can proactively control our risks and ensure good asset quality overall. And just now President Wang has shared with us the overall business or the overall situation at ABC. In 2025, our NPL ratio stood at 1.27%, down by 0.03% compared with the end of last year. The NPL ratio for 5 years running has been on a downward trend. Well, the special mention loan ratio was 1.39%, down by 1 bp from the beginning of the year. Overdue loan ratio, 1.25%, maintained the lowest among the comparable peers. And the difference between the NPL and overdue loan was always at negative. And also, we our credit balance of RMB 1.057 trillion, and we believe ABC is the only bank with a credit balance exceeding RMB 1 trillion. And from a prudent perspective, our credit provision increased by RMB 39.6 billion. The provision for loan loss ratio reached 292.55%, maintaining ABC at a strong risk resilient position. And in terms of the nonperforming loan formation, the formation ratio of corporate loans decreased compared to last year and the NPL ratio of inclusive retail loans has increased, compared to last year. NPL ratio of the whole bank for the whole year was 0.89%. We do believe the asset quality is well under control and similar of last year. And also the formation ratio of NPL has been maintained below 1%, which is relatively quite low. For the loans for the SMEs balance reached RMB 3.93 trillion, an increase of RMB 700 billion from the year beginning and NPL formation ratio, 1.54%. For the inclusive finance or the credit cards, including rural households, which is at the key of our risk control. So if we also incorporate them, our -- the balance of our retail loan balance loan was RMB 9.26 trillion, an increase of RMB 448.5 billion from the year beginning with NPL ratio of [indiscernible]. The main indicators of inclusive retail loans maintain leading position among the peers. It is worth notable that credit card business in terms of serving consumption, boosting development and advancing quality and quantity has performed quite well. And also our credit card loan incremental increase and asset quality are the best among our peers. And also, we apply the innovation and also the systematic thinking and relative philosophies to build a new management measures for the credit businesses and also further build a comprehensive risk management system for the inclusive retail business, we have done in the following 6 aspects for inclusive retail business. The first one is to build a stratified marketing system and also to promote or roll out the new business models and also have the top-level design of the head office from the provincial branch, and we have the sandbox operation at the city level branches, and we have the template of marketing for our outlets and branches focus on local conditions, industrial clusters and professional markets and also have a county-specific system. And also we draw a financial ecosystem map or road map adapting to the needs of different areas, adapting to the local conditions and also the formulating credit plans. We screen high-quality customers, and we have SOP so as to change the [indiscernible] , inefficient and a passive customer acquisition model. And we built an active batch based and a source customer acquisition business development model. And second, we adhere to the idea of minimization or focus on the [indiscernible] long accounts and also match the credit line with the customers' demands and also expand our business while also have system control so as to enhance our serviceability or quality to the small- and medium-sized customers to enhance the accessibility and coverage of our financial service. While at the same time, we give up using a simple model to measure or calculate the credit line so as to put our risk within our risk tolerance. And we take the households at our center or as a priority and also build a new vision of management. We have a unified credit approval and also credit management -- to be more specific, for the same family business for the SME legal persons and business owners and the relatives or friends or in the personal or individual business, consumption and credit card businesses are putting under the same umbrella of management. We have a cross-line and cross-product coordination so as to effectively prevent the under-standard eligibility of the customers for certain products because for some of the products, we have the differentiated threshold for the eligibility of the customers. So we also prevent the overlap of the credit granting, but also prevent the risk of excessive credit granting. Fourth, we integrated online and offline businesses. We leverage on the models or the digital tools, but we are not over relying on the digital tools. We insist on the principle of enhancing people's awareness, understanding and also have on the spot investigations for due diligence, while at the same time, we enhance businesses, tax, credit history, private fund as well as other third-party data to do the customer or KYC business. We have a cross check of the authenticity of our customers, so as to ensure that the fund they use is for the real purpose for business. And we are not just following the trend. We also used open cloud to process and analyze the data in an automized way and to generate the KYC report so as to make our credit approval and more efficient and also have a process and procedure constraints and build a business mechanism. What is key here is to separate the approval from the credit granting. And also we separate the roles because impressive for some of the inclusive retail loan granting, the approval and the lending are put together. But in our practice, we insist for the online SME inclusive loan, we separate the amount of the business and also we separate the roles in the -- between the approval and the loan or disbursement, so as to form checks and balances in the process of credit granting and we also make up for the shortcomings of the decisions for the models. And also, we prevent the one people have to save for everything. And we say no to any form of intermediary person participating in the marketing or doing the -- handling the business. If some of the illegal or inappropriate intermediaries or agencies participate in that they will bring a lot of shock to the business of the bank. Sixth, we empower on the technology and also to enhance our risk management capabilities empowered by technologies, meaning on the model process identification and system real-time early warning, we use UCR recognition and GPS positioning and also cash flow clearing and AI intelligence and other technologies to do the improved ability of anti-fraud and -- and also rely on the big data or large language model, we focus on new loans, professional debtors or the intermediary loan companions and other risk characteristics, consistently optimizing the risk control model and during -- before, during and after the lending to improve the accuracy of our early alerting, so as to ensure the stability of our asset quality, and we will further enhance our risk management and mitigation in a more systematic way in inclusive retail business. Moving forward, we firmly establish appropriate attitude to our performance and do our own job well for the right purpose. We will stick to a prudent and steady risk appetite and also put the risk prevention and management as a priority. It is very promising that asset quality will be -- continue to be stable and maintain a relatively leading position among our peers. Why we are so confident? First, we have a more profound and comprehensive full-fledged risk management control system, to be more specific, we'll have credit management. We have online/offline coordination and separate the credit approval and credit branding business. And we also have a unified credit management and also to enhance accountability, we use the smart tools and to have a unified monitoring and supervising. In Chongqing, ACB set up a head office level digital risk management center for the purpose of enhance our monitoring of the early warning identification and also early check and dispose of the credit risk of inclusive retail business and also to enhance our management overdue loans and enhance the disposal of NPAs and also enhance the notification of the overdue or when the loans come due. Here, we enhanced the smart disposal platform 2.0 version and also to enhance the dispatched transfer or disposal of NPA, enhance the efficiency of the diversified NPA disposal channels. Please rest assured, the inclusive retail loan are small, scattered or there are a lot of amount of them, but we will further make a health check so as to clarify and also have an order well-organized management of this type of business. And also for the risk management of the key areas that has been further improved in terms of efficiency. In terms of the real estate loan by the end of -- as at the end of 2025, NPL ratio in the industry remain unchanged from the previous year. And newly NPL has been decreased year-on-year. We'll continue to adhere to a household-specific policy and approach, project-specific plan and step up risk control for large clients focus on key links such as funds, assets, equity strictly managing the account presale funds and separating the operation from project funds. And we'll use the 16 financial policies for rules and whitelist loan continuation. And also, we will enhance or we will provide our credit support for the high-quality or better housing projects and also will enhance the credit measures. We will not expand our business or lendings in this area in a blend way and also use the policies to replace the implicit debts. And also we have to optimize the structure of the existing debt to lower down our risk exposure and also have a market-oriented rule-based and appropriate finance approach to increase our financing in these areas so as to safeguard the bottom line of not increasing the implicit debt. And also, we will enhance our structures in a preventive way that is very important. And also, we will reduce the low-quality or inefficient customers, but at the same time, support the building of the modernized industrial system. We'll focus on the structural risks, and we will take preemptive measures for the overcapacity. We will not do the evolution so as to ensure the credit quality. Qing Liu: The next question, please. Unknown Analyst: From Economic Daily. My question about wealth management, the personal customer is around RMB 896 million, which is leading among the peers and over the several -- past several years, customers have high demands on wealth management with the fluctuations in the capital fluctuation and also people have a demand of the capital allocation. As Mr. Wang said, ABC rolled out a lot of innovative measures in wealth management. Could you please elaborate more on the innovative measures on wealth management? And what are the plans moving forward. Qing Liu: Thank you for the question. Mr. Lin, please. Li Lin: Thank you for the question. So as an entity or a bond in connecting people's saving or household savings to the circulation of economy, there is a lot of room for us to -- or potential for us to tap into in wealth management. This is an important measure to serve to boost China's strength in finance. Wealth management is an important part for the modern financial system. By developing strengthen wealth management will help to cultivate potential capital increase the direct financing and also to enhance the efficiency and quality of the financial service to the real economy and the high-quality development. It also projected for people's well-being. Next, it can also improve the residence income. Wealth management can expand their income generation channels and it can also get the public to participate more broadly in the capital market and then share in the fruits of economic development. And thirdly, it is an intrinsic requirement for high quality development of commercial banks, wealth management features light capital, stable returns, and sustainability. It is an important path for commercial banks to transition from scale expansion to value creation. ABC has been people oriented in recent years, and we placed wealth management business development as a very important priority, and we have deepened our strategy for integrated and 2-wing approach of retail development. And basically, it's all about customer development. So the 2-wing refers to wealth management and digital transformation or transition. And with our forward-looking layout, we have a driven financial development system to cement the development for operating income. First of all, we have upheld value-driven approach and also a people-oriented model. The nature of our management approach is to have an asset allocation with customer at the center. We want to create value and also provide allocation service strategies. We hope that we want to strive to become a reliable planner or say, family, financial adviser for our clients. And another one is comprehensive service capability. By the end of 2025, the personal financial assets across the entire bank has reached RMB 24.7 trillion. During the 14th Five-Year plan period, the number has increased by nearly RMB 10 trillion, ranking ourselves at the forefront of the industry. If we look at the latest figures, we can see that is now exceeding RMB 25.4 trillion. In terms of assets and liabilities, ABC's personal asset, deposits and also personal loan scale, all ranked first in the industry. So we have the most deposits, loans and also the largest number of customers. So we should be a very big and preferred bank for a large number of customers. And secondly, we have optimized the asset allocation of customers and integrate that with advancing 5 priorities. In that regard, we have created an agricultural pension financial service platform. And in ESG, we have made comprehensive breakthroughs crossing the RMB 100 billion threshold across different product lines. And thirdly, we have achieved the breakthroughs on multiple fronts. In the past 5 years, we have seen that our LBM has currently reached RMB 3.65 trillion. And also during the 14th Five-Year period, the total customer volume has increased by nearly 2 trillion. So all of this has put us also at the forefront of the entire banking industry. The wealth management products in agriculture sector has also exceeded RMB 2.2 trillion, leading comparable peers. And more importantly, we have created over RMB 340 billion for investors. We are also doing very best to satisfy our consumer demands and also insurance demands. In terms of premiums under agency, we have ranked the first among our peers. ABC Life Insurance and also other institutions under ABC, have all maintained a leading position among comparable peers. We have also adhered to a reform-driven progress approach. Wealth management and resource integration and innovation have all followed a similar path. So we have 896 million individual customers and also 22,800 outlets, and we also have very big advantages in channels and customers. All of these have turned into the driving forces for ABC. First, we are dedicated to create a full spectrum of product portfolios to leverage the advantages of integrated operations. We need to build a multifunctional portfolio or is a matrix that covers different diversified strategies, wealth management products such as trust funds, precious metal investments and more. Secondly, we have upgraded the market open platform. We have to keep ourselves open to work with third-party institutions and improve our coordination and step-up management in scientific evaluation mechanisms, introduce quality resources from the market and satisfy diversified and customized demands of the customers. Thirdly, we have to provide full life cycle customer companionship at different stages. We can ensure that we provide the right services such as wealth management and also family protection. Throughout the life cycle, we have to focus on developing comprehensive services for private businesses and in this way, we can also have cross-border wealth management and also so many other options to satisfy our customers diversified demands at multiple levels and also improve the accessibility and inclusiveness of our financial management services. And thirdly, we have been persisting in organizational-driven efforts to forge wealth management service capabilities. We ensure that professionals under professional matters. A professional team can improve our efficiency and core competitiveness, which is in investment research and customer service. First of all, we have created an open integrated professional research system. We have also strengthened the group's investments source integration mechanism built a multidisciplinary expert team and gained market insights. With the forward-looking and culture of study progress forward, we have implemented a very sound strategy for research, product introduction, marketing support and asset allocation, evaluation and final review. And we have also been insisting in reasonable expectations and qualified interactions. We know that for our wealth management subsidiaries, we require them to have a realistic pricing expectations. We also worked with these joint venture financial companies, I would check their figures to ensure that we have the best delivery with our customers. This can help us to ensure that we have a sound interaction between customer and the market. And on the other hand, we also need to ensure that our team is also customer oriented. There are many things involved in ABC's business and our unique advantage is, of course, Sannong or agriculture-related services, but internally, we want to really interpret this service brand as improving results every day. It's not that we want to just do easy work or just shut out [indiscernible], but it is that we want to see improvements every day. And next, we insist on precision management and strengthen our structural optimization and capacity development. We have -- already have professional compromising 119,000 customer manager and 6,000 wealth advisers. We have also focused on the Yangtze River Delta, Pearl River Delta and emerging potential areas. We have implemented differentiated strategies according to local conditions, build benchmark. And also in a total of 500 branches, we have done so in private banks. And also in some wealth management centers, we have definitely ensure that there is a tiered system for training to empower their training system and also service or professional service capabilities on the ground. Sometimes we can go at bottom up. But other times, we think that top-down approach is also a very effective channel. Now we have 120,000 customer managers and 6,000 financial advisers. They should be working like seeds and they are providing services across the bank and serving our customers with their expertise. And fourthly, we have to uphold a digitalization-driven approach and let wealth management be one of our growth engines. By using digital means and intelligent approaches, we can ensure that we have online and offline wealth management coordination efforts and a multidimensional service network. On one hand, we can improve our online and off-line service efficiency and these digital means can also empower our business, and we will continue to advance this all channel convenient and intelligent platform building. And we will also make sure that we improve our capacity for all whether around the clock responsiveness. We are also actively using AI. We're applying in different scenarios. We have an employee, who is an AI model, and we will strengthen customer insights and intelligent layout as well as post investment companionship throughout the entire life cycle. From the performance in 2025, we can see the great wealth management income has reached RMB 35.7 billion and financial management fee income reaches RMB 251 billion, and we should say that this is a very big resilience market. Basically, we have shown strong resilience in our business and also high market recognition and also, our business has maintained very stable growth with little fluctuations. And many of our joint venture wealth management companies have proper expectations for their products. So we have talked so much about what work we have done and data and statistics. At the end of the day, high-quality development should be an all-hands-on-deck effort, which involves not only counter managers and also customer managers and wealth management managers and consultants and advisers and even sci-tech personnel. Here, I would like to take this opportunity to -- on behalf of the senior management, express our heartfelt gratitude to our staff, who have weathered through many hardships and difficulties. And with their expertise and hard work, you have been fighting right at the forefront. Thank you so much for your diligence and hard work. Qing Liu: Okay. Thank you so much, Mr. Lin, for that very encouraging words. And next, I would like to invite next question. Unknown Analyst: [indiscernible], a financial analysist. I'm wondering about the situation in international business. We are now paying attention to business going global and also foreign trade, especially the growth structure and also the overall layout with a new market environment and also new customer demand, ABC -- how will ABC support key foreign trade enterprises to go global? And how will this contribute to your operating revenue and also your efforts for high-level opening up? Qing Liu: Thank you so much for that question. I would like to invite President Dr. Wang for a response. Zhiheng Wang: Thank you so much for your interest in international business. ABC has been earnestly implementing the decisions and arrangements of the [ Party Central Committee]. And with that, we have been cementing the interplay between domestic and overseas market and optimize our cross-border financial comprehensive service system, the international settlement business volume has reached about USD 16,400, an increase of 8% year-on-year. And the international trade financing business volume has increased by 30% year-on-year. The growth rate is still very impressive. So I think that, first of all, we have been helping or supporting businesses to go global. In ABC, we have a presence in 18 countries and 21 overseas institutions, and we also have 1 joint venture bank. More than half of them are in building road countries and regions. So this has aligned with our efforts to help businesses to go global. In 2025, we have continued to ensure that the interplay between domestic and overseas institutions is well underway. Our interplay business has reached USD 118 billion, an increase of 13%, and we have seen the financing business of BRI countries has reached USD 340 billion. We will continue to focus on Sannong areas and ensure that this leading business in this area can go global, and we will also lend support to international corporation projects. Across the year, the agricultural-related financing business has been handled for RMB 69 billion. And second, we strengthened our product innovation to support the development of our new forms and new models of trade. It is safe to say that in recent years, the scale of the main players in the new forms and models for trade has been accelerated, becoming an important support for foreign trade. And in response to the new characteristics of many players in new forms and new models of trade, ABC has empowered with technology to innovate cross-border payment products and many branches have completed the registration with SAFE and obtained the qualification for direct cross-border e-commerce collection. Scale of our direct cross-border e-commerce collection business ranks among the top in the -- among the peers. And third, we have strengthened implementation of our regulation or regulatory policies, and we have enhanced the level of cross-border financial service, the reform of foreign exchange business development is an important measure for the institutional opening up of financial sector of China. ABCs continuously promoted the reform and foreign exchange business development, expanded its scope business volume and a customer base accounted for a large proportion of the whole bank approaching to 40%. The ability of promoting facilities and prevent risks has been further enhanced -- and also, we have supported the international use of RMB. Cross-border RMB settlement volume reached RMB 3.82 trillion, an increase of 8.7% year-on-year. ABC will combine the relevant arrangements for expanding high-level in the 15th Five-Year plan period continue to enhance our support for the real economy on foreign trade and build a closed loop for cross-border financial service. And to serve the high-quality joint development of the Belt and Road Initiative, and we will optimize the linkage mechanism at home and abroad, enhanced supply of cross-border linked products and strengthen financial support for key overseas investment projects and introduce a special work plan to support the development of the new land and sea passage in the West. We will also strengthen the service capability for settlement and exchange of small currencies with neighboring countries and we'll optimize the cross-border financial system service system, and support stable skill and optimal structure of foreign trade, improve the service mechanism for our customers' high-end certified enterprises and strengthen support for cross-border financial business and high-quality agricultural and rural entities continue to support foreign trade enterprise under the financing coordination mechanism for SMEs and carry out innovation and application cross-border e-commerce financing products, building diversified payment channels. And third, strengthen the supply of cross-border financial services enhance the level of cross-border trade investment and financing. And we will further enrich the system of exchange rate risk management, products support SMEs expanding foreign trade market, and we will support the cross-border use of RMB in the rural economy will play a more active role. So we will also provide a strong support for high-quality development of the entire bank. Unknown Analyst: And from [indiscernible] Asset Management, I'm [indiscernible]. My question is about inclusive finance. In the presentation, you mentioned inclusive finance, inclusive finance as one of the Five Priorities of finance about China. It is also a highlight of the business performance of ABC. Looking forward to 2026, how ABC will maintain the good momentum in inclusive finance for sustainable development . Qing Liu: Thank you very much for the question. I'd like to invite Mr. Wang Dajun, Vice President of ABC to take this question. Wang Dajun: Thank you very much for the question. Inclusive finance covering a lot of industries, covering a lot of households. One of the Five Priorities of finance of China is also an important aspect of practicing or maintaining the political nature and people oriented nature of the financial work. By 2025, ABC has thoroughly implemented decisions, arrangements of the CPC Central Committee and the central government, deepened coordination mechanisms for supporting the financing of SMEs and also enhance the ability of our inclusive financial service in a comprehensive way. We have promoted the increase of expansion and improvement of our inclusive finance. And we also achieved high-quality development and the quality and efficiency of providing inclusive financial service, mainly reflected on 3 aspects. First, we are -- we have the largest supply of inclusive credit supply. As at the end of 2025, the balance of inclusive finance loan registered RMB 4.35 trillion increase. And also, we have -- compared with the beginning of this year, the inclusive finance loan to SME RMB 3.93 trillion. And also this year, we reached or exceeded RMB 4 trillion. The balance of -- the balance and also increase of inclusive finance loan are the first among the peers. And also, we have the widest customer service coverage -- as at the end of 2025, ABC's inclusive SME customer with the loan from the bank, we have RMB 5.24 million, an increase of [indiscernible] from the year beginning. The total number and increase of the customers has been the first among the peers for 3 consecutive years. So we are providing the truly inclusive finance service. Third, we excel in sustainable development capabilities, and we shifted from the digitalization. We are leading among the peers to do so. The asset quality of inclusive finance loans are also leading among the peers. The evaluation from the regulators leading among the peers. For 2026, as in the first year of the 15th Five-Year plan period, we will work on the following 3 fronts so as to ensure the inclusive finance business to maintain our good business momentum. To be more specific, first, we will make a good use of the policy tools of the country. In the beginning of this year, relevant ministries of China rolled out the one package policy to support the coordination between fiscal and monetary finance, in particular, the fiscal subsidy for the SMEs and also the private investment guarantee plan that has brought new opportunities for the inclusive finance development. We will enhance the cooperation between the banks and governments, between the banks and the guarantee agencies, focus on new policy tools, optimize our business process and rolled out featured products and offers so as to lower down the cost of financing our SMEs and increase the convenience, so as to transform the policy benefits into the growth drivers for inclusive finance. Second, we'll make a good use of the institutions and mechanisms. ABC will continue to give our role of the 3 Sannong or the rural business departments and inclusive finance department and taking advantage of the dual-wheel drive organized structure. It is -- we are the only bank that has such kind of dual-wheel drive that is the cooperation between the inclusive finance department and the rural business department. And we will continue to leverage our advantages across urban rural areas with a large number of branches, outlets and extensive outlets coverages at the county level cities. And also, that is also the uniqueness or the feature of ABC. We will continue to demonstrate or the mechanism advantage that provide us with the willingness, ability and also expertise and also the courage of provide credit service to rural areas or related businesses. And also, we will promote digitalization in our inclusive finance. We have the iteration upgrading and further enrich and improve our -- the Huinong or agricultural bank E-Loan platform and also build [indiscernible] outlets and the inclusive finance E-Loan to build an ecosystem on inclusive finance and also roll out AI intelligent credit-related business and also consistently improve the digital risk control system. And ABC on [indiscernible] is for this purpose. And also, we will solve with the problems of the asymmetric information in inclusive finance and also for the -- further enhance our risk control and management, provide a high-quality service with a lower cost. And in 2026, ABC will continue to adhere to the general key of seeking progress for maintaining stability and coordinate risk prevention development and to serve people's well-being focused on major strategies, key areas, weakness, so as to ensure the high-quality development of inclusive finance business. I'll stop here. Qing Liu: Next question, please. Unknown Attendee: I'm [indiscernible] from the The 21st Century Business News, serving the rural revitalization is the positioning of ABC and also that is what ABC is good at, how ABC will enhance your competitive edge in providing service to the county level areas. Unknown Executive: Thank you very much for the question. Yes, provide rural revitalization is our main business, and it is also our highlights. And by the same time, it is a key focus area in our strategic development. In the past year, we stick to our main business and also to seize opportunity of the integrated development of the urban and rural areas provide financial supply or credit supply and also enhance our the quality and efficiency of providing service to the agricultural areas and country economy. And also in the several aspects, first, with the contribution of county level for our average daily deposit and loan increment has been exceeded RMB 1 trillion. Proportion of increase increased by the 10.5% and 1.4 percentage points, respectively, compared with the previously with this better structure, balance of household loan exceeded RMB 1.8 trillion with an increase of RMB 337.7 billion or 22.4% and loans for key areas, green production rural industries, the growth rate of loans in these key areas is higher than the growth rate of all loans. Third, better quality and better efficiency. NPL ratio in county level regions was very low with stable asset quality moving forward. We will have the document from the 15th Five-Year plan and there are systematic arrangement for the rural revitalization by aligning our development to the national strategy. We rolled out 2026, 2 consolidations and 2 insurance of providing service to rural-related businesses. One is to consolidate the proportion of the county level loan in our overall loan portfolio and also consolidate our advantage of providing service to the county levels. And also we ensure that we'll maintain the same intensity and also the over stable asset quality. In the new year, our 2026 will continue to enhance the policy resource investment, enhance our ability of providing financial service. To be more specific, we'll do a good job well in the following 5 aspects. The first, we will provide service to the major projects and county levels. The net growth of the country level loan growth will continue to exceed RMB 1 trillion. In our businesses, in the agricultural-related business, we'll work with the improve the agriculture-related projects and national water networks and also comprehensive agricultural production capability and also taking the counties as a major vertical, we will provide service to the major projects and also have list-based service and supporting financing. In terms of the agricultural enterprises, we'll focus on the leading agricultural industries and also leading agricultural technology companies, providing full cycle financial service. In terms