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Raquel Cardasz: Good afternoon, everyone, and thank you for waiting. I'm Raquel Cardasz from IR, and we would like to welcome everyone to Pampa Energía's Fourth Quarter of 2025 Results Video Conference. We would like to inform you that this event is being recorded. [Operator Instructions] Before continuing, -- before continuing, please read the disclaimer on the second page of our presentation. Let me mention that forward-looking statements are based on Pampa Energía's management beliefs and assumptions and information currently available to the company. They involve risks, uncertainties and assumptions because they are related to future events that may or may not occur. Investors should understand that general economic and industry conditions and other operation factors could also affect the future results of Pampa Energía and could cause results to differ materially from those expressed in such forward-looking statements. Now I will turn the video conference over to Lida. Please go ahead. Lida Wang: Hello, Raquel. Thank you very much. And hello, everyone. Good afternoon. Thank you for joining our call. I will make a really quick summary so we can spend more time on questions with the management today. Q&A, we have our CEO, Mr. Mariani; our CFO, Mr. Zuberbuhler; and our Head of Oil & Gas, Mr. Turri. So let's go ahead with the first slide where we make a quick summary of 2025. November 25, 2025, marked our 20th anniversary of Pampa and the creation of Pampa. Back in 2005, we did not produce any oil or gas or did not generate any single megawatt hour of generation, electricity. So 20 years later, Pampa accounts for 9% of the country's total natural gas production and reached a record daily production of 104,000 barrels of oil equivalent during the winter of 2025. This year also marked a steep change in our upstream profile. Our black flagship shale oil development at Rincón de Aranda began the year producing less than 1,000 barrels of oil per day and now reached a 20,000 barrel goal by December of last year. As a result, total annual average production exceeded 84,000 barrels of oil equivalent per day. This is 8% higher than last year and 73% up since 2017, the year after we acquired Petrobras Argentina, reflecting the sustained organic growth and disciplined capital allocation. In the Power segment, we consolidated a 15% share of Argentina's net electricity output, achieving an outstanding 94% thermal availability rate in 2025, reaffirming our position as the country's leading IPP and demonstrating a reliable, efficient fleet operating under a gradually normalizing market framework. At a consolidated level, EBITDA grew 8% year-on-year, surpassing the $1 billion mark, mostly driven by power, gas and Rincón de Aranda. While oil and gas and power each represent half of the EBITDA, we expect that ongoing growth at Rincón de Aranda will further expand Oil and Gas footprint in the EBITDA. So Pampa and its subsidiaries are deeply committed to the country's energy development. In 2025, we hit a new record high of $1.4 billion in CapEx, of which roughly half was testing to Rincón de Aranda, the largest single project development investment in our 20-year history. In 2026, we expect to set a new record high, allocating $770 million in Rincón de Aranda, very similar to last year to reach production plateau, plus another $400 million for maintenance across our operations and around $600 million for TGS'’ private initiative project. So moving on to the Q4 results. The quarter's adjusted EBITDA amounted to $230 million. This is a 26% year-on-year increase. Power generation was the main contributor, where, since November the new guidelines for the whole electricity market have allowed power producers to operate under a more decentralized scheme, improving price signals and enabling us to capture operational efficiencies and synergies with our E&P gas. Rincón de Aranda was the second key driver with this production ramping up -- ramp-up accounting for 23% of the quarter's EBITDA, supported by 10 active paths as of today. Our capital structure continues to strengthen following the issuance of our 12-year international bond. We closed the year with a net debt-to-EBITDA ratio of 1.1x and average debt life of almost 8 years. Quarter-on-quarter EBITDA decreased due to the gas seasonability -- seasonality, sorry, offset by Rincón de Aranda and steady contributions from our utilities, TGS and Transener. CapEx surged 81% year-on-year to $371 million in the quarter, of which $249 million were invested in the development of Rincón de Aranda. Okay. So moving on, on the Slide 6. The Oil and Gas segment adjusted EBITDA was $77 million in Q4, more than doubling last years, driven by Rincón de Aranda, increased gas exports and industrial demand. Higher transport and treatment costs partially offset these gains. Compared to Q3, EBITDA declined due to the gas seasonality, but was smoothed by Rincón de Aranda. Lifting costs averaged $8 per barrel of oil equivalent, slightly below last year due to higher crude oil output and stronger gas demand, offset by increasing gas treatment costs and the lease of temporary facilities at Rincón de Aranda. Quarter-on-quarter, lifting cost per boe increased due to this gas seasonality. Gas lifting costs remained flat year-on-year at $1.2 per million BTU, an average of $1 during the 2025, but rose quarter-on-quarter, again, because of the gas seasonality, while oil declined sharply to below $11 per barrel from $36 last year's Q4. This is because -- mainly because of Rincón de Aranda's ramp-up and the divestment of mature conventional blocks. Remind you all that last year, Q4, Rincón de Aranda was really a greenfield, produced only from one well. On top of that, we were recording trucking expenses, testing expenses, and we also held a lot of mature blocks that today are divested. Total production averaged more than 81,000 barrels of oil equivalent per day, up 32% year-on-year. This is led by Rincón de Aranda and Sierra Chata, partially offset by decreases at El Mangrullo and in nonoperated blocks as well as the divestment of El Tordillo. Quarter-on-quarter, production dropped 18%, again, explained by the gas seasonality. The production mix continues to evolve with oil rising to 22% of total output, driven entirely by Rincón de Aranda. Crude oil prices averaged nearly $61 per barrel in Q4. This is 10% lower than last year due to the weaker Brent prices. Without the hedging at Rincón de Aranda, our realized price will have been $53 per barrel. So focusing now exclusively on Rincón de Aranda, the ramp-up stays on track. In Q4, we reached the first goal of 20,000 barrels per day after tying two pads -- two new pads with an average quarterly production of 17,100 barrels per day. This is a 19% increase quarter-on-quarter. As of today, 10 pads are online, of which 3 of them are currently undergoing testing -- well testing. And -- plus we have another two pads, DUC pads and two other pads are under fracking. In 2025, Rincón de Aranda, contributed $126 million of EBITDA. Infrastructure build-outs, thanks to the RIGI incentive regime continues in parallel with the field development. Next month, we are installing an additional temporary processing facility with a focus on reaching 28,000 barrels by mid-2026, a key milestone toward the final production target of 45,000 barrels expected in 2027. So moving to Gas. Sales grew 10% year-on-year, but dropped 23% from Q3. This is, again, explained by seasonality. Mangrullo continued to lead the output, though its share shrank to 46%, while Sierra Chata grew to 38% share with production up 39% year-on-year, supported by a new pad that we tied in during the quarter. Together, they accounted for 84% of the total gas production. Gas prices averaged $3 per million BTU, flat year-on-year. Industry sales supported the pricing, offset by lower export prices due to the Brent underperformance and a drop in residential due to the lag tariff pass-through of the devaluation. In Q4 this year, 72% of our gas was sold under the Plan Gas GSA, CAMMESA and Retail, down from the 81% Q4 last year due to the transfer of certain rounds of the Plan Gas volumes to fuel self-procurement in power, which represented 4% of the total sales in Q4 '25. Now in December, we started to formally doing the self-procurement of gas in Genelba and Loma de la Lata. The self-procurement increased to 41% on average in January 2026. So as a result, Plan Gas GSA exposure shrank to 37%. With the new guidelines, in place, we expect 40% of this year's production to supply our own gas -- our own power generation, capturing margins and leveraging synergies between these two core businesses. Before moving from E&P, I want to just do a quick update on reserve. Total proven reserves rose 28% to 296 million boe, driven by our increased activity in Sierra Chata and specifically in Rincón de Aranda. Shale reserves grew by 55% year-on-year to 204 million barrels and with shale oil now accounting for 19% of total reserves. The reserve replacement ratio was 3.2x, extending the average life to 10.2 years. Since 2019, proven reserves have increased 118% with the most significant expansion coming from shale since 2023 when the year when we started to actively develop Vaca Muerta formation. Okay. So moving to power generations. We posted an EBITDA of $111 million in Q4, up 28% year-on-year, mainly driven by stronger spot prices under the new guidelines, especially -- partially offset by power dispatch at Genelba's new CCGT due to the program maintenance. Total availability declined to 91% due to the scheduled maintenance in Genelba and Loma de la Lata and the ongoing outage that we are experiencing in HINISA since January. However, Pampa's’ thermal availability continues to outpace the national grid under the new framework, also Energía Plus B2B contracts were discontinued, though we managed to recontract in the B2B market. So contract capacity remained stable year-on-year. With the new framework also performance balances between contracted capacity and the spot margin. So value creation also can be driven by efficiency and fuel management. Those units with high load factors and self-procure fuel will achieve higher margins. Turning to cash flow on Slide 11. We show the parent company figures because this is aligned with our bond perimeter. Despite the higher CapEx at Rincón de Aranda, we posted a limited $20 million free cash outflow in Q4, offset by strong EBITDA and working capital inflows mostly from winter collections. As a result, cash and cash equivalents stood at $1.1 billion at the quarter end. This is $210 million more than September close. Finally, on the balance sheet, gross debt was nearly $1.9 billion, down 9% since 2024 December. In November last year, we issued a $450 million international bond maturing in 2037 with a record 20-year tenure. This is the first long-dated issuance by an Argentine corporate over a decade and extending our average life to almost 8 years. The proceeds from this issuance and the 2034 notes that we issued in May were used to redeem all the outstanding international bonds, the '26, the '27, the '29 notes and some of the local dollar bonds. As a result, net debt reached to $801 million. This is 1.1 net leverage, maintaining a conservative capital structure while funding growth. Well, so this concludes the presentation. Thank you for hearing me. Now the floor is open for questions. [Operator Instructions] Lida Wang: All right. So we start -- Alejandro Demichelis from Jefferies. How do you see the evolution of production? Please split between oil and gas and of drilling and completion and lifting costs in 2026? Production, drilling -- D&C, lilfting costs. Horacio Jorge Tomas Turri: Okay. Good afternoon, and thank you, everybody, for joining. Regarding production, let's go first to oil. We are, as Lida mentioned, currently in around 19,000 barrels per day. Our target is to reach 25,000 barrels per day by the end of March, beginning of April and then keep on ramping up to 27,000, even 28,000 barrels per day as of the half of the year. All of this is coming out of Rincón de Aranda. In terms of natural gas, we just closed February around 14 million cubic meters per day. We will probably be reaching a peak of around 18 million cubic meters per day during the winter and an average of approximately 13.5 million cubic meters per day compared to 12.5 million cubic meters per day in 2025. In terms of drilling and completion, in Rincón de Aranda, we drilled 20 wells. We're going to be drilling 20 wells and completing 35. And in Sierra Chata, we will be drilling and completing 8 wells each. And I'm missing lifting costs, which are in the range of -- will be in the range of $10 per barrel. Lida Wang: Yes, until we get... Horacio Jorge Tomas Turri: Until we get the CPF. We are talking about 2026 and a little bit less than $1 per million BTU in our gas operations. Lida Wang: Great. So let's go to the next question. Next question comes from [ Guido Visocero from Nalaria ] about the hedging. How are the royalties settled? Are they include in the hedge? Or is that independent and settled at the market? Horacio Jorge Tomas Turri: No, royalties do not have any connection to the hedging. They are set at the market price. Lida Wang: All right. Next question, Alejandro Christensen from Latin Securities. How much impact have you seen so far from Resolution 425-25? And how much additional impact do you expect in 2026? Could you provide some color on the EBITDA growth outlook for this segment next year? Next year, I guess, '27, right? Gustavo Mariani: This year. Good afternoon, everybody. Thank you for joining. The impact of the resolution so far, it's -- I think what we have been saying in previous calls is between 10% and 15% vis-a-vis the EBITDA generation that we had in 2025. More or less. And that is what we expect for the segment as a whole when you compare 2026 vis-a-vis the previous year. Lida Wang: I guess 2027 is too early to say, right? Gustavo Mariani: Say it again. Lida Wang: 2027, it's too early to say. Gustavo Mariani: Too soon to say. Yes. What this resolution brings is also an improvement in our E&P business, and that is thanks to the fact that now we are self-procured. We are selling the gas and our thermal power use is provided by our E&P segment. So that also brings -- and again, we are expecting here, but it's so far what we have seen in January and February, a 10% increase in quantity in the natural gas produced by the segment, and that is thanks to the fact that we are self-procuring in our thermal plants. Lida Wang: We're kind of not putting much number of that profit, right? So we are -- the number you said is only for power generation, but the fact that we are self procuring this vertical integration, we are not putting a number so far ,an effect, right? An impact. Gustavo Mariani: Yes, that's correct. So that's -- in our projections, we expect on the power generation segment around 10% to 15% increase in EBITDA and another increase coming from the fact that the total gas produced by the E&P segment will also go up by around 10%. Lida Wang: That's right. All right. Next question coming from Alejandro. Alejandro as well he says, have you signed any PPAs with private counterparties for energy or capacity? Gustavo Mariani: Yes, we have been very active since November that this new resolution is -- our commercial team has been extremely active. If I remember correctly, I think that we have sold like 70 -- now you can sell energy and capacity. We've been active in both. Signed more than 100-something contract for a total of around 70 megawatts. So yes, we have been very active there. Lida Wang: All right. And then how are you seeing natural gas demand and pricing in the industrial sector, industrial evolving during Q1 '26? Horacio Jorge Tomas Turri: We see the industrial demand is stable. It accounts for less than around 10% of our overall production. And given the changes in the self-procurement it's not a segment that we are very familiar, we are not that interested. So it would have an effect in Pampa Energía. Lida Wang: All right. Next question coming also from Alejandro. What percentage of oil production remains unhedged throughout 2027? Gustavo Mariani: Throughout 2027 means until or until the end of 2027? Lida Wang: Probably it means until 2027 in English, right? But I don't know. Gustavo Mariani: So we are fully -- basically, we are fully hedged 1 year going forward. So until first quarter of next year, we are fully hedged. Lida Wang: All right. Next question coming from Bull Market, Felipe Collazo. Following the deregulation, has Pampa been able to start acquiring gas from its own wells? I think it's all self answer. Can you give a guidance of what the savings in fuel costs will amount during 2026? Savings in fuel costs? I don't see savings. Horacio Jorge Tomas Turri: We're making profit out of it. Lida Wang: We are vertically integrated. Horacio Jorge Tomas Turri: Exactly. Lida Wang: Yes. So we are producing more than before, right? Horacio Jorge Tomas Turri: That's right. Lida Wang: So January, we produced. Horacio Jorge Tomas Turri: We are particularly producing more during 2026 in the winter time. Lida Wang: Yes, it will be more like... Horacio Jorge Tomas Turri: We will have a flat curve. Lida Wang: But Q1 is already higher than Q1... Horacio Jorge Tomas Turri: We already said that February ended up with almost 14 million cubic meters per day. Lida Wang: Well, yes, last year first quarter, it was a little bit different because Q4, it was very bad, and they took -- CAMMESA took more gas. But even that, the production... Horacio Jorge Tomas Turri: Just taking into account that the overall average of '25 was 12.5 million cubic meter, and we're saying that only February is around 14 million cubic meters per day. So we will definitely be -- our estimation is that we will be producing around 13.5 million to 14 million in 2026. Lida Wang: How long do you expect the RIGI approval to take for the Rincón de Aranda treatment plant. We used to think that application has been filed by mid-2025 when it was first announced. But some news articles from about a month ago suggest it was just done last January. Could you clarify that? Gustavo Mariani: Yes. I don't recall when we filed the RIGI for upstream, but it was definitely third -- fourth quarter -- of last year. We haven't been approved yet. But recently, they have -- there was a new decree adding upstream of oil to the RIGI. So we are starting to file for an additional -- yes, an overall RIGI for the full development of Rincón de Aranda. Lida Wang: All right. Do you plan to fund the CapEx by via new debt issuance? Adolfo Zuberbuhler: Hi everyone. The base case scenario, the answer is no. The idea is we have a big cash position that we have been acquiring with our free cash flow and last year debt issuance. So the base case is that we use part of that cash to complete our CapEx investment of this year. That being said, if we decide to embark in new projects or any other new investments, we'll have to revalue that decision, and that base scenario. And of course, there is always-- I am very opportunistic. So if spreads keep tightening, that is something that we will look. But the base case scenario is that we will face the capital investments with our cash position. Lida Wang: Next question comes from Juan Ignacio Lopez from Puente. I think we haven't answered this yet. But what's the guidance about CapEx for 2026, Oil and gas and Power? Gustavo Mariani: Around total CapEx? Lida Wang: Sorry. Before that, we don't give guidance. But I will give you -- we will share with you what our Board approved by the budget -- for the budget, right? Gustavo Mariani: As Lida says, the restricted group only. So it's basically it's around $1.1 billion, basically $1 billion, the E&P segment and it's less than $100 million on power generation because it's only maintenance CapEx. So we don't have any project -- any new project going on, on that -- on the Power Generation segment. That answers? Lida Wang: And oil? Gustavo Mariani: Oil almost around... Horacio Jorge Tomas Turri: $1 billion. Lida Wang: Awesome. So next question, he says specifically, how much of that is maintenance and how much is scheduled for thermal plants this year? It's pretty much... Gustavo Mariani: Yes, it's around $80 million, and it's all -- maintenance CapEx, yes. Lida Wang: And second, guidance regarding free cash flow. Which, again, we don't do guidance, but we can share with you what it's approved by the budget. And what crude realized price are you assuming for your base case scenario? Adolfo Zuberbuhler: So we expect total CapEx, including maintenance CapEx, investment CapEx and the equity that we will deploy to our joint ventures. All that will imply more or less $500 million negative cash flow after all investments. So that is what will bring the cash position from $1.2 billion to $700 million roughly. Lida Wang: All right. What else? And the price of oil. The price of oil assumed for the budget. I think it was less than $58. Gustavo Mariani: Well, that's the one assuming the budget. But I think what is relevant here is the hedge price that is around $66. Lida Wang: Yes, that's correct. A little bit above $66, right? So the hedge is Brent, right? And then after discounts and export duty, which is 8%, it is roughly a little bit lower than -- roughly a little bit above $58 depending on the discount. Horacio Jorge Tomas Turri: Wellhead, you mean? Lida Wang: Wellhead and it's realized FOB. The wellhead, you have to account the transport -- okay. Next question. Cattaruzzi Matías from Adcap. How should we think the quarterly production ramp-up through 2026, particularly toward the -- around 24,000 barrels per day level by second quarter of '26 and around 28,000 by third quarter. Horacio Jorge Tomas Turri: We've been through that. That's exactly he's answering the question. Lida Wang: But then after -- so the [ 828 well ] in the chart, we put like it's like 20 and then sharply goes up to the plateau? Horacio Jorge Tomas Turri: No. It's not going to happen. Lida Wang: What do you think... Horacio Jorge Tomas Turri: It's not financially efficient. So it's going to be -- probably going to be a ramp-up curve going from 28,000 to 45,000 in around 5 to 6 months. Lida Wang: Okay. Matías is asking -- given that Pampa has more gas reserves that it can currently monetize, would you consider monetizing part of our -- of your gas acreage portfolio for farm out or farm downs or asset sales? Gustavo Mariani: We could consider it, but we are not actively seeking to do so. Lida Wang: Could you update us -- another from Matias. Could you update us on Southern Energy FLNG project, specifically timing, expected volumes and potential EBITDA CapEx contribution from Pampa and what the LNG FOB price assumption, it's basically the Coca-Cola, everything. Horacio Jorge Tomas Turri: In terms of timing, we are expecting the first boat by second half of 2027 and the second one by the second half of 2028 for a total demand of 6 million tons per year. That's around -- roughly around 25 million to 26 million cubic meters per day. We have 20% out of that. And the biggest capital or the biggest CapEx involved in the project now is the construction of the dedicated gas pipeline from Cartagena to San Antonio state, which will account for probably around $1.5 billion. Gustavo Mariani: Hopefully less than that. Horacio Jorge Tomas Turri: Hopefully less than that, from $1.3 billion to $1.5 billion. And out of which we could consider that 60% will be financed and maybe 30% to 40% is going to be equity. And out of that, we have 20%. So that's a major CapEx that we'll be facing. Lida Wang: Francisco Cascarón from DON Cap, he is asking what new opportunities do you foresee in the generation segment, if any? Do you expect... Horacio Jorge Tomas Turri: I'm sorry, just to add something that's relevant. We signed our first long-term contract with CFA, the German agency for 2 million tons per year. Lida Wang: It's binding? This is binding? Horacio Jorge Tomas Turri: It's already binding. Yes more than binding. Lida Wang: Great awesome. For sale? Gustavo Mariani: Binding for both. Lida Wang: Great. All right. Shifting to power generation. Francisco Cascarón from DON Cap, is asking, do you foresee any opportunities there? Do you expect to increase installed capacity this year or in the near term? Gustavo Mariani: Increase this year impossible because these projects take several years to be installed. What could be done in the short term could be something like batteries. And today [ Tamesa ] our Secretary of Energy announced a new auctions of batteries similar to the one that was done last year. The one done last year was within the Buenos Aires area, and this one is all around the country, but has been published today. Honestly, I didn't have time to take a look at it. Usually, these are small projects, very competitive. We have colleagues very aggressive on pricing. So not sure whether we are going to be actively in this auction. Lida Wang: That's it. Okay. So [ Houting Pacheco from, Maria ] he's asking, given the improvement in power prices under the new wholesale electricity market framework, are you now seeing higher returns in power generation relative to shale oil? What a question? Gustavo Mariani: Relative to shale oil. We are seeing higher returns on the power generation vis-a-vis previous year relative to shale oil. The power generation margins have improved. I still think that shale oil provides a higher expected returns than power generation. Lida Wang: There are two animal right? Gustavo Mariani: Yes, two different animal, exactly different risk -- exactly. But despite these changes, we are very comfortable with the development that we are doing in Rincón de Aranda and adding the oil segment to pump. That is where the question is... Lida Wang: Talk about, yes. Well, with the recent extension of the, RIGI, are you thinking to apply? I think we answered that. Gustavo Mariani: Yes. We are starting to apply for the upstream part of Rincón de Aranda. Lida Wang: He is asking -- I think it's too early to answer, but expected impact on project economics and timing. So we can give him a quick summary of the relief, if I may. So it's basically after the third year, you get export duties abolished removed, right, the third year. The tax rate goes down from 35% to 25%, accelerated depreciation, so the imposable amount, it's smaller as well. So that helps through the first years of the operation. BAT can be -- BAT credit can be monetized. What else, if I can remember -- pretty much that, right? But it's a 30-year time that they give you, right, the RIGI. And then, of course, free disposal of all the proceeds abroad. If you export, you can keep it. I think that's the key takeaways from RIGI. Gustavo Mariani: Totally. Lida Wang: That's not AI. We produce that. I have to think about it. So he said, well, congratulations from [indiscernible] He's asking the RIGI upstream, how broadens the scope of the Rincón de Aranda project and how could accelerate the development? Gustavo Mariani: He is asking... Lida Wang: The whole impact. Horacio Jorge Tomas Turri: Okay. The RIGI-- the possibility of the RIGI is going to give a significant, let's say, help to develop the northern part of Rincón de Aranda, which will have an impact both in the ramp-up curve and also in the total amount of oil to be recovered from the area. So we think that this is a major change in the overall economics of the project. Lida Wang: He's asking, should we expect any updated production guidance and timing, meaning adding RIGI or drilling capacity or having more capacity contracted? Horacio Jorge Tomas Turri: It will probably happen. It's not going to change the short-term curve, but it's going to have an impact in the medium term, something we're still analyzing and obviously, it's contingent to the RIGI application. Lida Wang: All right. Someone I don't know, like its name, it's Armando, which is very weired. He's asking a question that we will usually answer. Do the company is planning distribute any dividends in the near future? Gustavo Mariani: No. We're not planning to distribute dividends in the near future. As Fito explained, we have a negative free cash flow this year, and we expect still too early to say, but something that even or slightly positive in 2027. But we still see a lot of opportunities to continue growing. So because of this situation, we are not planning dividends in 2026. Lida Wang: From [indiscernible] asking he wants to double click on the CapEx estimates. For Rincón de Aranda $770 million budget for this year, how much is wells versus infrastructure? Horacio Jorge Tomas Turri: Yes, it's approximately $500 million in wells and the difference will be facilities. Lida Wang: How much in maintenance for generation is $80 million that we said. TGS, what we said is considering Perito Moreno expansion and maintenance, yes, it's $600 million of expansion of the Perito Moreno. Gustavo Mariani: This year. Okay. Lida Wang: No, no, no. Total, it's over $700 million. Gustavo Mariani: Okay. But we haven't talked about TGS CapEx. Lida Wang: Very briefly in the evolving chart-- evolution chart. Maintenance on TGS, like $90 million per year, more or less, total, right, the trunk -- the regulated trunk, the liquids and what is left for midstream. That's $90 million per year. What should we expect for next year? Well, for Rincón de Aranda, when we reach plateau, it's just maintenance. Horacio Jorge Tomas Turri: Yes. So I mean it's just drilling and completing for the -- to fill up the decline. Lida Wang: Gas, we are already. Horacio Jorge Tomas Turri: Gas, we already reached our peak, our plateau. Lida Wang: But when we have CISA, we will... Horacio Jorge Tomas Turri: When we have CISA, we need to decide whether we're going to be supplying all of the demand above CISA or we will be replacing some of our demand with CISA, something that we need to. Lida Wang: In power generation, we don't have any projects in the pipeline. So that's it. Next question from Ignacio. It's, what are the conditions of the B2B PPAs that you signed? Which is very, very broad, like we have some in HINISA, some in... Gustavo Mariani: Yes. Just to give you example -- information. But I think the volume is around 70 megawatts prices for energy in the mid-50s. Lida Wang: Yes, we are doing summer winter. We are doing peak, off peak. Gustavo Mariani: They are 1-year contracts. Lida Wang: Yes, 1-year contracts. We have first year -- mostly of that 70 megawatts is first year, which is mainly -- it's mandatory, but we have some second tier. That's it. Gustavo Mariani: Yes. In terms of capacity what the regulation has in order to incentivize the contractualization is that industries pay a higher capacity charge than what we collect. So that incentivize contractualization because we sell our capacity a little bit better than what we sell to CAMMESA and industries get a reduced price from what CAMMESA charge to them. Lida Wang: Yes. Well, Andresi Miliano from Balance. The liberalization of the power market contemplates procure energy by distributors. When do you consider this will be fully implemented? And how do you expect to impact your power segment? I guess the B2C conference is what he's asking, that we haven't done any... Gustavo Mariani: No, we haven't done any yet. Probably some of our colleagues, especially the hydro -- the recently -- the hydro units have that, but have not -- that is not yet a public information. So that is a market that we need to see how it will evolve. I don't have any clarity right now. Lida Wang: Another question comes from Andres Cardona from Citi. Regarding power generation, we already answered. The second question, is there any short to midterm M&A opportunity? Is there more likely to be for upstream or for power generation? Gustavo Mariani: There's nothing in the short term. So there's nothing in the pipeline. That is the question that we are studying neither in E&P or power generation. Harder to see how that is going to evolve going forward, but we are not actively engaged in any M&A opportunity. Lida Wang: This question was answered in previous calls, but well, there is always a new audience. Do you have any information about Rincón de Aranda. Specifically in the type curve, like, for example, with estimated URs, IP30, D&C cost per barrel? Horacio Jorge Tomas Turri: We don't give any guidance... Lida Wang: Very good. I don't know, it's like around 1.5 million. Horacio Jorge Tomas Turri: Okay. It's probably around 1.1 million barrels of EUR. And in terms of cost, we should be hitting $15 million per well approximately. Lida Wang: Well it's fully considered the whole thing. Horacio Jorge Tomas Turri: All of it, all of it. All the way to the collecting pipeline. Lida Wang: Correct. Which sometimes is different from the measure from other players. Horacio Jorge Tomas Turri: Yes, of course, of course. Lida Wang: Another question from someone I don't know is called [indiscernible] . How is Pampa involved in [indiscernible]? Gustavo Mariani: No, we are not involved. Lida Wang: Can you give us from, [ Santiago -- Valeria ] can you give us some color from the next maintenances in power plants program in the power plants? Usually, we do it when it's offpeak, right? Gustavo Mariani: No. Obviously, we do it either in autumn or in fall. I think there are plan -- and this year, I don't have anything in my mind for this fall, probably during -- sorry, Spring or fall. But I don't recall at this moment which plant has significant maintenance. Most probably will be Genelba and Loma de la Lata, those are the two2 relevant ones. Lida Wang: The legacy, right, the legacies. All right. Is there any change in 2026 CapEx considering the oil prices? This is a recent price of appreciation? No, nothing at all. Guido Visocero, his boss, he's asking urea project. Is there any further information to share about this project? Gustavo Mariani: No, not at this point, not at this point. We're still working a lot. But as it usually happens, there are delays. So it will take at least another semester to have more information about this project. Lida Wang: Gustavo Faria from Bank of America. He's asking a little bit different from the hedge, but he said how does the Pampa's oil prices hedge works in this new environment of high oil prices? Gustavo Mariani: I would say that last year, we realized like in average, $7 profit from... Lida Wang: Per barrel, right? Gustavo Mariani: $7 per barrel profit from our hedge strategy. This year and since today, we are probably losing $4 or $5 per barrel in our hedge strategy. But we will see how prices evolve throughout the remaining of the year. Lida Wang: Gustavo is also asking, are you open for new investments outside power and gas -- oil and gas? Within Pampa structure? Gustavo Mariani: As long as within the scope of energy of Pampa, we are open to anything. We are not studying apart from the urea project, we are not studying or not planning any different investment. Lida Wang: Okay. So Jonathan Swart from [indiscernible] is asking, why did you retire production from Plan Gas Round 1 and Round 3? Horacio Jorge Tomas Turri: Reallocated to our power generation. Lida Wang: To vertically integrate. Horacio Jorge Tomas Turri: To vertically integrate. Lida Wang: We still have some from the last round, the 4.2, right? Horacio Jorge Tomas Turri: Yes, we still have that... Lida Wang: Which... Horacio Jorge Tomas Turri: We're still negotiating eventually the handing over of that gas back to Pampa to be able to, say again, decide what to do with that gas rather than sell it to NASA. Lida Wang: Well, he's asking also, could you explain about the $55 million positive impairment, so recovery of impairment in generation? Yes. So Central Piedra Buena, our 620 megawatts in Bahía Blanca, it's a 2 steam turbine that load factor is very low. This -- last year was high because it was a dry year, but usually it's low. So under the legacy scenario under the old regulated remuneration, they have an impairment. Now that we have this new scheme that also recognizes a big -- like a big -- it's a 30% boost in the capacity because Central Piedra Buena can also operate under alternative fuels. This is way better than anybody can pay. Just because of that flexibility, it's cash in more money and cash in more cash flow. That's why we reversed that impairment. I hope that was clear. Okay. Next, news on the fertilizer plant. Does the sale of Profertil to Adecoagro affects your decision? Gustavo Mariani: No, it does not. Lida Wang: Okay. The one-off offtake agreement mentioned by CISA, the German's price maturity? Horacio Jorge Tomas Turri: Okay. It's an 8-year contract until 2036. And the pricing has to do with a formula that takes into account ETF and Brent -- I'm sorry, Henry Hub and Brent. Gustavo Mariani: 50-50. Horacio Jorge Tomas Turri: 50-50. Lida Wang: With certain percentages of discount. I think we did it all, and it's 7:26 I can't believe it. So I will check -- she's pulling for questions. But we are doing this because we have agenda constraints. All the people that asked why the stock was halted in nicely because Argentina closed and we were not allowed to file after 6:00 p.m. Argentina, and that's 4:00 p.m. in New York, and we are not allowed. So it's trading hours in New York. That's why we were halted. No speculations here because people ask me a lot of things. No questions? No more questions. So, Gus, Horacio and Fito would you like to add something else that we didn't talk about? Gustavo Mariani: No. We covered it off. Thank you all for joining. I hope it was useful. Lida Wang: All right. Thank you very much. See you next May. Bye.