of the farmers or farming households, we thoroughly carry out information finding or information collection for the farmers to expand the toolbox of farmers loans, try to have more than RMB 2 trillion of farmer -- RMB 2 trillion of balance of loans providing to farmers this year. And second, we'll further enhance our financial service capabilities, and we'll have 6-in-1 service systems, and we will also further promote relocation of inefficient outlets to townships, accelerating sinking financial service to more rural areas. And this year, we'll strive to relocate 180 outlets to townships and also further increasing the development of agricultural assistance service stations throughout the combination of service stations, mobile service, further enhance our base financial service. And this year, we will build around 3,000 -- last year, we have already built around 1,700. This year, we hope to have around 3,000 agricultural assistance service stations. And we'll innovate the innovative financial products and models for agricultural businesses, and we will roll out some new and diversified products and also use the smart bank tools in providing service to the rural areas for rural businesses and build have promoted the application of smart bank tools in the field of agricultural areas, farmers promote on-site plus remote investigations and build a system covering satellite, UAV and ground IoT and other agricultural data, enhance our support data supply capabilities for agricultural businesses. And fourthly, we will ensure that this normalized financial assistance will be put at a prominent position, and we have already formulated a package of differentiated policies, and we will try to ensure that we lend targeted support or especially policy support to people who have just been lifted out of poverty and to ensure they will not return to their previous state. We will focus on national and provincial level rural revitalization strategies and projects support underdeveloped areas in carrying out initiatives and form internal motivation for these assistance projects. And fifthly, we will ensure the compliance and risk management work of the country-level regions and ensure that we manage or prevent risks at the source and ensure that the loans will have a very strict risk identification and monitoring process and also a series of risk monitoring models. Qing Liu: Next question please. You may ask your question. Unknown Analyst: I'm from JPMorgan Chase and banking analysis. My question is about the bond market. We have noticed that last year, the contribution of bond investment is actually pretty prominent. So what is your plans for this year's bond investment? And also what is your judgment on the bond interest rate for 2026? Qing Liu: President Lin, please. Li Lin: Thank you for the question. From the perspective of the overall operation and management, we attach great importance to the financial market. And with our understanding about inherent loss of the financial market, basically 3 positioning. First of all, the level of the market and the level of the professionalism and also the level of talent that's 3 positioning. And if we want to summarize this or the characteristics of ABC's financial market business, I think that it can be summarized in 3 key words. First, big; second, stable; and thirdly, good. So first, large or big, it means that we are big in scale and stable means that we have been upholding prudent operations. So we are also very unwavering on that. And the third point is good or good quality. That means that we have a pretty good outcomes. And it is also sustainable in the long term. You are interested in bond investment business. Here at ABC, we have been committed to serving the real economy. We focus on improving our capabilities and optimizing asset allocations and better promoting and controlling risks to achieve high-quality development. You have mentioned bond investment has contributed a lot to the performance of ABC last year. I think that's inseparable from the external environment and also at the head office, the investment decision-making committee as well as the overall investment team have made a very good analysis on the market, and they have a very targeted and precise investment strategy. Looking back in 2025. At ABC, we have done 3 things right. First of all, with our strategic focus, we have cemented our investment foundation. While serving the real economy, we have improved our ability to make evaluations of the entire market as a core participator of the bond market. The financial market managers of ABC has over RMB 10 trillion in bond assets. Therefore, we really value our ability to make macro assessment of the financial market. And we have been adhering to national policies as the guiding principle and also the economic loss as our guidance. And we have been making proper evaluations of the macro policy curves as well as the dynamics of the economic environment, so that in the ups and downs or fluctuations of the market, we can identify opportunities and effectively address up to the place to manage and prevent risks. We have to seize the opportunity of interest rate fluctuations and to really understand its reference. And this ups and downs and range fluctuations. Take, for example, before the interest rate rebound window, we proactively compressed or duration and to cushion against the risk of rising interest rates. With our professional capabilities in practice, we can effectively stabilize market expectations. And secondly, in our work, we have been serving strategic situation with more precise allocation. In dynamic balance, we have achieved a new increase in scale and efficiency, facing international economic and trade landscape adjustment in 2025, the global financial market has been facing increasingly complex environment. So we have to focus our strategic focus and the strive to proactively or more proactively use a sophisticated and refined management strategies and approaches to prevent and control risks. In particular, with our comprehensive income target as the goal, the RMB bond scale has increased by RMB 2.4 trillion, compared with the beginning of last year, and we have achieved a due growth in revenue and profit and also we have a better revenue structure or duration allocation has been more balanced. This has given us an edge and cushion against the cyclical fluctuations of the market. Here, I think that it is important to highlight flexible or dynamic management and optimization of duration as well as the duration structure. We have to constantly strengthen the monitoring of potential risks coming from interest rate and exchange rates, so as to improve the forward-looking analysis and prevention of bond investment or credit risks. Thirdly, as a major bank in China, we have been acting on national strategies and serving the real economy, we have advanced the Five Priorities. In the year 2025, ABC has taken a lead in underwriting national bonds and local government bonds and credit bonds and altogether, more than RMB 3.7 trillion, a year-on-year increase of 20 percentage points roughly. So it is fair to say that we have supported implementation of active physical policy and the real economy. We have also been focusing on 5 major priorities. We have been continuing increasing our investment in industrial bond in green and low-carbon areas and technology innovation. These directions represent our top priorities. And by the end of last year, the green financing [indiscernible] balance has maintained a leading position, and we have also anchored our efforts in rural revitalization strategy. Our investment in that regard has increased by 300% and/or underwriting share ranked first in the market for this year. And especially in the Sannong, where agriculture-related sectors, we have precisely allocated or investment portfolios. And you're also interested in the bond strategy for 2026. We deeply feel that 2026 because it is the starting year for the 15th Five-Year plan, it is a pivotal year for us to build momentum and step into high-quality development as China's economy transforms itself. Here at ABC, we have served the real economy and we have coordinated development and security and ensure we have a better coordination at a macro level. We have been maintaining stability while seeking progress in our financial market operations. But all at the same time, we emphasize that we have to really delve into structural opportunities in these cycles. First of all, we have to improve our ability to assess different situations and support proper investment decision-making. So I think that you are also an expert in that regard. So I will not go into any details here. I believe that logic of global asset pricing has been undergoing profound changes. I should say that all of you might feel it to some extent. And internally, we say domestically, our economy is now building momentum and the pricing signals are expected to recover and the monetory policy remains not really accommodative. The government bonds has increased and supply has increased, and the issuance has been also significantly front loaded. And since the beginning of this year, the curve of the bond market yield has been more steeper. So we estimate that the bond market will take on a volatile trend. Credit bond as well as green and sci-tech bond will be even more active. The fluctuations were volatile or transaction or trading opportunities will coexist with those low volatility assets. And also in foreign markets, there will be increasing interplay between exchange rates, bond stock and commodity markets, so we have to have the overall picture in mind. One important part of our work is to integrate all platforms at ABC and pull together the research power to conduct research across different markets, cycles, sectors and asset categories so that even in complex fluctuating scenarios, we can really lend ourselves our certainty. And secondly, we focus on national strategies to accurately empower the real economy. First of all, we have used -- or adopted a proactive physical policy. We have been deeply integrated into modern industrial system. So here, we're focused on some of the modern and strategic emerging industries and also, we will intensify efforts to allocate more resources to high-quality industries. And thirdly, we will advance Five Priorities, especially in pension finance, inclusive finance and green finance and so on. And next, we will continue to optimize our investment portfolio while controlling and preventing risks will ensure prudent growth. Thirdly, we will give full play to our advantage as a major bank in China. We will deepen services for domestic and overseas investors, and we will continue to cement our core commercial functions, piggybacked on a full range of bond varities and pricing capabilities. We will continue to improve bond market liquidity and stability and improve our cross-market allocation capabilities. On the other hand, piggybacked on the Bond Connect, Swap Connect and so many others or other mechanisms, we will ensure we provide better services for cross-border investors and leverage the advantages of domestic and international linkage and supports high-quality Chinese businesses to go global and expand their development channels. And fourthly, we will empower or digital transformation with science and technologies. So we have to uphold the leading role of science and technology and digital means and risk control and prevention, bond and research and also so many other areas we have to have whole chain integration, and we ensure that AI is applied in different application scenarios, such as position management and pricing and trading so that we can improve for quantitative analysis and also intelligent investment decision-making and empower development or high quality development of ABC. Qing Liu: Thank you so much, Mr. [indiscernible]. Next question, please. Unknown Analyst: I am a financial analysist from [ CICC ]. What ABC has done in supporting the development of sci-tech businesses what are your best practices? And how will better develop the sci-tech finance business or the fintech business? Unknown Executive: I think that I would like to take this question. We know that the technological finance is a very important part of our self-reliance and also the construction of a technological strong nation, and it also involves the construction of a modern industrial system and new quality predictive forces here at ABC. As of the end of 2025, we have already provided services to over 350,000 technology-based businesses and the balance for loans is RMB 47,000. The annual growth rate is more than 20%. The coverage and overall loan volume has been at the forefront at this industry. To be more specific, enhanceability of technology and financial service at ABC continued to carry the special actions to enhance the capability of technology and financial service in the whole bank, focus on Beijing-Tianjin-Hebei area, Yangtze River Delta area, Guangdong-Hong Kong-Macao Greater Bay Area, Chengdu-Chongqing other high lines of technological innovation establishing 25 provincial and municipal level technology and financial service centers and building more than 300 specialized technology and financial branches established professional talent pool for technology and finance. We have allocated professional equity investment personnel to each subsidiary and build a large number of financial technological and industrial professionals in the ABC Group. Second, we expanded the coverage of products and the services we have taken the lead, introducing guidelines for our technology and finance credit policies, promote the 5 [indiscernible] capabilities and 7 abilities on credit evaluation model inclusive to technology and enterprise -- technology enterprises in a build of full life cycle credit service system covering the institutes and the sci-tech parks and also the technology workers in total around 50 specific products and customers. For example, in providing service to the agricultural technologies, we rolled out in the agricultural park science enterprise loan, especially also have the agricultural or machinery loan, effectively providing service to the leading agricultural technology enterprises. And also, we provide the seed industry revitalization and also make good use of various policy tools. We know that in 2025, digital bank and other 7 departments issued a series of policy tools to support technology finance. And ABC actively connected and implemented those policies. We support the creation of a technology innovation on board in the bond market. The first batch of RMB 20 billion of commercial banking technology innovation bonds were issued while we increased the underwriting and investment in various market entities in science and technology, innovation bonds also underwrite an investment are at the forefront of the industry. And also we implemented the policy -- monetary policy tools. And also, we signed a contract amount of loans and technology innovation, technological transformation has been achieved. And also, we participate in the policy and pilot projects -- we were the first to sign a RMB 50 billion of Social Security Science and Technology Innovation Fund in Zhejiang and Yangtze River Delta and also established 30 various types of science and technology innovation funds, including establishment of 18 AIC equity investment policy, city funds, and we have a full coverage of investment. The cumulative lending [indiscernible] technology-based enterprise exceeded RMB 25 billion. Those measures have supported the development of technology innovation. 2026 is the first year of the 15th Five-Year plan period while fully focus and will get [indiscernible] in terms of the technology finance and to empower the new productive forces and provide service for the economy so as to contribute to accelerate the strength of China -- China's strength in science and technology. First, we will provide service to the modernized industrial system, promote innovation technology to combine what were integrated with the industrial innovation, focus on the upgrading of traditional industries, focused on the new and future industries, focused on the modernized infrastructure, focused on the major national scien-tech projects to seize our targeted industries and customers, enhance our policy and resource support and enhance our professional service capabilities so as to accelerate the formation of new product forces. And second, we have a full chain, full life cycle comprehensive or one-stop service by adapting to the laws and patterns of the innovation and also the growth pattern of the enterprises. We will invest early, invest in small and investing in the long term and invest in the hard technologies and also continue to enhance our policy and support system. And also, we upgrade entire chain and entire cycle, the technology finance or financial service solution of ABC. We have the -- based on the advantage of ABC full license investment, lending bonds and leasing, consulting, [indiscernible] play to the role of AIC in serving technological innovation and equity investment. We work with government agencies and also to research institutes and VC firms and other financial institutions to meet the comprehensive financial service demands of the enterprise to our customers. We accelerated the promotion and application of our data tools to adapt to the trend of digital and intelligent development, we deepened the AI+ empowerment of technology and financial service. We coordinated the deployment of our large language models and development of intelligent agents, optimize the service platform for industrial finance, which has registered now 5 million high-quality technology enterprises, enabling precise service capabilities and also make in-depth use of innovation, external data, such as innovation points, intellectual property and investment and loan linkages optimizing the precise evaluation model for technology enterprises and also use AI agent system that enhance our quality in providing service. Qing Liu: Thank you Mr. Wang. A question online, please take a common question that we haven't touched upon. Well, this year is the first year for mandatory sustainability information disclosure. And the investors in the capital market are very interested in the sustainability of listed companies. Also, ABC is performing very well in ESG work. So what is progress of the sustainable development -- sustainable development and what are the next steps? Unknown Executive: Thank you for the question. Well, we will disclose 2025 sustainability development in line with our annual report, in line with the new regulators and benchmarking to the international initiatives, demonstrating the performance of ABC in our sustainable development. We actively implement a national strategy in sustainable development and incorporate the targets in responding to climate change in our day-to-day work management and business operations, enhance resilience through sustainable development, enabling the benefits to all stakeholders. To be more specific, first, we focus on improving our governance and implement Chinese characterized financial governance. We incorporate the party leadership into our work and also enhance our sustainable topics, scope of the disclosure of sustainable development. And the BOD is supervising, senior management is implementing and also the executive level effectively implementing the policies forming a connected governance chain and enabling the concept of sustainable development into the top-level design of business operations in the 15th Five-Year plan and further stimulating the quality and momentum of high-quality development. Second, we'll fully implement the green finance strategy. We steadily promote our own energy conservation and carbon emission reduction, actively practice the concept and take carbon peaking and carbon neutrality as our guide and actively guide capital to towards key areas such as carbon reduction, pollution reduction, green expansion and growth in terms of green finance, balance of green loan is nearly RMB 6 trillion and equivalent to an annual reduction of RMB [indiscernible] million tons of CO2 and RMB 66 billion of green financial bonds have been issued in China ranking first in the industry. The balance of green bond investment has increased by 37%. In terms of ESG risk management, we have built ESG evaluation indicator, matrix system for our clients, launched ESG evaluation function for corporate clients. We also explored and conducted climate, risk stress test for agricultural, personal housing and wind power enterprise loans, applying the result of climate risk analysis investment and financing management. And also in terms of our operations, we actively practiced green office green procurement and in green travel and the total carbon emission per capita of the whole group in 2025 have decreased compared with the previous year. We always put people at the first place, enhance our -- to improve our people, employees well being. ABC will have a wide range of stakeholders. We take customer satisfaction, employee satisfaction at our core or at our priority, strive to give back to our shareholders, give back to the society, contribute to the society, continuously expand the accessibility of financial service mentioned and ABC will provide service outlets to cover all more than 2,800 country-level areas and making it the only bank to achieve a full coverage of country-level institutions or outlets. In 2025, ABC has relocated and built 179 new outlets in rural areas or towns, further fulfilling the rural areas with insufficient financial service. And also in regular provision for mobile financial service has cumulative served 120,000 rural households. Agricultural service projects significantly enhanced service capabilities. We built 3,308 elderly friendly service outlets with remote banking hotline providing service to senior customers throughout the year. We have 22,000 warm-hearted union service stations providing considerate service for outdoor workers and new citizens. More than 9,900 public welfare activities were held -- were launched. ABC has also thoroughly implemented the talent empowerment strategy for professionals and frontline young employees. We have implemented major talent projects for key groups, selecting over 2,200 young talents and adding 47,000 talents to talent pools of different levels and types, building 6,115 facilities for workers strive to create -- realize greater value for our shareholders. We also enhanced a 2-way interaction in the capital market for 3 consecutive years, ABC has led its peers in terms of total market capitalization growth. We have maintained a high dividend payout ratio. We continue to shine the brand ABC philanthropy with full employment -- incremental 4 major actions of rural revitalization, protection care fulfillment and through donation volunteer service, mutual assistance and other means to provide a generation or benefit to the general public. And also, we have volunteer service hours exceeding 850,000 hours, and that has also given a recognition and a branding for ABC. Moving forward, we'll continue to follow [indiscernible] strategy of national system of development, deepening the development of the management system and provide a better service to our customers and to our employees as well as respond to the concerns of stakeholders to ensure high-quality development through the sustainability practices to create a better value to our shareholders through the good sustainable practices. Qing Liu: We have a very thorough discussion today. For the sake of time, we will have one last question from the Beijing venue. Unknown Attendee: And from [indiscernible], I have a question on AI. Now AI is applied widely in banking sector in the management and business expansions and a lot of results have been achieved. And Mr. Wang also said ABC will vigorously promote application of smart AI in smart banks. So what achievements has been made and what measures have been taken? Unknown Executive: Thank you for the question. My colleagues just now in their presentation also touched upon a little bit on the application of AI in smart banking development. AI is buzz for now, ABC also seized the opportunities of AI development. We set up the specific office for smart banking development and also in [indiscernible] coordination. Also, we will focus on the AI agent application, focused on the project and also, we will build AI+ capability system to ensure the smart inclusive or wide-range use of AI. Past year achievements are reflecting the following aspects. First, the accelerated our service, innovation and product innovation, we keep the accelerating the research and development of digital products. We have launched a fly handbag in way to provide the loans for drone operators, we also have a farmer e-loan. Also at the same time, we innovated technology finance credit products. We call that tech loan. And also scale of online credit business has increased. As at the end of last year, the balance of agriculture e-loan was RMB 6.8 trillion, an increase of 18.7% over the end of previous year, also improve the quality of efficiency of online service. The monthly active users of personal mobile banking have been leading among their peers. We also rolled out the new version -- 5.0 version of the inclusive finance [indiscernible] build an online inclusive business covering multiple channels. And also, we have increased in the efficiency and effectiveness of smart risk control. In terms of credit risk management, we have the on-site and off-site prelending due diligence, also deepened automatic identification and comparison of GPS positioning, image information, applied advanced technologies such as generative AI, strengthening multidimensional verification of real people, real events and real scenarios. We also continue to strengthen a centralized monitoring for the 5 group of customers in terms of the group customers and large medium-sized customers, small SME customer, personal loans and agricultural loans and also enhance our smart disposal platforms. We have also achieved batch handlement or disposal of these cases so that we have promoted NPL disposal. AI can also empower anti-fraud efforts as well as anti-money laundering. The quality and efficiency have both been improved. And -- this can also help us to reduce our business burdens. For example, in terms of intelligent customer service, we can deepen application of AI models to fill in the forms, for example, and effectively reduce the burdens of frontline agents. The average time required has been shortened to 176 seconds from more than 200 seconds. We have also speed up the construction or the development of intelligent investigation review report templates. The automatic generation ratio of this report data exceeds over 70% for small enterprises, credit recipients and group credit. This has reduced the manual workload of credit personnel in drafting -- and just now our AI model mentioned by our senior management can also fulfill the smart or intelligent Q&A session. And this function can also empower the consumer protection or compliance and other processes. And this AI model, [indiscernible] has also won many awards, for example, in the recent Consumer Protection Day, the 15th of March has also announced that it has won the Financial Consumer Protection Golden Award for 10 outstanding cases in financial technology innovation services. So it is quite popular within our bank. And fourthly, AI is a systematic work. especially in terms of application in ABC, we have been systematically promoting the application of AI. We already painted we mapped out a blueprint for AI application and compelled the AI capability map. And with a platform dedicated to AI application, we can promote it capacity building of computer power to successfully deploy multi-industry leading-edge models. And this will also help us to develop even more model metrics regarding AI. Next step, with intelligent platform building, we will continue to improve the accuracy and convenience of financial services and also its inclusiveness. Qing Liu: Thank you so much, ladies and gentlemen, very big thanks from my bottom of heart for all of you in participating in this 2025 annual result announcement of ABC. We have implemented regulatory requirements and implemented an investor-oriented management approach and also clarified our mechanisms, targets and approaches for market capitalization management. We have appealed high-quality development and highlighted our features as well as serve the real economy as one of the major banks in China and strive to create more value for investors and shareholders and disclose the information in a timely manner. Our stock prices and also valuation have all achieved improvement. Thank you again, all investors, analysts and friends from the media for your continued interest and support in ABC. And I would also like to thank the senior management for your sincere sharing of the operating performance of ABC today. If you have any questions in the future, you are the most welcome to contact ABC's team. So that's all for today's result announcement conference. Thank you so much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]
Operator: Good morning, ladies and gentlemen. Welcome to TeraGo's Fourth Quarter 2025 and Annual 2025 Financial Results Conference Call. [Operator Instructions]. I would like to remind everyone that this conference call is being recorded. TeraGo would like to remind listeners that the company's remarks and answers to your questions today may contain forward-looking statements that are based upon management's current expectations. All such statements are made pursuant to the safe harbor provisions of and are intended to be forward-looking statements under applicable Canadian securities legislation. When relying on forward-looking statements to make decisions with respect to the company, you should carefully consider the risks set forth in the Risk Factors section in the 2025 Annual Information Form, which is available on www.sedarplus.ca and also consider other uncertainties and potential events. Except as may be required by Canadian securities law, the company does not undertake any obligation to update any forward-looking statements as a result of new information. We would also like to remind listeners that TeraGo uses certain non-GAAP financial measures to arrive at adjusted results to assess its business and to measure overall performance. TeraGo believes that these financial measures provide readers with a better understanding of how management views the company's overall performance. I will now turn the conference over to TeraGo's Chief Executive Officer; Daniel Vucinic. Sir, please proceed. Daniel Vucinic: Thank you, and good morning, everyone, and welcome to our fourth quarter and full year 2025 earnings call. Today, I am here with our VP of Finance, Parveen Mithra, as our CFO, Raj Sapra, is away on personal matters. Now looking back at 2025, our team continues to have a disciplined focus on our customers, operational efficiency and positioning TeraGo to capitalize on rising demand as AI is really reshaping business Internet requirements in terms of increased quality bandwidth, secondary connections and lower latency. In Q4, we strengthened our foundation through financing initiatives, including new term debt and equity capital that enhanced our financial flexibility. We have brought in additional new institutional investors who are confident in our business and recognize the significant value in our assets. We continue to focus on customer differentiation as reliability, visibility being highly responsive and agile, providing full end-to-end managed business continuity accountability becomes super paramount. Our proof points continue to show this with our lower churn and higher average revenue per account, ARPA. In addition to this, we recently announced the appointment of May Daou to the position of Chief Customer Officer, who is accountable to build our customer-first culture, ensuring we serve, maintain and grow with our clients. We maintained disciplined investment in fixed wireless and private 5G and recently launched additional fixed wireless access broadband products to meet growing market demand. As for revenue, macroeconomic pressures continue to extend procurement cycles, which are delaying contract signings. That, combined with our customer segmentation strategy of exiting lower margin and unprofitable customers has impacted revenue in 2025. In parallel, though, we continue to have cost discipline mitigating adjusted EBITDA impact. TeraGo is a critical player in the Canadian communications landscape. We are uniquely positioned by owning 91% of the millimeter wave spectrum, our own national backbone network with 400-plus wireless hubs, covering Canada's 26 million population and passing over 11 million homes. There's really no one else like us. Very recent reports showing Canada's productivity gap with the U.S. continues to steadily widen with relative productivity tumbling by 26% since the turn of the millennium. Canada is at a pivotal moment where productivity needs to dramatically improve, and the most effective approach is to leverage technology. Industry verticals like manufacturing can leverage 5G millimeter wave private networks high bandwidth, performance and ultra-low latency to connect wirelessly to machines, robots through IoT and then feeding all that data into AI, which is very exciting. ISED's recent millimeter wave consultation is proposing to repurpose the lower 26 gigahertz band, which was previously called the 24 gigahertz, for flexible use. A flex use decision would mean that millimeter wave spectrum could be used both for mobile and fixed wireless services as today, it's only for fixed wireless services. Service providers in the U.S. are increasingly leveraging millimeter wave technology to enhance mobile connectivity in densely populated areas such as stadiums, concert arenas and urban centers. The extremely high capacity and ultra-low latency of millimeter wave spectrum makes it ideal for supporting large crowds where conventional mid-band or low-band networks often experience congestion. We are encouraged by the progress ISED made in 2025 5G millimeter wave consultation on the 26 gigahertz and 38 gigahertz bands. With that said, I will turn it over to our VP of Finance. Parveen? Parveen Mithra: Thanks, Dan. Let's move to Slide 4 of our Q4 and fiscal year 2025 financial results presentation for an overview of our KPIs. Our average revenue per customer, or ARPA, in our Connectivity business increased by 4.4% to $1,265 in Q4 2025 compared to $1,212 for the same prior year period. The continued improvement in ARPA levels is driven by favorable shifts in our customer base and product mix. Our churn was 0.7% compared to 0.8% for the same period last year. Customer churn continues to improve, reflecting our ongoing execution of our strategy to enhance customer engagement with a focus on mid-market and large-scale customers as well as implementation of enhanced renewal and retention programs. Now turning to Slide 5 to go through our broader Q4 and fiscal year 2025 financial highlights. Total revenue of Q4 2025 was $6.2 million as compared to $6.57 million for the same prior year period. For the fiscal year 2025, total revenue was $25.36 million, down from $26.16 million in the same prior fiscal year. The decrease was primarily driven by a combination of decreased bookings, delays in installations associated with multi-site deployments and a reduction in onetime revenues. In addition, management continued initiatives to optimize the customer base by discontinuing service for unprofitable accounts. The overall decrease was partially offset by revenue from new customers in the current period. Adjusted EBITDA was $885,000 in Q4 2025 compared to $1.2 million for the same prior year period. For the fiscal year 2025, adjusted EBITDA was $3.79 million compared to $4.02 million in the same prior year fiscal. The decrease reflects the early mentioned revenue pressures, partially offset by disciplined cost management and continued operational efficiencies across the business. Net loss for Q4 2025 was $4.9 million compared to a net loss of $3.2 million in the same prior year period. For the fiscal 2025, net loss was $16.8 million compared to $13.3 million in the same prior year fiscal. The increase in the net loss was primarily driven by higher finance costs associated with the company's increased debt following the financing completed during the year as well as noncash impacts, including the accounting adjustment related to the sale and leaseback transaction. While adjusted EBITDA declined year-over-year, the more moderate decrease to revenue reflects the company's ongoing focus on cost discipline and operational efficiency. Moving now to Slide 6. With respect to the balance sheet, the company ended the fourth quarter of 2025 with $12.6 million in cash and cash equivalents. In fiscal 2025, the company generated $2.9 million in cash from operations as compared to $5.0 million in the same prior year period. With that said, I would like to turn the call back to Dan. Daniel Vucinic: Thanks, Parveen. Our client-centric strategy is enhancing value for our customers, and we remain focused on delivering long-term value for our shareholders. That wraps up the prepared remarks for us today, and we can now open up the call for questions. Operator, back to you. Operator: [Operator Instructions] And our first question will come from David McFadgen from Cormark. David McFadgen: So a couple of questions. So when you look at the ARPA is definitely trending in the right direction, churn is trending in the right direction. But yet the revenue is down. I know you guys have been churning off some unprofitable accounts. So I was just kind of wondering, do you have an idea of what quarter you think you might cycle through all of this and then revenue would be on an upward trajectory? Daniel Vucinic: Yes, it's a great question. Thank you, David. So yes, we did have lower bookings, partly because of the macroeconomics that we talked about. And as you mentioned, the unprofitable customers. We also -- since we are also focusing on larger multi-site customers, some of those larger multi-site customers were taking longer to install mostly because, as you can imagine, different sites have different contract end dates with their incumbent carrier. So we have to kind of wait until those contracts are near expiration before installing. And then there's some onetime revenue impact in there. But going forward, we are seeing momentum in sales funnel, and we are seeing more clients engaging with us. But it does take a little bit of time to not only get those bookings and install that revenue to really start billing. So by the time you kind of put those two things together, to answer your question more directly, you probably see more of a potential revenue increase towards later this year. David McFadgen: Okay. And then I was wondering if you could give us an update on sort of the timing about when ISED is actually going to finally make a decision on whether the 24 gig spectrum will be reclassified for mobile use. Daniel Vucinic: Yes. So as you're aware, ISED did put out the consultation in March and had remarks returned by the end of June. And part of their consultation is proposing exactly what you said, our 24 gigahertz and 38 gigahertz to be deemed for flexible use. I know that they are working diligently on the decision. Unofficially, they can't say exactly when that decision is going to come out, but we're sort of predicting unofficially, of course, that one year from when the consultation fully closed in June of last year brings it to kind of summer of this year. So we're cautiously optimistic that hopefully it comes out around this time or at least within this year. We do note that the Industry Minister is quite busy in today's environment. But again, we're optimistic that ISED will launch the decision this year and then the subsequent auction rules and timing as part of that decision. Operator: At this time, this concludes our question-and-answer session. I'd now like to turn the call back over to Mr. Vucinic for closing remarks. Daniel Vucinic: Thanks again, everyone, for joining our call today. I'd like to thank our customers and shareholders who continue to support the company and a huge thank you to the employees at TeraGo, who continue to do an outstanding job. We look forward to providing an update and progress on our next quarterly earnings call. Operator? Operator: Thank you for joining us today for TeraGo's Fourth Quarter 2025 and Annual 2025 Earnings Call. You may now disconnect.
Operator: Ladies and gentlemen, thank you for standing by, and welcome to Fermi America's Earnings Conference Call. Today's call will be conducted by Rodrigo Acuna, Fermi America's Director of Investor Relations. Before I turn the call over to Mr. Acuna, I'd like to read the company's abbreviated safe harbor statements. I'd like to remind you that statements made in this conference call concerning future revenues, results from operations, financial positions, markets, economic conditions, product releases, partnerships and any other statements that may be construed as predictions of future performance or events are forward-looking statements, which may involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by such statements. Any non-GAAP measures that may be discussed on the call are supplemental to GAAP results and are intended to provide additional perspective on the company's ongoing operations. With that said, Mr. Acuna, the floor is yours. Rodrigo Acuna: Thank you, operator, and good morning, everyone. Welcome to Fermi America's Fourth Quarter and Full Year 2025 Earnings Call. Joining me today are Toby Neugebauer, our Co-Founder and CEO; and Miles Everson, our CFO. Before we begin, I want to remind you that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. For a detailed discussion of these risks, please refer to our annual report on Form 10-K for the fiscal year ended December 31, 2025, which will be filed with the SEC later today. Today's call will be structured in 2 parts. First, Toby and Miles will walk you through an operational update on Project Matador. Then Miles will cover our financial results. We will open it for questions after that. And with that, I'll hand it over to Toby. Toby Neugebauer: Good morning. Thank you for taking the time to join us. This past Saturday, we had our Board meeting where we reviewed all of the accomplishments of the team over the past 100 days. And it's the first time in 30 years of business that I witnessed multiple rounds of applause. In my opinion, the response to the team's accomplishments were well deserved. Obviously, Fermi heard loud and clear from the market, go get a tenant. Unfortunately, getting the tenant is the easy part. As our shareholders, what you need Fermi to do is to earn the trust of investment-grade counterparties and the investors that provide the financing to fund multibillion dollars per gigawatt construction projects. That requires excellence from engineering to accounting. At Fermi, we're creating a private community powered by a private grid to be the leader in powering artificial intelligence that will shape tomorrow. But it all starts and ends with our tenants trusting us with their business, but just as importantly, their balance sheet to execute on the enormous undertaking in an environment where many are failing. At Fermi, we believe the best way to earn this trust is to do, to execute. I invite and almost plead with you all to come to the site. When tenants come to our site, they are blown away with the scale and the speed of which we are executing, 450 million cubic feet of gas pipeline in, 10 million gallons of water pipeline in, grid connect in, substation for an 800-megawatt, 60% to 70% completed, foundations for our gensets either completed or on the verge of completions. But what really turned our shoppers into buyers was the air permit. When we got the air permit is when the C-suites of our customers got very, very serious about buying. As you know now, we have the 6 gigawatt air permit. On Friday, we filed for an additional 5, which we qualify for and that I have a high expectation for us executing. But first, I just want you all to understand the expectation at Fermi is tenants. We need multiple tenants to maximize the use of our power gensets. I think you have to have multiple tenants because we need diversity of demand to achieve the proper efficiency of what we're creating with this private grid. Second, the Board is very concerned about disclosure that in any way impacts the negotiations on transactions that are multiparty and involve tens of billions of dollars. So while we are signing new LOIs, we are in the mode of coffee as for closers. We are not serving coffee until we have a complete close. It's clear that there have been issues with the stock. And as many of my friends and family and all of you all entrusted your capital and being a steward for your capital, I can't overstate how seriously I take it. I also can't be too focused on the day-to-day fluctuations. We are building a consequential company to solve a critical need for our customers to protect consumers and to serve our country. I'm now going to hand it off to Miles Everson, our Chief Financial Officer. Miles Everson: Thanks, Toby. This is our first Form 10-K as a public company, covering the period from our inception on January 10, 2025, through December 31, 2025. It's approximately 11.5 months. In that time, we moved from formation to IPO and substantially completed the initial phase of Project Matador. I want to frame the financials the way we manage the business internally. A traditional income statement does not fully capture the economics of this company at this stage. We are pre-revenue and in full-scale construction. While our GAAP net loss is significant, it is overwhelmingly noncash. The more meaningful story is reflected in the balance sheet and cash flow statement, specifically how nearly $570 million of investor capital has been deployed into physical infrastructure at Matador. Let's talk about the balance sheet. As of December 31, 2025, total assets were approximately $1.4 billion. Property, plant and equipment totaled $935 million, nearly all of which is construction in progress as no assets have been yet placed into service. Cash and cash equivalents were $409 million at the end of the year. On the liability side, accounts payable and accrued liabilities were $177 million, reflecting the pace of construction and vendor activity. Total stockholders' equity was $1.1 billion. As of March 2026, we had approximately 630 million common shares outstanding. If we turn our eye to the income statement and operating activities, for the full year, the net loss was $486 million. Importantly, approximately $445 million of that was noncash. General and administrative expenses totaled $178 million, of which $133 million was noncash share-based compensation tied to equity incentive arrangements established at formation and in connection with the IPO. Cash used for G&A was approximately $45 million, including $12 million in personnel costs for a lean team of roughly 35 employees, $22 million in professional services and $11 million in other corporate expenses such as recruiting, travel and marketing. Other expenses net was $312 million was almost entirely noncash. The primary components were $174 million related to charitable contribution of Class B units prior to the IPO, $61 million of fair value losses on Series B convertible notes $46 million of losses on embedded derivatives associated with preferred unit financing; and finally, $24 million related to preferred unit issuances. From a cash perspective, operating cash use for the year was $34 million. That represents our true operating cash burn while executing formation, completing the IPO, securing a 99-year ground lease, building the organization and advancing Phase 0 construction, we view this as strong demonstration of capital discipline. When we look at investing activities, which is the core of our financial story and the deployment of our investors' capital, what we see is net cash used in these activities was $570 million, with virtually all of that invested directly into property, plant and equipment at Project Matador and recorded as construction in progress. More than half of this capital was deployed to natural gas power generation, including turbine procurement across Siemens F-Class and SGT-800s as well as GE6B fleets, along with mobile generation and balance of plant equipment. The remainder was deployed across data center infrastructure, substation and electrical interconnection, general construction, land and water development and early-stage nuclear predevelopment. Now let's look at our financing activities. Cash provided by financing activities totaled approximately $1 billion. This included $746 million of net proceeds from our IPO, $108 million of preferred units, $100 million from a Macquarie term loan, $76 million from Series A convertible notes and $26 million from seed convertible notes. Subsequent to year-end, we executed 3 equipment financing facilities, a $500 million MUFG nonrecourse turbine warehouse to support Siemens F-Class procurement, which also fully refinanced a Macquarie term loan and a $120 million facility with Keystone National Group expandable to $220 million for high-voltage equipment, including transformers and switchgear. And finally, the third one this week for $165 million with Yellowstone to finance additional Siemens SGT-800s. Those facilities, combined with our existing cash, give us the liquidity to satisfy our financial obligations for at least 12 months, but we are being deliberate about what comes next. The next phase of capital deployment at Project Matador will be timed to 2 milestones: First, the execution of a definitive tenant agreement; and second, the closing of project financing. Those are the gates. Until both are in place, we will not commit significant capital to the next phase of construction. That is how we deliver shareholder value. We are advancing both work streams in parallel. On the tenant side, we have potential tenants competing for initial power. We are in active negotiations with multiple counterparties. But as of today, we've not executed a definitive lease agreement. Tenant revenues are expected to commence in 2027, but even when they do, they will not be sufficient to fund our full operating capital requirements until Matador is built out and operating at scale. On the financing side, we are in active discussions with multiple lenders and progressing technical diligence now so that we are positioned to move quickly once definitive lease agreements are executed. The project level financing is underwritten to the future cash flows that a tenant commitment unlocks. We expect both Phase 0 and Phase 1 of Project Matador will exceed $3 billion in total aggregate capital deployment. The path forward depends on our ability to execute tenant leases, raise project level debt and bring in strategic equity where necessary. We believe this is achievable. However, these financings are not certain to occur. If capital is not available in the amounts, timing or terms we need, we could be forced to delay investments, amend purchase commitments or potentially surrender collateral to preserve liquidity. We're telling you that directly because it's the reality of building a multibillion-dollar infrastructure platform from a standing start. And because we believe investors deserve to hear it, not just read it in a risk factor. The bottom line, we have the liquidity to meet our obligations. We are being strategic in how and when we deploy capital. The next phase of capital deployment at Project Matador will be sequenced with the execution of definitive tenant agreements and the related project financing that follows. There is more work to do, and we are doing it every day. I want to touch on the REIT election. As we've previously disclosed, we intend to elect REIT status for U.S. federal income tax purposes beginning with our short taxable year ended December 31, 2025. We believe this structure aligns well with the long-duration infrastructure-oriented real estate assets we are developing. Given the level of expected noncash depreciation, we do not anticipate generating material REIT taxable income in the near term. And therefore, we do not expect to pay dividends until such time as taxable income requires it. Finally, I want to highlight for those pre-IPO investors that were subject to a lockup agreement that lockup agreement expires today. Thanks. Rodrigo Acuna: Operator, we're ready for questions. Operator: Our first question is coming from Paul Golding with Macquarie. Paul Golding: Congrats on all the progress on the site. I wanted to ask 2 near-term questions. One being what the key discussion points are with prospective tenants that are being negotiated as you try to work to a definitive agreement. And secondly, more specifically on the near-term energization milestones. As you look to the SGT-800 frames that you've received in Houston, now that you have the equipment on hand, how is the time line coming together for deployment of those assets and how that might relate to your negotiations with prospects? Toby Neugebauer: Thanks, Paul. The #1 issue, the #2 issue and the #3 issue with our tenants is they want all of our power, and they want it all forever. But for our model to work, we need to have multiple tenants so that you deal with the differences in loads. So that really is the issue. And so from -- when they get out there to the site, they're blown away by the site and they realize this is a place you can generate a significant amount of power, and they want it all. In terms of the SGT-800s, we've had quite a bit of luck. So when -- and I'm going to come back to tenant. The units came, as you're aware of, to Houston. We kept them in a free trade zone in hoping maybe we could get a break while we were waiting for our environmental permit. And literally, the second, the Supreme Court had a ruling on the tariffs. We checked them into the country. We saved ourselves probably $27 million to $30 million. And we make -- I'll have them put the pictures. You can see the SGT-800 foundations are ready to pour. But on the tenant side, because I know that's what everybody is focused on. What we can share is that we're in the contracting phase with multiple new potential tenants. But everyone needs to understand these transactions are complex. They're multiparty. And Macquarie, as you know better than anybody, they involve billions of dollars. Miles Everson: Yes, hey Paul, it's Miles here. I would just add that -- and we've said this all along, the other thing is it's not a tension point, but it's one of our things we're holding firm on is we want investment-grade wraps. That's why Toby earlier referred to the fact that this is really companies saying, are they going to put their balance sheet up? And when we say companies, we're talking about investment-grade companies that wrap these things. So then the second thing I would add is that it's not just what we do and what we control, but the ultimate offtakers also or development partners need to look at this and say, can they get their side of the equation up? In other words, all their MEP and the racks, et cetera. And so we're doing more, I'll say, reverse due diligence than I expected we were going to have to do to make sure that they can have their stuff up in time to take our power because our power is ahead of most people's ability to get the other stuff in place. That has been one of the bigger surprises is if you'd say, bear me in the fall was worried whether, yes, convincing people that we could have the power. We now want to be convinced they have the MEP because we do have the power and we need to put it to work. Paul Golding: Miles, if I could just sneak one more in then on the back of the discussion seeming to be pretty robust around demand. Is pricing -- are you able to give any color on pricing directionally relative to where you expect it to be when you first started considering sort of the financial approach to the first gigawatt of power? Miles Everson: We're at the same. And we'll try to bid for more, but we're definitely ready to say we're at the same. Operator: Our next question is coming from Vikram Malhotra with Mizuho. Vikram Malhotra: Congrats on your full fiscal year. I guess I just want to dig deeper, if you can, on kind of the tenant discussions. And I'm wondering if there are different sticking points for sort of Fermi as a landlord versus your potential tenants and kind of how those sticking points may result in, I guess, delays in signings. I think you cited 12 months in your share -- over the next 12 months. And I just want to get a better understanding on the sticking points from either side. And from a time line perspective, should we think over 12 months? Or could it be sooner? Toby Neugebauer: Again, I know it comes across [indiscernible]. Once they get to the site, it really is they want the power and they're trying to lock in all of our power at a price today because I think our tenants really appreciate the scarcity of the gensets and that the price of energy for them will be increasing. So they are rightfully focused on locking in as much power at today's prices as possible. That really is it. And it's -- like I said, we're in the contracting phase of this process. In terms of providing guidance on the time, the Board, the coaching, I've got a really great -- Fermi has a really great Board [indiscernible] look at it. Their point is we'll -- when we provide guidance on timing or expectations, that changes the dynamics of the negotiations to Fermi's disadvantage. And so the Board was pretty firm with me on Saturday that we're not going to discuss the timing because what we're doing is it changes the dynamics of -- these aren't $1 billion transactions. These are multibillion-dollar transactions, and I just want to keep the dynamics as flat as possible. Vikram Malhotra: Okay. And then just 2 things to clarify. One, the -- I guess, the shareholder letter mentioned sort of term sheets and various agreements. I just want to clarify, one, is there an actual LOI in place with any of these 5, 6, 7 tenants that you're negotiating? Or is that sort of the next step? And number two, if you could just clarify any of the near-term financings like from MUFG. Is there a stipulation in any of these financings that you must have a lease signed by XYZ period? I think our comment on -- that we're comfortable with is signing new LOIs, it will be a normal course of our business, and we won't be commenting on them. Post that, I think it's kind of one of the lessons that we've learned so far is we do not want to change the negotiating dynamics. I'm -- each one of these financings is separate. And I'm sure we've disclosed it. Miles, I just don't want to comment on the... Miles Everson: Yes. We don't have any tenant signing covenants, if you will, Vikram, on our financing arrangements. And the other thing to remember that these financings are nonrecourse to parent which I think is really important when you think of the overall public company. And then the thing that hasn't changed is that we do have an agreement with Texas Tech that will have a tenant by the end of 2026. That remains the same, and we're working collaboratively with them to advance that. So that's probably what's most important right now is to understand that we're still full on, and we feel really good about where we're at, to be candid. Toby Neugebauer: Yes, that's only a 200-megawatt tenant. I don't want to call that -- I don't want to demean it, but that should be [indiscernible]. That's not close to expectation. We look at it this way. We don't have a tenant that wants 200 megawatts. That's not our problem. Vikram Malhotra: They want more. Toby Neugebauer: Yes. If we had to have a call, you only could have a 200-megawatt tenant, we would -- that would be a problem for us. The problem is they want gigawatts. Operator: Our next question is coming from Ryan Gravett with UBS. Ryan Gravett: Miles, you touched on this earlier, but what additional development at the site are you planning at this point before a first tenant lease is signed and you secure project financing? Is there anything you can share in terms of more precise CapEx spending or cash burn that you're expecting this year? Miles Everson: Yes. So we are going to be very diligent about matching our development with the signing of a project financing as well and our tenant leases. The -- but as far as we'll go -- and look, these things change. This is a long-term project, not a 30-day project. But what we'll do is have the site ready to receive our power generation equipment. It's largely there today. There's a little incremental work that needs to be done so that we can place those generation assets into service as soon as we see that we've got tenant agreements to line up with the timing of that installation. Toby Neugebauer: Yes. I think what we were talking about, Fermi become not skeptical, but we definitely want to see that the timing of our development matches the MEP that our tenants can acquire. And if you say, is there a change in how we as a company have viewed it as we've become -- where I would say, last year, we were focused on people being able to do great due diligence on us. We have pivoted and actually made hires. We picked up a really great person from Meta that helps us do diligence on the pace of execution of our potential tenants. Operator: Our next question is coming from Stephen Gengaro with Stifel. Stephen Gengaro: I apologize if there's any noise, I'm in an airport. So when we think about like your tenants need for power and sort of the various tenants and the timing of kind of when their data centers are up and running and when they need power, what's -- like when you're talking to the customers, how far out are they thinking about securing power relative to when the data center becomes fully operational? Toby Neugebauer: First of all, that differs between each tenant. And it's the #1 -- not the #1, but it's in the top 3 diligence items we have or how we prioritize tenants is obviously, are you financeable, i.e., are you investment grade is number one. But the #2 thing is we actually, unlike most companies in the world are sitting on a whole heck of a lot of power generation that we are very anxious to put to work. And so it is -- that is -- there's no one answer to it. But when you think about how we're running the business and prioritizing people that we would contract, that's probably our #2 thing. How fast we're not -- we can have the power because of all the work we did in at the site to date. We can have the power, what we now realize probably faster than some of them can have the MEP. So that becomes how we prioritize who we contract with. Stephen Gengaro: And the follow-up is like -- just kind of going back to the first potential tenant and the negotiations that were terminated or at least maybe terminated but delayed at least, like when did they actually need power? Because I'm just sort of thinking if there's a lack of power, what are they doing for power if they're not doing it with you? Toby Neugebauer: What I look back, and again, I don't believe that I hope that the first tenant is a tenant. So I just want to convey that. When we look at when they need power, it definitely brought to our attention is we have to really make sure that these tenants have the MEP. I think it's a bigger bottleneck than we originally anticipated. Stephen Gengaro: Miles, I mean, you were involved in that... Miles Everson: Yes. Look, so they originally were looking at they would have power that they could deploy and make revenue themselves off of in 2027, okay? But I think there's 2 parts to your overall question, which is when do off-takers need power. And if you look at their planned portfolios, most of them are into '27, '28 where they need to consume the power. However, and this is an important point, -- you can read it in the newspapers. There's other sites that are not capable of delivering on the power that they've committed to these. So we do expect and we've seen some potential reallocations of where they're going to get their power that they thought they already had and they actually don't have. Toby Neugebauer: We are in a special spot because we have a lot of power and the world recognizes it. Operator: Our next question is coming from Nick Amicucci with Evercore ISI. Nicholas Amicucci: Just wanted to touch upon something. So I guess just given kind of multiple new LOIs in process in addition to the original one, I just wanted to kind of get some sense, has there been any kind of potential -- has the potential scope of those tenants increased, meaning like different types of tenants? Or is it still more or less those hyperscalers? Obviously, investment grade, but just kind of trying to see if those horizons broadened a little bit. Toby Neugebauer: I think the only thing that I would say is significant engagement by chip makers, not some directly, not directly, I think they are getting really concerned that they -- those chips are only worth the power behind them. So in terms of scope, that would be the only change I would highlight. Miles? Miles Everson: That's how I would describe it as well. The chip makers are more directly engaged in where is the power going to come from? And frankly, where the whole consumption of their chips going to come from is really what they're focused on. Toby Neugebauer: I think you all are off the markets where that the leading chip makers are now realizing they're getting behind a number of companies. And so that changes the dynamic so it does broaden it. For us, it's -- the key thing is, and you know this as well as anybody, we do need a diversity of load to maximize the efficiency of our gensets. So I think what you're seeing us do is a little more math, not a little more, a lot more math. We are better off with a more diversified load base to maximize the efficiency of this private grid that we're building. Miles Everson: Yes. Nick, the other thing I would just add in terms of market dynamics, what's happening is increasingly on the MEP side, the emergence, if you will, of modular MEP, which if you think of it as a chip maker, what you're really concerned about is speed to token. And so you look through the whole value chain and you say, where do I have places to speed up? There's opportunities to speed up the timing of MEP. And so you see more modular players coming in to help make that happen, which is a huge positive for us because we got the power. Toby Neugebauer: Yes. That is another thing that we've become hyper focused on. And one of the great things that we've had exposure to from the oil and gas business is modularization. And again, in terms of hiring, we are bringing people in that can help us diligence and engage on our clients' supply chain for MEP. That have been a real focus for us the last month. Nicholas Amicucci: Great. And then, Miles, you had mentioned, obviously, today, kind of the locked -- IPO lockup expires and the intention is still to file as a REIT for 2025. Just want to see, are there any specific management sales that either need to occur that we should be on the lookout for to satisfy that status? Miles Everson: Yes. So there's not a management sale necessarily required for the -- at the time of this expiration of the lockup. However, to meet the REIT 550 rules, there will be, what I would say, an orderly sell-down that we're working to make that happen. And then that we have a few months to make that happen. And we're in -- we got an adviser we've retained to help with that. And so I fully expect that, that will be done in an orderly fashion, Nick. But that's been there from day 1. And now is the time that we're focusing on getting that executed. Toby Neugebauer: Obviously, I'm the -- my family is the problem. Today, we own about 38% of the company. What I would hope to achieve, can't promise, that if our family has to sell down, it needs to be to an accretive buyer. And what I mean by that is I want 1 plus 1 on the sell-down to equal 3 or 4. And that's why we've hired an adviser to help us find which acquirer of a block. And frankly, I don't want to sell down hardly anything at all, especially at these levels. But if we're going to do it, I want it to be something that adds something to the brand of Fermi. So that is our goal there. And we did -- I don't know if that we signed it, but we definitely verbally agreed to hire an adviser to run a process that, again, becomes an accretive transaction that you all are all excited about versus a dilutive sell-down of my family's position. Operator: Our next question is coming from Skye Landon with Rothschild & Company. Skye Landon: Coming back to the tenant questions. Clearly, a few months ago, we were talking about kind of one client taking the full first gigawatt. It now seems like you're potentially balancing trying to keep multiple parties happy. So just wondering if that first gigawatt maybe splits into multiple tenants taking smaller kind of megawatt numbers or not or kind of what you see the base case from here? And then secondly, you mentioned that pricing was remaining in the same ballpark as previously, but just wondering if the structure of rental revenues kind of ahead of operational shells is still going to be the same structure as previously or if various different conversations with new potential tenants is potentially changing this? Toby Neugebauer: My strong -- first of all, there's no one that wants less than 200 megawatts. I mean we're trying to talk them down. We'd rather do 5 200-megawatt deals if you ask us when we run our calculations, that is the right -- that's great -- and the problem -- not problem, the opportunity we've got is we've got 2.3 gigawatts with the F-Class units on their way. Our team was in Germany the other day, and they were -- 2 of them were in the loading dock. So hey, our goal is -- I don't think we get away with 3 tenants for the first 2 would be victory, and I think we only get away with 2. But... Miles Everson: Yes. I would say -- Skye, it's Miles. I would just -- I would put it this way. We will likely only do deals 500 plus, and we can do that. So it's allocation -- if we can allocate the initial commitments, right, over that 2-plus gigawatts that Toby referred to. The real question for me in these discussions is -- they all want ROFRs on future quantum of energy. And you got to not just look at the initial allocation, but also how are you allocating the ROFR so that you comply with any ROFR that we will commit to. Toby Neugebauer: And in terms of the pricing, it's the same as we said. I think we're getting more involved in the MEP -- I'm not saying we're getting into MEP business, but we are wanting to make sure we're solving all of our clients' problems. So not a change in strategy, but enhancing the services that we provide to our customer. Operator: Our next question is coming from Eric Whitfield with Texas Capital. Derrick Whitfield: Congrats on your progress to date. With respect to your prospective tenant list, could you -- could you perhaps add color on how this list has evolved since your air permit was finalized? Toby Neugebauer: I didn't hear the last part. I heard airport permit. That's my favorite word. [ I didn't interest at all ]. Derrick Whitfield: Yes. No, just could you speak to how the tenant list has evolved since your air permit has been finalized? Toby Neugebauer: The tenant list didn't change. The engagement changed dramatically. And basically, the best way I can describe it is shoppers became buyers. I mean it is one of the largest air permits ever. I think the largest gas gen project is in Florida. It's only 3.5 gigs. We're at 6. I think, as you all know, we filed for an additional 5. I mean we're looking at being the place where you can have the largest gas generation set on the planet. And I think the C-suites across all of our customers immediately got concerned is, hey, we better get while they're getting is good to use our West Texas freight. Derrick Whitfield: Great. And then for my follow-up, with regard to the emergence of modular MEP development, what is the base unit in general on this modular operations? And to what degree can they accelerate time to power? Toby Neugebauer: I went to the Schlumberger factory in Shreveport, gosh, Fermi. 