Operator: Ladies and gentlemen, thank you for standing by. [Operator Instructions] I would now like to turn the conference over to Mr. Dan O'Neil. Please go ahead, sir. Daniel O'Neil: Good afternoon, everyone. Thank you for joining our earnings call for the third quarter of fiscal 2026. Today, I'm joined by Bill Brennan, Credo's Chief Executive Officer; and Dan Fleming, our Chief Financial Officer. During this call, we will make certain forward-looking statements. These forward-looking statements are subject to risks and uncertainties discussed in detail in our documents filed with the SEC, which can be found in the Investor Relations portion of the company's website. It is not possible for the company's management to correct all risks nor can the company assess the impact of all factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks, uncertainties and assumptions, the forward-looking events discussed during this call may not occur, and actual results could differ adversely and materially from those anticipated, implied or inferred. The company undertakes no obligation to publicly update forward-looking statements for any reason after the date of this call to conform these statements to actual results order changes in the company's expectations except as required by law. Also, during this call, we will refer to certain non-GAAP financial measures, which we consider to be important measures of the company's performance. These non-GAAP financial measures are provided in addition to and not as a substitute for or superior to financial performance prepared in accordance with U.S. GAAP. A discussion of why we use non-GAAP financial measures and reconciliations between our GAAP and non-GAAP financial measures is available in the earnings release we issued today, which can be accessed using the Investor Relations portion of our website. I will now turn the call over to our CEO. Bill? William Brennan: Thanks, Dan, and thank you all for joining our third quarter fiscal '26 earnings call. I'll start by walking through our Q3 results, give an update on our business and share our view on our long-term opportunities. After my remarks, Dan Fleming, our Chief Financial Officer, will provide a detailed financial review of the third quarter and our guidance for the fourth quarter. We will then open the call for questions. In the third quarter, we delivered record revenue of $407 million, a sequential increase of 52% and more than 200% from Q3 last year. We delivered non-GAAP gross margin of 68.6% and generated approximately $209 million of non-GAAP net income. Over the past 18 to 24 months, maximizing network reliability and energy efficiency have been our core mandates as we built our road map and brought new products to market. In AI infrastructure, performance without reliability stalls clusters and scale without efficiency, strains both economics and power envelopes. The strategy is clear, accelerate cluster bring up, maximize XPU utilization and reduce total cost of ownership, all while providing our customers the highest reliability in the industry. Our recent performance reflects the most accelerated growth phase in Credo's history. From fiscal '24 to fiscal '25, we more than doubled revenue. And for fiscal '25 to current year fiscal '26, we expect to triple revenue on top of that. That represents greater than 6x growth in just 2 years. Few companies, particularly in semiconductors have scaled at that pace while maintaining consistent execution, healthy margins and product leadership. Our purpose-built SerDes MICs vertically integrated system model and deep hyperscaler partnerships win at scale. We established leadership in high reliability copper connectivity and built strong position in optical DSPs and retimers. Now our strategy is to lead in reliability, power efficiency and signal integrity across the full spectrum of AI and data center connectivity from die-to-die links to chip-to-chip and board-level links to rack and [indiscernible] scale copper to mid-reach optical and to resilient facility-wide optical solutions. By extending both inward towards the silicon and outward across the data center, we're positioning Credo to encompass the entire connectivity fabric of AI infrastructure. Each layer of connectivity is being fundamentally reshaped by demand for higher bandwidth and faster data rates. AI workloads continue to grow in parameter size, model complexity and cluster scale, driving sustained transitions from 100 gig to 200 gig per lane and the 400 gig per lane in the upcoming years. At the same time, architectures are becoming more complex, power envelopes are tightening and reliability requirements are rising. We believe the industry's persistent push towards higher speed and larger clusters continues to expand our long-term opportunity and our ability to win. I'll now discuss our business in more detail. Our AEC product line once again delivered strong growth, driven by existing customers and new wins, including our fifth hyperscaler. Demand is accelerating across both hyperscalers and emerging Neocloud providers. We continue to believe the industry is early in its AEC adoption. As AI clusters scale, reliability and power efficiency have become the primary design constraints. AECs are now the de facto standard for intra-rack and rack-to-rack connectivity up to 7 meters, increasingly displacing laser-based optical modules. Their reliability and power advantages are driving broad adoption. Our ZeroFlap AECs deliver up to 1,000x better reliability than commodity laser-based optics, while consuming roughly half the power. In XPU clusters where downtime can cost millions, network reliability matters. We're supporting large-scale deployments at 100 gig per lane today and expect a long tail deployment at those speeds. We're fully prepared to support strong industry momentum towards 200 gig per lane or 1.6 terabit ports. Our 1.6-terabit AECs will support Ethernet, UALink and ESUN protocols. Additionally, our PCIe Gen6 AECs are sampling now and will be released to mass production in first half fiscal '27. Our vertically integrated system-level model remains a key competitive advantage. We take end-to-end ownership from SerDes leadership in silicon innovation to system design and qualification, beat telemetry and supply chain execution, positioning us for sustained leadership. I'll now turn to our IC business, including our retimers and optical DSPs. Our IC portfolio spans both optical and copper connectivity across 50 gig, 100 gig and 200 gig per lane speeds. We expect strong optical DSP growth in fiscal '26 driven by 100 gig per lane deployments with increasing traction at 200 gig as customers prepare for 1.6T transitions. For Ethernet retimers, we're seeing significant growth with our 100-gig per lane solutions in both traditional switching fabrics and the rapidly expanding AI server segment. Our PCIe Gen6 retimers remain on track with fiscal 26 design wins expected to convert to production revenue in fiscal '27. Customer feedback has been consistently stellar. We're delivering an unequaled combination of industry-leading reach, latency and power efficiency. We're also excited about Blue Heron, our 200 gig per lane retimer that is purpose built for scale of AI. It leverages our SerDes expertise to deliver long reach, energy efficiency and advanced telemetry with support for UALink, Ethernet and ESUN protocols. These IC solutions address a large and growing market opportunity. As the industry transitions to 200 gig per lane, we see substantial growth potential across multiple protocols. I'll now discuss our 3 most recent product families, where we've made meaningful progress since their announcement last year. At a high level, these products significantly expand our total addressable market by extending Credo's reach across the full spectrum of connectivity links inside the data center. I'm pleased to report that our progress with ZeroFlap Optics is ahead of schedule. As noted in our recent press release, we began production shipments with our first Neocloud customer, Tensor Way. In addition, we're in qualification with 3 additional customers, including hyperscalers and Neocloud operators. At a high level, data centers today face major challenges with extended cluster bring up times and uptime degradation created by the inherent link flat instability of commodity laser-based transceivers. Our ZeroFlap optics were designed to address these challenges directly. Through tightly integrated hardware, optics, firmware and our pilot software with switch level SDK integration, ZeroFlap optics delivered continuous like flat telemetry and autonomous detection and mitigation of potential link flat events before they impact the cluster. This enables a step function improvement in network reliability. From a TAM perspective, Zero Flab optics allows us to address optical connectivity spanning any length within the data center. Based on strong customer traction, we now expect to see a significant production ramp beginning in first quarter of fiscal '27 and continuing throughout the year. Next, I'll discuss active LED cables or ALCs. ALCs extend our system-level ADC philosophy into mid-reach optical by combining Credo's connectivity architecture with the micro LED expertise gained in our Hyperloom acquisition. We're creating a new system-level product that delivers the reliability of power profile of an ADC with a thinner gauge optical cable capable of reaching up to 30 meters. This makes ALC's ideal for [indiscernible] AI networks, where copper reach becomes limiting, and traditional pluggable optics introduced reliability, power and cost disadvantages. ALCs expand our TAM outward from short-reach copper into mid-reach optical, bridging the gap between AECs and conventional optical modules. We expect to sample and qualify our first ALC products in fiscal '27,and production ramp in fiscal '28. Finally, our OmniConnect line of products drives our reach inward towards the silicon to further expand our TAM. Omni Connect combines our purpose-built VSR SerDes with a family of gearboxes for XPU connectivity. Our first product, Weaver, enables up to a 10x improvement in memory beachfront I/O density which can reach up to 10 inches. By converting VSR to DDR, Weaver overcomes the physical fan-out constraints of traditional memory to compute interconnects. Our first OmniConnect customer, Pozitron, plans to leverage this architecture to deliver an inference XPU with 2 terabytes of memory capacity, enabling substantial bandwidth gains in memory intensive workloads, such as real-time AI video generation. We expect the production ramp for the first OmniConnect gearbox to be in fiscal '28. We expect to introduce additional gearboxes over time to enable a composable architecture where the same XPU design can be optimized for inference or training workloads and be future enabled as speeds or protocols change. We'll also develop an OmniConnect gearbox targeting near-package optics with micro LED that will address the reliability, serviceability and availability pitfalls of current CPO solutions, while at the same time, reducing power significantly. To wrap up on the business update, we're proud of our record performance and even more energized by the opportunity ahead. With continued growth in AECs and ICs and 3 new multibillion-dollar TAM expansions through ZeroFlap Optics, ALCs and OmniConnect, we've meaningfully broadened our near- to long-term opportunity. We remain confident in our ability to innovate, scale and grow in the expanding AI infrastructure landscape through our focus on delivering solutions with best-in-class network reliability and energy efficiency. I want to take a moment to express strong appreciation for our silicon operations and system product operations teams. They have done an outstanding job managing supply, scaling production and executing flawlessly in the face of significant upside demand from our customers. Their ability to respond quickly and reliably has not only enabled our record performance, but has also become a distinct competitive advantage and truly reason customers choose Credo. In an environment where execution matters as much as innovation, operational excellence is a differentiator. And with that, I'll turn it over to Dan Fleming for a detailed financial review of our Q3 and our Q4 guidance. Daniel Fleming: Thank you, Bill, and good afternoon. I will first review our Q3 results and then discuss our outlook for Q4 of fiscal year '26. In Q3, we reported revenue of $407 million, up 52% sequentially and more than tripling year-over-year and at the high end of our revised guidance range. Notably, our revenue again grew healthy double digits sequentially and RECONNECT to achieve new record revenue levels once again a substantial year-over-year growth across 4 domestic hyperscale customers. Our top 3 end customers were each greater than 10% of revenue in Q3. As a reminder, customer mix will vary from quarter-to-quarter. We continue to expect that 3 to 4 customers will be greater than 10% of revenue in the coming quarters and fiscal year. And we continue to make progress in diversifying our customer base across hyperscalers, Neoclouds and other customers. Note that with product revenue representing the vast majority of total revenue, we will no longer break out product and IP as separate line items in our income statement. Our team delivered Q3 non-GAAP gross margin of 68.6%, above the high end of our guidance range and up 92 basis points sequentially. Total non-GAAP operating expenses in the third quarter were $77.4 million, above the high end of our guidance range due to our strong R&D investment and up 35% sequentially. Our non-GAAP operating income was $201.8 million in Q3 compared to non-GAAP operating income of $124.1 million in Q2, up demonstrably due to the leverage attained by achieving more than 50% sequential top line growth, while OpEx growth was in the mid-30s. Our non-GAAP operating margin was 49.6% in the quarter compared to a non-GAAP operating margin of 46.3% in the prior quarter, a sequential increase of 327 basis points. Our bottom line once again demonstrated the substantial leverage we are delivering in the business. Our non-GAAP net income was $208.8 million in the quarter, a record high and a 63% sequential increase compared to non-GAAP net income of $127.8 million in Q2. Our Q3 non-GAAP net income quadrupled from Q3 of last year, which clearly demonstrates the magnitude of our top line growth, strong gross margins and our disciplined approach to scaling operating expenses. Our non-GAAP net margin was 51.3% in the quarter. Cash flow from operations in the third quarter was a record $166.2 million, up $104.6 million sequentially. CapEx was $26.5 million in the quarter, driven largely by purchases of production mask sets. And free cash flow was $139.7 million, up more than $100 million from the second quarter. We ended the quarter with cash and equivalents of $1.3 billion, an increase of $487.9 million from the second quarter, driven by the proceeds of our ATM offering, which began in October and ended in December and our strong free cash flow. We remain well capitalized to continue investing in our growth opportunities while maintaining a substantial cash buffer. Our Q3 ending inventory was $208 million, up $57.8 million sequentially. Now turning to our guidance. We currently expect revenue in Q4 of fiscal '26 to be between $425 million and $435 million. We expect Q4 non-GAAP gross margin to be within a range of 64% to 66%. We expect Q4 non-GAAP operating expenses to be between $76 million and $80 million, and we expect Q4 diluted weighted average share count to be approximately 197 million shares. These expectations are based on the current tariff regime, which remains fluid. As we look ahead to fiscal '27, we expect sequential revenue growth in the mid-single digits, leading to more than 50% year-over-year growth. And with that, I will open it up for questions. Operator: [Operator Instructions] Our first question comes from Tom O'Malley, Barclays. Thomas O'Malley: Bill, you mentioned that you saw a ZF Optics ramp in the first fiscal quarter of next year. And you talked about substantial size. Maybe you could compare what a ZF customer engagement looks like versus an AEC customer engagement? And then longer term, if you see kind of a similar pattern to what you've seen in AEC with the customers that you're mentioning, I think you mentioned 3 here, all representing some significant size? Or do you think there's more variation in the customer set when it comes to ZF optics? William Brennan: Yes. I think the -- comparing the customer activity with AECs, I think it's a good way to look at it. Now I understand that we've been in development on ZF Optics for going on 2 years. And so we are well along the path towards not only developing the solution, and a reminder to everybody, it's the first time anybody has taken an optical transceiver up the stack to deliver real-time telemetry data, so you can make real-time decisions on identifying and mitigating potential link flat events before they happen. So basically taking network reliability far beyond what you're able to achieve with commodity laser-based optics. And so I highlight that these products have gone through our own qualification internally, where we harden the solution even prior to sending it to customers for qualification. So it's very similar in a sense that we're delivering a solution to our customers for qualification that's fully vetted. And so moving from providing samples to going right into qualification with the customers, what we're seeing. And so that's why we highlighted the fact that although last quarter, we signaled that the ramp would occur in second half fiscal '27, we feel confident now saying that, that ramp is going to start in first quarter, noting that we've already shipped production units. And so we feel great about it. And so we did an announcement with our first customer, Tensor Wave. It was announcement on both AECs as well as ZF Optics. And so it's really great confirmation that the portfolio that we're delivering is really offering kind of next level overall reliability as our customers build out their clusters. Now I mentioned also that we're talking with hyperscalers as well as other neophytes. We are so early in the process of promoting this product that we couldn't be more excited about the fact that we think this is going to be such a strong ramp throughout fiscal '27. Operator: Your next question comes from Tore Svanberg from Stifel. Tore Svanberg: Congratulations on the record results. Bill, maybe you could just level set us a little bit here. You mentioned we're still in very early stages of AECs. Obviously, there's a lot of excitement around CPO. So maybe you could just help us on what's driving some of the use cases for AECs right now. How should we think about those developing, especially in fiscal '27 and fiscal '28? William Brennan: Yes. So I think the narrative on AECs is very similar to what has been played out up to this point. There are several areas within the data center network, where AECs make a really compelling solution and really almost becoming de facto in an intra-rack as well as now more than ever, we're seeing rack-to-rack solutions that are within the reach of 7 meters. What's driving it is it's network reliability and power efficiency. And so I would only say one of our customers were really fully penetrated on all the swim lanes and those being GPU to host connections in the scale-out network, front-end connections within those same racks and then this aggregate in switch rack. Those are really the swim lanes that we've talked about. And so we see there's really great growth opportunity, not only for 100-gig per lane deployments as we see those increasing, but also as we see a shift to 200 gig per lane, it's even a stronger value proposition at those speeds. And so that's going to help us drive more volume as well as there's an uplift in ASPs. And so you mentioned the narrative on CPO. And look, this narrative has been one that's existed in different forms for the last decade, started with MBOM, mid-board, optical modules that have moved on to onboard optics, it's moved on to many different acronyms over time. And the bottom line is, just recently, I think there's been a bit of a signal-to-noise ratio issue in the market. And the noise right now is dominating the signal. So it's not an either/or type of situation. It's about deploying the right technology at the right reach and the right power head below. And we see the industry is evolving even more so to a heterogeneous mix of short-reach copper, pluggable optics, near package optics and eventually CPO. And so the strong interest we've seen in ZeroFlap optical is a kind of a clear indicator that reliability matters more than ever now as AI networks are the bulk of the deployments and as these clusters scale. And so the bottom line is that the way we see it that until NPO and TPO solutions can deliver bulletproof reliability, deployments are going to be somewhat limited, which is why many of the forecasters show low single-digit share in the switching market over the next 3 years. Our investments are heavily focused on reliability. And so when we're talking about technologies that will deliver the higher density reach promised by CPO and NPO, our focus is on delivering the same reliability as AEC and ZF Optics. And so hopefully, that gives you color based on your CPO comment. Operator: Joseph Cardoso from JPMorgan has the next question. Joseph Cardoso: Congrats on the results. Maybe just wanted to get an update on how you're thinking about the composition of the 50%-plus growth heading into next year, as we think about the AEC opportunity continuing to ramp, but also confluencing with the material ramps of other areas of the portfolio like the PCIe solutions, optical products, et cetera. Can this be a year where we start to see a more material contribution from the non-AEC offerings in the portfolio and where they can drive a more material portion of the mix as early as fiscal '27? Or is the expectation really that's more of a fiscal '28 story and beyond? William Brennan: I think that it's fair to say that we'll see a different composition between copper and optical in fiscal '27, specifically as ZF Optics round. That's -- with that, I'll say that we do expect growth in AECs. We expect growth in ICs and then the new wave of growth will come with ZeroFlap optics. And within that, IC and AEC will include the PCIe business that we're earning. In fiscal '28, we expect to layer in our active LED cables or ALCs and in addition, our first gearbox as part of the OmniConnect family. That's really fiscal '28. Operator: Your next question comes from Vivek Arya from Bank of America. Vivek Arya: Just a clarification to Dan first on what drove the upside? Almost $60 million plus upside was there a one-off or anything else right in your projects in the reported quarter? And then, Bill, I wanted to get back to this question of how complementary versus competitive is AEC versus optical solutions because over the last 3 months, we have seen this massive divergence in the performance of stocks of your optical peers and this morning, we saw NVIDIA invest in 2 of your optical peers. So why isn't that a very important right incredible pushback that the market for AEC might be limited? So I just wanted to get your views on where copper versus optical is competitive and where they are more complementary? Daniel Fleming: Vivek, so let me address your first question regarding what drove that strength. And I'll answer a question that wasn't asked as part of my answer. If you look at our top customers for the quarter, we've just continued to see strength across all of our hyperscale customers. In fact, our top 3 customers all grew sequentially from Q2 to Q3. So that really drove that growth. And our largest 3 customers in Q3 were also our largest in Q2, as you would expect but in a different order. Let me just talk briefly about our largest customer. They were 39% of revenue, and they were also the same customer that was our largest customer in Q1. So that was quite a large increase quarter-to-quarter for them. The second largest customer was 32% and they were our largest customer last quarter. And then finally, our third 10% customer was 17% of revenue, and that was the first hyperscaler that we had to ramp. William Brennan: And related to the question about the AECs versus optical or actually how they complement each other. Really nothing has changed in the narrative. I think you mentioned NVIDIA, I think they've been really outspoken that where you can use copper, you will use copper. And so it's -- the reason is very basic why somebody would choose an AEC over, say, a laser-based optical module. And that's really reliability, number one. Power efficiency, number two. And ultimately, total cost of ownership, number three, that equation is not going to change. As we go towards 200 gig per lane 1.6T deployments, there is an effect that as you go faster, the length of connection is going to decrease slightly, we believe, from 7 meters to 5 meters. And so if you look at our investments over the last couple of years, it's been heavily weighted towards optical as we've talked about. There is a tremendous demand in the optical space. And that's in addition to the demand in the AEC space as well. Our approach is fundamentally different, and we think suits us well, which is to focus on delivering bullet-proof reliability, again, by going up the stack with real-time continuous telemetry on each link to be able to identify links that are degrading in single integrity and being able to mitigate by taking those links down in a proactive manner, in an orderly manner. I'll also say that the work that we're doing on active LED cables, ALC -- we're talking about delivering a different class of optical product, one that is at a base technology level as reliable as copper. You get the same reliability profile, the same energy efficiency profile, the same cost profile. But you get reach initially up to 10 meters, and then next step will be 30 meters. And so that's going to be a really unique new product category as we talk about the heterogeneous world between copper and different forms of optical. Operator: The next question comes from Quinn Bolton, Needham & Company. Quinn Bolton: I guess given all the noise in the market around CPO and optical, I was wondering if you could kind of just discuss some further detailed two products: One, your Blue Heron DSP for scale up AEC connections, are you seeing interest in that? And then sort of a similar question on -- Bill, I think in the prepared comments you talked about in OmniConnect gearbox with an ALC-CPO solution somewhere down the road. Can you give us any sense on timing when you would have a ALC-CPO solution potentially coming to market? William Brennan: Sure. So I want to note, first of all, that the bulk of our revenue from AI is really in scale out now. We don't have any revenue for scale up. And in fact, that market is relatively small in comparison today. There's great promise that the scale-up market is growth, especially if it goes from rack scale to [indiscernible] scale, and that's driving a lot of these conversations. The Blue Heron product that we introduced -- announced our first customer, upscale AI. This is a 200 gig per lane retire that supports UALink, ESUN, Ethernet. We will build AECs with this product as well. And so as that scale-out opportunity takes shape, we're going to have a full portfolio of products that we can offer. As it relates to my comments about OmniConnect, yes, it is a very straightforward path to basically extend the OmniConnect architecture to add a gearbox that converts from VSR to micro LED. And so the work we're doing with ALC, that's going to be the proof point. And ultimately, there's going to be a direct line of sight on doing a gearbox that takes that VSR conversion to, say, a pigtail that you can connect micro LED with. And so that is going to give a relatively straightforward lower-risk path to a near package optics solution. And again, that solution is going to be delivered with bulletproof reliability and it's going to be done at a power that's much less than laser-based CPO. Operator: The next question is from Sean O'Loughlin, TD Cowen. Sean O'Loughlin: I will add my congrats on a really incredible set of results. I had a quick clarification. I think last quarter, you mentioned that you expected the fourth hyperscale customer to represent greater than 10% of revenues for the full fiscal '26. Obviously, you mentioned 3% to 10% customers this quarter. Is that still your expectation for the full fiscal year? And then on the OpEx guide, I was a little bit surprised to see that it was almost flat quarter-over-quarter, obviously after a pretty big step up last quarter. But with all the irons in the fire, including the acquisition this morning. Is there just some constraints around I don't know whether it's hiring qualified mixed-signal engineers? Or is there something else going on in OpEx? Or am I just overthinking all of this and you're just executing to your road map? Daniel Fleming: Yes. So let me address the first question first. With regard to our fourth hyperscaler that we talked about, we made those comments last quarter, we've obviously experienced a lot of upside really driven by our largest customer this quarter in the current time frame. So that may make the math, while they're still in line with our expectations from 90 days ago, they may not be a 10% customer for the full quarter, if that makes sense or for the full year. With regard to OpEx, a couple of dynamics there to note. One is there was a large step up this quarter for R&D spend. And one thing to note is that it was off a relatively light spend in Q2. And in addition, I highlighted two things: project-related spend and hiring. The project-related spend was higher than has been typical related to a lot of these things that we're working on. So if that were to come down, you might have some incremental hiring to -- they just happen to kind of offset for the year or for the quarter. So that's kind of the underlying dynamics in our Q3 to Q4 R&D spend if that helps you out. Operator: Vijay Rakesh from Mizuho is up next. Vijay Rakesh: Just a question on the 1.6T ramp. I think as you go to 1.6T, most of the big hyperscalers still seem -- have not talked much about CPO. So is your assumption that as 1.6T ramps into calendar '27, '28 that it will be predominantly copper? And as you mentioned, the ASP bump that should drive a pretty nice upside there between the adoption of copper and ASP? William Brennan: Yes. For the 200-gig lane per market, we very much see that, that market is going to be addressed by AECs. And then a combination of laser-based models, we'll have the ALCs that ramp into that market as well. But that would be what I would consider the new product category. I think CPO is still sometime in the future beyond that. We see our customers ramping 200-gig programs really at very different schedules. Of course, NVIDIA is going to lead the charge with Vera Rubin, but many other customers will follow on a slower time line. So we do expect to see very strong business in all 3 categories that I just mentioned. So we'll have ZF optics that are going to be delivered in that time frame. I will say from an optical DSP standpoint, we're getting a lot of uplift right now for LRO. Power is becoming a much, much more important thing as our customers go to 200 gig per lane. So I think we have a really nice position. You mentioned ASPs, and that's right. There is going to be an uplift from 800 gig to 1.6T across the board, across the entire portfolio. So we feel great about the way we're positioned there. Operator: Your next question is from Quinn Bolton, Needham & Company. Quinn Bolton: The follow-up, I just wanted to ask you guys announced the Chimera acquisition this morning. It looks like that's kind of more layer 2 stuff, right, Mac, TCS, Mastek security, are you buying that just to kind of enhance the IC product that you've done historically? Or is this a move to try to get into more Layer 2 solutions down the road? William Brennan: Yes, I appreciate the question. We didn't have a chance to get it in the prepared remarks, given the fact that it's closed basically right at the same time. But we feel great about the combination of bringing Chimera into Credo. We've been collaborating with Chimera as an IP partner since 2022. And Chimera has a really strong reputation in protocol IP, error correction as well as security IP technologies. So we view this as a strengthening of our ability to deliver complete system level connectivity solutions. And you alluded to maybe going up, yes, absolutely, that's part of the opportunity. And so we're -- we feel great strategically about this and the fact that they'll be dedicated to Credo projects now, it will accelerate our end-to-end connectivity road map and expanding the overall platform. Operator: The next question is from Sebastien Naji from William Blair. Sebastien Cyrus Naji: There's been a lot of focus lately on supply chain constraints, including the high cost of memory. I guess what type of supply chain risks are you seeing for Credo, if any? And is there anything in the supply chain that can emerge as maybe a gating factor to your growth in some of the coming quarters? William Brennan: Yes. So I think we got a little bit out in front on this topic last quarter. I feel great about our supply chain for Credo, and that includes wafers in all of the different product categories that we've talked about. And that encompasses 12-nanometer, 7, 5 and 3. So we did a lot of work over the last quarter to make sure that we are aligned with our supply chain partners, not only on the wafer level but also the packaging level. So I think it's clear that we're going to be able to support our plan as well as upside that we expect. In the market, we are absolutely in kind of uncharted territory where I think supply chain is going to become more and more of a differentiator. And as it relates to the supply chain issues that are outside of our normal IC builds, I would say, from a system level, there's no issues from a supply chain standpoint there. I will say at an industry-wide level, memory, as all of a sudden, been a concern. And if anything, we can look at the first OmniConnect product Weaver as almost a solution to some of the pain points where we enable the use of DDR over HBM, which I think is probably the tightest area within the memory market right now. Outside of that, there's been a lot of conversation about lasers. But from a ZF Optics perspective, we feel that we've more than underpinned our demand for '27 and really beyond. Operator: The next question today comes from Jim Schneider, Goldman Sachs. James Schneider: Bill, it was helpful to hear sort of the -- you lay out the progression of your various product lines, especially the optical products over the next couple of years. I was wondering if you could maybe just give us a sense of how we should be modeling the strength of those optical products, a sense of where we might end fiscal '27 in terms of their contribution, are these something that could be kind of sort of 15% to 20% of total revenues of the company at an exit rate? Or should we be modeling something a lot less than that? Daniel Fleming: Yes, we haven't been too specific in that. But if you just look at where we are this year based on how we've guided Q4, we're just -- you'll end up just north of $1.3 billion. The 50% growth gets you to nearly $2 billion for next year. Bill did kind of mention that we expect AEC to continue to grow fiscal '26 to fiscal '27. So there will be a significant -- we think it will be a material component of our fiscal '27 for specifically ZF optics. But as that progresses and as our customer engagement continues with that product line, we'll give you an update as we enter the new fiscal year next quarter. Operator: Your next question is from Suji Desilva, ROTH Capital. Sujeeva De Silva: Congrats on the progress here. Just quickly, how many customers do you expect to be ramping ZF Optics across in the coming fiscal year? And just a longer-term question on the gearbox. You talked about being able to handle training and inference in the same architecture. I was curious on if you could elaborate on that opportunity. It sounds interesting. William Brennan: Sure. Sure. Absolutely. You got to be confused with the second question. What was the first again? Sujeeva De Silva: ZeroFlap Optics, how many customers you think you'll be ramping it across fiscal '27? William Brennan: My expectation is throughout fiscal '27, we're a bit early talking about fiscal '27. But my strong expectation is that we'll run more than 4. We've got 4 in now. And so I expect to add to that list. And I should reiterate that it's a combination of hyperscalers as well as Neoclouds. And the second part of your question was on OmniConnect. And so if you can imagine, the key enabler for OmniConnect is really our VSR SerDes that sits on the XPU side of the connection. And gearboxes are put together that mirror that VSR SerDes and then gearbox it to something else. And so I think it's pretty clear for memory that a first DDR gearbox would be for 5. And you can imagine as the market shifts to LPDDR 6, that all you have to do, you wouldn't have to retake out an XPU. You could just simply change the gearbox. And then you have that inference capability with that next-generation memory. And so you can also imagine, say, building a scale-up gearbox. And at first -- the first gearbox might be a Gen7 and Gen6 combo to where that XPU has got that same VSR SerDes and the gearbox would take those 100 gig lanes and Gearbox to either Gen7 or Gen6 PCIe. You can imagine when 200 gig per lane is really ready for that given customer you could just simply drop in a new gearbox that would support 200 gig per lane with any of the protocols we've talked about being Ethernet or UAL or ESUN. And you can extend that case to scale out as well. You could have a gearbox that would, say, improve, say, the first one that might be 200 gig per lane. As soon as 400-gig per lane was ready, you could simply drop in a new gearbox, that would gearbox lanes of 100 up to 400 gig per lane. So you're talking about having the ability to build an XPU that becomes composable based on different markets and it becomes composable based on the future enabled aspect of just being able to upgrade the gearbox to either the next speed or different protocol. Operator: The next question comes from Christopher Rolland, Susquehanna. Christopher Rolland: I guess the first one is probably to you, Bill. Just about AEC applications and kind of where this may be moving around, if you could talk about where you think you're being used in terms of front end versus scale out, scale up or like traditional cloud where you're being used today? And what this looks like over the next couple of years in terms of changes? William Brennan: Yes. So I'd say the part of the network that's probably where we're strongest is on scale-out. And so this is where we really see the full benefit of AECs, as we're talking about leading edge speeds, and we're talking about in the part of the network where reliability really means faster time to cluster stability as well as continuous uptime. And so we do very, very well scale out. Front end kind of comes along with it. And then we're also seeing a couple of customers now that are deploying in switch racks or disaggregated chassis. So it's really across the board, but I would say our real strength is in scale-out. Operator: Next up is Karl Ackerman, BNP Paribas. Karl Ackerman: Bill, perhaps a follow-on to that question earlier. You indicated much of your AI revenue for AC products is for scale-out networks, how should we think about the $5 billion TAM for AECs split between front-end versus back-end links between the server NIC networking switches? And Dan, could you speak to why gross margins are guided down roughly 360 basis points at midpoint of your outlook? Is it just conservatism? Is it near-term product mix? Anything around that would be helpful. Daniel Fleming: Yes. Let me address the gross margin question first. So overall, as you mentioned in Q3, gross margin at 68.6%, up 92 basis points sequentially. We've really, over the last, say, 7 to 8 quarters, really seeing a significant benefit to increasing scale. But we've also been very persistent in saying that the gross margin expansion will always be linear as we continue to increase scale. There will always be differences from quarter-to-quarter in product mix and we are conservative in the way we forecast. We believe that we have not changed our long-term expectation in the 63% to 65% range for gross margin. And we've clearly entered this phase where we're at or above that high end of that long-term expectation. So it's really just a function of how we view the world and how we forecast our gross margin, and it's a very conservative forecast. William Brennan: Right. On the -- you asked about the AEC TAM and the $5 billion number. So we're not the group that really focuses too much on the top-down forecast. We leave that to the market forecasters. And -- but I can give you my perspective on the market opportunity. And I think largely, the market opportunity that we see is scale-out networks, I think that will transition into some share of the scale up networks as they become deployed. And then, of course, front end is going to be smaller than scale out probably on the order of -- it will probably be 20% to 25% of the total scale-out market as we see it. And then this aggregate and switch market, that one is yet to be seen, but that could be a significant TAM if we see that kind of architecture deployed broadly, which there's a good case to be made for. Operator: Tore Svanberg from Stifel. Tore Svanberg: I just had a follow-up. So this pull in of the optics business, Bill, I mean is that just mainly because of certain technical milestones that [indiscernible] or are there market dynamics? And the reason I'm asking the question because obviously, there's concerns about the availability of commodity lasers. So just trying to understand exactly what's driving that pull in by a few quarters? William Brennan: Well, the pull-in is being driven by customers pulling it. I mean, this is a real indicator that as we've said many times regarding AECs, that reliability is really critical, again, from the standpoint of the time to bring up a cluster and the uptime that you can expect after that point of stability. And so it's a direct improvement in productivity. And so as AECs have been much more popular as a result of people getting it, right? The minute that we talked to our customers about ZF and we talk about extending that reliability into the optical space, it's very rare that somebody would say, yes, I really don't want that. So it's been really customer pull that's caused us to feel more confident in articulating that we expect the ramp to happen early in '27, early next quarter. And so the -- from a supply chain standpoint, understand, we've been working on this for 2 years. And so we've had the mindset that we would carry the model from AECs into ZF optics. And so we've been out there underpinning supply along the way. We've made firm commitments to supply chain partners, and we feel very confident about our ability to ramp even though we pulled in 6 months. Operator: And everyone, there are no further questions at this time. Mr. Brennan, I'll hand the call back to you for any additional or closing remarks. William Brennan: Yes. Thank you. I really appreciate the ongoing interest and support in Credo. We'll talk to you all very soon. So again, thank you very much. Operator: Once again, ladies and gentlemen, this does conclude today's conference call. You may now disconnect.
Stuart Togwell: Good morning, everyone. And for those here in person, thank you for joining our Half Year 2026 Results. I'd also like to extend a warm welcome to those joining by webcast and audio. So I'm Stuart Togwell, Chief Executive of Kier Group. And before we begin, I want to take a moment to say our thoughts are with our 9 colleagues and their families based in the Middle East. We are thinking of them at this difficult time and hope they remain safe and well. So turning to our half year results. I would like to start by saying I'm immensely proud and honored and energized to be leading Kier as its Chief Exec and speaking to you today to update you on our half year results and the strategic and operational progress we are making. I'm also delighted to be joined by Tom, our Chief Financial Officer since the 1st of January. Okay. This morning, I'll walk you through our highlights and touch on the strategic progress we've been making. I will then hand you over to Tom to talk through the group and divisional financial performance. I will then come back and take the first opportunity as Kier's new Chief Exec, to offer some color and context around these results and share my perspectives on our operational highlights and where we're leading as a group. We will then finish with a group summary and outlook before opening the floor for any questions you may have. Starting then with the highlights from the last 6 months. The period saw the group deliver a strong first half with good growth in both revenue and profits. The future prospects of the group also remains strong with our order book increasing by 5% in the period to a record GBP 11.6 billion, reflecting contract wins across our business and providing multiyear revenue visibility. Through our order book, we secured 94% of our full year '26 revenue and 78% of full year '27 revenue. And we have seen the momentum continue into the second half with a number of appointments to frameworks in our key sectors. Our Property division remains on track to deliver ROCE target of 15% by '28. We are continuing to convert profit into cash with a net cash position significantly improved to GBP 103 million. Most importantly, we have now delivered an average net cash position of GBP 17 million for the first time in 13 years. Our shareholders have and will continue to benefit from this strong performance. Due to our robust cash generation and in line with our capital allocation framework, we have announced a proposed increase in interim dividend up to 2.6p per share. In addition, I am pleased that we're able today to announce the launch of a new share buyback program, increased to GBP 25 million. This follows the successful completion of our first share buyback program worth GBP 20 million. We have also made a number of operational changes in relation to our new structure and leadership capability. If I may, I'd like to now take a moment to expand on this and reflect on the change we've made in line with the first few months since I became Chief Exec. Over the period, we've taken a number of steps to optimize our structure and leadership capability to maximize the market opportunities that exist for Kier, particularly in response to the government's 10 year infrastructure strategy announced in June 2025. We have strengthened our Executive Committee and be joined by Tom as Chief Financial Officer; Martin as the Group Managing Director for Construction, alongside the creation of new roles for Louisa as Chief Operating Officer; and James as Group Commercial Director. They give us industry-leading functional strength. We also brought together our 2 complementary divisions within infrastructure to form a combined infrastructure powerhouse, to create a more integrated delivery platform to meet our customer needs. The group has also introduced its Naturally Digital program to empower our people and improve productivity through access to the right digital tools and platforms. We are seeing strong operational delivery and opportunities within Kier's divisions, which I'll touch on later. And we're advancing our Kier 360 approach, which leverages the group's capabilities across the whole fund, design, build and maintain project life cycle and enables the most appropriate solutions to be achieved, tailored to meeting customer needs while meeting the environmental, social and digital requirements of national and local frameworks. These positive steps we are taking ensure we are poised for future sustainable growth. With that, I will hand you over to Tom to give our financial highlights for the period up to 31st December. Tom, over to you. Thomas Hinton: Thank you, Stuart. And I should firstly say that I'm delighted to be presenting to you for my first time as Kier's CFO. It's my pleasure to take you through our performance for the first half of FY '26. Let's begin with the financial highlights for the period. Revenue in the period, as you've heard, grew 2.6% and reflects good growth in activity levels, primarily in infrastructure services business, which I'll cover in more detail shortly. We delivered adjusted operating profit of GBP 71 million, up 6.6%, representing a margin of 3.5% and a modest improvement of 10 basis points from that achieved in HY '25. Allowing for our usual second half weighting of earnings, this margin is consistent with our target range of 4% to 4.5% on a full year basis. You'll see that the period end net cash position is materially better than the prior period at GBP 103 million compared to GBP 58 million at December 2024. This is despite increasing shareholder returns via our GBP 20 million share buyback and the increase in dividends paid. As we targeted, the group achieved average net cash over the period of GBP 16.8 million, a significant advance from the prior period average net debt of GBP 37.6 million. This cash and profit performance is all underpinned by our order book and framework positions, which provide us with the visibility over future revenue. Our order book currently stands at a record level of GBP 11.6 billion, having grown by 5% from June 2025. It represents 94% coverage of this year's revenue and substantial coverage of next year's forecast revenue, currently standing at 78%. The order book continues to be underpinned by long-term framework agreements, positions totaling GBP 150 billion. And within this, we have GBP 35 billion pipeline of work visible for this year and the next. You can see from the graph at the bottom of the slide, how our order book, combined with our framework positions provides revenue visibility covering a period of at least 5 years. Stuart will look at our pipeline, order book and long-term opportunities in more detail later. Now focusing on our revenue for the period. We delivered group revenue of GBP 2.029 billion, representing a 2.6% growth versus the comparable period last year. The main element of this growth comes from Infrastructure Services, which was up 4.9% to GBP 1.083 billion. This growth came primarily from the design and delivery of road capital projects, growth in rail work, including HS2 and a ramp-up of water activity under AMP8. Our Construction segment delivered GBP 920 million of revenue in the period, down slightly by 1.3% due to the recent transition to modular construction. Although as the off-site construction comes on-site, we will see these revenues bounce back in the second half of the year to full year growth. Property transactions grew modestly, although again, we expect a busier H2, which is a familiar seasonal feature of this business. In the same fashion, I'll now take you through the adjusted operating profit in the period. The revenue growth that we saw in Infrastructure Services translated into the profit growth of GBP 2.1 million to GBP 48.2 million. We maintained our strong 4.5% margin in this business. The Construction business also maintained its operating margin at 3.9%. The small increase in property volumes resulted in the operating profit growing GBP 1.2 million, and we also saw lower corporate costs in the period. Overall, we delivered adjusted operating profit growth of 6.6% to GBP 71 million. There are some specific costs excluded from our adjusted operating profit figure, which I'd like to take you through. Excluding noncash amortization interest, the adjusted items amounted to GBP 10.7 million in the period and are now solely related to fire and cladding compliance costs. This is an increase on the same period in the prior year, and we expect this to result in a charge of around GBP 30 million for FY '26. We then expect this level of expenditure to continue into FY '27 as we remediate any remaining cladding and internal fire remediation works under the Building Safety Act. These specific remediations are treated as adjusted items and are provisioned gross when the liability is recognized and can be reliably quantified. Further, we recognize insurance or third-party recoveries once they are confirmed, therefore, creating a net provision in adjusting items. We expect the adjusting items to reduce post FY '27 and for these claims to be resolved by the end of FY '28. The interest costs here are recognized under IFRS 16 relating to the exit of leased office space. Turning now to free cash flow. Starting with adjusted EBITDA, which in HY '26 was GBP 101 million. Working capital outflow in the half was GBP 107 million, in line with HY '25, slightly lower in fact. As you'll know, we expect to see our usual working capital inflow in the second half with the higher activity levels of the spring and summer months, combining with government spending and budgeting cycles. CapEx in the period amounted to GBP 24 million, with the majority of this relating to lease payments capitalized under IFRS 16. Net interest and tax paid were just slightly above the prior period, with the group continuing to utilize its significant long-term deferred tax asset. You may remember that the tax asset of GBP 130 million relates to past losses, allowing us to offset half of our tax charge in any given year, which we anticipate to take around 7 years to fully utilize. Altogether, this results in a free cash outflow of GBP 42 million, slightly improved on that of the prior year period in what, as we have said, is a seasonally disadvantaged half of the year. Then taking this free cash flow to the net cash flow, net cash movement in the period. We started the period on the left at the end of June 2025 with GBP 104 million of cash. This free cash outflow of GBP 42 million then reduces our cash balance. The cash impact of the previously mentioned adjusting items equate to GBP 4 million as our insurance recoveries offset a lot of the cash fire and cladding costs in the period. We contributed GBP 3 million in the period to our smaller pension schemes, which remain in deficit, with the schemes we inherited through acquisition around 10 years ago. The net cash bridge neatly shows a significant return to shareholders as well. GBP 23 million of dividends paid in the period and GBP 14 million of share buyback. We also purchased GBP 15 million of shares for the group's employee benefit trust for share-based employee incentives. This resulted in a net cash position of GBP 103 million, lower than at June 2025 due to the seasonal working capital outflow, but importantly, a significant increase over the last 12 months compared to GBP 58 million of cash at December '24. The second half of the financial year has started well from a cash perspective, and we expect this uplift in cash position to roll into the full year net cash. So staying with cash, we consider the average net cash position to be a critical measure. It's been a key target for the business for several years, and I'm delighted to report that we achieved a milestone in this most recent period. We've always defined average net cash as the average month end position. The average net cash is therefore the average over the month ends in the half year. You can see here how over the last 4.5 years, we have steadily reduced average net debt and debt-like items by GBP 600 million, so that we now have GBP 70 million of net cash. It represents a significant mark for the group and provides an excellent foundation for our growth plans. Looking now at our financing arrangements. This slide sets out the structures we have in place to provide flexibility and optionality as we pursue our growth strategy. Last October, we completed out the refinancing of our revolving credit facility with a new 3 year GBP 190 facility. This represented a GBP 40 million increase on the size of the previous facility, including an option to extend for 2 more years as we strengthen further our debt maturity profile. In October, our credit ratings are reviewed with S&P upgrading us to BB+ and Fitch upgraded our outlook from stable to positive, maintaining us BB+. This affords us the optionality as we review the financing requirements for the group. Now to my final slide, I thought I'd remind everyone of our capital allocation framework and its clear priorities. Overall, we are focused on optimizing shareholder returns while maintaining a disciplined approach to capital allocation and an ever-strengthening balance sheet. In short, our capital requirements are minimal. We target dividend cover of around 3x earnings through the cycle. We plan to invest further in our property business to generate consistent returns over time, deploying up to GBP 225 million of capital and targeting a consistent long-term ROCE of 15%. With regards to acquisitions, we will continue to consider value-accretive acquisitions in our core markets. And then lastly, having completed our first share buyback program of GBP 20 million in December, I'm pleased that we're now able to launch a new GBP 25 million buyback program. This, alongside the interim dividend demonstrates that our shareholders will continue to benefit from Kier's significant financial improvement as well as the renewed strength of the group's balance sheet. And now I'll hand back to Stuart for the market update. Stuart Togwell: Okay. Thanks, Tom. What I'm going to do now is give you some insights into how the business is doing and provide the confidence in terms of us do long-term generation of cash to give Tom loads of options in terms of what he's going to do with the money. So many thanks, Tom. Turning now to our operational update. It would be a good opportunity to reintroduce our divisions, particularly in light of the structural changes we have made and to give a sense of their size and scale and how that gives us confidence of our ability to continue to meet our medium-term targets. I will share an update on the breakdown of our order book and the considerable pipeline of opportunities beyond that. And I really want to highlight is our capabilities and to remind you of those. And the way we leverage them together across the group positions us strongly to benefit from the opportunities in front of us. We really do have a resilient order book, a healthy pipeline and a set of complementary strengths that continues to support delivery in our chosen sectors. So let's start with the Infrastructure Services. Infrastructure Services has an order book of GBP 7.1 billion, which is up 6% and provides 92% of secured work for full year '26. The business continues to win work across its chosen sectors. The most recent examples include National Highways Legacy Concrete Framework that's over GBP 900 million, where we're 1 of 3. Project to upgrade Thames Water treatment works at Maple Lodge, that's GBP 280 million. In nuclear, we've also been awarded a 2 year extension on the Hinkley Point C. We've made progress in aviation with an appointment to the British Airways Better Buildings framework. And if you look at the new graphs we provided on the right, which go to explain the gap between the GBP 150 billion framework position and the GBP 11.6 billion order book, you can see the scale of further opportunity. By the way, pipeline includes further material work even within preferred bidder stage and known tender opportunities. I've only included those that cover the next 2 years in terms of work opportunity winning. There is a clearer material pipeline emerging, particularly across water, defense and rail, which gives us real confidence as we move into the later stages of our HS2 delivery. Importantly, our 750 strong in-house design team gives us a fully integrated design-led delivery model. It means we can engage early with customers and shape solutions around what they genuinely need. In addition, our infrastructure division is driving innovation, whether it's around how we manage environmental risks through sustainable drainage techniques or through digital innovations such as our QuikSTATS, which delivers high accuracy digital data at scale, lowering strike risk, delivering measurable efficiency gains across major programs. Given the scale of the pipeline ahead and Kier's geographical footprint, we have robust strategic workforce plans in place to support us to pivot resources as required. Some of these capabilities are genuine differentiators for Kier and strengthen both the value we bring to customers and the quality of work we convert into the order book. But it doesn't stop there. So moving to our Construction business. We have an order book of GBP 4.5 billion, which is up 5% and 96% is secured for full year '26. Construction's approach to building long-term relationships and its track record means we have good visibility of repeat business on key infrastructure frameworks and also within the private sector commercial sector. Recent wins include a place on the GBP 37 billion new hospital program 2.0 Alliance framework, a place on the DfE's new GBP 15 billion CF25 framework for schools, universities further in technical colleges to deliver high-value projects over GBP 12 million in the North and South of the country. Now this is on top of the work we are delivering for the existing Department of Education or CF21 framework, including 8 schools within preconstruction agreements awarded in quarter 2 alone, and they are not yet reflected in our order book. Other notable wins include the construction of the flagship Government Property Agency Hub in Darlington worth GBP 85 million. You can see that there is a strong pipeline visibility ahead with opportunities to convert frameworks to projects in health, education and defense and of course, in the London private sector commercial market. Also part of construction is Kier Places. Now this represents 15% of the '26 revenue. It's an annuity type business providing long-term FM, housing maintenance and specialist critical school works under GBP 10 million, often from existing frameworks and often from direct award. Kier Places also plays a central role in our 360 approach. A recent example is a way their operational footprint and proven delivery of the Heathrow Quieter Neighbourhood scheme directly strengthened our proposition and help secure the BA Better Buildings win in infrastructure. This demonstrates how our integrated model drives differentiated value for our customers. Our construction capability is anchored in our national coverage and regional delivery model and the strength of our long-term supply chain partnerships with delivery projects from GBP 1 million to GBP 683 million, the strength of our dedicated clients and markets team and the access to call-off contracts under 2 stage or direct award. The construction offering is further strengthened by our in-house mechanical and electrical capability, which is supporting projects of circa 40% of the '26 revenue across all regions of the U.K. Using in-house capability allows us to self-deliver complex projects, reducing risk and removing reliance on Tier 1 external subcontractors. It also enables better engagement with customers, coordinated solutions, ensuring a smoother transition from construction to operation and our input to long-term building performance through our digital twinning capability. Finally, our product capability is critical to outcomes-led solutions and ensuring satisfaction and repeat business from our customers. I would draw your attention to our Deyes High School in Liverpool. It's a great example of how we do this. By taking an outcomes-led approach and working in partnership with the customer, Kier has delivered 7 extra minutes of learning time per lesson. And we did this through the design of the school. It's also delivered energy-efficient performance well above target and has driven high levels of customer satisfaction. There is a video that is available on our website and it is well worth watching. Property. Lastly, let's look at our Property business. Invest and develops commercial and residential sites, largely operating through public and private sector joint venture partnerships to deliver urban regeneration projects across the U.K. As you can see from the slide, property has a gross development value of GBP 3 billion. There has been considerable progress made across the portfolio as developments move through their cycles. For example, 60% of sites now have planning permission. 