6 weeks doesn't sound like that long ago, but at Fermi it's 6 weeks, it's 6 years at most companies. But I think it's game changing. And I think it's going to dramatically dramatic -- I don't believe we're going to be talking stick building MEP in a year. I really, really don't. It's just such a transformational way and a much more cost-effective way to build MEP. We're going to plug and play MEP into powered shells. That's what the business is going to go to. I encourage you all, I'm sure to let you go see their factory, and I know there's a couple of other companies. But I mean it took us 1 minute to realize, wow. We're trying to get Schlumberger to build a factory next to us. Operator: Our next question is coming from Joe Brent with Liberum. Joe Brent: Two questions, if I may. Firstly, you talked earlier about cash burn, and I understand there are different scenarios. But can you just give us the parameters of what the cash burn might be in FY '26? And secondly, related to that, I think you've got $885 million of equipment financing facility, which I understand is currently nonrecourse. Could you indicate at what point, if ever, that comes on to the balance sheet? And then related to both those, remind us of the funding structure. Toby Neugebauer: Well, first of all, on the cash burn, I like to tell people that I'm an aggressive personality but a financial [ CISI ]. And I -- we do have a standing call every day at 4:00 Eastern 3:00 Central where we review the cash position on a daily basis on the recourse. And I focus on it pre-tenant, meaning I'm, again, aggressive personality, financial [ CISI ]. Miles, I don't -- I'm not aware that any of it comes on to the balance sheet. Miles Everson: It doesn't come on to the holdco balance sheet. And then on the cash burn, we're running what does it look like cash burn from a pre-tenant signing perspective, and we got plenty of cash from that perspective. And then once we have the tenant, we'll do the project financing. And obviously, at that point, there's plenty of cash to finance the first tenant contract and finish out the deployment and commissioning of the gensets. Operator: Our next question is coming from Rich Anderson with Cantor Fitzgerald. Richard Anderson: So Miles, on the -- early on in the call, you addressed potential for asset relinquishment to preserve cash flow. Can you provide a little bit more color on how that might play out, assets that are sort of on that list? Anything more you can add to that topic? Toby Neugebauer: Yes. Let's be clear, Rich. That is not our intention whatsoever, and we don't see that happening. But when you think through all potential scenarios, right, you say, well, what are the levers I have to pull, that would be one lever if we had to. But right now, we don't have any plans to do it. But it would -- if you had to do it, you would do it with a genset or 2 because there's plenty of demand. I mean we get lots of inbound calls as to whether or not we would move our equipment to somebody else. We have no interest in doing that. I only mentioned it because -- well, and it's only prudent to say what are the levers if you got to pull levers, what do I have? So I would not want anyone to think that, that's on our list of things to do at this juncture given what we see on the tenant front and the timing of everything. But I don't even like talking about it. These gensets are incredibly valuable. And I would auction off my 2 boys first before I would let one of these gensets go. And probably the dumbest thing I've ever done is even before we got the tech lease, my family basically committed to buy those SGT-800s. So I did basically auction off my children's future for that. So it's a worst thing -- like I said, my boys will be auctioned off first, and then we'll look at the gensets. Richard Anderson: Well, that's love. Okay, and then... Toby Neugebauer: Please check where they stand. Richard Anderson: Okay. Second question is on the land lease -- ground lease. What must be in place by this date or that date from a power resource perspective or tenant or whatever it is that satisfies any sort of requirements around maintaining your position? Toby Neugebauer: Is a notice to proceed to begin construction. So we don't have to have anything built, which means we're further ahead. But yes, we don't have to have an actual data center. We have to have a tenant and an agreement with that tenant, and it has to be 200 megawatts. And I'm not going to diminish that. It would be hard to get 200-megawatt deal because no one wants that little of power. Miles Everson: And to be clear, that's by 12/31/26. Toby Neugebauer: Yes. Operator: Our final question today is coming from Andrew Fisher with Berenberg. Andrew Fisher: A few has already been answered, but I just had one follow-up just on the sort of pre-tenant cash or investment requirements. Could you maybe just give a little bit more color of, let's say, the turbines that you already have in your possession where you've already got the foundation being installed. Could you give us a rough idea about what remaining CapEx is needed just to get those installed to sort of get you there ready for the first tenant? Or if you can't give an absolute number, maybe an idea of the sort of percentage of the overall capital cost of those projects? I assume most of the heavy lifting has already been done, but it would just be good to get an idea, please. Toby Neugebauer: Okay. We're working on the actual calculations on the foundations for the F-Class units. Again, 2 of them is a wonderful picture. I hope -- let's put it on the website so people can see the F-Class units. I want to get those foundations installed. The site is cleared, the geotech is done. There are only 1,300 square feet per generator. I don't have the numbers for those. We have those out for bid literally right now. And if you're over here after this call, we're going to be debating how much money those -- the foundation we need to complete is the SGT-800s. And let me be clear, I don't think it should cost more than $10 million. But I would put that one in a source of consternation and debate at Fermi America. I'd like to get those SGT-800s instead of having them sitting in Houston, they need to come home to Amarillo, and it makes no sense to have those class units sitting in an expensive storage facility. I'm really zoned in on the foundations. We've got an additional extension on our deal with Excel that I think is kind of $8 million or $10 million-ish. I think it should cost $4 million. I think you're going to get a theme that the CEO says everything should cost half of what is currently being quoted. Operator: Ladies and gentlemen, this does conclude today's Q&A session and will also conclude today's call. You may disconnect your lines at this time, and we thank you for your participation.
Operator: Hello, and thank you for participating in today's conference call to discuss zSpace's Financial Results for the Fourth Quarter and Full Year Ended December 31, 2025. Joining us today are zSpace Chief Executive Officer, Paul Kellenberger; Chief Financial Officer, Erick DeOliveira; and Greg Robles from Investor Relations. Following their remarks, we'll open the call for analyst questions. Before we go further, I would like to turn the call over to Mr. Robles as he reads the company's safe harbor statement. Greg, please go ahead. Greg Robles: Thanks, operator. Good afternoon, and thank you for joining our conference call to discuss our Fourth Quarter and Full Year 2025 Financial Results. Before we begin, I'd like to remind everyone that certain statements made on this call may be considered forward-looking statements. These statements are based on our current expectations and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially. Additionally, we may discuss certain key business metrics, which are non-GAAP financial measures. A description of these non-GAAP measures and any comparisons to the most directly comparable GAAP measures can be found in our earnings release on the Investor Relations section of our website. Now I would like to turn the call over to the CEO of zSpace, Paul Kellenberger. Paul? Paul Kellenberger: Thank you, Greg, and good afternoon, everyone. Thank you for joining us for our Fourth Quarter and Full Year 2025 Earnings Call. I'm Paul Kellenberger, CEO of zSpace and with me is Erick DeOliveira, our Chief Financial Officer. We're excited to share zSpace's performance and the progress we've made advancing our strategic priorities. Our fourth quarter results reflect our continued focus on advancing our strategy and controlling what we can control. During the quarter, our software and services revenue continued to comprise over 50% of total revenue, contributing to gross margin expansion of nearly 850 basis points. This performance was driven by strong customer renewals and the continued adoption of our software offerings, which is a key part of our strategy and a testament to our execution and disciplined focus on delivering value to our customers despite ongoing macroeconomic and funding uncertainty. As we formally announced in late Q4 2025, we made structural changes in the business to align to the macro headwinds in the business we saw throughout 2025. We continue to look for ways to improve our business, both top line and bottom line as we get close to finalizing Q1. In addition, in January and more recently, we have announced additional capital via Planet One and [ 3i ] as well as announcing last week the additional restructuring of our [ Itria and PISA ] debt. During the quarter, we continued to advance our strategy by expanding both the capabilities of our platform and the breadth of our customer engagements across K-12, CTE and workforce pathways. We also strengthened our product portfolio with the launch of zStylus One, our next-generation AI-enabled stylist designed to simplify AR deployment and enhance precision across our Inspire and Imagine system. The new zStylus One showcases breakthrough embedded sensors powered by machine learning algorithms that eliminates the need for an external sensor module or embedded tracking in the laptop. Early feedback from customers and partners has been very positive, and we expect this product to support broader adoption of our next-generation platforms as our customers upgrade their hardware. We also achieved meaningful customer wins across several regions and program areas. In Pennsylvania, the Greater Altoona Career & Technology Center strengthened its Dental Assistant Program through the use of zSpace AR/VR technology, leveraging zSpace Inspire 2 and the zSpace Dental Anatomy Application to improve students' understanding of dental structures, support diverse learners and enhance preparation for hands-on clinical skills. In California, Mayfair High School has established a 36-station zSpace Inspire AR/VR laptop lab, where students interact with immersive simulations, applications and guided lessons aligned to CPE and core academic subjects. The lab serves as a central hub where teachers across the campus can bring classes to explore career pathways through interactive 3D experiences, demonstrating how dedicated immersive learning can drive cross-departmental adoption and provide students with early exposure to high-demand career pathways. And more recently, zSpace highlighted the long-standing success of its immersive augmented and virtual reality learning platform across Atlanta Public Schools, or APS, where students have used AR/VR technology since 2020 -- sorry, since 2015 to deepen STEM learning and explore career pathways. Over nearly a decade, Atlanta Public Schools has integrated zSpace immersive learning experiences across elementary, middle and high school classrooms, giving students hands-on opportunities to explore complex science, scientific concepts and practice real-world career skills in safe, simulated environments. Their long-term success underscores the durability of our platform and the impact we can achieve as districts expand diversive learning from early grade through workforce preparation. Finally, our Career Explorer powered by Career Coach AI was formally recognized with Tech & Learning's Best of 2025 Award of Excellence. This recognition reinforces the value our customers are seeing as they adopt immersive career exploration tools that engage students through real-world simulations and align directly to emerging skill trades and technical careers. Collectively, these wins highlight continued demand we see in immersive AI-enabled tools that simplify adoption for educators, deepen engagement for students and help districts strengthen both academic and workforce outcomes. In addition to support our global expansion and ensure accessibility across various educational geographies, we're strategically leveraging artificial intelligence to eliminate language barriers. AI is enabling quick and efficient translation across our platform, including website content and application interfaces and providing tools that can understand and interact in over 50 languages. This initiative not only expands our global reach, but ensures students and educators regardless of their native language, can fully utilize zSpace's award-winning educational experiences, significantly broadening our global reach. In closing, we remain confident in the long-term growth potential of zSpace and our ability to deliver on our vision. That said, we approach 2026 with continued cautious optimism given the ongoing uncertainty and the macro environment in the education market in the U.S. In addition, due to the war in Iran, we are seeing opportunities in the Middle East being delayed. We continue to believe that as the Federal Education Policy continues to take shape and funding mechanisms become more predictable, the longer-term outlook for our business will strengthen. With that, I will turn the call over to Erick to walk you through our financial results in more detail. Erick? Erick DeOliveira: Thank you, Paul. As you consider our results, a reminder that our revenues are substantially recognized upon shipment of laptop units or fulfillment of software license fees. This includes recognizing the full value of multiyear software licenses in the period in which they are fulfilled. Only a small portion of our revenue is rapidly recognized. As a result of this revenue recognition treatment, our financial results can exhibit quarter-to-quarter and year-over-year variability that exaggerates the underlying seasonality of the business. Throughout 2025, we saw dual themes of internal execution success, driving product innovation, quality of revenues and spend management, opposed by external headwinds from tariff policy, freezes and education funding and the longest federal government shutdown in U.S. history to close out the year. Both internal and external themes played familiar roles in our financial performance through the period ending December 31. And now diving into our full year performance. Revenues were $27.9 million, down 27%. As noted throughout the year, software and services revenues outperformed, down only 15% in comparison to total revenues and making up 49% of the revenue portfolio, up from 42% in 2024, a 7 percentage point improvement. This was an important driver of gross margin expansion. As previously discussed, our P&L reflects multiyear software license revenue in period. To help better characterize the run rate health of the business, we offer 2 non-GAAP software operating metrics. As of December 31, 2025, the annualized contract value of renewable software was $9.9 million, down 12% compared with 12 months ago. Also as of December 31, 2025, the net dollar revenue retention of customers with at least $50,000 of ACV was 71% for those customers present as of December 31, 2024. Unfavorable performance on these 2 metrics is attributable to 2 large customers who collectively expanded their zSpace footprint in 2024, but for whom macro factors prevented full renewal of their expanded commitments. Normalizing for these 2 customers, ACV would have been $11.1 million or down 2% and NDRR would have been 88%, pointing to wider stability across the customer base. Bookings for the 12-month period ending December 31 were $26.1 million, down 34% year-over-year. Gross profit was $13.3 million, down 15% against the same period last year. This includes a onetime charge for discontinued software license inventory, which is at once related to our exit of China and also our continued efforts to bring previously resold third-party titles in-house for both acquisition of applications and internal development. Gross profit was also affected by applicable tariffs and duties. 2025 gross margins were 47.6%, up 6.7 percentage points versus 2024. Factors driving improved quality of revenue were sustained throughout the year and highlighted in our quarterly results. Firstly, favorable growth in the mix of software content of our revenues drove 2.5 percentage points of margin. Secondly, product line refreshes in our hardware ecosystem led by the Inspire 2 platform reduced our bill of materials costs. Thirdly, increased first-party zSpace software content, combined with those hardware improvements for a total of 4.2 percentage points of margin, delivering the total 6.7 percentage points of gross margin expansion across the 12-month period. 2025 operating expenses of $28.3 million, excluding stock-based compensation, were up 11%. People-related costs, which make up 66% of 2025 OpEx were up 6% year-over-year, again, excluding stock-based compensation. As a result of corporate restructuring efforts in December 2025, management believes that our current OpEx run rate is closer to $19 million, still excluding stock-based comp, assuming stability of the current external environment. And now for the fourth quarter. Q4 revenues of $4.8 million were down 43% year-over-year, reflecting what amounted to a freeze in both orders and shipments during the U.S. federal government shutdown. For business secured during the effectively truncated quarter, revenue mix trends continue to be in evidence. Software and services represented 57% of total revenues, a 10 percentage point mix shift with significant gross margin implications, with hardware revenues falling below 50% for the second quarter in a row. Bookings for the 3-month period ending December 31 were $3.4 million, down 21% year-over-year. CTE customers drove 56% of bookings value, down from 58% in Q4 '24. Gross profit was $2.4 million and gross margins were 49.1%, up 8.4 percentage points versus Q4 '24. This laps the 6 percentage point margin expansion in that quarter and continues the improvements in profitability we have been delivering. Within the quarter, the 10 percentage point mix shift in revenues was responsible for 2.8 percentage points of margin gain and rate-based factors drove 5.6 percentage points of improvement. Operating expenses of $6.5 million for the quarter, excluding stock-based compensation, were up 9% year-over-year. Our Q4 reported results include $2 million in stock-based compensation expense attributable to grants made as part of our employee equity incentive program. Relative to the 22.8 million shares issued and outstanding at the start of the year, we managed issuance of RSUs to a target burn rate of 6.2% or 1.4 million RSUs, well below our 7% target. As of December 31, 2025, zSpace had approximately $1 million in cash, cash equivalents and restricted cash compared to $4.9 million in cash, cash equivalents and restricted cash as of December 31, 2024. Our path to profitability continues to run through revenue growth via operating leverage, our ongoing expansion of gross margins and tight stewardship of operating expenses. While overall revenues are challenged by headwinds in the U.S. K-12 market, our success in driving more of the revenue portfolio from software is bearing fruit. The gross margin expansions from revenue mix shift into software from additional first-party software and from new hardware product releases are now part of our track record in delivering results. As part of our ongoing attention to operating expenses, we undertook a significant restructuring in December 2025 that resulted in eliminating approximately half the FTE positions of zSpace across all levels and 1/3 of the people costs. We further reduced the size of our Board of Directors from 7 seats to 5 and abolished the executive bonus plan for 2026. Our consideration of these factors was made with the intention of aligning revenues and costs and putting a breakeven EBITDA performance in reach for 2026. Now moving on to our outlook for 2026. Familiar obstacles such as trade and tariff policies remain steadfastly unresolved, although promising developments have materialized. And the macroeconomic picture remains persistently volatile. These external factors present the same challenges to forecasting that we identified last year. Management's approach to 2026 was to consider the scenario in which we see a repeat of 2025's revenue performance and what it would take to weather such an environment. If 2026 presents a second year of top line volume similar to 2025, we believe the cost reductions made in December will allow us to deliver an adjusted EBITDA performance at or close to breakeven. We further believe that the company retains sufficient resources to scale back up to historical revenue highs. And in the event that opportunities for outperformance beyond that should appear, we will consider responsible reinvestment in the business at that time. We do not yet feel strongly enough about our ability to restore guidance on a sustained basis and want to avoid offering guidance in one quarter only to rescind the practice in the subsequent quarter. We will continue to manage the quality and mix of revenues for continued gross margin expansion as we've demonstrated over the past year as well as tight control of operating expenses as these are our 2 best levers for positioning the company to capture upside until our K-12 markets in the U.S. stabilize. Now I will turn the time back to the operator for Q&A. Operator: [Operator Instructions] And our first question comes from the line of Alex Paris with Barrington Research. Alexander Paris: To start off with the macro, maybe 2025 was obviously a tough year for K-12, the industry in general due to perceived funding disruptions, including Department of Education layoffs and inter-agency transfers of responsibilities, not to mention tariffs and the government shutdown. And as I recall, about 10% of your K through 12 STEM revenue comes from federal sources, if I'm not mistaken. So despite what was going on in 2025, most federal dollars came through. I know there was uncertainty, which probably made school districts hesitant to order or renew and things like that, but most of those dollars came through. And the government shutdown is essentially over with the exception of DHS currently. What does the funding outlook look like for 2026? I know you expressed some cautious optimism. And then how has Q1 gone so far? I know a lot of the revenue comes in the last 10 days of the quarter, but maybe talk about January, February. Paul Kellenberger: Sure. Alex, this is Paul here. By the way, about 10% of the funding in K-12 in our market does come from the federal side of things. So you're correct. That being said, particularly in the middle part of last year, Q2, Q3, we saw some very peculiar things. And I can't recall whether we had this conversation previously, but there was one specific state in the middle part of the country that actually sent money back to the federal government because of the uncertainty, and I'll just say their discomfort given all the headwinds and all the stopping and starting of funding. So you're correct with the 10% number. However, was, I would say, the ramifications and implications to our specific buyers, both in the K-12 STEM as well as in Career and Technical Education made them really hesitant and hesitate -- to hesitate to move things forward. So I think that was a big part of the middle of last year, Q2, Q3. Then I think in the fourth quarter, and we had business that in -- towards the end of the year that was impacted by the government shutdown. And maybe it was an excuse, but those facts were pretty -- it was pretty straightforward. That's what we were being told by a number of different school districts. So I know it's sounding like I'm making excuses here, but it was not the year that we wanted by any means, no surprise there. Although I do believe things -- and again, cautious optimism, things are starting to settle. And that's the best answer I can give you kind of looking -- I'll say, looking back at last year and the funding. And then this year, I'll maybe let Erick talk a little bit about the outlook. And here we are, it's March 30. We're not quite done the quarter, but we're pretty close to it and you asked about January, February. Erick DeOliveira: Yes, happy to pick up from there, Paul. What I'd say about the outlook for Q1 firstly requires an understanding that our Q1 is ridiculously back-end loaded, both in terms of bookings and shipments. And some of those on this call will recall Q1 of last year when with only a few days left in the quarter, we ultimately wound up outperforming our guidance by something like 30%. Now that said, we -- earlier in this quarter, the year started out, and we were observing some encouraging year-on-year strength through January and February. In March, the picture has become more mixed in large part because a number of our significant customer opportunities were customers that had previously started their zSpace relationship and are based in the Middle East and are therefore, in the midst of the current conflict there. So it remains an open question even with 48 hours left in the quarter, how much of that volume will actually ship and be accepted to capture revenue in the quarter. What I think I would say is the experience earlier in the year has given us some sense that the market has resumed its willingness to open their wallet, so to speak, and actually take possession and book new zSpace content. But our progress clearly has not been linear for much of the last 12 or 15 months. Alexander Paris: Okay. Understood. And then just a point of clarification, Erick, one of your last comments in the prepared comments, if revenues were roughly equal to what they were in 2025, so say, around $28 million, you're saying that the hope or target is to get close to adjusted EBITDA profitability or breakeven, at least [indiscernible] versus the current consensus of negative $12.5 million for 2026 adjusted EBITDA? Erick DeOliveira: Correct. And the 2 big levers there. So we -- in the absence of being able to forecast in the current environment, we engaged in some scenario planning and said, you know what, there are a lot of factors driving revenue that have proven themselves to be out of management's control. But if we saw a repeat of a $27 million, $28 million year what are the factors in our hands. And to that end, our ability to expand gross margins by approximately 7 percentage points year-on-year and to sustain the underlying business drivers that delivered that margin expansion, coupled with the cost reductions we took in December, we believe, put something close to a breakeven EBITDA performance within reach for 2026. Now obviously, as we move through the year, the revenue performance and the operating leverage we see on that will be the biggest driver. But we feel pretty good around our improvements around quality of revenue that delivered that margin expansion. Again, it all comes back to our ability to retain and renew existing software agreements, our ability to continue delivering hardware improvements that reduce that cost of initial deployment and also to roll out more zSpace-owned software where we just control more of the margin. Alexander Paris: Okay. In the absence of formal guidance, that's pretty helpful and reasonable sort of conversation regarding what 2026 might look like. My last question for now, and I'll get back in the queue is I just wanted to talk a little bit about that strategic investment from Planet One in late January, $3 million convertible preferred. But the really exciting thing there was the potential to expand international sales perhaps through cooperation or a joint venture based on what your press release said. What are you thinking there? And is that a potential opportunity in 2026? Paul Kellenberger: Let me take that, Alex. The answer is we hope so. And the war in Iran just really put everything kind of on the back burner for obvious reasons. Erick alluded -- so the answer is we think so. It's something that we're still pursuing. There are some other opportunities, Erick alluded to in his commentary in the Middle East, even some bigger ones. And we're hoping those come back. Operator: [Operator Instructions]. Our next question is from Rohit Kulkarni with ROTH Capital Partners. Rohit Kulkarni: A couple of questions to kick this off. Can you frame kind of size, scale, scope of these kind of recent announcements in the PR, Greater Altoona, Bellflower Mayfair High School and Atlanta Public School. Just talk about how they came about and how significant do you feel they could be for 2026 just from direct contribution as well as incremental on top of the base of '25. Paul Kellenberger: Yes. Let me take that, Rohit. This is Paul. Every one of those deals was -- I'll put it in the significant category. They're in the 6 figures. They have the potential, Atlanta being a very large school district APS [ length of ] schools, which, as I mentioned, we've been -- they've been our customer for 10 years. And we see some other -- I don't want to jinx us, but we see some other opportunities within that specific district late this year. So all of them, I'll put them in the category of substantial. Greater Altoona was in the CTE segment in a very specific in the dental component of it. I would again say strategic, Mayfair out here, again, a school system here in California that is newer customer. And so we have a combination of both newer customers and existing customers purchasing more. And I'm going to go back to something else. Erick kind of touched on it. I touched on it on my opening remarks. Over 50% of our revenue in the fourth quarter was software and services. And the way we look at the business and the way I look at the business is any time we're over 50% in that category, it's a really good thing. Now by the way, we also had a bunch of other changes we made in the fourth quarter. So that's the best summary I can give you. The other