6 sites are in construction and 4 schemes that we are actively marketing for sale. There is considerable capability within the Property division, which drives future opportunity and create synergies with the other business divisions. Kier Property has trusted public sector relationships built on delivering outcomes-led development and regeneration. It also has a deep understanding to what is needed in terms of responding to changing market needs in business and retail that leads to the efficient recycling of funds. An example is the growing need for net zero and energy-efficient office space, for example, our development 19 Cornwall Street in Birmingham. Looking ahead, these long-standing relationships with public and private joint venture partners will leverage funding that can be turned into delivery. Kier Property is also critical to our 360 approach. The historical PFI and urban regeneration expertise will support Kier to influence the early-stage vision and structure long-term investment models set out in the 10 year infrastructure strategy that is moving toward blended finance and PPP type models, particularly in areas like community health care and environmental resilience and from which Kier could create predictable, durable revenue streams. The momentum we currently have and the future opportunities that exist supports our confidence in delivering our target of 15% ROCE by full year '28. I thought it'd be worth just touching on some of the things that I've spoken about in the past. So I would like to just give a more of an explanation around our 360 approach. It's really cool. Simply put, it captures the breadth, depth and scale of Kier and enables us to leverage the group's capabilities across the whole fund, design, build and maintain project life cycle. It enables the most appropriate solutions to meet customer needs while meeting the environmental, social, digital requirements of national and local frameworks. This drives tangible customer benefits because due to the breadth of our national footprint, we can deploy capability consistently wherever it's needed. We combine that breadth with real depth because we can fund, design, build and maintain. We solve customer needs end-to-end. We can offer customers choice of solution, what we call Choice Factory. That focuses on the flexibility needed to deliver true value for money and high-quality outcome-led solutions. One example is MMC. Now Kier doesn't own a manufacturing facility. That means we don't need to keep it full. Instead, we have a broad supply chain, and we can curate a choice of factory-based solutions. This has allowed us to select the optimum system for each project, improving value for money, managing risk and delivering with greater certainty. Harnessing digital is also fundamental for improving customer experience. Digital processes and data-led approaches drive productivity, improving accuracy, program certainty and building performance, e.g. digital twin. And crucially, our work delivers more than just assets. We support customers to generate social and economical benefits such as creating jobs, training, supporting SMEs and creating greater equality. This all reinforces our position as a trusted industry partner, strengthens repeat business and enhances margin certainty. I would also like to expand on the environmental and social benefits as environmental and social performance, they're not an add-on, they're integral to long-term value creation. They are both a key requirement for government contractors and a direct driver of employee engagement. The Kier recent highlights include achieving the first Carbon Disclosure Project A rating for climate disclosure, placing us in the top 4% of companies globally. First in sector in the FTSE Women Leader's review for women in senior leadership positions, strengthen our safety performance through Kier Cares, our new health and safety well-being strategy and through adopting predictive digital tools to help us prevent incidents even before they happen. Average supplier payments down to 32 days, and we achieved 95% of payments within 60 days. We have 532 people engaged in apprenticeship programs, and we were included in the top 100 Apprenticeship Employers list. We are also signatories of the government's Youth Guarantee. For those who are financing within the room, I thank you for your patience of going through that slide. Moving on to drive shareholder value. That all points to how we now continue to drive shareholder value. Before I come to our summary, I thought just to remind everyone of our medium-term financial targets, which are set out here. And actually, there's no reason to change these, they're still applicable today. So we target revenue growth above that of GDP, an adjusted operating margin of between 4% and 4.5% cash flow around circa 90% conversion of operating profit and an average net cash position, a sustainable dividend policy of circa 3x earnings cover through the cycle. And then finally, in summary, the group delivered a strong first half, along with the significant achievement of average net cash for the first time in 13 years and revenue, profit and cash all continue to grow. Our order book stands at a record GBP 11.6 billion, and we have further excellent visibility of future performance. Significant increase in shareholder returns, we're able to announce the launch of a new larger GBP 25 million buyback program and a 30% increase in our interim dividend payment to shareholders. Finally, in terms of outlook, building on our half year '26 performance, we have seen this momentum continue into the second half, and we are trading in line with Board expectations. Full year expectations remain unchanged. We are building and leveraging capabilities through 360 approach, which underpins a 4% to 4.5% margin target range. We are confident in our ability to pivot at scale and pile sustainable growth through delivering social and economical infrastructure that is vital to the U.K. So with that, I'd like to open up the meeting to questions-and-answers. Questions from the room first, please, and then we'll take questions from the call. Thank you. Robert Chantry: Rob Chantry at Berenberg. Just 3 questions. I suppose, firstly, for both of you. Could you just share your views on the optimal balance sheet structure medium-term for Kier, I guess, in the context of the potential bond refinancing this year, the recent cash generation, the move to an average net cash, just how you see that evolving on a 3- to 5-year view? Secondly, just touch on building safety costs. I think it's fair to say that's a step-up versus where the guys thought it was a year ago. I think you're now talking GBP 30 million this year, GBP 30 million next year, a bit of a balance in '28. Can you talk a bit about what's driven that change and happy it goes no higher thereafter? And I suppose, thirdly, really interesting going through the different structural dynamics of your market share. Could you just kind of highlight to us, I guess, where you think you're a genuine market leader in these markets and where you think there is a gap to the top and how you might think about if that's a gap you want to fill with potential M&A or more investment? Stuart Togwell: Do you want to take the first 2? Thomas Hinton: Yes, a couple of questions there. Can everyone hear me okay? So let's start with the balance sheet one. I guess, firstly, let's reflect on where we are. So we're at this average net cash positive position, which I think everyone is very pleased with. It's been an enormous journey to get there. And then if you reflect on our cash flow, here we have strong cash flow, and we expect that to build over time. We've obviously come out there and said, we'd like to continue with the share buyback. So we've continued the share buyback. So the implication there is that if you look at our cash flow, we are kind of returning the dividend. We're doing the share buyback. That does mean we have spare cash. So that does mean it will build. So we expect the cash to build over time, and that's what we'd like it to do. So we would like to continue to build -- we'd like to continue to strengthen our balance sheet in the medium-term. So what I can't say is here's the cash number we're going to aim towards. We haven't got that. What I can say is that we want to keep it positive, and we would like to continue to strengthen the balance sheet. That's our plan. And then the point on the bond, I think you kind of reflected on the bond quickly. So we've got a bond. It's at 9%. Kind of I alluded to it in the slides that there is optionality around that bond, and we will look to potentially go to market on that at the kind of end of the first quarter. So like in the next few weeks, let's see what happens. But ideally, we'd like to come to the market with the bond later on. So that's the bond side, the balance sheet. So fire and cladding. So you saw there in the half year that we've got GBP 10 million adjusting item for fire and cladding. And I also said that we expect that to be around GBP 30 million for the full year. So your question then was, well, how you got comfortable with this? So what we've done is look through every project that's got any exposure on fire and cladding. And each one is bespoke. Everyone is unique, each one is discrete, and it all has different insurance recoverability against it as well. So -- and we have to wait to see if the liability is going to crystallize. So we're going through each one to try and work out, is there a liability? Is it going to crystallize? And then those numbers that I've kind of alluded to are an estimate on how that liability could crystallize over time and an estimate on how we could get recoveries on insurance against them. So that's a kind of net estimate against that. And the challenge, of course, is that you can't take it all today because you don't know the liability is going to crystallize and you don't know the scale of it. So that's the best we can do is estimate what that adjusting item is going to be this year and next year. Stuart Togwell: If I pick up in terms of the market and the sectors, it's a great question. Thank you. If you think about it in terms of Kier stalwarts, that still remains around education, highways and at the moment, MoJ work that's passing through. We are seeing through the slides I put up there, the growth opportunity through the pipeline in defense, the water contracts are starting to come through and working with the water companies in terms of their cycle of funding coming through. Certainly, a huge opportunity in health, particularly off the placement in terms of the new Alliance framework, but there's also other health spend that's going on with the trust that haven't been privileged enough to be one of the 11 hospitals. And we're seeing entry into the nuclear sector, which is a slow burn. It takes time, but we are there and positioned well. In terms of areas in terms of future, rail is an area that I'd like to do more in. There's certainly going to be some spend. Certainly, when the money starts being diverted onto HS2, we're looking about where that's going to go. The London -- the views out here, the London private sector is starting to wake up. And we have a dedicated team in London that is delivering very well at the moment, and I see further opportunity there. And finally, the Places business. I made a point today, I've actually explained a bit more around that business particularly being annuity and the opportunity we have through FM, housing maintenance and also the specialized work we do around small works. As I said, that's often work that's coming through existing frameworks or direct award. It's critical work to the client and often it leads to either repeat business within places or across the group. Longer-term, I've often said around, I felt the opportunity was going to be there for PPP and urban regeneration. And what we're doing about it? Well, we're starting to have conversations. We had a conversation yesterday with NISTA and cabinet office and other CEOs around how the construction industry can feed into the models going forward to make sure that we learn the lessons, the good and bad of previous PFI. But I also look to, at the moment, I've got a Property business that has expertise from the previous PFIs. We certainly have the ability to draw on funding and with the relationships with the public sector. And we have a Places business that is already currently working on 22 contracts under PFI arrangements. So we have all the bases covered. Jonathan William Coubrough: Jonny Coubrough from Deutsche Numis. Can I ask perhaps on the change in mix within Infrastructure Services and it looks like water is clearly expected to be a big growth area also defense. How do you view the contract terms in those markets and also potential margins relative to transportation? The second question would just be on central costs and why they fell in the period. And then third question on Kier 360. Do you think there are opportunities to broaden that out across your markets in terms of increasing your activities at the front end of projects and improving margins there? Stuart Togwell: So if I take 1 and 3 and leave you on 2. Yes, I leave you 2. So the margin risk in terms of these new areas, we've used the word pivot quite a lot. So what we look for is work that is procured on a similar basis through framework that it plays into our strength of having the U.K. coverage, plays in our strength in terms of that we have the local presence that we can bring the environmental and social benefits. Generally, in terms of the frameworks, the risks are going to be proportionate to what we do elsewhere. And it really plays into then us bringing -- being able to bring in the other capabilities we have across the group. So I see those very much in terms of being just same as just a different sector. And that's the strength of the model that we have going forward is that we have the visibility where spend is going to be. We start thinking about those sectors way before they come to market in terms of frameworks. It gives us time to think about the capabilities that we need to understand the customer needs. And we also have a model now that we can really look at our workforce in terms of how we move it around to suit these new streams of work. If I touch on the last point in terms of Kier 360, the answer is actually both. If you think about it in terms of the infrastructure business, our 750 strong designers predominantly are based on the highways business in terms of transportation. Now by combining those 2 organizations together, I've opened up that ability to move it quicker into serving things like water and defense going forward. Now if I look in terms of the construction capability around M&E design, again, I'm looking at 40% of the construction business. But there's no reason why I can't start looking in terms of how do we help that, particularly around the water sector to drive better efficiencies and confidence around that. So both internally and externally. The feedback we had from our one government day when we're talking about the departments about ability to bring, say, environmental understanding into any scheme because most schemes at the moment will have some form of water problem in terms of how they deal with the current water or how they make sure it goes away. Or they're going to have issues in terms of how do they get power in and make sure the energy supply is there sufficient for them. They might be looking for funding solutions because they haven't quite got the funding. And they might need be talking about, well, how do we maintain these buildings in the future? Are you Kier interested in doing the future maintaining? If you're not, can you make sure that the base specification reflects your knowledge of operating these buildings elsewhere? And if you want to put it all together, go and have a look at the Deyes High School. So an outcomes-led design. And you can only do that by bringing all these skills together, look at it in terms of how the building works in terms of energy efficiency, how you actually transfer children more effectively around and teachers around the school classrooms. And that's delivered, as I said before, 7 minutes improvement per lesson. That's [ Kier 360 ] in work. Thomas Hinton: Okay. On the corporation costs, I mean they're relatively flat year-on-year. I think there's a slight improvement. I think the only change is kind of -- I think it comes down to things such as what's the level of bonus accrual you put into the corporate costs, Jonny. I don't think it's much -- there's not much more than that. There hasn't been a deliberate cost drive in the corporate center to date. So it's not different from that. It's more kind of smaller assumptions driving it. Andrew Nussey: Andrew Nussey from Peel Hunt. A couple of questions. Useful disclosure around sort of the pipeline. I did observe that you've got defense sitting in both sectors. How do you sort of draw the line? And does that create some inefficiencies having it sort of sitting in both buckets? And secondly, in construction, modular construction is becoming a feature of the industry and there was an implication of being the revenue sort of slightly lumpy. Is that going to be an ongoing feature as one would imagine your projects get bigger and more modular? And is there any impact on the cash flow from that shift? Stuart Togwell: Okay. I'm happy to say both, and you can then correct me in terms of the second one. Good spot on the defense. The distinction is one is nuclear defense and one is anything else that isn't nuclear defense. Nuclear defense has a particular requirement in terms of your capability, obviously. And it tends to be more large infrastructure complex schemes like Hinkley. So that's why we keep that within that side of the organization. We do, though, share knowledge between the 2 and the relationships and make sure that if there is any joint learning or joint sharing of design or joint sharing of M&E that we do the crossover. But that's the reason we do that. In terms of the MMC, I think you have to remember in terms of the big impact there is in terms of the Glasgow, in terms of the size of it, in terms of timing. I personally don't see it as being -- having a lumpy impact on us. And our approach to MMC really has been embedded in the organization from what we've learned around MoJ in terms of the mill site. And we will continue working through it. Anything else you want to add? Thomas Hinton: No, I think as you said, it does suppress the revenue a little bit on one side versus the other. But what it does do is large construction, you can actually achieve bringing that cash in slightly earlier, if anything. So if anything, it's positive from a cash perspective. So you've got kind of large construction activities, then that can be advantageous for cash actually. Adrian Kearsey: Adrian Kearsey, Panmure Liberum. Three questions, if I may. In terms of water, which kinds of projects have you got in the pipeline and which looking beyond the current AMP do you see sort of coming through? Kier Places 15% currently in terms of revenue of the division, where do you think that can go? And what kind of -- do you think you need to expand your capability within Kier Places in order to grow that? Or is it more about just winning more -- just more of the same kind of work? And then the last one, frameworks, your position within frameworks is not equal across all of the participants within the framework. Which particular frameworks do you think you'll win a greater share? Stuart Togwell: Okay. Again, I'll do my best. Yes, I thought you'd say that. Water, I like the [ time ] there in terms of pipeline. So capital works, we went to the water treatment works. Some of us went to the water treatment works. We're seeing more of that, which is what Maple Lodge is. So more around the capital works. In terms of places, no, we have the capability. It's more of the same. I held back in terms of housing maintenance because that became quite awkward in terms of price per property programs that were in the last 5 or 7 years. But definitely, there is going to be a need to upgrade in terms of housing maintenance properties across the country. And the FM, generally at the moment, we're staying within public sector. I'd like to see if that opens up more opportunities around, particularly around the PPP work going forward. Frameworks, are we equal? There are some that we are more equal than others. That is correct. But generally, the approach with any framework that we go on that we've discussed this morning, we try to have a position in 1 of 3. So if we can get a position in terms of 1 and 3, you have the real opportunity to influence in terms of the customer. You start being able to bring forward your views around outcomes-led design, and it often allows you to work very closely in terms of the alliancing work about what's going forward. Generally, if you look in terms of longevity in the past, education and highways are a stalwart of what we've done. Alongside that, I took a trip down to Bridgewater to look at the environmental work we were doing. We do somewhere between GBP 50 million and GBP 100 million a year on that. Smaller organizations will be talking about it because it will be a larger proportion of their works. But some of the work we do that in terms of our understanding in terms of the environment and how we work with local communities to make sure that we manage water, wildlife, et cetera, is a real strength that we have. And I can see us leveraging that expertise across the other divisions. Maximillian Hayes: Max Hayes from Cavendish. So first, looking at the in-house design consultancy, just looking at the potential to sell these services externally. And then also the improvements in net cash and average net cash balance, has that supported access to any certain frameworks and help develop the pipeline? Stuart Togwell: Okay. In terms of cash, no. But what it has done is reduce the number of questions we've had about net debt with some of the people in the room. But I do see it as a positive sign in terms of where we are. Generally, the turnaround has been accepted. We've closed that off in terms of the frameworks. What this does do, though, is draw people into, okay, Kier, PPP, okay? You get into a position in terms of having surplus cash at some point in the future. We will have conversations with you in terms of how should we be thinking about Kier in those conversations. So, positive. In terms of design, at the moment, we have so much internal. It's a benefit to us. We like to keep it internal. The other benefit we have in terms of the internal model is that when we go to customers, if you like, our outcome is revenue for the other divisions. It's not time on the clock. It brings a different focus in terms of what our design capability do. So I wouldn't want them to move away from that focus and all the work they do for us, moving into an external place where quite often it's time on the clock. So for now, internal. Okay. I think this is the last question. Alastair Stewart: Alastair Stewart from Progressive. A couple of questions. First, following on from Andrew. Defense, very small in terms of the current order book as a percentage, but very big in terms of both pipelines. Have you been getting a sense that, that pipeline is getting more urgent from your clients? And specifically, have you had any incoming calls in the last few months and more particularly -- more particular in the last few days that could move that forward. So that's question one. And question two, GBP 197 million capital employed in property. Given the move to average net cash and the comments on PPP, do you see that GBP 225 million ceiling moving up in the mid-term? Stuart Togwell: Do you want to take that one? Thomas Hinton: Yes, I'll do the last one first. So let's start with the -- you can talk to the defense kind of point, your phone is booming this morning or not. On the property, I said GBP 197 million at the moment. And we were quite clear, we want to get to a 15% ROCE. So we kind of need to prove that. We need to prove it to this room. We need to prove it to ourselves. We need to show that this business can get up to that kind of sustainable return level. And we're confident we can get there, but we need to kind of prove that. I think once we prove that, then you can look to invest further. And to what Stuart said earlier, that doesn't necessarily mean that it's the current kind of design model. It could be slightly pivoted model into other investment areas. It could be a PPP. It could be a specific focus on urban redevelopment. But that's what we're thinking about it. It's about how do we use our cash, let's get the returns, let's prove the returns of the business, and then let's move from there. Stuart Togwell: There's a subtlety that I'm looking for is to make sure it generates revenue across the divisions. So we can actually see it more as in terms of being integrated solution we have. Just going back to defense, I've got to start by saying it's most important that we -- at this time, we think about our people, the 9 employees we have -- employees that we have over in the Middle East. And also, we have -- many of our staff have friends and family of that region. In terms of the urgency, it's been urgent for a while in terms of the need they have, whether it's in terms of providing the nuclear safe havens for submarines or warships, along with improving the living accommodation for -- under the SLA or in making sure that we've got proper safe havens for storage in terms across the country. So there has been an urgency for probably the last couple of years. But what I would say is that Kier saw this as an area of undoubtedly, there was going to be some spend that was going into it, that they were going to start changing their way in terms of the way they approach more to an alliance in way and procuring work through frameworks. So it's a reason why we -- and we needed something to continue the work that we created in terms of the MoJ and defense became a natural place to start moving our resources probably a couple of years ago to be ready for this growth. Alastair Stewart: Specifically, is that urgency getting more urgent? Stuart Togwell: No. Okay. I think we are done. So thank you very much for coming. Thanks for your time. And I'd love to share a coffee with you next door if you've got time. Thank you very much.