thing that, Rohit, I'm going to reemphasize is the zStylus One, which I mentioned, which is the new -- doesn't require the little device on the side. There's clearly a lower [ bond ] because we have one less device and the implications for it, including how we're using AI in the process. We're super bullish on. We're early in the shipments of it still, but we feel really, really positive about it. Rohit Kulkarni: Okay. Great. I guess you mentioned CTE, Paul. How is the mix today versus previous periods? And is CTE growing as compared to the shrinking on the other side of the business? Maybe comment on that. Paul Kellenberger: Yes. So CTE is more than 50%. I think the exact number is 56% versus 48%, Erick, in the previous year. Sorry? Yes. So it continues to grow. And some of that, Rohit, had to do with the funding. And again, Alex was asking the questions about the funding. Perkins is a big part of money in the CTE world that is a federal funding that has continued to expand and it's an annuity. But the CTE side of the business -- and by the way, along with the applications that we own and control has continued to grow for us. Rohit Kulkarni: Okay. Great. And in terms of -- I think just drawing out what the previous question was around kind of run rate OpEx and kind of run rate revenues that may lead us to a point not too far out in the future that you could have breakeven operating cash flows or even kind of positive EBITDA. Is that something that you feel reasonable to expect in '26, assuming modest shrinkage in revenues, but pretty significant drop in your expenses? Erick DeOliveira: Rohit, this is Erick. I'll take that one. That's our current outlook through the combination of continued margin expansion and the expense cuts we took in December. We think that our run rate OpEx is closer to $19 million, again, excluding stock-based compensation and with continued margin gains and a top line that looks relatively like last year, that could put a breakeven adjusted EBITDA performance in front of us. Operator: And at this time, this concludes our question-and-answer session. I would like to turn the call back to Mr. Kellenberger for closing remarks. Paul Kellenberger: Thank you, Carmen. We'd like to thank everyone for listening into today's call, and we look forward to speaking with you when we report our first quarter 2026 results. Thanks again for joining us. Operator: And ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Steven Brown: Hello, everyone. Thank you for joining. I hope everyone is doing well and looking forward to a fantastic presentation today. I'm joined here by our esteemed CFO, Matt Boyle, and we're going to walk you through our full year results. We do have a longer presentation than we've had in the past. And so we won't have time, obviously, to cover every slide. So you're going to find I'm going to kind of do an abbreviated presentation today, and the full presentation is available -- will be available on our website. But just for the sake of hitting the key points, I am going to move around a bit for the sake of speed. So I'm going to start off actually on Page 8 because I think you all know who we are, what we do, what markets we serve. You all have heard that plenty of times and are very familiar with the business overall. But I want to point out that we have a history of sort of evolution. That's really what the whole company is about. And as we'll talk about more later, we're in that same position today. And we're kind of built for that. We're geared for change, all the way back from the very beginning when Leonard Sim had the idea to start a virtual queuing product because he got tired of waiting in line at Universal Studios in Florida from the fact that we started out with accesso Passport as a SaaS product when people thought we were crazy, that no one would rely on the Internet for their ticketing. Then we pioneered online ticketing. We were the first to market with mobile ticketing for theme parks and attractions. And so we're always evolving, always inventing. And while we're doing that with the products that we have, we've also been expanding our verticals and our capabilities with a whole range of acquisitions in what is now built, I would call it a global powerhouse across the attractions industry in terms of technology. So we're very familiar with change. And as we all know, the market is quite disrupted right now, SaaS Mageddon, if you will. And we'll talk more about that as we go through in terms of where our -- where we think our position is in that space. So I'm going to -- obviously, Matt will talk about the numbers. You can see the headlines here on Slide 10. Top line revenue, $155 million, cash EBITDA, $23 million. We have lots of cash and a great balance sheet at the end of the year and some great progress on our EPS and Matt will get into all this in more detail. But overall, a solid year. Obviously, we'd like to have more growth. But in a year that was a bit challenging for a variety of factors, we held our own quite well, and I am pleased to be end with the result given all the overall circumstances. So one of the things we've seen in our, I guess, our market updates is just the environment and how we responded to that. And we're a pretty nimble company. If you were around during COVID, you saw that in full play. And we adjust and not only in our technology, but also in how we operate our business. So we had some uneven demand across the geographies. There were some travel disruptions, people not wanting to travel to certain regions for social or political reasons. We had some summer softness with operators. And I think the operators are always struggling to respond. Is it this happening for a week? Or is it a trend? Should we change our pricing? Should we change our promotions? And then also, we were dealing with the overall backdrop in terms of our trading, I guess, you could say, our share price with the sort of indiscriminate, as someone called it, indiscriminate software sell-off despite the fact that we feel our position related to AI is actually very strong. So what we've done is our commercial team has done very well. You can see our wins. We've had a great focus on cost discipline. We've lowered our headcount from just to about 600 now, 605 or so where we stand today and focusing a lot on productivity and efficiency, some of that powered by AI, some of that powered by just rethinking how we're structured. Our margin, our transactional revenue was flat. It's important to note here. We didn't go backwards. And I think in hindsight, some of the conversations or updates we had about transactional revenue softness could have implied that we were going backwards. And really, what I meant was that we weren't seeing the growth that we had hoped for. So I just wanted to point that out because I think some translated the fact that, although, market was soft and transactional revenue went backwards for access, but that's not the case. Actually, it held flat even in a difficult market backdrop. And importantly, as we announced today, we laid out and have facilitated a structured transition plan between myself and Lee, having hired him at the beginning of last year. He is now ready to take the helm on May 1. So a lot of information here on the slide on Slide 12. A fantastic new Chief Commercial Officer in place. We've really refreshed our go-to-market approach. We've thought about our look and feel. You may notice today, our presentation looks a little different than it has in the past. We've gone to a sort of crisper look, more modern look. We have a fully a brand-new website, which actually is quite a project with all the products and markets that we serve. And as a result, our pipeline looks really good. It's continuing to strengthen as the year has progressed. And the quality of our wins has improved. We're seeing more customers from our legacy product moving into SaaS solutions or new customers coming in looking for SaaS product and also continuing to expand our relationships with existing clients. So overall, our win rate has dramatically improved. The new business that we signed compared to 2024 was roughly double in terms of annual value. So we're really happy with the traction we're seeing on the commercial side and with the new focus that our team has. 13 and 14 really are a bit of just an update on how things are going with both accesso Freedom and accesso Paradox, 2 acquisitions that we've made in recent years. And just highlighting the fact that we've thought about these acquisitions and these different products very carefully. And sometimes it takes a little patience, but our strategy is intact, and it's really paying off. We're seeing great momentum with Freedom. We now have 63 venues that are contracted and continuing to grow. That's more than double than we had in the prior year. And it's proving to be a really important part as prospects consider their overall operation and the benefit accesso can bring to them by having that integrated platform between ticketing, food, retail and all kinds of things. Same thing with ski, accesso Paradox, which is really an acquisition we made is to give us a path forward for our clients that are on Siriusware, which is an installed application. Customers looking to move to SaaS needed an alternative is particularly in the ski market. And accesso Paradox is doing exactly that. So we're seeing great move to -- from the clients in that Siriusware product moving over to our transactional model or SaaS model. And overall, just in terms of ski, remember, we have 160-plus resorts as clients that's double the nearest competitor in this sector. So we are very strong in ski and continue to grow. And I believe it's a very important vertical for us to continue to stay focused on and to continue to innovate with. So I want to take a moment on this one because if you're on Slide 15, about virtual queuing. And I think this is really important because context does matter. And as the headline says, one decision is not a verdict on the product. And we sort of had a lot of focus around this, a lot of chatter around what's going on with accesso and queuing. And I think it's important to point out that we have 25 years of fine-tuning a really robust application that works at scale and handles a wide range of scenarios. And as I called out on the slide, this is not something you can vide code over the weekend. And it's not just about the base idea of, okay, who's next in the queue, what's happening? It's all the multitude of scenarios that go on in an environment, when you have 10,000, 15,000, 20,000, 30,000, 40,000 people in a park and 15, 20 attractions, all the different variables that are going on, helping guests with accessibility, accessibility needs, the whole range. And importantly, we do still have IP. I know that our core patent expired some years ago, but we've continued to file patents for specific functionality that is very critical to how the application works when you're running at scale. Again, someone can make a very simple [ lo-Q ] type product. But our application and queuing is much more robust and much more significant than that. And we had a successful defense of one of those patents in 2025 that we're very happy about. So I just want folks to think about this product as something that's obviously the foundation of the business. but it's not a legacy product. It's not a tired product. It is a fantastic product that not only proves itself functionally, but also from a revenue perspective. And as we noted midyear last year, one of the major customers indicated they were not going to continue using the product. Near the end of the year, they changed their mind on that. They've extended through this year and actually have a pilot going at 2 additional locations and very, very pleased with those initial results from those pilots. So I just wanted to sort of put a pin in this because I think it's super important that we realize that LoQueue is a very great product, and it will still be a centerpiece for us from a product strategy. A couple of pages here, sort of 16 and 17. I won't go through those in detail. I think it goes without saying that every organization is looking at AI enablement in terms of how they work. We are certainly do that -- certainly doing that across every single area, including myself. Much of this presentation has been designed by AI as a matter of fact. And we are looking at everything from engineering, product design, sales and marketing, operations, so many tasks that can be expedited with the use of AI tooling, all in different scenarios. And we are seeing some great efficiencies coming from that, improved work product, improved time to market with everything across the board, whether it's an application, whether it's meeting notes, whether it's marketing content, we are -- we have embraced AI across the organization. And it's also allowing us to find some efficiencies, but also to be a better business to operate more efficiently and more effectively and be faster at bringing things to market. So we're going to talk more about AI in a minute as a product and how that as a strategy. But I think it kind of goes without saying that we're embracing AI in the organization. We're a technology company for goodness sake. And it's at the core of what we do. I have multiple AI applications on my own desktop. And I can only imagine how many our developers and our operations teams are using in their work every day. And so it's important just to call that out. I don't think it's something that you need to hear about every presentation because it's sort of, as I said, goes without saying that this would be a fundamental part of how we operate. So with that in mind, I want to save as much time as possible for the strategic inflections that is coming up later in the presentation. But I'm going to turn it over now to Matt to cover the financial highlights for you all. Matthew Boyle: Thank you, Steve. So key financial highlights on this page to call out. So you see at the top there is cash EBITDA was $23 million, so plus 0.8% up on the prior year, a margin of 14.8%, again, consistent with the close to 15% that we had in the prior year. So cash EBITDA for those that aren't familiar with it, is our principal operating metric. It is an adjusted EBITDA number less capitalized development spend. So our revenue was GBP 155.1 million. That was plus 1.8% up on the prior year on a reported basis. On a like-for-like basis, it was up just under 4%. So there were a few like-for-like adjustments to strip out there being the disposal of a Brazilian subsidiary that we made in January 2025 and a couple of -- well, a B2C business that we disposed of in 2024 and a onetime hardware sale that we also had in 2024. So stripping those out, we were just shy of 4% growth on a like-for-like basis. You'll see gross margin there, up slightly on the prior year, up to 78.5%, up from 78.1% in the prior year. That really is just due to the margin mix or the revenue mix -- so the hardware is typically a lower margin, and we didn't have it in 2025, so up slightly. You'll see there a notable increase in statutory profit before tax, which is very strong as well as a notable increase in adjusted earnings per share. And again, a very strong -- Steve mentioned it, strong balance sheet, so GBP 30.5 million of cash at the year-end. And that is after significant share repurchase activity that we've had over the 15 months -- past 15 months that I'll cover in a later slide. On the right-hand side, you'll see a mix of our revenue on a -- by type basis. So 84.6% is repeatable. And just as a reminder, the majority of our revenue is about just shy of 3/4 is coming from transactional arrangements, whether that's on a revenue share basis or a cents per transaction basis. That's the major component of repeatable revenue. And then we also have some support and maintenance agreements as well over term periods. Next slide, please, Steve. And then this slide, again, for those of you that have followed us for a while now, this is our breakdown of that revenue by type into the more granular buckets that we have. So at the top there, you'll see repeat the breakdown of repeatable revenue. So within transactional revenue itself, you've got virtual queuing. So we highlighted that had quite a choppy peak seasonal period in that summer. So we were down 6% compared to the prior year, but relatively flat ticketing and e-commerce. So flat attendances equates to flat ticketing revenue, but resilient despite that. And then offsetting that, you've got growth in distribution of 4.5%. So we mentioned this at the half year, where there are flatter attendances, operators will tend to lean on those distribution channels for promotions and discounting to fill the gaps that they have, and you see that reflected in the numbers there, sort of the 4.5% increase. So there are other components contributing to the repeatable bucket are recurring license fees that were up 30.8% and maintenance and support agreements are both up 16.8% and they're being driven really by the new Horizon venues that we've had going live throughout the back end of '24 and throughout '25 and predominantly in the Middle East, which operates a license and support model and less so of a transactional model. And then beneath that, you'll see the contributors to our non-repeatable bucket. Again, I think this is really highlighting the resilience of our business model. So whether there is flatness or less lower growth in transactional, you do have this service-based nonrepeatable business that we can turn to. So you'll see increases there in implementation change request and billable services and the professional services line that we've broken out on a more granular level this year to make it easier to follow. So the increases in implementation and change request really customers wanting advanced change requests or advanced road map items to align with their own projects or desires that they may have. And then we have a very willing and able professional services team that perform adhoc customer requests. And typically it fluctuates year-over-year, but really is another boat another string to our bow. And then the final item to call out there is the hardware line. So again, touched on it earlier, you'll see a drop of about $1 million, and that's really because of the onetime accesso Prism sale that we had in 2024 that we wouldn't expect to repeat in '25 or going forward. Next slide, please, Steve. And then this is the income statement. So a couple of call-outs on this slide. Really, we've covered revenue and cost of goods sold is the admin expenses. So flat there, which really goes to show the robust cost control we've had throughout the period. So reported admin expenses up 0.2% and the underlying admin expenses up to GBP 99.5 million, which is up 2.5%. The underlying expenses we have majority being a SaaS-based business, mostly payroll and headcount-related costs. And you'll see on Steve's earlier slide that we ended 2024 on 682 heads. We ended 2025 on 655 heads, and we're now down at 600 -- roughly around 605 heads, really having robust cost discipline and making sure that we're rightsizing the cost base to reflect the revenues that we have. And then the final piece to call out here is the net finance expense, I will call it. So that is a net number of GBP 0.1 million expense for the current year, which is significantly lower than the prior year. And then that's reflective really of the fact that we had lower drawings throughout the year. So we were drawn roughly about GBP 10 million average on the facility throughout the period compared to double that in 2024 as well as having some positive FX revaluations. We have a USD facility set in a GBP entity, so we benefit from the positive gains in that facility, and that's reflected in the finance income line. The next slide, so cash EBITDA. So this is bridging from the previous slide where you saw operating profit to how we get to our cash EBITDA numbers and the adjustments that we're making. You see the pretty limited exceptional expenditure during the year. Really, that's only related to our acquisition -- the disposal, sorry, of the Brazilian subsidiary. And then you'll see the amortization line dropping down quite dramatically during the year. That's really assets becoming fully amortized. So there's a 20% -- 20% drop in the number there year-over-year, assets becoming fully amortized and the cost dropping off. You'll see the share-based payments there dropped to about 14.9%. So we run equity programs for all of our staff, but the vesting assumptions changed slightly during the year, which is reflected in the cost decrease that we have there. And then the last one to call out on this slide is the capitalized development spend. Again, we're very prudent on this number. So you'll see a slight increase from GBP 2.6 million to GBP 3.1 billion, but that's still only representing about 2% of revenue year-over-year. And that's all really to call out on that slide. And then this slide is showing cash flow. So I think the thing to call out here really is the strong, stable, sticky nature of our cash flow. So you can see year-over-year, very, very consistent and strong free cash flow generation. So you can see the top there, GBP 1.8 million up on cash flow before working capital movements. And just to touch on those working capital movements, you'll see a large swing there from negative GBP 11 million almost in the prior year to plus GBP 6 million in the current year. So that really reflects the seasonality, particularly of our distribution business, depending -- it has a seasonal peak in December and depending on whether it's collected at the cutoff of December or whether it hasn't, it makes a significant difference on a December basis throughout a 3- to 5-year average, you'll see it normalizes quite dramatically. So that's driving that movement. Back to previous slide, Steve. Yes, sorry. And then the other things to call out on the cash flow are -- you'll see there the GBP 4 million acquisition, just over GBP 4 million acquisition of intangible assets. So that's the OneRisk intellectual property that we purchased in the midyear. And then you've got GBP 15.9 million on share buybacks and a further GBP 4.1 million on shares for our Employee Benefit Trust. So we ended the year on GBP 30.5 million, which is gross cash of GBP 41.4 million and borrowings of GBP 10.9 million. So again, very, very strong healthy balance sheet that we've got. Just touching on the outlook before we move on. So we have made movements, I think, it's fair to say, since the year-end. So we've had the tender offer of GBP 20 million as well as the acquisition. We expect to end the half year, so H1 in a relatively very modest net debt position, which is consistent with our normal seasonal cash profile. And then we collect cash significantly through H2, and we'll end the year -- end 2026 back in a very strong net cash position. And then final slide for me, really touching on capital allocation that we mentioned at our interim, but bringing to the fore again here. So we've operated quite a number of schemes over the past 12 months really at this point. So first buyback started in April 2025. So we purchased 1.7 million shares for just shy of $11 million a further program extended that for another 1.2 million shares for $5.3 million back in October through January '26. And then on the 18th of March, we completed a tender offer that you will all have seen for $20 million returning or purchasing and canceling 4.8 million shares and just shy of a total of 20% of the shares in issue being canceled over that period and a total of $36 million return to shareholders. So we still hold a very strong balance sheet post all of the movement post year-end, which gives us leverage to continue to providing shareholders -- shareholder returns through meaningful capital allocation in the period going forward. And that's everything for me. Back over to you, Steve. Steven Brown: Sorry, Matt, I'll practice your slide turning better than next time. All right. So on to some very exciting things. And there's a lot to unpack here, and we've tried to make sure we have plenty of time for this. And then obviously, we have a lot of time for questions at the end as well for those of you that have questions. We spent a lot of time thinking about AI, obviously, not only internally, but also what it means from a product perspective. And importantly, what are our customers looking for. But I want to start with just kind of highlighting what the overall AI space looks like. And as I said before, there's been a sort of indiscriminate sell-off of software companies. And it feels like everyone sort of said, run from software, and we'll figure it out later in terms of which ones are viable, which ones are at risk. And we obviously have an opinion about where we sit in that, based upon the facts of AI and the different categories of businesses that are at risk. And obviously, on the left-hand side, you see companies mainly that have per seat pricing. That's the big underlying issue. Think about all the applications we use in our daily lives, our e-mail, things like our word editing tools, all those applications that we use every day are seat licenses. And so companies that are running on seat licenses are looking obviously at a declining workforce, lower seats. And not only that has a onetime effect, but a continued drip of lower seat licenses being needed. And so those sort of are the big core types of products that are in the highest risk category. In the middle, you've got some companies that are systems of record. They have a lot of integrations, but the data is sticky, but AI really just become an interface layer, sort of translation layer. And then on the right-hand side, you see categories 4 and 5, and I think we sort of sit in the range of those depending upon the product that we're talking about. But vertical systems of record, deep domain expertise, which is certainly accesso, proprietary data, proprietary logic, obviously, there's a lot of that in our business, transactional pricing, not seat license pricing. And AI -- the jump -- the business in these categories really AI enhances them versus replaces them. And we clearly believe that AI enhances everything we do. As one headline we have, it says it makes us more valuable, not more vulnerable. And I believe that is absolutely true. And you can sort of digest this and think about, okay, where does accesso sit, but I do believe we've been caught in a wave of the sort of everyone running from software -- and when folks start peeling back and really categorizing the companies in the space, they're going to realize that, well, accesso was in a really strong position and not only in a strong position today, but also where we're going is going to further secure that position. And so I just kind of thought this slide was really helpful in terms of putting some context around that because we get a lot of questions about, oh, what's going to happen to accesso with AI. And I think it's going to make us a lot better. So as I said before, we have embedded customer data. Our systems are mission-critical. They're not a nice-to-have system. There's not an easy alternative to maybe work processing like you may have today or e-mail systems. We have 20-plus, probably almost 30 years of accumulated tech logic. And that's hard to come by in our space and not just across ticketing, but across a range of solutions that our operators are using. We have a whole ecosystem. We're not just one sort of a one-trick pony. You can come to us whether you need 1 solution, 2 solutions or 9 solutions. And we can help you out with that in an integrated and coordinated manner, and that's something that absolutely no one else has. And importantly, just our structure of our transaction-based revenue. And we've certainly had the jabs about that over the years about all being transaction-based, but I think it puts us in a really great position, and we are thankful we are in that situation versus having sold our products on a seat license basis, for example, we are well positioned and not under threat of -- from a revenue perspective that a lot of the other companies are going to be facing in a pretty strong way. So as I said, we have a strong position in what is an otherwise noisy market. And from an offense perspective, there's nobody else that has everything we have to offer to operators of these venues. And what we've stepped back and looked at is clearly, we're going to innovate within our products. Passport will get AI. Paradox will get AI. Horizon will get AI. Freedom will get AI. All of our products will get AI, where it benefits the product, where it benefits the user. But importantly, that overall view is really where AI is going to be at its strongest. The ability to take different components, different silos of data and make sense out of that and turn it into insights is invaluable. And it's not just about our systems, it's about all the systems the operators use. That is the opportunity. So I'll talk more about that in a minute, but we sort of have 4 things we've been working on in the past year, and they are accelerants of our growth going forward and at the core of our innovation history. Number one is we've expanded our view on payments. This is something that's been well considered because when you embark upon a journey on payments, it's rather permanent. You're installing hardware with the venue, the terminals you check out with, you're doing lots of internal plumbing. And importantly, you're relying on this partner for service, which is an important part of our customers' business. And so when you're going to connect yourself to a partner, you need to make sure you're connecting to the right partner because you don't want to sort of get -- have issues with your payment process that then sort of backwashes on your overall relationship. And so we spent quite a bit of time, the majority of last year and even part of the year before, evaluating all the different providers that are out there, and we're very happy to say we've secured a partnership with Adyen, and I'll talk more about what that looks like in a moment. Composable commerce, we've mentioned that before. At the core, as I reflect on accesso overall, e-commerce is at the core. It is our absolute powerhouse. And not just for ticketing across everything we do, leveraging that expertise for transaction optimization is absolutely foundational to this business. And we have to always evolve. And so right now, we are well underway with what we call composable commerce, and it's our next evolution of e-commerce and how customers will buy when they go to their computer, when they go to their phone. Alongside that is conversational commerce, which is there will obviously be people going to their computer, will go to our phones for a very long time, but there's a big wave coming, and that is conversational commerce. That is going to ChatGPT. That is going to Meta AI and saying, "Hey, I would like tickets to LEGO land this weekend. What are the options? I'm looking for a 6 flags annual pass. Can you give me my choices and have all that on the chat, never typing a thing on your keyboard or on your phone. And we have really made great progress on this. And in fact, we're ready for our first customer pilot here coming up in the next coming weeks, actually, allowing guests to browse, order and pay everything via conversation. And that is an example of, again, another level of innovation, just like mobile ticketing, just like being a SaaS company, this level of innovation and getting in there early, when you can be an early adopter, you can learn from those smaller sample sizes and perfect your process. So when it becomes larger, you're the leader. And last but not least is our AI evolution from a product perspective. And as we shared today, we have acquired DeXibBit. We identified that as a target. rightfully so, Lee brought this to our attention early on after joining accesso. And after getting to know them and realizing what they've built, it was clearly an opportunity for us to leapfrog to use the term to accelerate our capabilities. And we certainly looked at alternatives and hands down determined that acquiring DexibBid and bringing that into our ecosystem was going to be a game changer for us. So I'll unpack these a bit more as we go through. Payments are at our core. start with payments. We move billions of dollars a year. Passport alone moves something like $4 billion of revenue. That's just Passport. Think about all of our other products in total, we are moving a tremendous amount of money. And what that does is it allows us to get scale pricing. Our individual operators, maybe they sell $20 million a year across their whole resort or $200 million, they can't access the pricing that we can access when we look at the billions of dollars that we process. So what we're doing now is we moved from being a payment gateway, which is what we've had forever, which is where we hand off the transaction to the processor. We're now going into actually being a processor with a partnership with Adyen. And what that does is it allows us to, a, bring much better pricing to operators that can't negotiate anywhere near that level of rate. And it allows us to integrate our system in a more comprehensive way to become less disjointed, if you will, because we can then end-to-end offer the package that is plug-and-play more so than, please go here for your payments, go here for this, go here for that. We can bring you the whole package. And so within that, on the payment gateway, yes, you get a fee for every transaction that goes through. But on the processor side, you get a portion of the margin as well. So in addition to giving the clients a much better rate, access to much better rates, we also are rewarded with that for bringing those clients into the Adyen platform. And so it expands a new revenue line for us in a way that is scalable, not just across ski or theme parks or live entertainment, but across our whole business. And so that is a very scalable opportunity that over the sort of midterm, long term, is going to be a very valuable line item for accesso in terms of margin. And if you think about other operators that are out there in different areas like Shopify or Toast point of sale here in the U.S., they actually make most of their money on the processing side, and they don't