Operator: Hello, and welcome to Nuvation Bio's Fourth Quarter and Full Year 2020 Financial Results and Corporate Update Call. Today's call is being recorded, and a replay will be available. [Operator Instructions] Now I'd like to turn the call over to JR DeVita, Executive Director of Corporate Development and Investor Relations at Nuvation Bio. Please go ahead. Robert DeVita: Thank you, and good afternoon, everyone. Welcome to the Nuvation Bio Fourth Quarter and Full Year 2025 Earnings Conference Call. Earlier today, we released financial results for the quarter and year ending December 31, 2025, and provided a business update. The press release is available on the Investors section of our website at nuvationbio.com and a recording of this conference call will also be available on our website following its completion. I'd like to remind you that today's call includes forward-looking statements, including statements about the therapeutic and commercial potential of IBTROZI and safusidenib, the components of our anticipated product revenue, expected milestone payments and our cash runway. Because such statements deal with future events and are subject to many risks and uncertainties, actual results may differ materially from those in the forward-looking statements. For a full discussion of these risks and uncertainties, please review our annual report on Form 10-K, which we filed with the U.S. Securities and Exchange Commission today. Joining me on today's call are our Founder, President and Chief Executive Officer; Dr. David Hung; our Chief Commercial Officer, Colleen Sjogren, and our Chief Financial Officer, Philippe Sauvage. David will provide an overview of our key achievements in 2025 and other business updates, Colleen will provide details on the commercial launch of IBTROZI and Philippe will discuss our financial, partnering and operating updates. David will then conclude with closing remarks. Now I'll turn the call over to Dr. David Hung. David? David Hung: Thanks, JR. Good afternoon, everyone. Thank you for joining us. 2025 was a pivotal year for Nuvation Bio, and I'm pleased to discuss our full year and fourth quarter results with you today. Our most significant achievement occurred on June 11 with the full U.S. FDA approval of our first therapy IBTROZI, indicated to treat people living with advanced ROS1-positive non-small cell lung cancer, or NSCLC. Since then, we've been working tirelessly to bring IBTROZI to patients with this aggressive disease. And based on the number of patients who have started our therapy, and the confidence we have in this differentiated profile, we believe that IBTROZI is becoming the new standard of care for ROS1-positive NSCLC. By the end of 2025, 432 new patients started IBTROZI, including 216 in the fourth quarter. For IQVIA data, patients are being prescribed IBTROZI at a rate that is approximately 6x faster than the 2 prior ROS1 TKI launches over their first 2 full quarters following approval. Our fourth quarter patient starts also reflect an increase the 204 new patient starts in the third quarter during the time of year that may be impacted by seasonal factors. We continue to see a steady cadence of new patient starts in the first 2 months of 2026 from those who have filled a TKI, those currently on a TKI, who have switched to IBTROZI, and those naive to therapy. This broad patient mix further highlights the strength of our launch and collective belief in our medicine. Feedback from key opinion leaders, daily interactions with health care providers and results from our market research have consistently been overwhelmingly positive. Since launch, we've learned that IBTROZI's efficacy profile resonates strongly with physicians and equally important, its safety profile, especially limited CNS toxicity may allow earlier line patients to remain on therapy for years. An essential factor in a space for long-term duration therapy is paramount. As I mentioned, and consistent with this, we continue to see switches to IBTROZI from all 3 of the other therapies approved for ROS1 positive lung cancer. The reasons for these switches include disease progression, tolerability challenges, brain penetrants and physician confidence in the strength of IBTROZI's clinical data, particularly in the durability of response. I'm thrilled with how our team has executed despite the fact that rare disease launches always provide a variety of challenges. Their efforts have resulted in significant impact and most importantly, patients, but also on how providers choose to treat this disease. Colleen and Philippe will provide more detail on launch dynamics and net product revenue later in the call. Looking ahead, we are focusing on increasing our prescriber base and identifying more newly diagnosed first-line patients to be treated with IBTROZI. We believe that treating these patients will significantly increase the collective time our active patient population stays on therapy while we continue to simultaneously treat patients in the later line setting, who are in urgent need of our medicines. We also plan to present additional long-term IBTROZI data at multiple medical conferences in 2026. As a reminder, on our prior earnings call, we reported that as of August 2025, IBTROZI's median duration of response has now reached 50 months in a pooled analysis of TKI-naive patients in the TRUST-I and TRUST-II pivotal studies, population of which IBTROZI has previously shown an 89% confirmed overall response rate or ORR. We believe these long-term IBTROZI data represent the greatest patient benefit seen to date in ROS1 positive NSCLC. And unlike ongoing studies of other ROS1 TKIs, our pivotal study did not exclude patients with other concomitant oncogenic mutations making the results with IBTROZI, we believe, representative and applicable to real-world patients. We look forward to providing more clinical analyses from the August 2025 data cutoff in the first half of this year. Our scientific updates in 2026 may also further characterize IBTROZI's unique balance of activity against 2 important targets: ROS1 and TRKb. IBTROZI is 11 to 20-fold more selective for ROS1 and over TRKb and remains strikingly potent against ROS1 with picomolar level inhibitory activity. But importantly, IBTROZI also has measured inhibitory activity against TRKb. What is starting to emerge with improved scientific understanding is that the degree to which a lung cancer therapy inhibits TRKb, in addition to its primary oncogenic driver, may play a significant role in not only controlling the growth of the primary tumor, but may also inhibit the ability of that primary tumor to metastasize and grow in distant sites, particularly in the brain. Remember that ROS1-positive lung cancer has a particularly high propensity to spread to the brain, as 36% of newly diagnosed patients present with brain metastases. And in an additional 50% of cases, the first site of disease progression will be in the brain. We believe the ability to control and even prevent brain metastases in ROS1 positive lung cancer may be 1 of the most important determinants of long-term survival and will be reflected in a therapy's durability of benefit. TRKb is an oncogene, meaning that it drives cancer growth and metastasis and the natural ligand for the TRKb receptor is BDNF or brain-derived neurotrophic factor, as the name implies, this factor is expressed at high levels in the brain and can fuel the growth of cancer cells via the TRKb pathway if that pathway is not inhibited sufficiently. However, too much inhibition has been shown to lead to neurological side effects. IBTROZI is far more potent against ROS1 and TRKb, about 20-fold, which may explain why it has such a high response rate and durability in ROS1-driven lung cancer. And yet, while IBTROZI does have adequate activity against TRKb, this inhibition is measured enough that its dizziness rate is similar to that of crizotinib, a drug that doesn't cross the blood-brain barrier. In a recent commentary in publishing the Journal of Thoracic Oncology, renowned thoracic oncologists, Dr. Ross Camidge, Dr. William Phillips, Dr. Rafael Nemanov and Dr. Diana Sitelli, hypothesized that this selectivity could make IBTROZI the best tolerated next-generation ROS1 inhibitor. And we believe IBTROZI's intentional, but well-tolerated TRKb inhibition may contribute meaningfully to intracranial disease control and ultimately survival without introducing the significant CNS toxicity that has limited other agents, to the point Dr. Camidge and team emphasized in their analysis. Separately, published data have linked uninhibited TRKb signaling to larger tumor burden, higher stage disease, increased risk of CNS metastases and poor outcomes across multiple solid tumors, including lung cancer. In our view, IBTROZI strikes a particularly effective balance, deep durable inhibition of ROS1, paired with measured TRKb activity that potentially supports CNS disease control while preserving tolerability. Interestingly, the only other approved TKI to demonstrate longer durability in TKI-naive patients than IBTROZI is lorlatinib in ALK-positive NSCLC, which showed a median progression-free survival, or PFS, of over 5 years in the CROWN study. Lorlatinib has even greater TRKb inhibition than IBTROZI which we believe is likely related to lorlatinib's high rate of CNS events like mood disorders. However, given the high propensity for CNS involvement in ALK-positive disease, Dr. Camidge speculates that it is lorlatinib significant TRKb inhibition that may account for its high intracranial response rate in 5-year duration of response. We do not view the shared prolonged durability of lorlatinib and IBTROZI as coincidental. Taken together, we believe that IBTROZI's ability to strongly suppress ROS1 while modulating TRKb in a tolerable way could help explain durability intracranial activity and safety profile we continue to observe as real-world use increases. We also continue to envision and develop IBTROZI for a broader ROS1 positive lung cancer population. Based on our label, IBTROZI has been prescribed to a significant number of patients in the advanced setting across lines of therapy. And the next step for us is to move to earlier stage of lung cancer. As previously shared, we have dosed the first patient in TRUST-IV, a randomized, placebo-controlled Phase III study evaluating taletrectinib as an adjuvant therapy for patients with resected ROS1-positive, early-stage non-small cell lung cancer. Adjuvant therapy is fundamentally different from treatment in advanced disease and is an area we targeted for study only after garnering support for multiple lung cancer KOLs. These patients have undergone surgery, often feel healthy and are understandably unwilling to remain on our therapy that is difficult to tolerate or interferes with daily life. As a result, only a drug with a manageable and highly tolerable safety profile can realistically be developed in this study. We believe it is particularly meaningful that IBTROZI is the only ROS1 inhibitor currently being studied in the adjuvant setting, and we view this as a further testament to its safety and tolerability profile. Across our clinical database of 337 patients with advanced ROS1-positive non-small cell lung cancer, only 1 patient discontinued treatment due to any of the 6 most common adverse events, including diarrhea, nausea, vomiting, dizziness or liver enzyme elevations. While this does not summarize all adverse events detailed in our prescribing information, this level of tolerability for our most prevalent adverse events is critical when considering use immediately following surgery and why we believe IBTROZI may provide benefit in the adjuvant setting. Lastly, we not only aim to bring IBTROZI to patients across the ROS1 positive disease spectrum, but also the patients and providers around the world. Last year, we received approval for IBTROZI in China and our partners at Innovent Biologics and in Japan with our partners at Nippon Kayaku. In January, we were thrilled to announce a strategic partnership with Eisai to develop IBTROZI in Europe and other ex-U.S. territories outside China and Japan. We are working diligently with Eisai to submit IBTROZI for approval in Europe in the first half of this year. In short, we believe our continued launch performance, the latest updates reconfirming IBTROZI's efficacy and tolerability profile and additional development, regulatory and commercial achievements, all show why we believe IBTROZI is becoming the standard of care for ROS1-positive lung cancer. We also made exciting progress developing our second program, safusidenib. Safusidenib is an inhibitor of mutant IDH1 being developed for IDH1 mutant glioma, a devastating type of brain cancer. Importantly, not only are there very few treatment options available for this disease, but these younger patients are typically diagnosed between the ages of 38 and 45. Clearly, there is an opportunity to make an impact for these patients and their families. IDH1-mutant glioma described using 2 types of terminology, grade and tumor classification. A grade of a glioma indicates the level of risk while the classification describes certain biological features of the tumor. Malignant IDH1 mutant tumors can be defined using grades 2, 3 and 4, and these tumors can be classified as an oligodendroglioma or an astrocytoma. Both descriptors together indicate the level of risk, aggressiveness of disease and estimated time patients may live with their disease. To simplify this, we describe both grade 2 oligodendroglioma and astrocytoma as low-grade IDH1-mutant glioma, while high-grade IDH1-mutant gliomas consists of grade 3 oligodendroglioma, grade 3 astrocytoma and grade 4 astrocytoma. Each year, there are approximately 2,400 new cases of IDH1-mutant glioma in the U.S., split almost evenly between the low-grade and high-grade population. The key difference is that based on published median overall survival data, patients with low-grade IDH1-mutant glioma live approximately 12 to 20 years, while high-grade patients live on average approximately 2 to 12 years. The only targeted treatment option available for patients with IDH1-mutant glioma is vorasidenib, which was approved by the U.S. FDA in August 2024, where only patients with grade 2 oligodendroglioma and grade 2 astrocytoma are the low-grade population. In this pivotal INDIGO study, which included 168 Grade 2 patients with non-enhancing or low-risk disease in the active study arm, vorasidenib demonstrated a median PFS of 27.7 months, a 41% progression rate at 24 months and an ORR of 11%. In a separate Phase I study of 30 patients, vorasidenib showed a confirmed ORR of 0% in a high-grade enhancing population, which is not included in its approved label. In November, results from our Phase II study of safusidenib for low-grade IDH1-mutant glioma were published in neuro-oncology. This patient population was treated with safusidenib following surgery and prior to radiation or chemotherapy. The same types of prior treatment patients received in the INDIGO study. In this study of 27 patients, safusidenib demonstrated a median PFS have not reached a 12% progression rate at 24 months and a confirmed ORR of 44%. As a reminder, in a Phase I study of 35 patients, safusidenib also showed a 17% confirmed ORR including 2 complete responses that lasted multiple years in a high-grade enhancing population. As we've discussed previously, vorasidenib is already approaching a $1 billion U.S. net revenue run rate, less than 2 years after its approval. This rapid commercial uptake underscores both the unmet need and the willingness of physicians to adopt targeted therapies in this setting. While we acknowledge the inherent complexity and limitations of cross-trial comparisons due to differences in study design, patient populations, endpoints and sample size, recently published data in neuro-oncology and data from our Phase I study highlights the encouraging clinical profile of safusidenib and its potential to address significant unmet need in this patient population. In parallel, we continue to learn more about safusidenib's safety profile. While the drug is generally well tolerated, we observed a distinct set of dermatological related adverse events, including alopecia, arthralgia, and skin hyperpigmentation. We believe the presence of these events may be due to a different pharmacological profile of safusidenib, and we continue to investigate if safusidenib may inhibit targets other than IDH1. Importantly, the drug-related discontinuation rate in the Phase II study, which was conducted at the pivotal 250-milligram twice-a-day dose remains low at approximately 8%. The patients, who had discontinued therapy, were able to recover with interruption and appropriate management. Based on data generated to date, we announced in February that we started enrolling our pivotal Phase III study called SIGMA. This global randomized study is evaluating the efficacy and safety of safusidenib versus placebo for the maintenance treatment of high-risk and high-grade IDH1 mutant glioma following standard of care. Specifically, the study population includes 300 patients with grade 2 or grade 3 astrocytoma, who show certain high-risk features in all patients with grade 4 astrocytoma. As an important reminder, these patients have no FDA-approved targeted therapy options. Considering the high unmet need and the exciting profile of safusidenib, we are optimistic about the speed of recruitment in this trial. Due to the sizable population being enrolled to support approval, and the use of PFS as the primary endpoint, we expect this study will read out in 2029. Importantly, we recently announced the initiation of a second nonpivotal cohort evaluating safusidenib in patients with grade 3 oligodendroglioma, a patient population that is considered to be within the lower risk end of the high-grade glioma spectrum. This grade 3 oligodendroglioma study will enroll approximately 40 patients with measurable disease, including patients with residual disease following surgery for those with recurrent disease and will evaluate ORR as the primary end point. Given that we have 31 sites activated in the U.S. already, we estimate that we will be able to provide a full study readout in 2027. Importantly, if we see significant objective response in this study, we will meet with the FDA to discuss the results and potential options for further development, aiming towards an accelerated approval pathway. Patients with grade 3 oligodendroglioma frequently seek alternatives through the cumulative toxicities associated with prolonged radiation and chemotherapy given the relatively young age at diagnosis and median life expectancy of 12 to 14 years. Yet, there are currently no approved targeted therapies for this group either. While there are approximately 400 new grade 3 oligodendroglioma cases diagnosed annually in the U.S., we believe this represents a much larger prevalent population of several thousand patients, who are underserved today and could meaningfully benefit from an effective, well-tolerated targeted therapy. We view safusidenib as an ideal complement to IBTROZI as we now have an approved therapy and a late-stage program that both address a clear unmet need for patients. We look forward to generating updates from our evaluation of safusidenib as quickly as possible. Lastly, our drug-drug conjugate or DDC platform represents a novel modality in targeted cancer therapy designed to conjugate 2 small molecules, a targeting agent and a warhead. While we discontinued development of our first DDC NUV-1511 in the fourth quarter, we were able to gather valuable insights into DDC development and are already applying these learnings to new preclinical candidates in our pipeline. We hope to have updates on the next phase of our DDC program by year-end. We remain confident in our capabilities to successfully execute our program goals, build lasting value and most importantly, serve patients. With that, I'll turn it over to Colleen to provide more color on the launch of IBTROZI. Colleen Sjogren: Thank you, David, and good afternoon, everyone. I'm excited to report that the launches of IBTROZI continues to build what we believe is market defining momentum in a rare disease indication. From our approval in June through the end of 2025, we treated 432 new patients with IBTROZI, which represents a rate that is 6x faster than the 2 most recent TKI launches in ROS1-positive lung cancer. As David mentioned, we continue to see patient starts from 3 distinct populations. Patients who have failed prior ROS1 TKI switches from patients currently treated with ROS1 TKI and newly diagnosed patients who are TKI naive. This momentum underscores that a significant medical need in ROS1-positive non-small cell lung cancer still exists. And it is clear to us that the efforts of our incredible team our tailored strategy and IBTROZI's compelling efficacy and safety profile are well positioned to address this need. By the end of the year, we had engaged all top-tier target accounts and our field-facing interactions reinforce that physicians are quickly gaining comfort prescribing IBTROZI for their patients. Prescriptions have been written in 100% of our 47 sales territories by multiple repeat prescribers and per IQVIA data, we are showing significant growth in market share of new patients treated with a ROS1 TKI. On the market access front, payer engagement continues to be constructive and effective. At this point in our launch, we have achieved broad coverage to label for patients across the country. Finally, our patient support program, Innovation Connect continues to help eligible patients receive support and access to IBTROZI, while reimbursement is secured. Now I'd like to walk you through some of the key dynamics of our launch to further characterize, where we are today and what lies ahead. As we've noted, IBTROZI is being prescribed across both TKI-naive and TKI-pretreated patient populations. With our extremely high response rate in TKI-naive patients, we do expect an overwhelming majority of this population to be treated with IBTROZI for an extended period, which we are now starting to see. Still, it is typical at the beginning of any oncology launch that the majority of patients who start therapy are in need of a third or even fourth medicine and the response and duration of treatment will unfortunately be lower. While we expect IBTROZI to benefit these patients for a relatively shorter duration, meaning most will not remain on therapy for multiple quarters, we view this as an encouraging signal that providers are motivated to offer their patients a differentiated therapeutic option. While we have limited visibility into the characteristics of all IBTROZI patients, we do have some insight into the segment of patients that come through our Innovation Connect support program and specialty pharmacies. Within this group in 2025, we know that about 75% of discontinuations came from later-line populations. We're encouraged that IBTROZI is providing another meaningful option for patients across lines of therapy and the patterns we've observed through this experience have given us 3 important insights. First, discontinuation is strongly correlated with the line of therapy. IBTROZI has been well tolerated by first-line or TKI-naive patients, who have shown extremely high response rates in clinical trials. We also know that median DOR and PFS are much longer in this population than in the TKI pretreated population. Therefore, we expect to see far lower discontinuations as we move IBTROZI upstream in the treatment paradigm. Second, the fact that a significant share of our new patient starts at the beginning of launch were in the third-line plus setting helps explain the gap between an unprecedented number of patients starting IBTROZI and our net product revenue growth from the third to fourth quarter. As I mentioned, this late-line population unfortunately tends to discontinue therapy relatively quickly. And as a result, the majority of these patients are not treated for multiple quarters. which directly impacts near-term revenue trends. By the end of 2026, we expect to see a more direct correlation between growth in new patient starts and growth in our revenue. As a larger portion of active patients treated with IBTROZI shift to those who are newly diagnosed. Lastly, first-line IBTROZI patients are the main driver to our long-term growth. And the reason we are so optimistic about our launch is because we continue to see a meaningful, steady increase in first-line patients starting on IBTROZI in recent months. Our data, including the number of previously treated patients in the market suggest that we are expanding the ROS1 TKI landscape rather than simply competing for a fixed pool of patients. We anticipate this will directly impact the number of active patients on IBTROZI over multiple quarters going forward. And we plan to elaborate further on this trend as we collect more data in 2026. Switching to another key area of our launch dynamics, we continue to see use from providers in both academic and community settings nationwide. As of the end of 2025, approximately 70% of our new patient starts had come from the academic centers or IDNs and 30% from community centers, compared to a 75%, 25% split at the end of the third quarter. It is typical in a rare oncology launch that immediate uptake occurs in the academic setting. That said, this gradual shift towards the community is expected to increase over time, and in turn, will support prescription growth and momentum. This is important because the majority of ROS1 patients will be found and treated in community centers. Looking ahead, we are focused on deepening adoption and continuing to raise awareness of the importance of patient identification. Today, DNA-based testing should identify roughly 3,000 advanced ROS1-positive non-small cell lung cancer patients annually in the U.S. And as the field shifts towards also utilizing RNA-based testing, which publication suggests may help to detect approximately 30% more ROS1 patients, the annual addressable population could potentially expand to roughly 4,000 advanced patients in the U.S. alone. Because of IBTROZI's unprecedented durability, especially in the TKI-naive setting, this small incidence population turns into a substantial prevalence population, generating an opportunity to treat a meaningful number of patients over a period of several years. Finally, I want to commend the efforts of our commercial team. We believe their hard work has positioned IBTROZI as the emerging market leader in this disease. There is still educational work that needs to be done, but I am beyond thrilled we have been able to deliver this therapy to so many patients in need. With that, I will now turn it over to Philippe. Philippe Sauvage: Thanks, Colleen, and good afternoon, everyone. For detailed fourth quarter 2025 financials, please refer to our earnings press release, which is available on our website. Now let's go over some important highlights of the quarter. I'm pleased to inform you that in the fourth quarter, we generated $41.9 million in total revenue, including receipt of the milestone payments, which brings our total revenue for 2025 to $62.9 million. These figures include $15.7 million and $24.7 million in IBTROZI net U.S. product revenue in the fourth quarter and full year 2025, respectively. As Colleen mentioned, we know a significant share of our product revenue was driven by patients, treated with IBTROZI as a third line plus option. And unfortunately, these patients do not remain on therapy for very long. We do expect that over time, the bulk of our sales will be from first-line patients, staying on drug for many years. This trend of more TKI patients benefiting from IBTROZI is what makes us extremely optimistic about our long-term growth. As this occurs, we'll be able to see the true impact of our 50-month median DOR on revenue growth. Still, this dynamic will play out gradually over time, and we will continue to update you on emerging trends. Our channel movements are stabilizing as we expected we would. And today, we believe our specialty pharmacy and distribution partners hold approximately 2 to 4 weeks of inventory on hand. This is standard and shows that our product revenue has been driven by true patient demand for IBTROZI. In addition, our free trial program continues to provide patients with IBTROZI before they are fully reimbursed and this prescription generate full commercial revenue in the patient's second month on therapy at the latest. Our approach to access has been extremely successful and has resulted in broad coverage for patients across the country. As I mentioned on our last call, our level of gross to net will naturally increase as we enter more contracts that allow us to cover more lives. As a result, our gross to net now sits around 25%, and we would expect this to slightly increase before stabilizing long term. This is based on our balance of business with commercial, Medicare, Medicaid and 340B plans and the limited amount of free medicine provided to date. The remaining revenue for 2025 came from our collaboration and license agreements, including milestone payments, royalties, product supply and research and development services. In addition to ongoing royalty revenue from our partner in China, Innovent Biologics, we began receiving royalty revenue from our partner in Japan, Nippon Kayaku following regulatory approval and reimbursement in November, an event for which we received a milestone payment of $25 million. We also continued our mission to bring IBTROZI to as many patients as possible outside of the United States. In January, we announced our strategic partnership with Eisai, covering Europe and select territories outside of China and Japan. As a reminder, commercial rights in China and Japan were previously out-licensed and when those deal values are combined with the Eisai deal, this represents a total deal value of nearly $520 million for most territories outside of the U.S., but still excluding Latin America. Under our agreement with Eisai, we received an upfront payment of approximately $60 million and are eligible for a payment of about $30 million upon European approval. We will also earn up to $140 million in milestone payments upon the achievement of certain sales level, in addition to double-digit tiered royalties up to the high teens on net sales in EIsai's territories. This partnership meaningfully strengthens our cash position, allows us to reinvest in our own programs and allows us to precisely focus on our commercialization efforts in the United States. Looking ahead, we expect to file IBTROZI for approval in Europe with Eisai in the first half of this year. On the expense side, R&D expenses were $34.3 million for the quarter and $115.1 million for 2025. We continue to invest in IBTROZI and importantly, are focused on bringing safusidenib to patients as quickly as possible. SG&A expenses were $40.3 million for the quarter and $151.6 million for 2025, primarily driven by support for commercialization. As discussed in prior quarters, we do not expect material increases in commercial head count going forward. Turning to the balance sheet, we ended at 2025 with $529.2 million in cash, cash equivalents and marketable securities. This cash position has increased by approximately $60 million following the upfront payment we received from Eisai. As a reminder, an additional $50 million remain available to us under our term loan agreement with Sagard Healthcare Partners until June 30, 2026. Our robust capital position gives us a flexibility to invest in our launch and pipeline, while also enabling the evaluation of additional business development opportunities that can create shareholder value, similar to our acquisition of AnHeart. Based on our current operating plan, revenue trajectory and disciplined expense management, we do not anticipate the need for additional external financing to reach profitability. We remain a well-managed and agile organization that is positioned to execute our 2026 objectives. I'll now hand it back to David. David Hung: Thanks, Philippe. When I take a step back and reflect on our 2025, what gives me particular confidence is the foundation we've built for what comes next, an increasingly durable commercial franchise, a pipeline with meaningful long-term potential and a capital position that allows us to execute with discipline and flexibility. I'm incredibly proud of the team and grateful for the support of our investigators, partners, shareholders and most importantly, patients as we continue this journey into 2026. With that, I'll ask the operator to open the line for questions. Operator: [Operator Instructions] The first question comes from the line of Farzin Haque with Jefferies. Farzin Haque: Congrats on the progress. So you're not providing any revenue guidance yet for 2026. But what are you seeing in 1Q in terms of first-line and second-line plus mix that gives you confidence in meeting the consensus mark of $150 million for the year? David Hung: Farzin, thanks for the question. This is David. So we're -- as we said, we feel that the patients are out there. We think that the robustness of the first 2 quarters shows that we are able to capture a lot of -- a significant number of these patients. Just -- if you look at the number of new patient starts, we think the trajectory has been pretty good. As we did say, the majority of our NPS, our new patient starts to date have been later lines, as you would expect. But we are seeing increases in first line news. But we've also made the point previously that we don't have visibility into the majority of these patients. because unless they come to the Nuvation Connect Portal, we don't actually necessarily know -- what we need to know about them to know what line of therapy they are. But what we've seen we do see a majority of our use currently in later lines of therapy. Clearly, those aren't the ultimate price. Those patients, especially in the third-line study, have relatively short durations of response. And so that would lead to a much higher discontinuation rate. In fact, the vast majority of the discontinuations that we have seen are due to these late-line patients. But we are confident that over time, we're going to see growth moving toward to the second line and then to the first-line setting. And so we think that the patients are there and we think that ultimately we will start to see first-line use a much longer durability and then the revenue stack that we've previously talked about. Farzin Haque: Perfect. And then for safusidenib, can you provide an update on the current enrollment trajectory for the Phase III? And do you anticipate any interim analysis before the projected 2029 completion? David Hung: We haven't commented on our enrollment. Those patients are definitely there. As you know, there's absolutely nothing for high-grade disease or vorasidenib approved only in a subset of low-grade disease. So we think that, that trial will enroll well. But it is a PFS study. So it's going to take a while to get the number of events we need to see it -- to see the results. So that's why we've guided to a 2029 readout for that. But I would say that the patients are there. We feel very confident in the capabilities of our clinical operations and clinical development team. So we think that trial will enroll on target. We will not be any later than 2029 in reading that result out. And also -- I'm sorry, we don't have any plans right now for interim analysis. I forgot to mention that. Operator: The next question comes from the line of Leonid Timashev with RBC. Leonid Timashev: I just want to ask a little bit more about the IBTROZI trajectory. I guess, in the fourth quarter, there was potentially some seasonality, maybe changes in diagnosis has also been a historically weaker quarter for some lung cancer drugs. I guess how should we think about the seasonal bounce back we should see in the first part of 2026. Is any of those maybe weather-related seasonality is going to pull through into the first quarter? And any kind of payer dynamics that we should be thinking about in the first quarter as well? David Hung: The data set that we discussed, the seasonality was still based on just ROS1 TKI use in the last 4 years. So while there was a somewhat lower use in the fourth quarter, I would say, it's hard to know if that would necessarily predict about what's going to happen going forward. We feel confident the patients are there. We know -- we know that from -- just from our interactions with all the centers that we're at, these patients are there. We think that with -- while there's always way to improve the amount of genetic testing, we think that new patient diagnosis will happen. We know there's a prevalence pool of over 1,000 patients who are TKI experience. Clearly, those are the ones that are the -- going to be the easiest ones to identify because they've already been on our ROS1 agent. And clearly, we've already captured a significant number of those. But so I don't really know if the seasonality will necessarily result in a bounce back. It could, but I can't tell. And as you know, we just had a significant blizzard recently. So that was a pretty significant weather event. But, I don't, again, know if that will change anything. Operator: The next question comes from the line of Michael Yee with UBS. Unknown Analyst: This is Matt on for Mike. I wanted to ask on your expectations just kind of further trajectory cadence of patient uptake for the year, especially with maybe a competitor entering the market in the second-line setting, later in the year. How do you expect to see kind of the market shake out? I know you guys talked about TRKb as an important factor for you guys? Just kind of speak to the longer-term competitive landscape here would be great. David Hung: Sure. Well, as you've already seen from the first 2 quarters that we're over 200 new patient starts per quarter so far, and we think that's going to continue. And I've already said that the majority of those are later line therapy. So if you talk about second or third line, we've already captured a significant amount of about 1,000 TKI experienced patients that we believe are out there. So -- by the end of the year, we think that we will have probably captured a significant majority of all those patients. And as I said, what we're looking for is growth in the