make a whole lot from software, if you look at their financials. And so this is an area that we have not really explored until now. And we've made a big move with the partnership with Adyen, which was by far our top choice. Their global footprint is phenomenal. And they're going to give us that end-to-end relationship that we're looking for, for our customers. So our clients will get better rate. It's less complicated. And by the way, it doesn't take much capital for us to do this. So we're off and running. We'll start bringing customers on here mid-2026. Obviously, it will take time to scale, but we'll be moving on this very promptly to make it a core part of our offering. So I talked about composable and conversational. There's more details on this page. If you think about e-commerce and maybe true to my heart, if you think about excessive Passport, e-commerce is -- was the lifeblood, is the lifeblood of that product. And we've taken that learning across our whole product set in increments. And products all have their own e-commerce I guess, you could say module, right? But what we're doing with composable commerce is we're separating that from Passport, and we're making a commerce layer, an e-commerce layer that can work across any of our products. So it's adaptable and scalable across our product set. So taking that transactional revenue and that incredible optimization we bring to our clients for optimizing their revenue and opening that up to work for Paradox, to work for Horizon, to work across our whole product set is a very big move, and it's an effort we've been working on for about 2 years. We completed our first pilot over last summer. And now this year, we'll start the rollout to access of Paradox. It will be the first of our products to adapt composable commerce. And then clearly, we'll work across the portfolio to bring that to life. But if you look at the revenue profile this brings in, if you look at Horizon, for example, Horizon doesn't have a transactional-based e-commerce product. And why would we rebuild something only for Horizon, when we should build something that works across all of our products. And that's what we're doing. So you might imagine Horizon will be next. And then clearly, Passport will get a major upgrade with composable. So it's not just separate. It's also a different architecture. So if you think about e-commerce as a flow, A, B, C, D, then you check out, that's kind of what we have today. But composable is what it says, it's composable. Think about being able to drag and drop and design your own screens. Think about being able to go in as a user and change your colors, change the shape of the squares and rounding the corners and changing the fonts and changing the pictures and the images, that's what's composable. So we end up with a much more adaptable platform. And it's one of the things that our clients often ask for is the ability to customize the flow and the site to work for their branding, but it has all the optimization within that. So they can't mess with that essentially. We've determined which modules work the best, and we make those modules available to them to drag and drop on their screen. So this is a fundamental part of transactional revenue growth for accessory going forward. A sub to that, I guess, you could say, is conversational commerce. And that is, like I said, you just talk to it, right? And it helps you out with your order, helps you out with your choices. And this is where everything is going. And going to a venues owned website will certainly happen for many years to come. But there's going to be a convergence of shopping within things like ChatGPT, where everything we do will be -- we'll go to Claud, we'll go to ChatGPT for everything. And it will shift from being a Google search. Google is already doing that today. It will shift from going to a venue's prime website to just using ChatGPT for everything we use or whatever your platform of choice at the time. So conversational commerce allows us to plug in to those chat-based channels very smart and have a dialogue with our product set, have a dialogue with our customers' information and give the user back exactly what they're looking for in a way that we are managing the messaging. We're giving them those options, and we're still controlling the transaction. And again, something operators can't bring to the table themselves, and we're making sure we are -- our plumbing is there. We're making sure that this is available. And like I said, it will be rolling out in a few weeks of the trial at a very significant theme park. So we're looking forward to that. Stay tuned. So shifting now to the fourth box, which is how we think about AI. So my favorite headline here is data everywhere, inside nowhere. I'm going to say it in my sleep. But that's really what we were looking at. And on the left-hand side, you can see an operator all the things she's thinking about, right? Oh my gosh, I have all this information. Everything is in a different folder, right? It's all in a different data silo, guest surveys, social media, ticket sales, weather, accidents, incidents, you should say, their loyalty program, their point-of-sale data from the restaurants, from their retail stores. What do you do with all this data when it's not connected, and that is the problem. And the opportunity is to help them leverage that. So if you want to know how to optimize your labor, you have your labor scheduling system and you have your food sales, 2 different buckets. How do you leverage those 2 together to help the operators create optimized labor schedules, for example? How do you leverage weather, prebookings, social media feedback, marketing calendar, all those to drive dynamic pricing. Connecting all that is something that a human brain simply cannot do that AI now opens as a new opportunity. And so we are absolutely the best prepared in the market to bring this to our customers and to the end markets that we serve. We can see everything across the guest journey. We're embedded in their core systems. We have the foundation for AI insights. And we obviously have a huge customer base. We know how to execute at scale. And importantly, we know the business really well. That's something that's lacking. When you go to ChatGPT or to Claude or to whatever your choice of AI tooling is, it doesn't understand the attractions sector. It doesn't know what a per cap means. It doesn't know what seasonality means in terms of that context. And that's what we bring to the table, right? And that's what the tooling we need to do because that's different than just loading all the data into a random AI tool and hoping it can give you the proper answer, it needs context. So with Dexibit, we acquired that context. We acquired that intelligence. And what we're looking at is embedding the intelligence at the core. And like I said earlier, not just putting AI into our products, of course, we're going to do that, but thinking about it more broadly in terms of what will really make a difference to the industry, which is what matters, and that's what will drive our business. So on Saturday, Matt may be a little tired still. On Saturday, we completed the acquisition of Dexibit -- and we're bringing that into accesso and into the market as accesso Intelligence, which happens to stand for AI, by the way. And it's an AI analytics, demand forecasting, capacity planning. It's a big data management platform. And what's interesting is it gives you a single view across everything, not just the accesso systems. Clearly, we're important to that equation, but it gives you systems from other vendors. Maybe you're using a different food system, maybe you're using a different scheduling system. You need weather data. You need event data. You need local event data. You need school calendar access. You need all of that. And what it does is it unifies all that into one layer of intelligence. And the -- what Dexibit has done over several years now has accumulated the context, if you will. So the models are trained, the AI models are trained on specific context, like what does seasonality mean? What does an event do? What is an event -- what event in town has an impact on my attendance this coming weekend. When it rains, what happens to my attendance. When the sun is out, what happens to my attendance. All of that off-the-shelf AI absolutely does not bring to the table. So for us, this is clearly a leapfrog move. I did enjoy the frog icon, I have to admit. And we certainly evaluated whether this is a build versus buy -- and we determined that buying this was going to catapult us ahead of the industry and give us something that would take us years to build on our own. So there are already 75 venues using Dexibit. They include things like the Smithsonian. So a very good, strong blue-chip customer base. They have 1,000 prebuilt visualizations or dashboards, if you will, and they're already integrated to 100 systems. That alone would have taken years for us to do, just the integrations. So what it does, it brings all these things together on the left, right, food sales, wait times, whatever it may be the venue has and their different data forward or data silos. First of all, it gives you reporting, okay? Reporting is really important. And we struggle ourselves to bring all of our different applications if someone is using more than one of them into a single view. We get that immediately, just add water and you're going to have dashboards across all the accessory applications that you're using. And that will give you -- will give us a significant advantage in the marketplace and a big advantage for our clients to have a single view across the business. There's also an important part, which is called Voice of the visitor, which is looking out across the Internet at all the things customers are saying about your venue and bringing that all into a consolidated perspective and also providing you insights around things you can do to improve any concerns that visitors might be expressing. So what we do in Phase 2 is we move into predictive operations. So things like demand forecasting, what should I expect for attendance this Saturday? What should I expect for attendance across next year, dynamic pricing, things like staffing, as I mentioned before, as well as capacity planning. That's sort of Phase 2. And in fact, I think Dexibits already pretty far into this. What we'll be doing is looking at bringing that into our product set as capabilities. So imagine accesso intelligence taking all these different variables and creating dynamic pricing and then feeding it back into Passport, feeding it back into Verizon, feeding it back into Paradox. So it becomes a loop of not just putting data out about what happened, but helping you predict the future and operationalize that into something that maximizes revenue. And then Phase 3, that is sort of, okay, Star Trek here, but this is not far away, by the way, which is allowing things to automatically happen, right? Self-healing operations. So when you see something happening, you have the system respond to take care of it versus opening a trouble ticket, for example. So that is the next level. I think where we're going to see accesso out of the [ issue ] is going to be Phase 1. We're going to be largely there probably in a matter of weeks, honestly. Phase 2 will then be a process that will happen over -- starting this year, over the next couple of years and getting better and better every single day. So just the intelligent reporting alone is a significant advantage to the industry and the elements of the predictive operations that will come to market very soon and the ones that are already there are something that no one else is offering. So what you end up is a little bit of a complicated graphic that shows, I think, in one view, accesso in the middle, our applications, whichever ones you're using, wrapped around a payments platform. And then the internal systems, other systems you're using, your CRM system, your financial reporting system, Google Analytics is looking at your website traffic, your hotel management system, which we don't offer today, your visitor survey data and then external data like weather, school calendars, social sentiment, industry data, economic data, all of that can be combined to give you through accesso intelligence, applying sector context, all the data, all the dashboards that are there, being able to interact with a conversational engagement to do this and give you all the things you see across the bottom, forecasting, revenue optimization, dynamic pricing, ops planning. And I think an important part here I want to highlight because I didn't cover it before is that third green box, conversational. So having grown up in the theme park industry, my early days was deep in spreadsheets and a lot of manual data work. And what would happen is everybody comes to you asking you, can you run this query for you? Can you build a spreadsheet for me? Can you give me this report? The operator, the operators don't have the ability or the access to that kind of data or the skills to mine the data. And what Dexibbit accesso Intelligence brings to the table is conversational insight. So anyone with any skill level could ask a question, what was my #1 guest satisfier yesterday? What food items sold the most on Saturday? Which food items didn't sell on Saturday? What should I expect next week because there's a big concert in town? Will it affect my attendance? You can ask those questions and it can take all this information and come back to you with an intelligent answer, insight and predictions. And that's really what unlocks the power here is not that you've got to be a master in database queries, you can be anyone, you can be the CEO, you can be the Head of Marketing, you can be the store manager, and you can use this by simply asking a question and getting back the data you need, whether it's an answer, whether it gets you back a spreadsheet, whether it gives you back a report, that is conversational insight that absolutely does not exist today, and it's across all of these squares on the page, not just one system. This is an absolute game changer for accesso and importantly, for our customers. So Matt, you're going to cover the outlook, I believe, -- or am I going to cover the outlook? I'm going to cover the outlook. So the outlook is coming up, I think the slide is actually out of order. So #1, we're unrivaled in our position, cover all that ad nauseam. We're engineered to evolve. One of the things that we've gotten on the right side, you'll see, we've gotten beat up a little bit in the past about the amount of money we spend on R&D. Well, what that has done is kept us current, kept us flexible, kept us adaptable, and we are ready for AI. And if you scrim on the R&D, you find yourself in a position when something changes, you're not able to respond because you now have to go and spend the next couple of years on significant deficit of technology. Accesso is not in that position. And if I've ever been thankful for our commitment and our continued investment in our products, it's never been stronger than today and the fact that we are literally AI ready. And I can say that our competitors by the large, are not in that same position. This is an absolute strength for us, and it will -- and the ability to layer AI on to what we have immediately is going to have a significant impact on this business going forward. So I think, Matt, you now you've got the outlook part. Matthew Boyle: Yes, I'll cover this, Steve. Thank you. So at the top there, you've seen the 2 black boxes, with the guidance we're giving is in line with the current consensus, so revenue of $146 million approximately and approximately $20 million of cash EBITDA. As a trading update, January and February traded in line with our expectations, particularly on transactional volume, that's pleasing given the choppy end that we've had from June through December at the end of '25. Being mindful though that it is still early in the year. We are a seasonal base business and our peaks are in late May, late June through early September and then again in Halloween at the end of October. So mindful that there's still a lot of the year left to play out. Just really highlighting the Middle East piece in there that's in our numbers. So we expect this year somewhere between GBP 4.5 million and GBP 5 million of milestone-related revenue from that Middle East region. Half of that, so approximately GBP 2.5 million, we've delivered already. It's just pending customer acceptance, which is great. The remaining GBP 2.5 million is to be delivered from April through the year-end. So some level of risk there. We -- so far, it has been business as usual for us as best it can be given the circumstances, but it could change in a moment's notice. We did have a positive signal that Aqua Arabia, a large park there in the Qiddiya attraction opened on the 20th of March despite the conflict. So we are happy, but we are mindful of it. The last piece on this slide is just to highlight really the strength in the balance sheet, which I mentioned on my earlier slides with regard to capital allocation. So we have purchased 20% of shares back over the last 12, 15 months and completed, as Steve says a game changer of an acquisition. And we have predictable steady-state free cash flows, and we expect to continue supporting future shareholder capital returns. Steven Brown: Okay. Last slide, I have to leave it up there. Our new tagline, powering the business of fun. I'm going to close with that, and then I'm going to stop a share, so we can take questions from the group. I know we moved through a lot quickly. We have a lot to unpack. It's also been a very busy week or 2 here between finishing up results, finishing an acquisition of a company based in New Zealand, nonetheless. And so we're obviously very excited about all the things that are to come. We're very excited about -- I'm very excited about Lee, having I guess, you could say handpicked my successor and having him here since the beginning of last year, he's fully embedded in the business and having such a planned transition smoothly with such a qualified person, who was not only intelligent and great at what he does, he's a great person as well. So I'm super excited and to have a running start on the next wave of accesso with all the things that are to come. I think the Dexibit acquisition is just -- is going to really make a huge difference in this business on top of everything we already have that's working great. So I'm super excited. And Matt and I are happy to take your questions. So let's go. Operator: [Operator Instructions] We'll take our first question from Katie Cousins with Shore Capital. Hopefully, you can hear me okay. Katie Cousins: Two, please. On the Dexibit -- struggling with the name of Dexibit have you got any examples of their existing customers, who are already using it and anything tangible you can kind of point to how it's improved trading? That's the first one. Steven Brown: Yes. I mean the [indiscernible] is one that is -- that has a notable customer. I mean, Matt, you probably can blame name a few others on the list you have in front of you. I think it's -- the customers often request that they're not being quoted as a customer just for confidentiality reasons, so we can't provide the whole customer list. But there are a few notable ones that I think are important to highlight. And what we see is a very high retention rate for the customers. They see -- there was even one customer example where they said, oh, maybe we don't need this, and then they quickly came back realizing they didn't need it. The power of what it brings to them in terms of being able to operationalize the amount of savings just in report generation alone aside from the revenue and business optimization is very significant. And I can tell you that on the accesso side, we've been working with Dexibit now for, I guess, a year as a partner while this was happening on an underlying basis. And we're 2 for 2. We showed the product to 2 customers and both bought it. So in the first meeting, by the way, they bought it quickly, they bought it without question, and they're loving -- that's on its way. So I think it speaks for itself. And as I told someone yesterday, it's almost hard to explain it until you see the demo and see how it works because it's really mind-boggling. And the operators are getting a lot of value from it. And I don't have exact numbers on what the improvement to them is. I think some of the capabilities we're going to bring into our product like dynamic pricing, for example, will have a material impact on their top line revenue. Katie Cousins: It's good to hear the 100% success rate so far. Yes. The second question is just on -- in terms of new wins, and it was encouraging to see that actually, I think it was 11 out of 43 new wins took multiple products for you guys. So could you provide a bit more color on what products that they've taken? And is there a bit of a pattern between a combination of products? Steven Brown: We're basically seeing any product plus Freedom. That's kind of what the equation would be. Obviously, a lot of Paradox plus Freedom, and Passport plus Freedom. Freedom is gaining traction as there are more customers using it, our referral base increases and it sort of starts to snowball, but it's generally plus Freedom. Operator: Our next question comes from James Lockyer with Peel Hunt. James Lockyer: Firstly, just on the guidance for the year. I think within the GBP 146 million, you've got some milestone payments from the Middle East within that. And obviously, you have some of that in 2025. Am I right in thinking that on the current guidance, it sort of implies a decline year-over-year? And if that is the case, what's the major driver for that? And if not, how should we see some upside from current guidance from that perspective? Matthew Boyle: I'm not sure where you're getting the decline from, James. But the last year, we did roughly about GBP 3.5 million to GBP 4 million of milestone-related revenue from Saudi Arabia. James Lockyer: I meant the group revenue. Sorry, I meant the group revenue. I think it was 155 last year... Steven Brown: [indiscernible] Customer. Matthew Boyle: Yes, that one customer. I mean we do have the loss of a major queuing customer in the current year. And so transactional revenue would be below where it was in 2025 for 2026. And so that is reflected in that guidance. But the Middle East alone, if you're looking at it, will be slightly up where it was for '26 compared to '25. James Lockyer: And what's the implied underlying organic growth from the core business in the guidance? Matthew Boyle: For transactional revenue, you mean? James Lockyer: Yes. Matthew Boyle: Yes. Well, it's -- so it's reflected in our commercial wins really. So if you look at the commercial outperformance that we had, so we have moved from 30 wins in 2024 to 43 in the current year in 2025, and that will be reflected in the growth rate that we have underlying outside of the major milestones and non-repeatable revenue and ignoring the major customer queuing loss. So there will be growth in there. James Lockyer: Excellent -- and on the AI point, I think you flagged some operational efficiencies, their productivity gains throughout that. And obviously, we're early days with where that technology is coming through. Where do you see the benefits over the next few years in terms of time saved product releases quicker in terms of if you able to quantify that in terms of where you think margin might get to because of the AIs you're implementing? Steven Brown: Yes. So we've had enough time now with the tooling and understanding kind of where we see the most efficiencies the quickest. Clearly, any kind of operational or product area, operational area are seeing the most gains. We are not seeing the gains in engineering, which is not unusual, especially when there's so much context required. The tool doesn't quite understand the context in order to just write an e-commerce application for a theme park, for example. It doesn't have experience with that. And so we're seeing -- not seeing the gains in engineering, which I think is not unusual for a lot of companies. It is helping us move faster in certain areas. And certainly, refactoring code is quicker, things where we need to update something, we're seeing some gains there, but not large gains. The bigger gains are coming in sort of our -- like I said, our operations, product and marketing areas. Think about even just sales proposals, the speed with which and the quality with which we can create sales proposals. Those are the areas that I think are going to make the biggest underlying difference in terms of efficiency, both in being able to operate over time with fewer people, but also importantly, being able to move faster, getting quotes out faster, getting product design faster and handling customer queries either automatically through automated processes or more quickly with AI tooling. So I think we're going to see the biggest benefit in the areas outside of engineering, which is more than half our group. And engineering will be a little bit slower on the uptake, and we'll see those -- there will be a decent amount still, but it's not going to be the same level we're going to see in those other areas. James Lockyer: Okay. Maybe just a final one. I think historically, you've talked about a 20% margin. Do you think as the medium-term, longer-term guidance, do you think that this could see the AI investments, the acquisitions you've made recently, the pricing, the weight because your consumption versus per seat, do you think your -- the margin could be higher than 20% over the mid- to longer term? Steven Brown: Yes. I think where we get there is we need to increase our revenue growth rate. And one of the -- there is sort of 2 sides to that. One is attrition. So making sure we stick our customers right, we stick the landing with our customers for the long term, right? They're not seeing some better things across the street, so to speak. And this progress with AI will differentiate us in a way that competitors can't get to for years. And so I think on any attrition basis, this will really help a lot. Although we don't have much, if we allow the competition to continue growing, our attrition could start to grow. On the new wins, this is something that no one else can bring to the table. And sometimes we find ourselves competing on price maybe or customers sort of past history with an application they're considering. This is something that is going to be a differentiator for us that again is unmatchable. And I think our competitors are going to be showing a feature within their own system. They're not looking at the overall client ecosystem the way we can come into the room, already ready to do with the integrations that are in hand. And the conversational AI is really going to be unprecedented. So I think that will help the revenue growth rate. And if the revenue growth rate picks up 7%, 8%, 9%, which is probably about where this company can be given our scale. And at the same time, the cost base is not growing. It's continuing to shrink even by the amounts that we did this year, you get there pretty quickly. And so it's really about not solving -- we can't cost cut our way to 20%. That is certainly not the goal. And I think a lot of our savings, we will reinvest in things like accelerating AI capabilities even further. But at the same time, continuing to lower that cost base and propelling the growth rate is obviously the combination of higher margin. James Lockyer: I'm sure we'll catch up before you go, but I wish you good luck unless we don't. Steven Brown: Thank you, James. Operator: Our next question comes from Jon Byrne with Berenberg. Jonathan Byrne: Two questions from me, if I can, I take them in turn. So firstly, on Dexibit, I guess from a commercial perspective in terms of monetizing, what should we expect in terms of contribution from accesso intelligence going forward? And do you think about it as a stand-alone kind of product to monetize? Or is it kind of primarily a good foot in the door for cross-sell opportunities and sort of supplementing existing solutions? How should we think about it? Steven Brown: Yes. I think it's strategic for us, #1, around our product set and increasing our win rate, which is more powerful than just selling accesso Intelligence on its own because the value of selling intelligence along with Passport, along with Paradox, along with Freedom, that's a much bigger opportunity than Dexibit would have had on their own. And that really is going to amplify both the value that they their product rates, but also the overall results. And so I expect that the commercial model is still a bit of a discussion around that, and we will obviously be managing that going forward. But there will obviously be customers that are out there that can benefit from the technology that don't necessarily even maybe work in our space or they don't use our -- one of our applications. We see that as a lead opportunity. Let's bring them in. Even if they're using a competitor system, let's enable them with some elements of the product. And that brings them closer to accessory and allows us to talk to them more about our actual solutions and maybe switching over. So we see it as a conversion tool. We see it as a strategy to improve our overall portfolio. But I can say we've not sort of said, oh, is this line item today is going to grow in a trackable manner for its own revenue category. It's going to become more of an overall benefit to the business. Jonathan Byrne: Great. And then just secondly, on outlook, you mentioned seasonality. Can you just remind me or give us a steer in terms of concentration in those summer months, say, June to August, particularly given the growth of the ski product. What should we expect for this year? Steven Brown: Yes. It's -- so the majority of our revenue, Jon, comes from that June through September period. So -- and October, a little bit in December, but we think of it as pivotal really for our year. And we had that last year, right, when there was softer and weaker transactional volumes through the back end of June and early July, we revised guidance accordingly at that point in time. So it reflects the importance of it to our business, and that will continue going forward. I mean ski has seen some level of growth. It was certainly our strongest performer in terms of commercial new wins last year, but it will take some going in some way to offset the size and the impact of the attraction space that we have Operator: Our final question comes from Jasmine Rand with Deutsche Bank. Jasmine Rand: Hope you can hear me. Just chiming in for Tintin today. Jasmine Rand, Deutsche Numis. On the customer base, I appreciate you mentioned can be named. But can you talk at all about any joint customers you may have? And then again, I think you just touched on it slightly, but what do you expect kind of pricing for the solution to be looking ahead? And then secondly, on capital allocation, at this level, how are you thinking looking ahead in terms of share buybacks compared to kind of further bolt-on acquisitions? Steven Brown: So the interesting thing -- sorry, we can echo there. Yes, there we go. So interestingly when Dexibit is Angie and her team's focus have primarily been around cultural attractions, museums, if you will. And so our overlap, that's not one of our bigger markets. Similar operations, similar concept to a theme park, but it's just a different space. We certainly have museums in our portfolio, but it's not a primary sector for us. And so our overlap or sort of bumping into each other have been fairly limited. We obviously had gotten to know them before joining accesso. We got to know them as a group much more closely over the last year, year plus. In terms of customer overlap, I think that's what we're going to build going forward. And we see their customer list is additive as new commercial opportunities for us. Some of them are certainly customers we would like to move over to an accesso platform. And so it's really about taking what they've built, where they've learned the context of a venue operator, primarily in the cultural space and now enabling that across the broader leisure and attraction sector. That's really our goal. It's a bit -- obviously, they have a great customer base, but it's really focused on what the potential is for the product within our ecosystem. In terms of capital, Matt, you hold the money. Matthew Boyle: Yes, I'll just touch on the capital allocation piece. So thanks, Jasmine Rand. I think the key point to highlight there really is the nature and the stable, sticky nature of our cash flows, which I hope has been reflected in the last couple of years when you look at the cash flow that accesso generally see, consistent free cash flow, which we've used accordingly to provide shareholder returns over that same period. There's no reason that, that shouldn't continue. So whilst spending $20 million on a tender and making an acquisition over the weekend, we still hold a strong balance sheet, which we would continue to leverage to provide shareholder returns in whichever form that may take, we'll make the best use of our available options at the time that comes, but there's certainly no reason it shouldn't continue. Steven Brown: I'll add on to that, Matt, they wouldn't let me write in the annual report that our share price is frustrating. And so I'll say it now. They thought it was a little too direct. But it is very frustrating, obviously. If you look at our underlying business, it is strong. It's strong. We've got a very good position related to AI. And we have a really great customer set. And we've sort of been caught in a wave of either disproportionate focus on one client, one product some of the AI pressure, maybe some end market pressure as well, a whole variety of factors. And our view, I think, along with many probably of you is that our share price is tremendously undervalued. Our company valuation is much lower than it should be. And I'm confident that this too shall pass. We just got to keep our head down, continue to build great product, provide great service. And at this share price, obviously, buy back shares to the extent that it is reasonable for us from a balance sheet perspective. Operator: That's the end of our Q&A session. I'll now hand over to Steve Brown, CEO, for closing remarks. Steven Brown: Thank you very much. And it seems like this may be my last investor presentation. So I thank you all for sticking with us and staying so tuned into our business over time. It's clearly an exciting business. And I've been through many waves of change in this business since 2007, which turned into excessive in 2012 and then what it is today. I had 12 employees in the very beginning. There's 605 now. We worked, I think, 3 countries. We're working in 31 countries now. And this business is built on changing and innovating and not just sort of building something and letting it run, but it's always being ready for whatever is next. And I think the move we've made here is our big step into what's next and not just adding features and calling it a strategy, as we say in our report, but thinking about it more comprehensively. And importantly, if we always put the operators first, the clients first in terms of what will help their business, then we will win in the end. And I think that's exactly what Dexibit and accesso Intelligence will do for the business is put the client first, help them run their business much better than they can without it. And in turn, we'll continue to be the trusted partner and the market leader for many, many years to come. So I thank you all very much. And I'm sure Lee will do a fantastic job. I have all the confidence in the world, and he's obviously supported by Matt, who probably can use a good rest of out now. So thank you all very much, and we'll talk to you later. Operator: Thank you for joining today's call. We are no longer live. Have a nice day.