first-line setting. And given our 50-month duration of response, which is unmatched and our tolerability profile, we would expect to claim the majority of that. So that's what we're really looking for. We're not really looking any more at later-line use because that's -- we've been there and we've actually captured much of that. But we're looking towards the first-line growth, and that's what everyone should be focusing on. I think the one of the most compelling features of our drug is its durability. As you know, patients and doctors decide on therapy based on efficacy and by far, the most important metric for efficacy is how long that drug will work. We think that TRKb is an important factor in durability. If you look at the lorlatinib data, there is no TKI with longer median PFS that lorlatinib in the CROWN study, which is over 5 years. And lorlatinib has significant TRKb activity. And if you look at CNS control rate, it's really high. And as you know, for a cancer like ROS1 lung cancer, which is so CNS tropic, where it starts in the brain more than 1/3 of the time and goes to the brain another 50% of the time. It's really important to have as robust control of the CNS as you can. And we think that TRKb will play a significant role there. And as I've discussed previously, if you look at our intracranial response rate and our second line setting at 66%, that's not been matched. There's nothing close to that. So -- we think that the profile of this drug is extremely compelling, tolerability, efficacy, we're looking to move the first line, and we think that's where the unmet need will persist after we've already taken care of the later lines of therapy, which we are capturing. So we feel bullish. We feel we're just where we need to be and things are heading in the right direction. Operator: The next question comes from the line of [ Mary Coleman ] with Clear Street. Unknown Analyst: Congratulations on the progress. For taletrectinib or IBTROZI, just in general, how much adoption of TKIs any -- in the first-line setting? Have you observed following the NCCN guideline changes, especially in the community setting or community practices? And what factors or initiatives could further drive first-line use of IBTROZI there? And I have a couple after that safusidenib. David Hung: Sure. So we did note that if you look at the other TKIs that before we were approved, we actually did see an increase in scripts in the other TKIs after the NCCN guidelines came out. So I think those guidelines were helpful, and they did increase TKI use. Now since the introduction of IBTROZI to the market after our approval, we've seen clear growth from the little glimpse that we see, we have been seeing increasing first line use, but it's -- again, our glimpse into that window is still limited at this point. I don't -- I can't really speak in detail about it, we'll need to wait until we have maybe a quarter or 2 more under our belt. But we feel that things are going in the right direction. We think the NCCN guidelines are going to be a real benefit. Just the amount of IO/chemo use before those new guidelines was significant. And even after the guidelines, we still think that's a challenge. But I think that now that IO is actually contraindicated, I think that's only going to help drive the appropriate therapy. And as I've said earlier, there is no other therapy that can match our metrics on efficacy or even tolerability. So I think that we are well positioned to capture this. And I think the NCCN guidance will be a significant tailwind. But I think the greatest in the tailwind we have is just the strength of our label. Unknown Analyst: All right. That's helpful. And for the Phase III astrocytoma trial, what efficacy outcomes would be considered both clinically meaningful and commercially attractive. And -- what is the kind of estimated market opportunity or value that it can provide? And for the other cohort, what was the rationale for adding the oligodendroglioma patients as a separate cohort? And how might this become a value-generating program? David Hung: Yes. That's a great question. So when I think about glioma, I divide it into a pie about 50-50 low grade on 1 side and about 50% high grade on the other side. But within those subsets, you can divide them again. So each side, both the lower and high grade have a low-risk and high-risk features. Currently, vorasidenib is only approved in 1 of those pieces of that pie. It's only approved in low grade, low risk. That means what remains for an opportunity is high risk, low grade, low risk; high grade and high risk high grade. So the Phase III study that we're doing targets 3 of those parts -- 3 pieces of that pie. Instead of the vorasidenib 1 piece, our Phase III trial targets 3 of those pieces. So we think that's a very significant unmet need for patients. It's clearly a much larger commercial opportunity. And so we -- to get that drug approved in those 3 pieces of that pie, we have to do an overall -- we have to do a progression-free survival study, which is why -- we just need to enroll a certain number of patients. We have to follow them for a certain amount of time, and that's why the readout is 2029. Now that said, we also think that it's important for us to get this drug out to patients as quickly as possible. And there is yet another piece of that pie that isn't currently being adequately addressed, which is -- if you look at all grade 3 oligodendroglioma patients, these patients are a little bit different because unlike the Phase III study patients, which I talked about, those patients have completed surgery and radiotherapy and somewhere between 6 and 12 cycles of temozolomide. So as a result, they don't tend to have measurable disease. When you don't have measurable disease, you have to use PFS. You can't use response rate. Well, clearly, response rates are much faster readout than PFS. So the grade 3 oligodendroglioma study is important because those patients have measurable disease. These are patients who have not had a resection or not a recent one, have, in general, significant measurable disease, and they just can't take because these patients can live 15-plus years, they just can't take chemotherapy or radiotherapy every day for the next 15 years. I mean it would just be impossible to tolerate that. So we think it's a huge unmet need. But because now these patients have measurable disease, we can use overall response rate, unlike the SIGMA Phase III study, which is a PFS readout -- this will be an ORR, an overall response rate readout by RANO 2.0 criteria. So we think that if we can see a significant response rate in that study, and we've guided to reading that study out by 2027. Clearly, that's a much earlier readout. We know there are examples of all the glioma drugs being approved on a very small data set with response rate, we know that day 1 glioma drug was approved on less than 80 patients with an overall response rate. So clearly, we see a really robust response rate. We think that would -- that would justify a discussion with FDA as to what would it take to get this drug approved to get it to patients a lot sooner than a readout in 2029 for the Phase III study. So we think that it's important to do the study because, number one, it's a really important unmet need. These patients just cannot take chemo and radiation for 15 years. That's just not tenable. They need something that's much better tolerated, much more convenient. And secondly, it gives us an opportunity to see the activity of this drug in an area where nothing else works. Vorasidenib has no responses in this highway population. The response was literally 0%. So we think that it will give us an opportunity to look at the response rate of this drug and potentially initiate a discussion with FDA to just figure out how to get this drug to patients even earlier. We also think that generating data in this subset were nothing works and even vorasidenib has a 0% response rate will compel physicians and patients, who think, hey, this is a drug that has activity where nothing else does, should -- is this a better drug. Is this a more powerful drug. Is it to do things that other drugs can't do. And we think that could potentially influence the glioma market and the practice of what position the patients decide to use or attempt for treating a disease that has relatively few treatment options that is still, at the end of the day, an invariably lethal disease. So we think that the second study is a very important study for all of those reasons. Operator: The next question comes from the line of Mayank Mamtani with B. Riley Securities. Mayank Mamtani: Congrats on the progress. I appreciate the level of detail on IBTROZI launch. Just maybe on the metric should we expect for you to provide the new patient start numbers in the coming quarters, like you have and expect to see this 200-patient quarterly run rate to sort of continue in the coming quarters, including perhaps when there's a competitor entrant later in the year? And also, what's the real world discontinuation you're seeing in earlier line? I know you gave the 75% discontinuation rate in later line. But I was just curious if you had something in frontline, I understand the sample size will be small there? Then I have a follow-up. David Hung: So we have said since our very -- since the first quarter that we reported sales that we would continue to look at new patient starts. I think that's an important metric. It's particularly important in the first year where depending on the mix of patients and the duration of response or the rate of discontinuation, your revenues will not necessarily track with your new patient starts, especially as an example of your a third-line patient you just continue in a month or 2, you're not going to have the kind of revenues that you would expect in the first line setting. So we think it's important, and we said this since June 11, when we got approved, that we would focus on new patient starts at least for the first year because I think that's the best metric is our patients using this drug do physicians who want to prescribe it. And over time, what you'll see is that we've said there's only about 1,000 or so TKI-experienced patients. So if you see -- if you continue to see 200 patients per quarter, and we know that at some point, we're going to have captured the majority of that 1,000 patients. That means any growth at all in that 200 number has to be in first-line patients. And while that revenue may not appear immediately because it takes you a year to get stacking. When you start to see that growth in first line, you will see over time revenue stacking. And you will also see a significant increase in revenue. It's just not going to happen immediately because those third-line patients are going to come off, some of them discontinue within a month. And we think those first-line patients will be on for 5 months. So I think that for the next few couple of quarters, we still think NPS is important. But a year into our launch, so by third quarter of this year, we'll have been doing this for a year, and we continue to get 200-plus patients per quarter, and the majority of those are TKI experienced. That means we will have captured the majority of the TKI experience market. So any growth at all in that NPS number has to, by definition, be in first line. So I think that's what you should be looking for. I think the revenues will catch up to NPS with a few more quarters. It's just not going to do it right away, but that's what you would expect. Mayank Mamtani: On the discontinuation on the earlier line. David Hung: Oh, yes, sorry. So 75% of our discontinuations came from late-line patients. So -- so very late. Philippe Sauvage: For the patients that we know, as David said, it's a subset of patients, the one that we're going through the hub or patients going through the hub and discontinuing 75% of them were late line, which gives a lot of confidence to us about the fact that, yes, the main patients will discontinue are clearly late line patients. If you go back to our clinical trial, the rate of discontinuation was very low, as you know, 6.5%, right? So this is really what we're going to see. We're going to see some of those late-line patients, unfortunately, as is expected in oncology, not responding very well to a third or fourth line of therapy. That's true in oncology. And what we've seen in our subset going through the hub is that those are the most discontinuation we see by far. Mayank Mamtani: Understood. And then on the nonpivotal cohort SIGMA study that David, you just touched on, is there a threshold on ORR that you may have quantified or have in mind that would warrant that accelerated approval discussion? Sorry if I missed that. David Hung: I think that we've seen OR anywhere north of 20%. I mean this is a population, as you said, the biggest glioma drug in the world, vorasidenib has a 0% response rate in that population. So couldn't be lower, maybe, but certainly at 20% or higher, I think that would be extremely interesting. Operator: The next question comes from the line of Greg Renza with Truist. Gregory Renza: Congrats on the progress. David, just maybe on your current resource position. As you've commented on the current financial structure and also the path with the IBTROZI launch, maybe providing that path to potential profitability. Just wondering if you could provide a finer point on maybe what that horizon looks like. And related to this, as you've spoken about business development, you've mentioned the complementarity that IBTROZI and safusidenib provide for the pipeline. How are you thinking about adding to that mix especially in light of that focus or that mention of profitability? David Hung: So you might recall that last year before we announced the Sagard Healthcare deal, we had said that at that point, we had enough cash to reach profitability. Well, since we made that statement, we raised $150 million with Sagard with another $50 million in debt. And then since then we've done a deal with Eisai, where we got another $60 million, and we'll have yet another $30 million upon European approval submission or approval next year. So we stand by that statement. We -- we have certainly far more cash than we need to get to profitability. Now if we do a significant business development deal that would certainly take some cash. But -- we're aware of the importance of getting to profitability without having to need additional financing. These are still difficult markets. I think that we, in general, we've been relatively conservative on that front. So we'll carefully weigh the upside of a deal. And certainly, any deal we do would have to be what we consider a good deal as we consider AnHeart, we think that was a great deal for us. So any further business would have to be a great deal for us. So we have to be -- we have to weigh the benefits and cons of using our cash and cutting into our runway to profitability. But we feel very, very confident that we'll get to profitability right now easily with what we have on hand. And we do believe that given what we have, we think that further business development is an important -- it's always been an important part of our company growth historically. And we think we will continue to look for opportunities that we think are particularly compelling for us, especially if they can capture some of the synergies that we already have within our company. Gregory Renza: That's great. I appreciate that color. And maybe just one last one. If you could just comment on the DDC platform. I think I heard you mention maybe some updates into the year. Just maybe just remind us of your conviction on the platform as you invest at that area of the business? David Hung: So we are absolutely convinced that, that platform is real and has real potential. We -- that was a first-in-class compound. It's a first in history compound actually. So we learned a lot with 1511. And it wasn't that we didn't see any responses at all. We did see responses with 1511. It just weren't consistent enough for us to invest $100 million also in a Phase III study. We look at all our all our drug candidates as would this be worth spending $100 million on or should we make it better? And it's something you always have to balance in early-stage programs. So the answer for 1511 was probably not. And we learned enough to figure out how to make it better or to make a DDC better, and we are hard at work doing that. But we feel very confident that our DDC program will yield molecules that will go to the clinic and that we probably will take forward in development and we'll update you all hopefully by year-end this year. Operator: The next question comes from the line of Yaron Werber with TD Securities. Steven Ionov: Thank you very much, team, for the question. This is Steven on for Yaron. On the IBTROZI launch, in terms of trying to get more penetration in the first-line setting, where it seems like crizotinib might still be entrenched, what else can you do in terms of increasing the potential for first line? Have you engaged regulators to try to perhaps get a preference in the 1L setting in the NCCN guidelines? And if so, how is that going? And secondly, any update or perhaps any news on the BET inhibitor NUV-868? And then thirdly, on the approval in Europe, I seem to remember that there was in a head-to-head trial versus XALKORI that was thought to be necessary for approval. It seems like that's no longer the case. Can you maybe update on the thinking there? David Hung: Sure. Let me take the first couple of questions, then I'll hand to Colleen. So -- so crizotinib is -- you still use a significant amount because it is pretty well tolerated. But as you know, crizotinib does not cross the blood-brain barrier. And when there were no options other than crizotinib, that would have been appropriate. Today, I would consider it about practice to use crizotinib in the first-line setting for -- when you don't really know which patient is going to go on to develop the CNS that way. First of all, 36% of them present with a brain met. But even if they don't -- we know that 50% of them will go on to get a brain met. I can't tell which the 1 of 2 is going to do that. And to give a drug that doesn't have any CNS coverage, in my opinion, as an oncologist is malpractice. I think that is inappropriate for patients. So I can't comment on how long crizotinib will be entrenched. I think that KOLs and patients appreciate the importance of CNS coverage. And I think that's part of our job and Colleen's team is -- that's one of our main messages. I think we have to continue to do that. So I can't tell you that crizotinib will go away. But I do think that over time, it is the absolutely wrong drug to use for this disease. In terms of engaging regulators to get preference in the first line setting, we do actually believe that our drug is differentiated. And we are looking at strategies to have that captured within the NCCN guidance. So on that, I would say stay tuned on that. But we are well aware of the difference in performance metrics of our drug against other drugs. So we think that IBTROZI is an extremely compelling choice for patients and physicians. And we think that should be adequately reflected in all the sources that are available for patients and so -- and so and physicians. And so -- that is not lost on us. Colleen? Colleen Sjogren: Steven, I just want to elaborate a little bit more, so David spoke about -- the patients that we're receiving that have been pretreated, and obviously, progression toxicity that you just spoke to, brain-penetrant. So in addition to those patients, we're also looking to expand the market and you ask what else can we do? So I will tell you that it's our personal mission that we take it very personally that these patients that have ROS1-positive non-small cell lung cancer are going through their patient journey in the appropriate way. And 1 of those ways is to ensure that they're being tested before a treatment decision is made. So when we look at educational opportunities, we have several of them in this idea that patients are not only getting tissue, but liquid biopsies and I spoke about also earlier DNA testing being very, very important to understand the actionable mutations before a treatment decision is made. So in addition to us getting patients that are being switched off other TKIs, we are definitely growing the market and helping to educate more on the importance of understanding the entire picture before treatment decision is made. Steven Ionov: Okay. And then on 868 and then the European approval? David Hung: So on the European side, we don't believe that any additional clinical trials will be needed, and we'll give you more details once the MA is submitted. On 868, there's been some interesting -- some interest in that compound. So I think we're looking at all our options. Operator: The next question comes from the line of Silvan Tuerkcan with Citizens. Silvan Tuerkcan: I just wanted to ask is the gross to net for the pricing stabilize at this point? And can you share where that's coming out? And if you have any idea where that will end up? David Hung: Yes. Thanks for your question, Silvan. So I mentioned during my presentation that we were a little bit above 25% for Q4 and that we were still expecting this to grow a little bit beyond that, to say exactly when it's going to stabilize is always a very difficult question because it all depends upon negotiations with payers, obviously. But yes, we think that we are in a very good place in terms of access, which is what we wanted. We really wanted to make sure that all patients that needed that access reported that's what we were. And we think that doing all of that will take us probably a little bit further up, but not so high. I give you much more detail than that. But yes, we're still going to increase that a little bit in the coming quarters. Operator: There are no further questions waiting at this time. That will conclude today's call. I would now like to pass the conference back over to management team for closing. David Hung: Thanks so much. We want to thank you for all your support. Launches can be anxious. I think everyone has been looking at our numbers. We've gotten some feedback that some people might have been disappointed with the gap they perceived between the new patient starts and the revenue number. This is to be expected. As you know, in launches, especially in oncology and as an oncologist, I can tell you that late-line patients get started first. They're the ones that are out of options. The pool is already identified. This is a prevalent population. It's hard to find the new patients. So when you get those late-line patients, they're going to discontinue faster. I would say just be patient. It's all going to happen. We're very confident in this launch. We like the way things are going, and we think that we will get the first-line patients as long as those NPS numbers continue anywhere remotely in that ballpark. We know that we are running out of TKI experienced patients. The growth will be in first line. So I want to thank all of you for your continued support, and we look forward to updating you further on our next call. Operator: That concludes today's call. Thank you for your participation, and enjoy the rest of your day.
Operator: Ladies and gentlemen, good morning, and welcome to the SES Full Year 2025 Results Conference Call. [Operator Instructions] I will now hand the conference over to Christian Kern, Head of Investor Relations. Please go ahead. Christian Kern: Thank you, Gaya. Good morning, everyone, and thank you for joining us today. It is my pleasure to welcome you to SES Full Year 2025 Results Call on behalf of our management team. Before proceeding with the management presentation, we would like to inform you that the financial information contained in this document has been prepared under International Financial Reporting Standards. As usual, this presentation may contain announcements that constitute forward-looking statements, which are no guarantees for future business performance and involves risks as well as uncertainties. Also, certain results may materially differ from those in these forward-looking statements due to several factors. We invite you to read the detailed disclaimer on Page 2 of this presentation. The presentation is also available on our company web page. Today, I'm joined by our CEO, Adel Al-Saleh; and our CFO, Lisa Pataki, who will take you through the presentation, followed by a Q&A session. Adel, without further ado, over to you. Adel Al-Saleh: Great. Good morning, Christian. Good morning, everybody. Thank you. Good morning, good afternoon. Thank you for joining us. Look, I'm going to start our presentation before we get into the results with a little bit of an overview of the direction of travel of our network. You've probably heard us talk about our next-generation MEO in different events, and I thought it would be probably important to talk to you as analysts, investors, colleagues on this call to repeat the message and maybe clarify the direction of travel that we have as a company. So if we go to Slide #3, especially given the latest events over the weekend, I want to emphasize that our largest vertical or market opportunity is the defense sector. And what we've seen over the last several decades, a dramatic shift in the defense and how defense uses SAT communications to enhance their capabilities. So if you rewind back between 2000 and 2010, really the function of SATCOM was basically strategic long-haul pipes, so important communication links between the command center and the theaters of operation. During that period, the dominated technology was GEO, right, with very large terminals, with limited bandwidth and early steps into communication on the move. If you fast forward into 2010 and 2025, space evolved into a contested theater as adversary begin to build counterspace capabilities. So militaries had to adopt a different approach. Specifically, they started thinking about hybrid architectures, combining commercial military capabilities, they started looking at different orbits, looking at different throughput. But predominantly, the networks remain siloed. So the LEO network would be siloed from the MEO, from the GEO, from the different application and so on. But that began to evolve very, very quickly, especially in the last 3, 4 years. Now if you look at 2026 going forward, it is now very clear that space is a war-fighting domain. It is no longer a contested domain. It is a war-fighting domain, requiring superiority across all orbits. This domain is now looked at the same as they look at air, navies, cybersecurity, et cetera, et cetera. So the applications using space have begun to evolve dramatically. So if you look at the complexity of what is being done today, it's dramatically different than the past. I'll give you a couple of examples. So in the past, being able to capture images across earth and deliver them to the right hands to be able to make decisions is changing into continuous observation of earth, real-time image processing on the fleet to be able to issue commands. Missile defense systems, missile tracking like Golden Domes and European Space, Defense Agencies, that's absolutely now a requirement. And not just predicting the launch of the missile, but actually being able to acquire that launch from the beginning all the way to strike in a persistent way. And then sharing that information across multiple domains within the defense and the armies. And the third -- the last example I'll give you is this control center -- the command centers are becoming extremely complicated, extremely diverse, connecting many different aspects of data from space, from the ground to be able to compile it and be able to deliver the right level of intelligence to the folks that are in theaters. These kind of command complications require an integrated network. It requires more sophisticated capabilities in order to deal with it going forward. So if you go to the next slide, that dynamic that I just described is really shaping our direction of travel as a company. And although the slide is a little bit complicated, we're hoping to do it in a build slide, I'm going to try to explain it to you. So the first layer of space continues to be this proliferated LEO capabilities, right? And that will continue to grow. SES is not in proliferated LEO domain. We use partners to access LEOs when we need it in order to provide services to our clients. We will have our own micro LEO capabilities like quantum key distribution when we launch that constellation, but we predominantly use that as a partner network. If you look to the next layer with -- the light green layer, that's our MEO layer. And you got to keep in mind that MEO, although pictorial looks like it's between GEO and LEO, it's actually very close to LEO. It's much further away from GEO than it is from LEO, which gives it that unique capability to cover earth with less satellites, but also have an attractive latency period, which is about 130, 150 milliseconds. Our focus as a company is to continue to build that backbone of the network. And I'll come back to that in a second. And if you think about GEO, our focus in GEO will be on very specific applications where GEO continues to be the superior medium to be able to transfer data or connect people like media distribution or very specific governmental applications. So why do we like MEO? MEO is the backbone for us of this network. The future is going to be connecting all these networks to optical links. That's what we develop. So we'll be able to talk to LEOs. We'll be able to talk to GEOs. We'll be able to talk to earth. We'll be able to talk between our constellations, but also connect to other constellations to move data. It provides a high-speed backbone capability and a very attractive, resilient layer to the network that without it could be weakened. So this mesh network combined with our ground infrastructure, which is one of the largest ground infrastructures in the world, gives us that an edge and a differentiating capability to provide that multi-orbit service to our customers. So if you go to the next page, now I want to talk about what are the design principles as we evolve this meoSphere network. So first of all, when we think about MEO and the new name of the network will be meoSphere, we think big. We don't think small. We think big satellites, we think satellites that could do multiple things, we want more power on these satellites in order to accomplish some of the things that I'll talk about in a second. We also believe it's very critical. We take control over some of the supply chains that are critical for innovation and control of our destiny. So therefore, we will be doing more vertical integration as a company, creating this new layer of resilience and new layer of a backbone in space. This network will be ideal to be able to connect to the different networks to create that backbone that I keep talking about, which just opens up multiple partnerships that we have today to enhance this partnership further, but actually new partnerships for people who want to enhance their networks to drive these capabilities. It enables multi-orbit resilience for sure, right? We will be able to move signals from one layer of the network to the next layer between satellites in order to make sure we avoid jamming and we avoid direct attacks, which is happening, ladies and gentlemen. It also is ideal for the critical -- for the mission-critical applications because the next level of satellites are going to have a combination of commercial and military capabilities requiring security to be built in beyond what we currently have, mixing the military capabilities that we currently have in our military satellites with the commercial capabilities to give us that ability to drive these important missions. And the last point is really important. With the size of the satellite, with the flexibility of the satellite, we will be able to do multi-mission capabilities. The platform will always have the capability of having a communication as the foundation of the capability. But actually, there's the additional missions, the additional capabilities that the satellite will provide is a growth opportunity for us. So what are these missions? So if we go to Slide #6, these are some examples of missions that we can host on our satellites, on our meoSphere capability. Number one, data, space data relay. This is something you remember, we talked about demonstrating when we did a project with NASA and Planet Labs using RF at that point in time with not optical links to be able to move data from Planet Labs' earth observation satellites to meoSphere -- to the MEO layer and then delivering it to our customers wherever they want to deliver real time, which reduced the time of getting the signal to the right people and demonstrating that we can actually move those very, very quickly in real time. The next generation of our meoSphere will have these optical links within the satellites. The other potential hosted missions will be missile warning and missile tracking. I described that being able to build sensors on these satellites to capture capabilities, to capture things that are happening on earth. The third area, an example is being able to slice the network to provide governments a sovereign network slice of the overall network, giving them control and giving them the sovereignty that they're looking for. Of course, military communication channels and all that like X-band, Ka-military bands, UHF, that's something we'll be able to do on these satellites as well. Space situational awareness, again, not just tracking an object, but being able to connect the intelligence across the -- across space and deliver it with AI to decision-making systems to be able to track everything that's happening around us in space and combine that with our partners. Imagine the ability to combine our space situational awareness data with, for example, Starlink situational awareness, which they announced creates an incredible intelligence available for space. And of course, the last one is the AltPNT capabilities that we require in order to have more accurate positions within space and within the earth. So these are some important government missions that we will host on ourselves, and we see incredible demand for these capabilities. Our government customers are excited about this next generation of MEOs that we will be launching very, very soon. So if you go to the next page, obviously, we're working on getting this project off the ground. And we're thinking about it in a very different way compared to the traditional way of a waterfall development of creating requirements and then waiting for 5 to 7 years to be able to launch the constellation. We're going to do it in a different way. So first of all, this is going to be an iterative phased approach as we build up this capability. We're not going to do everything in one go. That's number one. Number two is we're going to use space to actually test the capabilities as they evolve. So instead of waiting and just testing in the labs and on the ground, we'll be launching missions to start testing portions of our design as it becomes available. And I'm happy to deliver, and I think we announced it earlier that our first test flight is going to be Pathfinder 1 at the end of March 2026, so the next couple of weeks, launching our bus as well as some of the payload capabilities already to be able to test it. And we have that scheduled every year until we get to a point where we're comfortable with the production of the final systems. It is also going to be a very disciplined milestone-based investment approach, both based on demand we're getting from our customers as well as the investment we'll continue to be putting in building up and scaling the capability. And all of this is going to be done with a very disciplined approach based on data and our customers' reactions. We're going to be leveraging new space capabilities and our deep experience to drive innovation. SES is well known with many firsts in the industry, many innovations that we have driven. Combining that with new space capability, their agility, their speed and their ways of development is going to be very, very helpful as we go forward. And of course, this investment that we're going to be deploying is contained in our CapEx guidance. We see meoSphere as an important evolution of the company, and we see IRIS2 being the first phase of meoSphere. And we'll talk a little bit more about IRIS2 a little bit later in the deck. So let me just end this section by going to Slide #8. So what we're doing, obviously, is we're sticking to our strategic focus of multi-orbit capability by building this next-generation MEO in a very different way than what we've done in the past, partnering with new space capabilities and leveraging the experience we have across the world. We're taking control of the supply chain to make sure that we capture our IP and our strategic advantage and keep it within the company. And with this approach, we're driving towards our North Star, which is building and evolving the company to advanced space solutions company with defense being a very important vertical within that solution capabilities. We drive solutions beyond communications, while communication continues to be a very important component of the overall portfolio. And of course, controlling supply chain and customer relationships is a very important point that we need to keep driving. So that's what I wanted to share with you before we get into actually our financials and what we're doing. And now let's get into the financials. Let's go to Page #10. So on this slide, we summarize our full year 2025 business highlights and financial performance. With the closure of the Intelsat transaction on July 17 last year, these full year 2025 results are shown on a reported basis, with Intelsat contributing roughly 22 weeks to the combined company. On this reported basis, we delivered 2025 financial performance within our financial targets with lower-than-guided capital expenditures. 2025 revenue of about EUR 2.6 billion was up 34% year-on-year with growth in all verticals. 2025 adjusted EBITDA of close to EUR 1.2 billion was up 19% growth year-on-year with a margin of 45.4%. Capital expenditure of around EUR 560 million were lower than guided, demonstrating faster-than-planned execution of our CapEx synergies. We generated EUR 229 million of adjusted free cash flow, another year of positive cash generation. Over the last 12 months, we have secured EUR 1.8 billion of renewals and new contract -- new customer contracts with the majority coming from our growth segments. This has supported our gross backlog of EUR 6.6 billion, which has been impacted by the weaker U.S. dollar and intercompany eliminations. 2025 is a milestone year for SES, with major progress and a step change in SES' scale, having combined 2 major companies with multiple platforms. We've been working on various scope changes, intercompany eliminations and some different accounting conventions. So this has been a rather complex reporting year. With the financial performance in the second half of 2025 below our initial expectations for the first year of the combined company, we're facing these challenges head on and are building a stable foundation for future growth. In terms of like-for-like financial trends, revenue was down 1.6% year-on-year and adjusted EBITDA declined around 12% year-on-year. These like-for-like trends are due to key business factors that are unchanged from what we've previously discussed. Lisa will cover those in more detail. Let's go to Page #11. Across our businesses, we integrated operations, continued to innovate and supported customers at scale as OneSES. We are a trusted partner to customers worldwide in over 130 countries as evidenced by our strong customer base and notable wins in 2025. Starting with our media business, now operating at greater scale following the Intelsat acquisition. We serve more than 2 billion people around the world and nearly 700 million households with a strong cash generation profile. We're securing long-term renewals well into the next decade. And despite industry headwinds, our strategy is clear: defend and optimize high-value neighborhoods by leveraging our industry-leading reach while expanding in market growth segments like Sports & Events. In 2025, we signed close to EUR 450 million in renewals and new business, including multiyear agreement with Sky, RTL, ORF, Telekom Srbija, Warner Bros. Discovery, Dish Mexico, Arqiva, PGA TOUR and QVC. We're winning new businesses by leveraging our combined satellite and ground network, including major new media customer in North America. We launched our new free-to-air/free-to-view offerings in Mexico and Spain, opening new markets with our compelling channel offerings. Let's now shift to our government business. We continue to see strong and growing demand for our resilient secure communication solutions from government customers around the world. We built a government solutions business of scale on both sides of the Atlantic, being a true space partner to over 60 government organizations, including European and U.S. agencies. We're well positioned to tackle the sovereign capabilities, which governments now demand with multi-orbit networks. I just described it a few slides ago. With space and defense budget increasing both in the U.S. and among NATO allies, we view the government vertical as one of the strongest growth levers over the next few years. For example, the IRIS2 program continues to progress well through Rendez-Vous 1, reinforcing SES as the European Commission's trusted partner for its flagship sovereign connectivity network. IRIS2 will become Europe's multi-orbit network of choice and supports the future expansion of our differentiated multi-orbit architecture, enabling profitable growth from 2030 onwards. Another important milestone was the announcement that SES and Luxembourg government will develop and launch GovSat-2, the second satellite under the LuxGovSat public-private partnership. We also extended a long-term hosted payload contract with Australian Defense Force. The French Navy's aircraft carrier, Charles de Gaulle, utilized SES O3b mPOWER services during the Clemenceau mission. In the U.S., we secured important new contracts, including being selected as 1 of 5 companies on the U.S. Space Force's $4 billion Protected Tactical SATCOM global PTS-G IDIQ contract and a strategic award from the Defense Innovation Unit for secure integrated multi-orbit networking. These strategic wins highlight our commitment to innovation and growth in the government sector. Turning to aviation. Millions of passengers rely on SES multi-orbit multi-band connectivity that delivers reliable, consistent performance in the air and on the ground. We're winning new airline customers around the world who are choosing SES because of our clear differentiators. These include our electronically steered antenna solution we call ESA, which uniquely enables access to GEO and LEO orbits, delivering broad coverage, low latency and unmatched resilience. We also offer multi-band flexibility across both Ku- and Ka-bands and solutions tailored for both narrow-body and wide-body aircraft. Our flexible commercial models further strengthen our value proposition. In 2025, our aviation business was supported by important customer wins and ramp-up in equipment installations. 16 airlines have committed to our multi-orbit ESA solution on more than 1,000 aircraft with many awards secured in recent months, including American Airlines, Air Canada, avianca, JAL, Skymark, Royal Brunei and others. While competitive pressure from LEO providers remains, the market continues to support multi-providers with differentiated offerings. Shifting to maritime. We are the leading provider of connectivity at sea, keeping passengers and cruise connected, informed and competitive in fast-moving world. We're confident in our maritime platforms, which position us well despite facing pressures for some partners moving to LEO solutions. Our strategy is focus, defend and rationalize supported by selective investments. Our direct maritime business remains strong and resilient despite mega LEO's entry into the market. We secured renewals with multiple major cruise lines and continue to serve 5 of the 6 global leaders. In 2025, we supported the largest cruise fleet transition from GEO to SES Cruise mPOWERED and continue to see strong demand, for example, from MSC, Virgin and other major cruise lines. Our FlexMaritime platform performs well and connects over 13,000 vessels across the world. Finally, our fixed data business. Fixed data saw intense competition in 2025. We have taken several actions to transform the business and focus in areas where we have market-leading offerings and the right to win. Our fixed data business serves 8 of the world's top 10 mobile operators and numerous global energy companies. We expanded digital inclusion in Brazil with Telebras and made meaningful progress in Africa, expanding 200 Africa mobile network sites, reaching 500,000 people. We won additional business with Orange across multiple countries and closed our first SES Intelsat combined fixed data deal in Chad. In recognition of our impact in Africa, we're honored with a Changing Lives Award at Africa Tech Fest for connecting schools in South Sudan and Uganda. As you can see, we're creating a stronger, more agile, more competitive SES, one built to lead across orbits, markets and technologies. Let's go to Slide #12. This slide highlights our fast-track synergy progress and integration efforts. We began delivering synergies from day 1. The integration of the 2 businesses is well on track. The organization design and structure is complete. Leadership is in place on all levels of the company and the new operating model across the combined business is established, enabling faster decisions and clear accountability as one company. Leveraging these operational changes, we're progressing well with fast tracking our initial synergy plan. On OpEx, we're crystallizing synergies more rapidly and are taking well -- and tracking well towards the EUR 210 million annual run rate target. Both labor and nonlabor savings are already flowing through with contracts rationalized, office footprints consolidated, automation scaled, procurement efficiencies captured and IT consolidation progressing to plan, always delivering these efficiencies with utmost care and transparency to support our teams as we align on the needs of our scaled business operations. On CapEx, we're also fast tracking the annual synergy run rate of EUR 160 million. We're confident to achieve this target sooner than initially planned to focus on our growth priorities, smarter asset use, non-replacement of certain satellites as well as rationalizing of networks and ground infrastructure. Already in 2025, we're able to save around EUR 100 million in CapEx versus the midpoint of our guidance. Our labor costs were down 7% on a like-for-like basis in 2025, accelerating the decline in fourth quarter. As you can see, we are executing with discipline and precision on our synergy targets. This positions us well to unlock the full value of OneSES. With this, I'll hand over to Lisa, who will share with you more details of our 2025 financial performance. Elisabeth Pataki: All right. Thank you, Adel. Good morning, everyone. Before I begin my remarks on the financial performance of the combined company, I'd like to remind you that our full year 2025 press release, which can be found on our company website, includes supplementary financial information with like-for-like revenue per vertical and adjusted EBITDA at the group level as if the Intelsat transaction had consolidated from the 1st of January 2024. We hope this additional disclosure helps you better understand the underlying performance of the combined business and complements your financial modeling going forward. Let's turn to Page 14 for our financial highlights. Overall, as Adel mentioned, both revenue and adjusted EBITDA were in line with the outlook we provided last quarter. I'll start by walking through our company results on both a reported basis as depicted throughout the presentation as well as on a like-for-like basis at constant foreign exchange rates for comparison purposes. Reported revenue was EUR 884 million for the fourth quarter and EUR 2.6 billion for the full year, resulting in a full year growth rate of 33.9% when compared to the same period last year. On a like-for-like basis, with constant foreign exchange rates, full year 2025 revenue was down 1.6% compared to 2024. We saw lower revenue in our fixed business as well as in media, partially offset with growth in our aviation and government businesses. As previously discussed, the fixed data business has been facing a challenging competitive environment. And within Media, the decline was driven by structural headwinds and the effects of a Brazilian customer bankruptcy. On reported adjusted EBITDA, Q4 was EUR 358 million, resulting in EUR 1.2 billion for the full year 2025, showing growth of 19.1% year-over-year with margins of 40.5% for Q4 and 45.4% for 12 months. On a like-for-like basis, full year 2025 adjusted EBITDA was down 12.1% compared to 2024, consistent with the outlook we provided on our last earnings call. The decline was driven by a few factors in line with what we've previously discussed. First, within our aviation business, we delivered over 450 electronically steered antennas in 2025, which is an important milestone for this business, and it's worth mentioning that we have another 600 ESAs still to be installed. This revenue is initially profitability diluting before enabling higher-margin service revenue after installation. Additionally, as expected, we did see some impact from timing differences between onboarding and decommissioning certain airline customers. Next, the Intelsat IS-33e anomaly, which occurred in the fourth quarter of 2024, resulted in higher third-party capacity costs in 2025 as affected customers were retained. And in Government, we had some timing impact mainly due to the U.S. budget delays at the start of last year, contract rationalization by the U.S. Department of Government Efficiency, otherwise known as DOGE and some postponements of large contracts, in part due to the U.S. government shutdown in late 2025. The good news is these awards are merely timing issues, and several are expected to materialize this year, underpinning our confidence in future growth. Lastly, with structural declines in media and difficult market conditions within the fixed data business, margins are impacted by the change in overall company mix. We expect the decline in Media to improve going forward. And on fixed data, we are focused on restructuring the business by securing the most value-additive deals, supported by disciplined capacity allocation. Moving now to Page 15. I'll discuss in more detail the top line financial performance of our vertical segments. Media's reported full year 2025 revenue was EUR 977 million for the year, up 7.9% over prior year as inorganic growth more than offset anticipated segment contraction in this business. On a like-for-like basis, Media was down 12.6%, driven by structural declines with capacity optimization in mature markets, standard definition channel switch-off and the full Q2 to Q4 impact of a Brazilian customer bankruptcy. Despite the year-over-year decline, the media business ended the year with a solid backlog of EUR 3 billion and serving close to 2.3 billion viewers worldwide. As the company's largest segment, Media carries strong margins, resulting in solid cash flow. In 2025, this business closed on roughly EUR 450 million of new business and long-term renewals, which span into the next decade, reinforcing customer confidence in our solutions. It is important to note that although global TV viewing is evolving and linear consumption is structurally declining, we expect the trend in our media business to improve. Free-to-air, free-to-view and Sports & Events remain resilient, while satellite continues to provide most efficient and reliable access in many remote regions. Moving now to Page 16. Our Networks verticals comprised about 60% of total company revenues for the full year 2025, with reported revenue up 55% year-over-year. On a like-for-like basis, Networks revenue increased by 6.6% versus the prior year, representing the fourth consecutive year of growth for Networks, driven by increases in both the Aviation and Government segments. Within Networks, the government business had revenues of EUR 726 million for the full year, up 47% over 2024. On a like-for-like basis, Government grew 17.3% year-over-year, driven by demand in European global governments and the IRIS2 program. This growth was partially offset by timing impacts and budget cuts within the U.S. government portion of the business, as I mentioned earlier. As we look ahead, we expect growth in both the U.S. and global government segments, driven by rising demand for our secure multi-orbit resilient and sovereign solutions, particularly meoSphere. Geopolitical tensions and shifting defense priorities, especially in Europe, are accelerating government investment in sovereign space capabilities and robust communications infrastructure. With proven multi-orbit solutions and a strong track record serving European, U.S. and allied global governments, SES is well positioned to capture the surge in demand. Our aviation business continues to show solid growth, supporting around 3,000 aircraft tails, thanks to our strong pipeline of ESA antenna installs and subsequent service revenues. For the full year 2025, Aviation revenue on a reported basis stood at EUR 382 million, more than doubling the size of the business. On a like-for-like basis, this segment has seen a 29% growth versus prior year with continued momentum in securing global airline customers and commercial traction around our multi-orbit ESA antenna. This strong commercial momentum supported by new installs and subsequent service revenues underpins our future revenue growth and highlights the strength of our value proposition in a competitive market. And on our fixed and maritime business, reported revenues totaled EUR 530 million for the full year. On a like-for-like basis, revenue declined 15% due to competitive headwinds, primarily in our fixed data business. We continue to navigate these headwinds with a disciplined approach, which includes rationalizing and prioritizing capacity in our growth segments. In our Maritime segment, demand for MEO capacity remains high, evidenced by solid cruise renewals as well as in commercial shipping, where we serve more than 13,000 ships globally with our Flex platform. Finally, Networks combined gross backlog stood at EUR 3.6 billion at the end of 2025, having secured close to EUR 1.4 billion of new business and renewals last year with a strong Aviation and Government pipeline as we look ahead. Our solid backlog and robust pipeline underpin our financial outlook and future growth momentum, reflecting sustained market demand for our multi-orbit solutions globally. Now let's turn to Page 17 for a more detailed view of our capital allocation priorities and our debt maturity profile as of December 2025. Our combined like-for-like adjusted net debt to adjusted EBITDA ratio at the end of 2025 stood at 3.9x. This includes cash and cash equivalents of EUR 674 million, excluding EUR 401 million of restricted cash, which is related to the SES-led consortium's involvement in the IRIS2 program. It's important to note that we remain committed to deleveraging and returning to investment-grade metrics while meeting our near-term debt obligations. We maintain a solid liquidity position supported by prudent planning and stable market access, which provides us with flexibility for future financing decisions. In terms of our debt maturity profile, we have EUR 1.3 billion coming due this year, including EUR 525 million of hybrid notes. The current debt portfolio carries a weighted average cost around 4% with approximately 80% of SES debt at fixed interest rates. Furthermore, the weighted average maturity of our debt facilities stands at approximately 5 years, providing a solid foundation for financial flexibility and long-term planning. In terms of capital allocation priorities, as we've said before, our objective is to pay down debt to 3.0x or below net leverage. We continue to make solid progress in our insurance settlement discussions related to the first 4 mPOWER satellites. In 2025, we successfully collected approximately USD 189 million or EUR 164 million. We'll continue to provide updates as the last settlement negotiations progress. We continue to invest in our MEO capabilities and as Adel mentioned, our next-generation multi-mission MEO network, meoSphere, supported by new space innovators. This is underpinned by strong financial discipline to drive sustainable growth with a focus on new space technologies while transforming our approach to capital deployment. Capital expenditures for 2025 totaled EUR 559 million on a reported basis and EUR 707 million on a like-for-like basis, primarily reflecting milestone achievements in the mPOWER satellite program. The EUR 559 million is below our prior outlook as a result of our continued focus on CapEx synergy delivery as we work towards optimizing our fleet and ground infrastructure. Further, the company has introduced a dedicated CapEx task force at the Board level designed to enhance oversight and ensure disciplined capital allocation aligned with long-term strategic objectives. SES continues to be sector-leading in shareholder returns. We paid the interim 2025 dividend of EUR 0.25 per A share and EUR 0.10 per B share in October of last year. We expect to follow this with the final 2025 dividend of EUR 0.25 per A share and EUR 0.10 per B share to be paid to shareholders in April 2026, subject to shareholder approval at the upcoming Annual General Meeting on April 2. As we've said before, once the company meets its net leverage target, at least the majority of future exceptional cash flows of the combined company will be prioritized for shareholder returns. We remain focused on improving the company's financial metrics as we look ahead. Our priority continues to be deleveraging with a return to investment-grade metrics while being selective and disciplined as we pursue opportunities to drive growth, focusing on investments where returns are clear and accretive. Slide 18 outlines how our disciplined financial management strategy supports long-term value creation for shareholders. 2025 was a pivotal year for us. We began integrating 2 major companies, rolled out best-in-class processes, initiated the consolidation of our ERP systems and strengthened compliance with SEC-aligned controls. These actions accelerate decision-making, improve data quality and help us capture synergies faster. We remain focused on disciplined capital deployment, ensuring every investment aligns with our strategic priorities. We continue to tightly manage discretionary spending through automation, labor arbitration, cost efficiency initiatives and synergy delivery. These actions will structurally lower our cost base and drive margin improvement. Cash flow continues to be a core pillar of our value creation strategy. We have further enhanced our cash discipline with tighter integration of cash metrics into operational decisions. Alongside disciplined capital allocation and focused working capital initiatives, these actions are driving more consistent and sustainable cash generation. Together, these actions reinforce our capacity to invest, drive profitable growth and deliver attractive returns. And finally, I want to thank the entire SES team for their dedication and exceptional execution throughout this complex integration. And with that, I'd like to hand it back to Adel for his closing remarks. Adel Al-Saleh: Thank you, Lisa. I echo your thanks to the team. It's been a heroic effort, right, bringing the 2 companies together and getting the results and getting the financial statements and all that stuff. Okay. Let's go to Page #20. I'd like to present our 2026 financial outlook. After a challenging 2025, we're expecting our business to stabilize in 2026. Some of the headwinds we faced last year are likely to continue into the first half of 2026, but we're executing firmly on our initiatives to offset their impact. This positions us well for the next phase, returning to sustainable growth. In 2026, we will accelerate integration, execute on synergies, grow in key markets and continue innovating across our global multi-orbit architecture. As such, as on a like-for-like basis, with a full year consolidated Intelsat, we expect both revenue and adjusted EBITDA to be stable as compared to 2025 on a constant FX basis. As a reminder, 2025 like-for-like numbers are shown at reported rates of EUR 1.12 per U.S. dollar exchange rate and more recent rates are in the EUR 1.18 to EUR 1.19 range. As we continue to fast track our CapEx synergy delivery, 2026 capital expenditures at the euro-U.S. exchange rate of 1.2 is expected to be around EUR 700 million. This will include IRIS2, which is the first phase of meoSphere. This is around EUR 100 million lower than our prior guidance. Our network of the future, meoSphere, supported by new space innovators and IRIS2 are part of this CapEx guidance. A quick update on IRIS2. SES is currently progressing through Rendez-Vous 1 of the IRIS2 program, working closely with the European Commission and our SpaceRISE partners to validate project costs, technical requirements and delivery time line. SES remains fully committed to the European Union's vision for a sovereign secure and competitive space-based connectivity infrastructure. The project -- I'm sorry, the project must work for both, the European Commission and the SpaceRISE consortium. We have clear objectives on how to make that happen. As the lead member of the SpaceRISE consortium, SES collaborates with all partners to ensure the timely and successful delivery of IRIS2. Let me also give you a quick update on the well-advancing C-band process. The draft notice of proposed rulemaking, also known as NPRM was published by FCC last December and was followed by a round of stakeholder comments. SES filed its comments on January 20 and reply comments on February 18, supporting FCC's proposal for upper C-band clearance. SES remains fully committed to collaborating with FCC and all stakeholders to identify and implement the most effective technical solution that delivers mutual benefits for all parties involved. It is FCC's stated intention to auction up to 180 megahertz of spectrum in the upper C-band. The One Big Beautiful Bill requires the FCC to complete a system of competitive bidding for at least 100 megahertz in the upper C-band no later than July 2027. FCC ruling is expected in the second half of 2026. This process continues moving on an accelerated time line, and we'll keep you updated accordingly. Before moving to Q&A, I would like to conclude today's presentation on Page #21. Our vision is building a leader in space-based solutions. 