Operator: Good morning, ladies and gentlemen. Welcome to Sigma Lithium's 2025 Fourth Quarter Earnings Conference Call. We would like to inform you that this event is being recorded. [Operator Instructions] There will be a replay for this call on the company's website. [Operator Instructions] I would now like to turn the conference over to Anna Hartley, Vice President of Investor Relations. Please go ahead. Anna Hartley: I'd like to welcome you to our 2025 earnings conference call. Joining me on the call today is Ana Cabral, Co-Chair and CEO of Sigma Lithium. Our earnings press release, presentation and corresponding documents are available on our website. I'd like to remind you that some of the statements made during this call, including any production guidance, expected company performance, update on mining operations, the timing of our projects and market conditions may be considered forward-looking statements. Please note the cautionary language about forward-looking statements in our presentation, MD&A and press release. Before turning the call to Ana Cabral, we will be showing you a short corporate video as we think the pictures will paint a thousand words about what's happening at Sigma. [Presentation] Ana Cabral Gardner: Hi, everyone. Well, thank you, Anna, for showing us this video of our operations. As you can all tell, we're very, very proud of what we built here in Vale do Jequitinhonha. So without further ado, I'll go straight into the fourth quarter 2025 earnings release presentation, which covers the entire full year 2025 annual financial results. We're going to make quite a lot of forward-looking statements, and we would like to encourage you to read the disclaimer of this presentation that's going to be posted on our video. Sigma is the largest industrial mineral producer in the Americas. We've delivered operational excellence. We are a low-cost operation, and we are executing a high-growth strategy for 2026, 2027 and 2028. This is because we are a management operator company where our interests are fully aligned with the interest of our shareholders, which are to build long-term value. Our main competitive advantage is our resilience, which comes from operational efficiency. Our efficiency is, again, driven by the fact that the management is owner of the company. More importantly, we are located in a country in Brazil, which is a politically stable traditional mining jurisdiction, where we have a very low-cost operating environment. On sustainability, we are 100% sustainable. We have the Quintuple Zero lithium, which starts with 5 points. We do not have tailing dams, so 0. We do not use drinking water, 100% of the water is reused and recycled from sewage, 0. We use 0 hazardous chemicals in our operation. DMS is basically a physics-based process, so third zero. We use 100% clean energy, so 0 dirty energy. And we have had 0 accidents with lost time for almost 3 years. Again, a picture is a thousand words. Here's a picture of our waste tailings before and after the artificial germination program. It's blended into the landscape. It's basically stacked up rock, fully geotechnically stable. And we went through the sustainability initiative of actually planting the rock into a green mountain. So what you see now is essentially the picture below. We are 100% sustainable. We produce the Quintuple Zero lithium. We have zero tailing dams. We have 0 drinking water. We have zero hazardous chemicals. We have 0 dirty power. 100% of our power comes from clean electricity. We have had 0 accidents for 2 years and 7 months, 5 zeros. At the bottom, a picture is a thousand words. You see the before and after of our waste tailing piles, which are basically the rocks removed from the pits. Rocks, very stable, geotechnically stable. But more so, we have planted the face of those rocks with artificial germination. We basically did what we call proactive regeneration and the picture shows how it looks like now just a year after those piles were created. So geotechnically safe, sustainable, blended into the landscape, which further enhance the environment. We have built the fifth largest industrial mineral lithium producing complex in the world. So in the picture, you can see that we have a state-of-the-art industrial plant, integrated into a mine. But the plant is not just an industrial plant, is a state-of-the-art clean technology lithium processing facility where we achieved 70% recovery of the lithium, which is amongst the highest in the sector, and it compares with processing methods, which are a lot less sustainable. Sigma is the economic engine for developing the valley of Jequitinhonha. We lifted the valley towards prosperity. That is a key region of Minas Gerais, which is the second richest state in the Republic. We created 1,000 jobs, 11,000 indirect jobs and 21,000 beneficiaries from our social programs of microcredit and small-scale agriculture. We also have granted drinking water access to 18,000 people. 85% of our workforce is regional. 50% of the economically active population has benefited from our social programs. We have renovated, created and built schools that put over 500 children in after-schools or school programs. We have been instrumental in delivering 6.8% of GDP growth for the whole state of Minas Gerais. And still, every year, we serve 3 million meals so that the new waves of people keep coming to help build this lithium valley. So we have a built to last company. It's a resilient business that's been thriving throughout lithium cycles. That's what we have achieved in 2025, and that's what we will continue to deliver in 2026, large scale, low production costs and traceability. We have had 0 accidents for 2.7 years. We uphold the highest health and safety standards in the world, top ranking amongst all companies in metals and mining. But more importantly, we have demonstrated speed of execution, low CapEx to build and to restructure operations, such as what we've done with mining. And we are in a low-cost operating country, which supports us to achieve all of that. So now I'm going to go through the operational and financial highlights of 2025, and I'm going to give you a preview of the first quarter 2026 estimated. We have had unparalleled resilience throughout the last year to date. We have generated cash flows across 2025 lithium volatility. Our business was built to last and to endure the cycles. Four key examples, we signed $146 million in offtake agreements with very robust intrinsic values. Intrinsic value is the advancement we receive from clients for the right to have deliveries of tonnage throughout periods. First offtake agreement was basically to fund working capital. It was signed in '25 for deliveries throughout 2026. The total is $96 million for 70,000 tonnes of deliveries. The second was a $50 million typical offtake prepayment that was signed for 40,000 tons of annual deliveries throughout the next 3 years commencing in 2026. Second, we have been the demonstrators that a commercial strategy well executed can actually yield actual results even in this market, even throughout volatility. We have been tracking seasonality, and we have achieved $67 million in net sales in the fourth quarter of '25 and the first quarter of '26, solely a result as this sound commercial policy. First, we monetized lithium seasonality to by basically receiving price adjustments in the fourth quarter, working with our clients to time the deliveries and the final sales, resales of their products throughout the contract season of 2025. That has resulted in the revenues for the fourth quarter. More importantly, we have generated cash flow from a whole new line of business, which is selling the lithium fines, high-purity lithium oxide fines that we have reprocessed through our industrial plant out of our dry stack tailings. That happened initiated in 2025 and then throughout 2026. We've deleveraged our balance sheet and we repaid debt. That was our third highlight. 60% of our short-term debt has been repaid. 35% of our total debt has been repaid in the years such as 2025. On top of that, number four, we have upgraded and restructured our mining operations completely for safety, for efficiency, for low cost, for cadence and for better delivery. We transitioned from an outside contractor to full operational control, and we are poised to demonstrate those efficiency gains and cost optimizations throughout the next quarters. Here are pictures that, again, a thousand words. It just shows the lithium fines piles being moved across to the shipping halls already at the port. The result of those sales have actually monetized what we used to call green premium, which doesn't really exist. But the fact that we actually created this new line of product out of the dry stack tailings definitely delivered to our investors what we call a sustainability premium, meaning actual financial results from the investment we made on a dry stack unit for the Greentech Plant. This is a page with our offtake agreements. The offtake agreements single-handedly enabled our mining upgrade, our long debt repayment and the capacity expansions. We have an announcement. We signed a 40,000 tonne a year typical offtake agreement that is going to net us $50 million in a true prepayment to be closed within the next 3 months. That amount is equivalent to 120,000 tonnes to be delivered over the next 3 years. The use of proceeds will be for our growth strategy. We also announced and signed the 70,500 tonne 1-year offtake agreement for a total of $96 million. That offtake agreement is for deliveries throughout 2026 and the purpose of it is for working capital. That's the working capital that enabled the mining upgrade and some of the debt repayments. Now in 2026, we have two more offtakes to conclude. First, we're going to amend our contract for the equipment leases of the mining upgrade large-scale machines that have been backed by an offtake for 3 years. Initially, it was for 11,000 tonnes. The number probably will increase depending on the scale of machinery that we are able to secure in the second quarter. So again, the continuity of the mining upgrade to better, more efficient, more cost-efficient and safer operation. The second offtake that we're about to close is the 80,000 tonne a year for 3 years that is going to net us $100 million in a typical prepayment. That conventional offtake will have used proceeds to pay down the long-term debt that currently is sitting in our balance sheet as short-term debt because it matures in December of 2026. That was a 4-year shareholder that has been gracefully given us by our shareholders in late 2022 to enable us to have working capital to commission our plant. So that debt will be replaced by an offtake, which is a very sound and very logic operational move for Sigma. On this page, we again demonstrate how the competitive advantage of low costs create resilience from the price pressures that lithium has undergone this year, especially coming from new regions, sometimes not necessarily compliant or traceable product, but more importantly, from the constant refining innovation that the main markets have demonstrated by bringing the ceiling of this industry constantly lower. The ceiling for, for instance, lepidolite that once was $20,000 to $25,000 per tonne is now around $17,000 to $18,000 per ton, but going lower to a target of probably $15,000 per ton. It doesn't matter. Irrespectively, we are actually working below the floor of the industry, which is product coming from the African new supply regions. So long as we are sitting exactly where we are in the cost curve, we have the resilience of operations that allow us to, for instance, sign offtakes without floors and continue to deliver excess returns every time prices are in the current levels. On the left, we demonstrate the resilience with our total cash cost, which are all-in sustaining costs plus interest. On the left in green, we show the full year achieved all-in sustaining costs plus interest and the guidance. So we're pretty much in the same ballpark. And as a result, we felt comfortable to put in the guidance of $532 for all-in sustaining costs plus $60 for interest for 2026. In the next slide, we show the numbers of how we are able to bring our people safe to their families every single day, day after day. And this is what we work for. We have never had a fatality in 13 years of operations. We have been producing for almost 3 years. We have never had a fatality. But more importantly, we're getting to almost 2.7 years with 0 accidents with lost time. So our people go home every day and come back to work the following day. That is the highest operational global safety standard in the entire battery materials industry, but more so, we sit at the top of the ranking across all metals and mining companies. We have had 1,600 employees here. We now have 1,000 employees. It's a large operation, and we still achieved that, 966 days consecutively without accidents. We're very, very proud of it. So here is to the numeric operational excellence. A number is a thousand words. The unique resilience and robust cash flows can be demonstrated by each and every one of the main items of our 2025 and first quarter '26 estimated operational performance. First, offtakes. We had signed a $96 million offtake prepayment in '25 that enable us to receive working capital by having our production paid in advance. Then we just signed a $50 million traditional offtake for 3 years of 40,000 tonne deliveries totaling 120,000 tonnes to be delivered over the next 3 years. But in advance, up until June this year, we're going to receive $50 million, traditional typical offtake. Irrespectively, we have managed to repay debt to a magnitude that is significant considering the volatility in low points lithium prices reached in 2025. We paid 60% of our short-term debt and 35% of our total debt. That was basically because of cash flow generation. This company was built for cash flow generation. We are a cash machine. In the fourth quarter of '25, we generated $31 million of cash from operations. In the third quarter of '25, the previous quarter, we generated $23 million. So we increased our cash flow generation in 35% from third quarter to fourth quarter of 2025. More importantly, the lithium materials production has had a decrease in volumes because of the full restructure we conducted in mining. But given that we are an industrial operation, we delivered another source of revenues. In fact, we built another business, which was reprocessing the dry stack tailings into what we call low-grade lithium fines. So ultimately, we had equivalent of 70,000 tonnes of the main high-grade product in revenues sitting as inventory accumulated throughout the last years. And that material became this new line of business of what we call high-purity lithium fines. So for the full year of 2025, we produced 183,000 tonnes of high-grade premium lithium oxide. For the full year of 2024, we produced 240,000 tonnes of high-grade premium lithium oxide. So our annual production decreased in 24%. However, how did we generate so much cash flow? How did we accomplish so much repaying debt? By basically creating a new line of business, which is what we call the sustainability monetization, the green premium in numbers. We reprocessed the lithium contained in our lithium fines in our dry stack piles, and we created a whole new business, which is selling high-purity lithium fines, which have a lower grade, but in monetary value, it's equivalent to 70,000 tonnes of the high-grade premium lithium oxide. So all in all, we're not even solving for volumes. We're solving for cash flow and cash flows were delivered, and debt was repaid. And here are the numbers, which speak for a thousand words and do not have an opinion, numbers are numbers. What we want to show on this slide is, again, the quantification and a pictorial of how commercial successful strategy actually helped us to deliver revenues in the third quarter of '25 and in the fourth quarter of '25. We have fantastic clients who are commercial partners. So we sell them the material. We do a final sale and they take the risk. That sale takes place using a provisional price. So we take some of the risk, but we also gain some of the upside. In other words, when our clients resell their product, resell to their clients, we have a profit sharing gain or a profit sharing loss. Last year, we had a loss. This year, we had a substantial gain. Again, this was achieved by mapping seasonality and seasonality in this industry is pretty clear. It happens in the restocking period that takes place after September. It's called contract season. So our commercial partners worked with us to basically execute their final resales mostly after October of 2025, which allowed us to reap the benefits of a much better pricing environment than what was experienced throughout the whole year because of the tariff volatility in the metals market. So when you look at the greens, you can see the resales by our clients. When you look at the red, you can see the sales from Sigma to the client. And you look at the line, you see the lithium prices and the tremendous volatility that happened throughout the year. In partnership with our clients, we captured not only the first peak of volatility, which happened in August, but also the subsequent curve of price increases that happened throughout contract season beginning in October 2025. That helped us book over $20 million in final price adjustments in the third quarter of 2025, and it helped us book over $14 million in final price adjustments in the fourth quarter of 2025. These are substantial revenues, so that's a quantification of what a sound commercial strategy is. On this slide, I'll go very slowly because we have quite a lot of information to unpack. But again, it's the financial discipline that generated the high operating cash margins. High operating cash margins are the source of the cash flow we posted. In 2025, if you compare the fourth quarter of '24 with the fourth quarter of '25, we have substantially increased our operating cash margin. If you compare the full year 2024 full year and 2025 full year, our gross margins have decreased, yes, because the pricing environment in '25 was very challenging. But what is interesting is that the cash margins and the cash flow generation came from one thing and one thing only, we were able to reduce our costs faster than the decrease in our revenues. So despite the mining restructuring, despite price volatility, we were focused on what we could control and what we can control and on what we always control, which are our costs. So if you look at the bottom of the page, you can see that the quarterly comparison between fourth quarter '24 and fourth quarter '25 shown a 77% reduction in costs. That's way more than just variable costs. When you look at the annual cost reduction, you can see that full year '24 to full year '25, we've had a 21% decrease in costs. So when we talk about these operating costs, we had operating costs, SG&A, ESG plus all others. So it's truly an achievement of financial discipline. We're always cutting what we control. We're always optimizing costs. So with that, we can go back to revenues. In other words, when you look at net sales revenues on a quarterly basis, we've had fluctuations, which again just demonstrate how volatile lithium prices were. More notably, from the third quarter to the fourth quarter, when we restructured mining operations, we had a 41% decrease in net sales revenues. However, when we look at the first quarter 2026 estimate, we more than compensated for that decrease. Why is that? Because we not only opened this new line of lithium fines, which were the low-grade high-purity business that we created out of our dry stack tailings, but also all the work we've done in mine restructuring began to show results. So on an annual basis, the revenues decreased 27%. And so when you look at the bigger picture here, what is actually visible that, yes, revenues decreased 27% on an annual basis. Cost decreased 21% on an annual basis. So costs decreased less than revenues on an annual basis, but we were very quick to compensate that and to fix it in the fourth quarter, where we cut costs and we decreased costs in 77%. So this is how financial discipline is demonstrated with numbers. In this slide, we show the quantification of the financial discipline, but now on balance sheet optimization. We have significantly deleveraged despite all the price volatility, despite all that happened with revenues. From fourth quarter '24 to the fourth quarter '25, we lowered our short-term debt in 60%. From the fourth quarter '24 to the estimate of first quarter '26, which is actually the numbers that we have closing, we lowered it by 68%. So the work continued. We didn't stop. Then when you look at the third quarter '25 against current, we lowered the debt in 49%. That's a complete restructuring in the way we fund ourselves, in the short term, in a way we look at working capital even, meaning clients are now funding our operation because of our successful commercial partnerships with our clients. We make it win-win so that it cost us less in working capital and we deleverage our balance sheet. This slide, I'll go very slowly on it because it shows our cash flow generation outlook. It's quite simple. It's quite straightforward. And again, it just demonstrates how Sigma is a cash machine. Why? Because we have high margins. We are built for cash flow generation. We have estimated that in the next 12-month period for Phase 1, we're going to probably have 240,000 tonnes of production. As we've shown before, for the year, we're going to deliver 200,000 tonnes. Now because of our optimum cost efficiencies, we are going to be yielding an all-in sustaining cost, including interest of $592. That's our estimation for the next 12 months, as we've shown you in guidance. That creates cash flows no matter what. If lithium retrocedes to $1,500 a tonne, we're going to be generating about $158 million in free cash flow after interest, free cash flow. If lithium stays around where it is now between $1,800 and $2,000 a tonne, we can generate anything between $218 million to $260 6 million of free cash flow just with one phase. As we double capacity, which will be in place by the end of next year, capacity and we prorate production as we commission, you can sharpen your pencils and you can do the math of how much cash flow we're going to have with two plants. More importantly, as we calculate all-in sustaining costs and all-in cash costs, the only optimization we've done were on G&A and ESG. You don't need 2 of me or 2 of most of our personnel to run these businesses on the administrative side and interest because we're going to cut interest in half, given that the interest is on the total debt that we are going to contract precisely to build plant 2. So we have not factored in the actual operational scale gains that come from running 2 plants using infrastructure that is built and utilized now for 1 plant. So the infrastructure sharing of 2 plants are probably going to bring more cost gains, which are not here in these cash flows. But just with this conservative analysis of doubling operations and having some synergies on G&A and interest, we're bound to generate basically $600 million in free cash flow if prices stay where they are. If prices retroceded to about $1,500, that's okay, too. We'll generate $384 million in free cash flow, meaning after interest at those levels. What becomes really interesting is when we build a third line, which could be done concomitant with the second line. That means that at 770,000 tonnes of production, and again, we're just calculating efficiencies here on G&A, ESG and interest. And we flattened the interest. We haven't cut interest further. We just cut G&A further because, again, to be a commercial person or to be an administrative person, you don't need to triple your numbers when you have triple plants. So interest is flat, but G&A and ESG was the only number that was reduced. What does that mean? Our all-in cash sustaining costs, including interest, goes down to $495 per tonne with 3 lines. So if prices retroceded to $1,500 by the end of '28, when we plan to have this capacity in place, we could be generating $581 million in free cash flow. If the prices stay where they are, we could be generating $900 million in free cash flow. That's a significant amount. And it just shows how building long-term value means building a company that is geared to generate operating efficiency, operational excellence and quite a lot of free cash flow to shareholders. As management operators, our interests are 100% aligned. We're building a business to last. We're building a business to create shareholder value for all of us, management and outside shareholders. So this slide shows the cash flow bridge, the cash bridge with its respective explanation. So again, more numeric demonstration that the disciplined execution that we have delivered in '25 and continue to deliver throughout '26 has created this operational resilience despite the very volatile market conditions. We have had operating cash generation. This is why we didn't raise capital because we were able to generate the amount of cash to deliver and to execute on plan, on target. So let's start at the end of the third quarter of '25. We had $6 million in cash. As forecasted and as discussed in those materials, and I encourage you to go back to them, we continued on the trend to deliver cash flow from operations. So on a net basis, we delivered $31 million in cash from operations, mainly final price adjustments from transactions from sales that had taken place on a provisional price basis as we discussed earlier. Then we had our cash operating costs. We have executed CapEx towards the mining upgrade, and we had $26 million of debt repayment and interest repayment as we've shown in #1 and #2. Debt repayment was just debt repayment, amortization of principal. Interest expense was the annual cash expense for the $100 million of long-term debt we've had in our balance sheet. So we had a flat cash position between the third quarter '25 and the fourth quarter of '25. This is financial discipline. We conserve cash. We burned 0 cash. So with the knowledge that there was a whole new business of lithium fines coming on stream, which, again, we flagged during our third quarter presentation, we had inflows in the first quarter '26, which were the cash sales of those lithium fines that we affected and closed on the beginning of the year. So we achieved $30 million on the sales of the lithium fines, and we achieved $5 million on the sales of the premium high grade. That was the beginning of sales resulting from our mining restructuring. Then we had a $24 million CapEx bill for the mining upgrade, mining restructuring and all that we had to do. But as we conserve cash and as we generate cash from that new line of business, which was reprocessing dry stack tailings, we were able to not only pay our CapEx for mining restructuring and upgrade, but also to continue to do debt principal repayment. So we paid down another $5 million in debt, which means we increased our cash position in the first quarter of 2026 by 100%. So we doubled the cash position. So this is, again, numbers. Numbers don't have an opinion. And it's very much in line with the strategy for cash flow discipline that we have laid out in the third quarter '25. We're giving you an advancement here or a preview as we call it. We have another $14 million of cash sales from the -- we call lithium fines business, the reprocessed dry stacking tailings. Then we have another $50 million of a true long-term offtake agreement prepayment that is poised to close by the end of the second quarter. And then we have about $32 million of the first installment of the $96 million offtake that we signed just in 2025 for the high-grade premium lithium, which is the 70,000 tonnes that we are planning to deliver in 2026. So again, we closed the first quarter '26 with $12 million in cash, and we have a significant amount of cash coming our way in the second quarter of '26, having executed pretty much most of the mining upgrade, as you can see in the CapEx bill for $24 million we paid in the first quarter of '26 plus the $4 million we initiated in the fourth quarter of 2025. Now we're going to do a bit about the operational work we have done to restructure our mining operations. This was done for, again, the construction of long-term value for shareholders. We had to do this. We had to take control of our mine because without that, we would not be ready to deliver the cadence that was necessary to affect the capacity expansions of the second and third industrial plants. Just to recap, we are a fully integrated industrial mining operation. We have this proprietary cleantech technology that produces what we call the clean lithium. That means we have a mine that's integrated into an industrial facility. And again, stopping the mine doesn't mean the industry stops. Obviously, what we want is having a mine at full tilt and then the plant receiving fresh rock. But the plant can do many things given that we have dry stack materials. But once we think about doubling capacity and tripling capacity, we mean that our mines need to operate at full tilt and in perfect cadence so that our plant can deliver on the 70% recovery levels it actually is -- it has demonstrated it can achieve in the fourth quarter of 2024. Think of it as a blast furnace. If we turn it on and off, it will not maintain those levels of efficiency. So if the same amount of material is not fed into that dense media separators per hour, it won't achieve 70% recovery. And for that, we need mine planning, mine execution that delivers piles or delivers fresh rock to the ROM pad on the same quantities regularly, at least on a weekly schedule. So this is kind of the overall concept of 100% vertically-integrated operation. Here is a picture of a Greentech Plant at night, unquestionably a beautiful, beautiful industrial installation. This is what we've done with the Greentech plant that allow us to get to the 70% recovery. We had a 2.0 version of the plant, which was the version we operated from July '23 until November 2024. That was not recovering 70%. It was recovering anything between 50%, low 60s, almost 60%. The dry stack tailing units was not working as we wanted anyway. We actually invested a significant amount of CapEx to get the plant to what we call the current stage, which is the 3.0 version that we plan to double and triple, meaning we're building another one of this and then we're building a second one of this. But in order for that to happen, as we said earlier, we need mine and plant to work in cadence. How did we get to the 70% recoveries? We automated industrial operations. We have software, we have scatter, we have algorithms. We have detection of anomalies automatically. We have correction recommendations automatically. It's self-learning metallurgy, self-learning for mineralogy. It's a bot that basically keeps on getting better and better and better when it's fed the same mineralogy. This is a picture of our fully automated control room. Then we have the mine. The mine had quite a lot of work to be done. It was using less than efficient small equipment. It was using too many pieces of equipment. At one point, there were 48 small 40-tonne trucks trafficking through the mine. So a lot had to be done there. First, we had to fix geometry. It had to be widened. And here on the picture, you already see the result of widening the geometry. So we've done intermediary strip with the objective of widen geometry and increase the mine life and increase access and open other areas with ore that were closer to surface. So what we've done, we basically open additional mine fronts now to accelerate the ramp-up. How did we do this? By using larger equipment, larger fleet to remove strip faster. So larger equipment increases efficiency on the excavators, on trucks across the board. In parallel, while we did that mostly in the fourth quarter, the Greentech Plant continued to operate. So we reprocessed the lithium materials from the dry stack tailings during the fourth quarter '25 and the first quarter '26 with superior recovery, not the 70% recovery, but it enriched it enough to create decent cash flow to create a decent sale value, a decent value added so that it could generate the cash flow and the revenues we achieved both in the later fourth quarter, but also throughout the first quarter. So what we're hoping to happen, and we've seen happening already now in March was that recoveries get closer to 70% as we resume delivering fresh rock to the plant. Now this is how we're going to bring all that software knowledge to the plant. We started and we continue. So we have fast mining implemented in process for mine planning. We have the same software implemented for fuel control. We have fatigue automatic software detection. We have a cost control app sitting on iPads and iPhones for all the mine operators. So we have loading and blasting simulations for optimal results with minimum loads, minimum vibrations. So we're bringing the same software technologies, the same intelligence to the mining operation. And that is starting in the control room for mining, which is here, as you can see in the picture. This is a picture of the first wave of larger equipment. The equipment is going to get bigger and bigger. This is the kind of the small large equipment. So -- but more important than that, we own production control. We drive production control. Mine planning is ours, blasting control is ours. We hired a third-party driller for blasting. So we're managing different contractors with our own in-house mining team. That allow us to gain confidence on deploying larger equipment, on investing in larger equipment and on basically doing the calculated analysis of where should we be blasting for safety, for optimal geometry, but also for efficient ore recovery. Now I'm going to talk about how we're going to continue to expand. We are resuming the construction of Plant 2 this year. So we're going to double industrial capacity for the high-grade premium lithium oxide. And we're not that far. In other words, once we get to it, we're going to go from the 240,000 tonnes that we're guiding to 520,000 tonnes, and that is not that far away. More importantly, there's the potential that we may build 2 and 3 sequentially. So we are never going to decommission the construction crews, given that the CapEx involved here is actually very little and the CapEx efficiency is very high, meaning it's going to cost us $80 million to conclude the second plant, and it's going to cost us $100 million to build a third plant. So with $180 million we are able to take our production from 240,000 tonnes a year to 770,000 tonnes a year. That's a substantial increase, and that's one of the most efficient CapEx ratios in the whole industry. So this demonstrates what can happen when we double and then triple production. We run the fifth largest industrial mineral complex in the world. We are the largest lithium mineral producer in the Americas. But here, we have all of our peers. We have the lithium producers in the Americas that produce from the lakes in Argentina, and that includes the Chilean and the American producers. We also have the producers from Australia, and we have the producers from Africa. So although we are the fifth largest industrial mineral complex in the world, and we're the largest industrial mineral producer in the Americas, we are the eighth ranked producer in the world as a whole. Now look what happens when we double and we triple. When we double, we go from #8 to #6 or #5. Then when we triple, we go to # 4. All of these companies have valuations substantially higher than ours. In fact, we're valued as a nonproducing company. So the effect of doubling production and tripling production is not just numeric, it's also a clear demonstration that we can be up there in the rankings with a concomitant valuation. And that is what it means for us to build long-term shareholder value. And this is what we're planning to do. This is a slide that shows how close we are to getting there. We have made a decision in the fourth quarter '24 and in the first quarter '25 of accelerating the construction of Plant 2. And unfortunately, because of tariff volatility, lithium prices collapsed in more than 50%. So we deployed CapEx and we deployed our liquidity in the fourth quarter '24 and in the first quarter '25 towards the construction. Well, that is not the so good news. We managed, we delivered throughout '25 as we've shown. We overcame because the business was structured to generate cash flows and live through organic cash flow generation. But here's the good news. We're almost there. We've almost finished civil foundations. So what is missing really? Ordering equipment and assembling equipment, and that can be done quite rapidly. In the first plant, we were able to order equipment and assemble equipment in much less than 12 months. So this is how finishing building the second plant is actually a very expedited exercise in construction, managing procurement of equipment and managing assembly of equipment. And that's it. This is a fully licensed construction, fully licensed operation is just within our control to do this. So Sigma is very well positioned to deliver substantial returns to shareholders in 2026. And here, we're going to show why. This slide demonstrates how Sigma continued cash flow generation, production cadence in '26 and growth by building Phase 2 that will yield 520,000 tonnes of lithium will certainly position us for a re-rating of our stock. Why is that? When you look at our peers that produce lithium industrialized oxide from minerals in Australia, they have a larger nameplate production and a significantly larger cash flow. However, as we increase production, that means our cash flow will much more than increase because we have this competitive advantage of high margins, low cost and operational resilience. So our increase in nameplate production will bring a disproportionately larger increase in cash flow generation. More so, that happens irrespectively of pricing environment because of our low-cost operational resilience. The next slide just shows how we're going to get there. We've demonstrated operational discipline. We delivered on all fronts in '25. That's what we've seen on the right. We deleverage and repaid debt, we increased operating cash margins. We built a new line of revenues. We're now selling lithium fines high purity from our dry stack tailings. We increased mineral reserves by 40%, which shows we can operate for 66 years with 1 line for over 25 years with 2 lines and most likely for over 25 years with 3 lines. We strengthened commercial strategy by basically capturing seasonality. We monetized final prices in line with contract seasonality in the fourth quarter. And we closed 2 significant offtakes, almost $150 million in offtakes, $96 million to fund our working capital throughout 96 (sic) [ '26 ] to fund our upgrade and restructuring of mining operations and then a $50 million typical offtake that will basically be invested in building Phase 2. So how are we going to continue to deliver in all fronts in 2026? We're going to resume steady-state production from the mining operations, that integration mine plant cadence that we've shown before that will resume the cadence of what we call the premium high-grade lithium. We're going to close financially on the offtakes transaction signed, and we're going to close on 2 more offtakes as we disclosed when we discussed offtakes here. We're going to receive the development bank disbursement for the funding we already spent on Phase 2, and we are in discussions with several other banks for Phase 3. We're going to repay $100 million of shareholder debt funded by one of the offtakes that are in negotiation, 80,000 tonnes per year for 3 years. And we're planning to commission the Plant 2, the Greentech 2 by the end of 2026. So with that, I close -- very proudly close the full year results of 2025, where we crossed the Rubicon of probably one of the most volatile lithium environments this industry has seen. And we're entering 2026, awash in significant cash generation coming from numerically delivering operational efficiency. So with that, I close this presentation for the full year of 2025. We're very, very proud of our team. We're incredibly proud of how we work, how hard we work to cross the Rubicon of one of the most volatile lithium pricing environments I have ever seen, and I've been here for 10 years as a C-level executive. We've done it without raising capital. We've done it without a hiccup in our operations. We're entering 2026 in a much strengthened position. Why? We have the resilience that's basically quantify. We already earned our revenues by building a completely different product line. We resumed production cadence at the end of the first quarter, and we're entering '26 with roughly $48 million of quarterly revenues, which is a significant accomplishment considering we're just coming out of a volatile 2025. All of that without raising any dollars of new capital, pure organic, disciplined cash generation. And that is the quintessential competitive advantage of this company. This operations efficiency delivered and quantified in the numbers we've shown you. We're very proud of our team, and I want to thank all of our clients and stakeholders who have been there with us, holding hands and helping us cross '25 and enter '26 in this very strengthened position. Operator: [Operator Instructions] Our first question comes from Fortune Era. The company has indicated a production target of 520 kt in 2027. Does this imply that Plant 2 is expected to reach full capacity by the end of 2026? More specifically, when do you currently expect Plant 2 to begin commissioning? And how long do you expect the ramp-up to full capacity to take? Ana Cabral Gardner: We are going to have another presentation on plant construction, but we'll tell you what we're planning to do now. As we've shown in the slide previously, what there is between us and new production is essentially resuming ordering equipment, assembling equipment and commissioning that plant. That can be done quite rapidly. If we use the timetable from the previous plant, it could be easily done in under a year. We are going to order equipment in the summer after the close of the second quarter. The reason being the offtake we just signed will be the main driver for us to deposit and prepay the equipment that we need to build Plant 2. We believe that it will take us anything between 8 to 12 months to actually build and commission that line. So Plant 2 will be fully commissioned early 2027. And as a result, the guidance for '27 is not a guidance for production, it's a guidance for installed production capacity, and we will be further updating the market as that unfolds. But what we can say is we're almost there with three-fifths of our timetable accomplished in the construction of Plant 2. And what stands between us and that level of production is purchasing, building and commissioning, which we've shown we can do quite rapidly. Operator: A follow-up question. In the guidance section titled cash flow forecast at various realized lithium prices, could you please clarify whether the price assumptions of $1,500 and $1,700 refer to Sigma's expected average realized selling price for its concentrate or the benchmark SC6 China FOB price. For Sigma's concentrate grade of approximately 5.2% to 5.5% lithium oxide, what is the typical realized price as a percentage of the SC6 benchmark price? Ana Cabral Gardner: So we are using -- we're not using the gross prices. We're using adjusted prices. So when you think about the nameplate price, we take nameplate price from SMM. And then we typically ship 5.2, 5.3 lithium oxide grade product. So the adjustment is done dividing that level of oxide by SC6 in older contracts. In the newer contracts, we divide by 5.5. The results are kind of the same. So when you look at the prices on that table, they are net prices. As you probably are all aware, gross prices have reached $2,400 just 2 days ago. So $1,800 and $1,500 are far below the current level of nameplate prices at Shanghai Metals Market. Operator: Our next question comes from Lamartine Gomes. Question for Ana Cabral. Can you give us your directional sense of how much each plus USD 10 per barrel increase in oil prices impacts the demand for lithium? Ana Cabral Gardner: Unfortunately, I don't have that number, and I am not really an oil expert. What we can say, though, is 15% to almost 20% of the fossil fuels we use here are just the fuels that power the trucks that run around our operations. In other words, every liter of diesel in Brazil has mandatorily 15% of biodiesel. Now that percentage is slated to increase. So we actually are, let's put it that way, 20% less impacted by the increase in diesel prices than any other country in the world because we have this fantastic, we call, biofuels program in the country, which was actually created 30 years ago during the last oil crisis for this exact reason for energy security of Brazil. And we are the beneficiary of that when it comes to our emissions. So our trucks generate 20% less emissions because the fuel by law has 15% and we're putting 20-ish percent biofuels for every liter of diesel. Operator: Our next question comes from Robert Cook. Please detail the timing of Phase 2 and 3 to completion both 2028. Anything more specific? Ana Cabral Gardner: Well, I was mentioning what we're going to do on Phase 2. And again, we're going to keep giving the market updates pretty regularly on that. Phase 2, by the summer, we're going to be ordering equipment. So close second quarter order equipment. As we demonstrated, that will be funded by the growth offtake we signed, $50 million or more than enough to prepay or deposit towards the equipment we need. To be specific, now what's between that order equipment and production is essentially assembly. In the previous plan, we had 1,000 man on site assembling that plant, that line. That was done in 8 months. We use what we call air procurement for some of the parts that were delayed so that we could cut short delivery times. We use a lot of what we call acceleration techniques, which in this budget are factored in. If we use the accelerated timetable, it means we're going to spend another $7 million for extra man, extra shifts and air freight for some of the equipment. What does that mean? It means that we could have a built plant by the first quarter of 2027, assuming we start in the summer. And then there's commissioning. What is the advantage of doing a plant that is a carbon copy of a plant we've been operating by then for almost 4 years. That is the plant we really know. And as a result, we believe we can cut commissioning times significantly. And more importantly, start benefiting from the get-go, begin with the same levels of recoveries instead of going through the curve of going -- starting with 50% recoveries up to 70% recoveries we underwent from the 2.0 version of the plant to the 3.0 version of the plant. So without being more specific, we're quite confident that we're going to have Plant 2 by any time in the first half of next year. But that's the reason why we're making a clear distinction between installed production capacity and production. Production is dependent on the commissioning, and we're going to keep the market vastly updated as we go along. Now Plant 3. Plant 3 is what we're very proud of actually because given our operational success, given our cost resilience and given our strength as a business throughout cycles, what we've shown basically in 2025 has not gone unnoticed by the main development banks throughout the world, by the main players throughout the world, by the main financiers throughout the world. So we do have dialogues going on for building Plant 3. Building Plant 2 and 3 together is not new. In fact, in December '22, when we filed our DFS for expansion, that was the plan. So much so that we invested in building infrastructure for 3 lines. The goal was to do 1, 2 and 3 sequentially and maximize what we call construction synergies. Unfortunately, lithium took a tumble in '24, and we quickly aborted that plant, and we stuck to just the first plant. By the end of '24, we resumed Plant 2, and we went all in, again, with the volatility of tariffs in '25, we aborted that plant and we stuck to Plant 1. But doing 1, 2, 3 is actually what we have been designing this industrial complex for. Why? We spent the money in the infrastructure, and that was not a small feat, meaning we have the water to feed 3 lines. We licensed to feed 3 lines. We have the sewage inbound treatment station to feed 3 lines. We have the power substation to build -- to feed 3 lines. So from an infrastructure point of view, we are ready for 3 lines. And this is why we're delighted to actually say that, that has not gone unnoticed. And we have, let's say, no shortage of choices from where to get funded with the appropriate kind of debt, development financing debt to build these 3 lines. Operator: Our next question comes from David Feng with CICC. Can we have some color on how Sigma would mitigate any potential fluctuations in fuel costs and power costs? What percentage does diesel costs account for in your cash cost or AISC? Ana Cabral Gardner: I don't have the number by heart, but I can talk about power. It will have 0 effect in power. In other words, when you think about power, our power is fixed at $2 per kilo -- $0.02 of $1, meaning $0.02, $0.02 of $1 per kilowatt hour. This is fixed. One important point, power is renewable here in Brazil. So it's coming from a hydroelectricity dam. And we have a 5-year agreement, which is set to expire 2.5 years from now. So we're going to be good with power. Diesel is the element that is a little bit less straightforward to explain. First, because we got biofuels on the mix, and that is mandatory by law. Secondly, because our oil company is state-owned, and they have what we call a diesel compensation account, which works like a shock absorber during oil crisis. In other words, the diesel costs don't go straight to the consumer as they increase globally. Petrobras absorbs some of that shock initially using what we call the oil compensation account and then it releases in the market. And that was created because all transport in the country mostly is done by trucks so that -- and trucks are individual entrepreneurs so that they have time to plan to actually send that cost into their customers. So we're going to revert back to you on the percentage of diesel in our costs with that knowledge. Operator: This concludes the question-and-answer section. I am returning to our CEO, Ana Cabral, for her final remarks. Ana Cabral Gardner: Well, I want to thank you all of you. And in fact, everyone watching us for the trust. We have gone through 2025, which was one of the most volatile years in lithium, delivering exactly as we said we were delivering resilience, demonstrating operational excellence and executing to plan. We already started '26 on a fantastic note because of what we've learned in 2025 as far as becoming more and more and more resilient. So that's the effort, the collective effort of our management team, of our workers, of the team here in Vale do Jequitinhonha, essentially working like what we call racing horses. We lowered the flap, we focus on our lane and we raised our own race without looking to the sides, focusing on the target. And that's how we've been running this business, and this is why we achieved these results. So once again, I want to thank on behalf of our management-operated shareholders here that work at the company and control the company, we want to thank all of our outside shareholders and reiterate our interest cannot be further aligned. There isn't another company in the sector that's management-owned, management-operated, where employees are shareholders. So for all of you watching, we're in this together. And I want to thank you for staying our shareholders because we crossed 2025, and we are incredibly well positioned to deliver stellar 2026. Operator: Thank you. Thus, we conclude the fourth quarter of 2025 conference call of Sigma Lithium. For further information and details of the company, please visit the company's website, www.sigmalithiumresources.com. You can disconnect now.
Unknown Executive: Good morning, and welcome to the Capricorn Energy PLC Full Year Results Investor Presentation. [Operator Instructions] Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Randy Neely. Good morning to you, sir. Randall Neely: Good morning, and good morning to everyone, and thank you for joining us for Capricorn's 2025 Full Year Results Presentation. I'm joined today by our CFO, Eddie Ok; and our COO, Geoff Probert. First, let me take a moment to address the evolving situation in the Middle East, particularly the conflict involving the U.S., Israel and Iran. We are closely monitoring the developments, but our operations remain stable and unaffected. It is very much business as usual for us on the ground. But before we also dive into the presentation, I want to briefly address the recent speculation regarding a potential offer for Capricorn. I understand there may be considerable interest, but due to the takeover code, I'm unable to provide any specific information beyond what was in our statement earlier this month. To reiterate, Alamadiyaf al-Masiyyah, also known as the Cafani Group, has made multiple unsolicited nonbinding proposals for potential all-cash offer for Capricorn. Discussions are ongoing, and the Capricorn Board is actively seeking further clarity regarding Cafani's funding arrangements. Under the U.K. takeover code, they have until the 8th of April 2026 to make a firm offer. At this stage, there is no certainty that a firm offer will be made nor clarity on the terms of any such offer should one materialize. So let's get into the presentation. 2025 was a significant year operationally, strategically and the financial progress made for the company, and a number of milestones were met across our Egyptian operations. 2025 marked a pivotal year for Capricorn. I believe we may have made the turn from a turnaround story to a serious growth opportunity in the Egypt and hopefully shortly, the U.K. North Sea arena. Over the past year, accounts receivable outstanding has come down materially, which allowed a significant reduction in accounts payable as well as retiring the company's senior debt. We also received the approval from the EGPC Board for the consolidation and amendment of the 8 jointly held production sharing contracts with Cheiron, our operating partner in the Western Desert. We are now only awaiting ratification, which we expect in the near term. Following EGPC Board approval, jointly with our partner, we were able to begin increasing our development activities to arrest the production declines. This, combined, of course, with the very solid technical work of our team resulted in our achieving the higher end of our production guidance. We put this graphic into our materials over a year ago to represent our base intentions and where we're going to take the company. Hopefully, our results are showing that we meant it. We now have an almost debt-free balance sheet. We have a disciplined and rigorous approach that we operate within and project on to our partner. And to be very clear, our partner has been receptive to this and has worked very collaboratively with us over the past year plus to allow a very -- sorry, to follow a very similar approach. We are now set to take advantage of all the hard work accomplished over this past 3 years, rebuilding Capricorn. In the near term, we will look to build on our base in Egypt, both organically and through acquisitions and also look to capitalize on our geographic location and capabilities in the U.K. North Sea. I'll now turn it over to Eddie, who will walk through some of our results and guidance for 2026. Eddie Ok: Thanks, Randy, and good morning, everyone. 2025 was a solid year as we not only achieved some key structural milestones in the Egypt business, but also really cleaned up our balance sheet. Production was just over 20,000 BOEs on a working interest basis, and we preserved a 40% liquids weighting in that production base. OpEx increased slightly over the prior year at $540 per BOE, driven by our fixed cost base and the currency devaluation from the prior year, having largely worked its way through the system. We're guiding to an OpEx range of $5 to $7 a BOE for 2026. A successful capital program in 2025 of $77 million invested, drove production performance in the year and set a sustainable foundation for '26's program. We had material collections in 2025 of $217 million, resulting in us ending the year with an $86 million receivables balance on $81 million in Egypt net cash flow. With only $30 million outstanding on a ring-fenced junior facility and having repaid the senior facility early, we entered '26 with a significantly improved balance sheet. The business ended 2025 with $103 million in cash, net of facility debt, which represents a year-over-year cash increase of $80 million, and we continue lobbying efforts with EGPC to return our receivables to a reasonable level. We are encouraged by the recent press from EGPC and the minister about receivables balances for IOCs and remain confident in the ultimate collection of our outstanding revenues. For 2026, the drilling activity completed in '25 and planned '26 activity will shift overall production to a slightly higher liquids weighting at about 43%, though 2 turnarounds planned for the year will impact full year production estimates as we guide to 18,000 to 22,000 BOEs per day. Capital of $85 million to $95 million this year will prioritize liquids and ratification will be critical to unlock acreage perspective for additional exploitation and development activity. Next up, Geoff is going to take you through our operational plans for the year. Geoffrey Probert: Thanks, Eddie, and good morning, everyone. Next slide. 2025 Egypt operational activity was a year of 2 halves, with the first half primarily fulfilling legacy exploration obligations and the second, pivoting the 4 rigs to development drilling. It's worth noting here that without the EGPC agreement to merge our 50-50 concessions and improvements on the payment side, we would not have been able to support much further development drilling there post the first half exploration commitments. So the timing was excellent for all parties. Development drilling was effectively reopened on BED, which supported by the ongoing reservoir management program contributed to improved production performance and a solid year-end exit rate. The legacy exploration yields success in NUMB and encouragement in Southeast Horus with the latter sufficient to move into the next exploration phase. Next slide, please. Much of this is a reiteration of what we've said on the merged concession before with improvements in concession longevity and fiscal terms a catalyst to increase Capricorn's reserves and production with value and cash flow enhanced through increased investment self-funded from Egypt. Two bullets I'd like to highlight are first, the example, approximately $5 per BOE improvement in netbacks at $80 a barrel Brent; and second, replacement of more than 250% of our 2025 production through reserve adds with the merged concession being a major contributor to that. For EGPC, our increased and more importantly, sustained investment delivers greater production over the long term for Egypt, having the potential to be a true win-win for all stakeholders. We continue to expect customer ratification in the near future with our investments since mid-2025, consistent with the application of the new terms. Next slide. This final operational slide demonstrates the impact of the new merged concession agreement on reserves and resources underlying our business. We previously highlighted the potential to convert up to 20 million barrels approximately working interest resources and reserves into reserves with the merged concession. We've achieved that as the 277% reserves replacement ratio shows. We've already identified a resource maturation runway with a further 332 million barrels of oil equivalent unrisked working interest 2C, of which around 80 million barrels of oil equivalent has been evaluated by GLJ. With some prospective resources to chase and discussions underway to improve the ASW concession, these are a bonus. All in all, the new merged concession supported by operational excellence and regular EGPC payments has helped transform the outlook for Capricorn Energy. Thanks for your time and attention. I'm now passing it back to Randy to wrap up. Randall Neely: Thanks, Geoff. So in closing, I would like to emphasize that we are now positioned to take advantage of all the hard work undertaken over the past 3 years. We are near debt-free with net cash of over $100 million at the end of 2025, thanks in part to regular robust collections of our revenues over the past 15 months and in particular, the last 6 months of 2025. We have new terms to the bulk of our concession agreements now just awaiting ratification, which we expect to happen shortly. We have a strong and collaborative working relationship with our joint venture partner, Cheiron. Our technical team has identified significant contingent resources for the JV to mature and exploit. We continue to be laser-focused on building cash flow and shareholder value. And our plan is to do that by continuing to employ technical rigor, be focused on costs and details and by seeking out opportunities to expand our operations in Egypt and realizing on our advantaged position in the U.K. North Sea. I want to thank everyone for attending. We're going to open the floor for questions, but I'll remind you that we will not be able to make any comments on the potential offer for Capricorn as mentioned in the opening. Unknown Executive: That's great, Randy, Eddie, Geoff. Thank you very much indeed for your presentation. [Operator Instructions] I would like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A can be accessed via investor dashboard. And Diana, at this point, if I may hand back to you to take us through the Q&A session, and I'll pick up from you at the end. Thank you. Unknown Executive: Thanks very much, Alex. So we have 2 questions that have been submitted. Thank you very much for submitting them. Just to say any that aren't answered on the call will be followed up via the Investor Meet platform with a written response from the company. So to our presenters, first of all, we have the question, you mentioned M&A in Egypt and the broader MENA region. What valuation thresholds or return hurdles are you applying in the current oil price environment? Randall Neely: Well, given the recent changes in oil prices, we haven't factored any change -- long-term changes into our analysis at this stage. We do, however, always look for a reasonable rate of return on any investments. And for us, that typically means kind of starting with a 25% rate of return given just generally the business itself and, of course, the region. Unknown Executive: And then we have another question asking what production and cash flow uplift do you expect from the merged concession over the next 2 to 3 years? And what key risks could delay or reduce those benefits? Geoffrey Probert: Okay. I'll take that. In terms of the cash flow at the start, at first we don't really forecast cash flow, although we do put the CPR out there. So that's a place you can go and do your own calculations, I guess. Similar, I guess, on production as well. In terms of production, the new concession agreement is focused on giving us running room and the opportunity to grow. And I mentioned the -- not just the reserve side, but the continued resources side, which is a significant underlay to that GLJ evaluated CPR. I think in 2 to 3 years -- over the next 2 to 3 years, key risks, obviously, they're geological, but that's mitigated to a large extent by some of the improvement in the runway we have land-wise. There is the new development leases, which about our small BED concession area, apart from those concession. [indiscernible] North area, too. Plus over [indiscernible], we have with an improved gas price for incremental investments, some additional running room there. So there's a lot of broader, if I say, opportunity there to allow us to mitigate any risk from a geoscience point of view. Really, the thing that drives our investment is respect we get and we increasingly and continue to get from EGPC, our operating partner in Cairo, there in terms of being paid by EGPC is critical. So we've been very fortunate that we've been prioritized along with others in the IOC space for payments, and that really drives right into this investment we see. So that's what underpins our production. Unknown Executive: And we've got just one final question here asking what's the biggest financial risk that investors may be overlooking from Rob? Eddie Ok: Yes, Rob, I think that our annual report and the section that we publish on principal risks and uncertainties adequately captures our risk management process. And as always, within the operational jurisdiction of Egypt, receivables collections with us having one customer for our oil and gas is a sort of principal risk. But given the recent press out of the ministry as well as the minister in the past 48 hours, there's been a real commitment on the part of Egypt to ensure that IOCs are getting paid and continue to get paid. And so we look forward to continuing to invest in this jurisdiction. Unknown Executive: That's great, Randy, Eddie, Geoff. Thank you for addressing those questions for investors today. But Randy, before we direct investors to provide you with a feedback, which is particularly important to you and the company, could I please just ask you for a few closing comments? Randall Neely: Well, I think I'll just reiterate, I think the company has done a lot of heavy lifting over the past few years, and I'll spare going through the storybook, but a huge amount of work has been done over the last 3 years to put the company in this position, terrific balance sheet, great working relationships with our partners, not only Cheiron, but also the government and a great future with respect to the contract renegotiation that's taken place over the past 1.5 years. And so we're now in that position to take advantage in Egypt, and we're just sort of in the beginning to try to as I said, capitalize on our geographic and capabilities in the U.K. North Sea. So we're looking forward to expanding our operations and more to come in future months. Thank you very much for attending. Unknown Executive: Perfect. Thank you very much indeed to you all for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team, we would like to thank you for attending today's presentation, and good morning to you all.
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