2025 was a foundational year with the integration of a new company. Our focus was in getting the basics right and building a platform for the future that is scalable. Operationally, we're strengthening the network as we start building and scaling our multi-orbit next-generation network with meoSphere, building on our success of O3b mPOWER constellation and supported by new space innovators. During 2025, O3b mPOWER Satellites 7 and 8 entered service and more recently, Satellites 9 and 10 started providing much needed capacity. The launch of Satellite 11 to 13 is on track and planned for second half of 2026. The year 2026, it's not just the continuation of integration. It is for us, the acceleration of the new SES, building an industry leader. We're looking to stabilize the business and prepare it to grow by reshaping our portfolio to concentrate on the markets where SES has the right to win with customer-driven solutions, relentless focus on operational excellence and financial strength underpinned by synergy delivery. As we enter 2026, we'll move with momentum, accelerating integration, executing on synergies, growing in key markets and continue innovating across our global multi-orbit architecture. Through this momentum, we're positioning SES to operate at a new scale and lead in business performance, innovation and expansion. We're focused on delivering differentiated end-to-end capabilities across our segments as a global space solutions company. Our vision is clear: to lead the next chapter of space solutions industry, driving innovation, sustainable expansion and compelling value creation for both shareholders and our customers. With this, we're now ready to take your questions. Operator: [Operator Instructions] The first question is coming from Aleksander Peterc from Bernstein. Aleksander Peterc: I just have a couple, please. So first one is on the margin outlook for the current year, presumably in '26, you have a lower impact from the IS-33 failure that may have had an impact on Intelsat side of the operations in '25. So I would assume this would be a tailwind also equipment revenue was quite high in '25. Is that coming down? And you also have synergies that are already in play and will accelerate. So I'm just wondering what are the headwinds here to the margin for you to predict a flat year-on-year margin. That will be the first one. And then the second one, just very briefly, if you could tell us anything new on the upper C-band's process in terms of time line and amount of spectrum do you think you -- that could be in play here? Are we still talking about 160 megahertz as being the base case scenario here? Elisabeth Pataki: Yes. So I'll start with the margin outlook for '26 and then hand it over to Adel on the C-band. So EBITDA is stable from '25 into '26 with stable revenue while synergies are on track. So the reason that you don't see all of the synergies drive the growth in 2026 adjusted EBITDA yet is really driven by the company mix across the verticals. So as you noted, we still have strong equipment sales going through the aviation business. Maybe a way to think about it is we've got about 40% of that business is in terms of equipment sales. We ramped the ESA antenna installation significantly in the second half of 2025. And we still have quite a bit of equipment sales going into aviation into 2026. Also, we do have a bit of a mix dynamic when it comes to some of our highly profitable businesses like media, which is in a structural decline, with the fixed business -- fixed data business that is also declining that we've taken active steps to rationalize how we're performing in that business and streamline things, make sure that we're allocating capacity over into the right areas. So if you kind of look at it from a mix perspective, we are offsetting some of that decline with synergies. We're well on track when it comes to synergies, and we're feeling very good about our performance. But overall, given where we're at, we're stable on both revenue and EBITDA in 2026. Adel Al-Saleh: Great. Thank you, Lisa. And Alexander, just to clarify, the IS-33 third-party capacity is still in our numbers. On a compared basis, obviously, it gives us a little bit relief, right, because we didn't have it in 2025 compared to 2024. So that gives us a little bit of a relief. But it's still in there, and we're working hard to move that traffic on fleet, but given the demand for our fleet, it's not so straightforward, right? As soon as we find the capacity to move it, we will do that. And by the way, the equipment -- I mean one thing we need to keep highlighting is this equipment headwind we have from airlines is translating into a service revenue. And we see it. So for example, one of the large airlines that did install over 400 kits in 2025 when we look at their margins in 2025 installation, if you look at their margin in 2026, it is significantly better. But as Lisa said, because of the success of sales, we have a good backlog of more than 600 terminals to install in the year. But so those dynamics continue. Look, on the C-band, I mentioned it already, it's progressing very, very well. The replies to the comments have now closed. We expect now FCC to move in second half of 2026 to issue their ruling. FCC has clearly said they want to go as high as possible up to 180 megahertz, Alexander, you've seen in our comments, we would like them to go up to 160 megahertz leaving some C-band for very specific applications that we think will be beneficial. But as I said, we are working closely with FCC and we will support them with their objectives, ensuring that our customers get the services that they need to have. So it's progressing. It's picking up speed actually. Operator: The next question is coming from Roshan Ranjit from Deutsche Bank. Roshan Ranjit: I've got 2 questions, please, and perhaps following up on the previous around the synergies. Now clearly, Lisa, you're very confident on that progression. I think that's been clear from day 1. Now you're talking about fast tracking. So if I think about what you previously said, I think 70% of the run rate by year 3, I suppose just to give a sense of how fast track this is. And given that the run rate should be achieved faster. Should we be thinking about an NPV higher than the 2.4 or are there kind of associated higher costs and maybe moving a bit faster and extracting those synergies? And the second question is around the midterm. Now I know you did comment at Q3 stage on those midterm targets because of the many moving parts. Is that still the case now? And when can we expect any details around the midterm targets within the integrated group. Elisabeth Pataki: Yes. So sure. So on the synergies, if I take that one first, we did fast track the execution of some of the key labor synergies early in the first 6 months of this integration. Obviously, as you work through those things, they are hard decisions to take. But as Adel mentioned in his prepared remarks, we took those decisions quite quickly. It's very important for us to have been able to stabilize the organization, and that did result in quite a number of our employees exiting the organization. Now at the same time, we've taken a very hard look at optimizing our fleet, and that includes satellites, satellites that we have on order and our ground infrastructure. To make decisions on that, it does take a bit of work. So we've started -- we've accelerated our process in terms of making those decisions. And I think you'll expect to hear some more things from us probably within the first 2 quarters of this particular year. So all in all, we are completely on track with respect to synergies. I don't anticipate that we are going to increase our expectation of what we're going to accomplish for synergies. It's just that we're going to try to execute those things as quickly as we possibly can. And then in terms of midterm guidance, obviously, 2025 was a milestone year for SES. It was a year of major progress, step change in the company's scale, decisive actions while integrating Intelsat, we've been delivering on our synergies since day 1. Some of those things, like I said, are under rigorous scrutiny. We're putting in place some of the ground rules for how we operate a business and who make investment decisions going forward. We are in the middle of the IRIS2 Rendez-Vous 1 process. So we expect to have more clarity as we round out that process. We're also going to host the Capital Markets Day later this year. And at that point in time, we'll be better prepared to give more midterm guidance. Adel Al-Saleh: And we look forward to that, right? Elisabeth Pataki: We look forward to that. We absolutely look forward to that. Operator: The next question is coming from Ben Rickett from New Street Research. Ben Rickett: I had 2 questions, please, if possible. Firstly, just to help with the sort of cash flow modeling for 2026. Can you say what we should be expecting in terms of lease expense? And also, I think there was some noncash EBITDA Intelsat. If you can quantify what that would be in 2026? And then second question, just on the media revenue trends. So in the second half, they were down 16% year-on-year. Is there any one-offs within that? Or I mean, obviously, you're impacted by Brazil. But I mean are you still expecting the midterm trends there to be mid-single-digit decline? Or could that be a bit worse now? Adel Al-Saleh: Then that was on the media. The last part was on the media, right? Ben Rickett: Exactly, on the media revenue. Adel Al-Saleh: Yes, it wasn't decline in 16%, it was about 12%, but we got it. Elisabeth Pataki: Okay. Yes. So cash flow. So 2026 cash flow, fairly from a lease expense perspective, noncash EBITDA perspective, fairly stable from what we've communicated previously, just off the top of my head, and you'll just have to check the press release, but noncash EBITDA is around EUR 200 million. We expect that to decline about EUR 20 million to EUR 30 million each year as we go forward. And then on some of the one-offs, I think as you know, every year, we have a number of one-offs. So I don't expect 2026 to be any different than 2025 at this point. It's fairly stable when we look at one-offs year-over-year. We are going to be quite happy to have the Brazilian activity behind us at this point going into 2026. So while media declined 12.6% from '24 into '25, we do expect that decline to kind of taper off a bit in 2026. Adel Al-Saleh: And just to add to that, Lisa. So Ben, we do expect media to be back to where we talked about, which is kind of a mid-single-digit decline. That's the model, right? And we see it now coming back to normal in 2026 after this bump that we had in 2025 was what Lisa described. Ben Rickett: That's great. Just on the first question, you can't say anything about the lease expense you're expecting for 2026? So I know Intelsat was quite significant lease expense. Elisabeth Pataki: I don't expect any changes between '25 and '26. Adel Al-Saleh: Can we follow up with Ben on it? Ben, we can follow up with you on that. But, we don't see anything abnormal happening in 2026. So what is it? Is it decline? Yes, it's going to -- the team here is saying it's going to be going down. But let the team follow up with you to give you the exact number. Operator: The next question is coming from Nick Dempsey Barclays. Nick Dempsey: I've got 3 left, please. So first of all, where could you see a help to your revenues this year from what has been happening currently in the Middle East this weekend? Of course, the U.S. military always takes capacity with a view to having flex to conduct operations. But are there areas where you could achieve extra services revenues or could this situation help you to fill SES 9 and 10 more rapidly? Second question, you said I think you're expecting a ruling on C-band in the second half '26, just so that I understand what we're talking about, do we mean that in that time frame, the FCC would talk about how much satellite operators would be paid to clear a specific amount of space in the band. Is that exactly what we mean by a ruling? And then on risk weight, you talked about the Rendez-Vous. Is everything on track in terms of timing as you'd hoped a year ago? Are there any risks that this project takes longer and could end up costing more? Adel Al-Saleh: Very good. Well, thank you, Nick. Look, a couple of things. Let me start with the first question, right? So it's very difficult for us to comment on what we're going to be able to do in conflict scenarios, right? However, the demand for our services continues to surge. And we have multiple capabilities and multiple contracts, both with NATO and the U.S. government and the European Commission that is able to use that capacity when they need it. And when they do, and there's a search, there's obviously an opportunity for us to deliver better performance in our government business. It's also important to mention that although the U.S. had headwinds in 2025, the ones that Lisa explained and the one we talked about in November last year, the European business and the global business had a fantastic year with double-digit growth. And that will continue. So we see that happening going forward. So I'm not giving you the exact answer, but the outlook is positive and is accelerated with conflicts, but not even without conflicts, the buildup of sovereign capabilities is now a big priority for many nations and continues to be an important element of Space Force activities. Look, on the C-band ruling, so what we expect when the ruling comes out, is FCC to decide how are they going to handle incentive payments and reimbursement payments for relocation costs. And as you've seen from our filings and filings of many, many others, there is big support to follow the same process that was used with what we call for C-band 1.0 to the final hearing, right, with how the incentive payments are calculated and who is incented as well as the relocation costs that need to be reimbursed. So we expect when the ruling comes out that FCC would clarify those elements of the ruling, right? And they can't really predict exactly what FCC will do, but that is expected to be part of the ruling. And then the final point on Rendez-Vous 1, yes, things are progressing, working very, very hard as we adjust the solution with the technical results and the outputs that we have from all the testing and the costing that we have done. And as I said, look, this is not something we want to rush, right? We want to make sure we do it at the pace that's required to ensure that it's a win-win. We are not going to do a project that's a lose-lose or lose-win. It has to be a win-win. And therefore, we're working diligently with full commitment to the commission and the objective of building a European sovereign capability. And we're excited about, right? Because that whole architecture of IRIS2 is exactly what we've been pitching to the world, a multi-orbit architecture with connections between the satellites and different orbits with resilience. And obviously, it's an enablement for our meoSphere ambition to be the first phase of that project. So that's how it's going, Nick. I hope that answers your questions. Operator: [Operator Instructions] The next question is coming from Paul Sidney from Berenberg. Paul Sidney: Two questions as well, please, if I may. Firstly, just sort of building on the discussion we've been had on the call and I think following on to Nick's question on government. Clearly, very rapidly evolving geopolitical situation we're seeing. But is there also -- are we starting to see a mix shift away from Starlink and towards yourself other non-U.S. satellite networks? I understand obviously government appetite demand is growing very fast. But there also that mix shift that we're seeing, if that's starting to happen? And then just a question, at least on the CapEx guidance. If I understand rightly, it's sort of underlying EUR 500 million now ex IRIS2 components. Is that the sort of run rate we should expect going forward? I know you'll update us later in the year and give us more detail. But again, just building on all the CapEx discussion we've been having on the call so far. Is that EUR 500 million now a bit more realistic than the EUR 600 million to EUR 650 million? Adel Al-Saleh: So Paul, look, the -- keep in mind, look, the conflict that we're seeing today clearly accelerates and drives demand in short term. However, the macro dynamics are such that the requirement and the acceleration of space demand has been happening before these conflicts, and it's happening at scale. And it's because, as I described in the beginning of the presentation, space is now a war domain. It's a war-fighting domain, right? It's no longer a contested domain. There is an acceleration across all nations around the world, especially the United States and European Union to build up these capabilities at scale. And it's part -- of it is being able to build your own sovereign capabilities. Europe is looking at space as part of their NATO objectives and how to reach the NATO levels of spend that is required but also with the objective of making sure that their presence is competitive, right, because it is a war-fighting domain going forward. And we, as a company, are moving ourselves to be more and more exposed to that government opportunity. We feel our architectures, our solutions capabilities with the meoSphere expansion with what we have in GEO assets positions us extremely well, right? And that's what's going to happen. Now I don't believe the mix is going away from Starlink or other American players. I think the overall demand in the market is expanding. You will see Starlink and Amazon and others growing as well in this segment because there is a massive demand requirement across the world, especially in allied nations to keep building that volume and capability out. So don't see it as money moving from one to the other, seeing as a major expansion of the overall opportunity and the European nations deciding that they need to have their sovereign capability as well, right? They will use the other partners, but they need their capability as well, and that works very well for us, especially with the architecture that we're building. Remember that idea that I put on the table, which is no longer an idea, it's design principle, we can give slices of our network as sovereign networks to different nations, where they control the traffic, when they control how it lands in their systems under their security capabilities. And that's a very unique thing that we are doing as a company compared to some of our other players. And look, we are leveraging and expanding our partnership network. So for example, a great company that's called Kratos, who's been an expert in defense capabilities is now a partner. We're working with them on figuring out how do we virtualize the networks that we have. How do we take our capabilities to the next level. And I think the Kratos CEO in their earnings comments mentioned SES, and I want to make sure we mentioned it as well here because those are the type of partnerships that creates this unique solutions in an open collaborative environment versus having closed systems, right, that are specific to what you can deliver. Look, in terms of CapEx guidance, and Christian will help me here for a second. We've always said that our base CapEx for the company going forward is between EUR 600 million and EUR 650 million per year, excluding IRIS2 and excluding meoSphere. And we had given guidance in the past that meoSphere plus IRIS2 would be about EUR 200 million in 2026 and then growing to EUR 400 million in subsequent years. So what are we doing with that? You can see it already in 2026, if you look at our EUR 650 million base CapEx plus EUR 200 million of IRIS2 CapEx adds up to EUR 850 million. Our guidance is EUR 700 million, to be clear. Why is it EUR 700 million and not EUR 850 million, because of the synergies that Lisa talked about, we're accelerating the network synergies. We have decided not to spend money on certain areas. We're optimizing the ground investments. We're looking at ways of moving the money away from legacy into the growth areas, right? And that is what's helping us to contain this CapEx. Now the team is going to give you more guidance in terms of future, especially as Lisa said, when we have our Capital Markets Day in the second half of the year, we are going to show you the profile of how we're going to build meoSphere, how we're going to expand it. But again, I want to reiterate, the way we're going to build meoSphere with IRIS2 being the first phase is an iterated phased approach. We want to get customers on board, want to have customers sign up before we go into larger CapEx spends, right, in a very controlled way. That is what we are going to do as a company. So I hope, Paul, that answers your question. Lisa, do you want to add anything? Elisabeth Pataki: No, I think you hit it. Christian Kern: Can I just add, Paul. Adel has shared online the various visits of the several ambassadors, which have visited us here in Betzdorf and also EU Commissioner Kubilius more recently, right? So that... Adel Al-Saleh: The European Commissioner Kubilius, who is the commissioner of Defense and Space. We had Supreme NATO Commander who was here with us. It's all public information. We had multiple defense ministries that come over. I mean, this just shows you the demand and the importance of SES in the government and defense sector. It's really important to recognize that, right? Because people see that multi-orbit architecture is absolutely a requirement. MEO plays a very important role in the resilience, the ability to move traffic, the ability to create alternatives and the ability to carry traffic for very specific missions. So that's what we're seeing in the marketplace, Paul. Paul Sidney: That's very clear. Could I sneak in a very quick question at the end, please. So we saw reports of Norway joining IRIS2 projects, even the U.K., and I think there were some headlines potentially joining as well. Does that make the project more likely? And does it potentially change economics? Adel Al-Saleh: Look, the project -- Paul, so first of all, when I say win-win, that's what I talk about economics and others, right? It's got to be right for us as a publicly listed company. And I've always been very, very vocal. And the European Commission knows our requirements, right? They know that in order for this to be a success, we have to be successful, right? We cannot have a project that burdens our financial position. So that has always been the case. It will continue to be the case. And I have much confidence that we will be able to figure out the path. And the European Commission is very committed to this project. Where you're seeing the countries joining, I believe that will continue. And I believe that you will see beyond the European Union and the European Union member states, other allied nations joining the project over time, right, given the importance, being the ability to connect to that network and expand it. And outlook, our goal is when we think about meoSphere as an example, right, we have a unique position to build out that backbone of the network with MEO part of the IRIS2 capability. We are not -- our goal is not to stop at the IRIS2 requirement because the demand is expanding. So our goal is to keep building and expanding in a phased approach based on the demand that we see in the market. So what's happening, IRIS2, and by the way, the same thing applies to Eutelsat. It gives us the opportunity as the consortium to develop the new systems, the new capabilities as the first phase and then build on it going forward, and that helps the economics significantly when you start adding incremental capabilities without having to repeat the nonrecurring expenses, if you will, that you incur when you're building a new system. Operator: The next question is coming from Halima Elyas from Goldman Sachs. Halima Elyas: I wanted to follow up again on defense. So growth has been clearly supported by changing global attitudes towards defense spend. But when do you think we will see this translate to more meaningful tailwinds? And how will it manifest? So is it most likely to be reflected in higher capacity demand? Or do you think there's potential to either accelerate or maybe expand the scope of projects like IRIS2? And then on the flip side, has there been any notable change in U.S. attitudes or spend towards European solutions over the past year? Adel Al-Saleh: Halima, thank you for the question. So let's start with the first one, right? So our government business has been growing double digit now for several years, right? And it's accelerating. We had a bump in 2025 with the U.S. government shutdown, the DOGE initiatives, which hurt us in certain areas. And on the same time, we won multiple projects that will drive the future growth. I believe with the system, we're proposing the expansion because what we're trying to do, Halima, is expand beyond communications capabilities. There is a massive demand -- and by the way, I want to make sure, again, everybody understands in the call. The demand is not driven by the current conflict. The demand for space is driven by the fact space has become a war-fighting domain, just like ground, air, sea and cybersecurity. These are the different domains of the defense organizations. Space is the domain to be treated the same exact way. So as forces think about strengthening their ground capabilities, strengthening their air capabilities, they're thinking the same way in space. So before any of these conflicts happen, that's been a decision from an architecture point of view of how to create better deterrence, better defense and better strength. And that's where European Union and other nations have decided they're going to have to significantly increase their spending in space. And that is driving the demand, right? The conflicts obviously drives spikes in demand for a certain period of time because people need the capacity and so on. So our strategy, as I described with meoSphere, is to expand beyond communications because the satellites that we will be introducing part of the next-generation MEO networks, have the real state and the power, Halima. So today, our empower satellites had less than 10 kilowatts power on the satellite. Our future satellites will have 20 kilowatts. We're doubling that. The real state of satellite, which is why I said why we like bigger satellites rather than smaller satellites is enough to have more, what we call hosted payloads to do missions beyond communications. And I described some of these missions, missile defense, missiles tracking, relay between different orders, right, slices of the network, space awareness. Those are all new opportunities for SES to enter over the next few years, and this will drive growth -- significant growth in the government sector that we currently cover today because we are not exposed to that today. With our future platforms and customers signing up will be exposed to that opportunity as well. And that is absolutely required. And I'll give you an example. Golden Dome in the U.S., which is a protective shield against ballistic and other kind of missiles. That is in billions of investments. We believe our MEO capability could be enhancing that beyond the military specific investments that will be made. The same thing, Europe, we'll be building a very similar shield for Europe, and we will be a partner and a player in that capability as well. And we're building the satellites that add this functionality. So we are very excited, right, about the opportunity going forward. And you can't think of it as because there's conflict today that demand is going. It's actually a fundamental shift because space has become a war fighting domain. Now your question second about have we seen notable U.S. spend shifts? No, we have not, right? We believe the U.S. is open to use allied capabilities. SES is positioned in the U.S. very well. We have an established capability that we've been working there for 40 years with specific clearances that's required in order to be able to participate in some of these different opportunities. So we have not seen that yet. We hope not to see it. We're proud to be an allied nation and allied company that works on both sides of the Atlantic to bring capabilities to both, of course, our home nations and European Union and those capabilities, but also in the U.S. as an allied for these forces. Operator: There are no more questions at this time. So I hand the conference back to Christian Kern for any closing remarks. Christian Kern: Thank you so much for joining today's call. I think it was a very clear message that 2025 was bringing -- was about bringing the companies together. 2026 is stabilizing it, and then we take it from there in terms of teeing it up for growth. The overall layer in terms of the defense thing has been very well reflected by our top management team. If you have any follow-up on this, please reach out to the IR team, we are there to help. And again, thank you very much for joining us today. Operator: Thanks for participating to today's call. You may now disconnect.
Operator: Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Oxford Square Capital Corp. Fourth Quarter 2025 Earnings Release Conference Call. [Operator Instructions] It is now my pleasure to turn the call over to CEO, Jonathan Cohen. Please go ahead. Jonathan Cohen: Good morning, everyone. Welcome to the Oxford Square Capital Corp. Fourth Quarter 2025 Earnings Conference Call. I'm joined today by Saul Rosenthal, our President; Bruce Rubin, our CFO; and Kevin Yonon, Managing Director and Portfolio Manager. Bruce, could you open the call with a disclosure regarding forward-looking statements? Bruce Rubin: Of course, Jonathan. Today's conference call is being recorded. An audio replay of the conference call will be available for 30 days. Replay information is included in our press release that was issued this morning. Please note that this call is the property of Oxford Square Capital Corp. Any unauthorized rebroadcast of this call in any form is strictly prohibited. At this point, please direct your attention to the customary disclosure in this morning's press release regarding forward-looking information. Today's conference call includes forward-looking statements and projections that reflect the company's current views with respect to, among other things, future events and financial performance. We ask that you refer to most recent filings with the SEC for important factors that can cause actual results to differ materially from those indicated in these projections. We do not undertake to update our forward-looking statements unless required to do so by law. To obtain copies of our latest SEC filings, please visit our website at www.oxfordsquarecapital.com. With that, I'll turn the presentation back to Jonathan. Jonathan Cohen: Thanks, Bruce. For the quarter ended December, Oxford Square's net investment income was approximately $5.4 million or $0.07 per share compared with approximately $5.6 million or $0.07 per share in the prior quarter. Our net asset value per share stood at $1.69 compared to a net asset value per share of $1.95 for the prior quarter. During the quarter, we distributed $0.105 per share to our common stock shareholders. For the fourth quarter, we recorded total investment income of approximately $10.4 million as compared to approximately $10.2 million in the prior quarter. In the fourth quarter, we recorded combined net unrealized and realized losses on investments of approximately $18.3 million or $0.22 per share compared to combined net unrealized and realized losses on investments of approximately $7.5 million or $0.09 per share in the prior quarter. During the fourth quarter, our investment activity consisted of purchases of approximately $18 million and repayments of approximately $7.4 million. During the quarter ended December, we issued a total of approximately 4.3 million shares of our common stock pursuant to an at-the-market offering, resulting in net proceeds of approximately $7.9 million. On February 26, 2026, our Board of Directors declared monthly distributions of $0.035 per share for each of the months ending April, May and June of 2026. We note that additional details regarding record and payment date information can be found in our press release that was issued this morning. With that, I'll turn the call over to our Portfolio Manager, Kevin Yonon. Kevin P. Yonon: Thank you, Jonathan. During the quarter ended December 31, the U.S. loan market performance declined versus the prior quarter. U.S. loan prices, as defined by the Morningstar LSTA U.S. Leveraged Loan Index decreased slightly from 97.06% of par as of September 30 to 96.64% of par as of December 31. According to LCD, during the quarter, there was some pricing dispersion with BB-rated loan prices decreasing 8 basis points, B-rated loan prices increasing 18 basis points and CCC-rated loan prices decreasing 265 basis points on average. According to PitchBook LCD, the 12-month trailing default rate for the loan index decreased to 1.23% by principal amount at the end of the quarter from 1.47% at the end of September. Additionally, the default rate, including various forms of liability management exercises, which are not captured in the cited default rate remained at an elevated level of 3.35%. The distress ratio, defined as a percentage of loans with prices below 80% of par, ended the quarter at 4.34% compared to 2.88% at the end of September. During the quarter ended December 31, 2025, U.S. leveraged loan primary market issuance, excluding amendments and repricing transactions, was $70.7 billion, representing a 27% decrease versus the quarter ended December 31, 2024. This was driven by lower refinancing and LBO activity, partly offset by higher M&A and dividend activity versus the prior year comparable quarter. At the same time, U.S. loan fund outflows, as measured by Lipper, were approximately $3.2 billion for the quarter ended December 31. We continue to focus on portfolio management strategies designed to maximize our long-term total return. As a permanent capital vehicle, we historically have been able to take a longer-term view towards our investment strategy. With that, I will turn the call back over to Jonathan. Jonathan Cohen: Thank you, Kevin. Additional information about Oxford Square's fourth quarter performance has been posted to our website at www.oxfordsquarecapital.com. And with that, operator, we're happy to open the call up for any questions. Operator: [Operator Instructions] And our first question is from the line of Erik Zwick with Lucid Capital Markets. Erik Zwick: I wanted to start with a question. You mentioned the $18 million of new investment purchases during the quarter. Curious if you could just add a little maybe detail into what you bought and what you're currently finding attractive in the market. Kevin P. Yonon: Sure. So broadly, the investments were focused on first lien loans, generally B2B loans. Going forward into this quarter, I mean, obviously, the primary market has certainly slowed down just given the volatility associated with certain things. But I think we're definitely seeing opportunities in the primary and the secondary, just given the way the markets are trading. Erik Zwick: Got it. And maybe kind of the back end of that question, if I dig in a little bit deeper. You mentioned there in the prepared comments, the distressed ratio up to -- I don't have the exact estimate, 4-point-something percent, up from 2-point something. So a market increase there. I'm wondering if, from your perspective, is that reflective of some of the volatility we've seen and concerns in the software market? If not, what else is driving that? And two, has this -- is this creating some of the opportunity for you to maybe find some good investment opportunities at lower prices today? Jonathan Cohen: The answer, I think, Erik, is yes to both questions. Certainly, the state of the software market right now, the software private credit market and the syndicated loan markets in that sector are reflecting real concern, no question about it. There's also, I think, a more general pushback against the growth in the private credit asset class that we've been seeing for the past several years. All of that is manifesting in somewhat more recently wider U.S. syndicated corporate loan spreads and lower pricing for the LSTA index. So the answer certainly from our perspective anyways is yes. Erik Zwick: That's helpful. And last one for me. Wondering if you could just describe a little bit the unrealized depreciation in the quarter, what was the primary driver there? Unknown Executive: Erik, yes, that was -- a good portion of that was the CLO equity portion of the book. As you know, it had a very challenging year-end quarter, and that was mainly a markdown of the CLO equity portion of the book. Jonathan Cohen: Principally unrealized. Operator: And with no further questions in queue, I will now hand the call back over to CEO, Jonathan Cohen. Jonathan Cohen: Thank you very much. I'd like to thank everyone on the call now, listening to this call and also everyone listening to the replay for their interest in Oxford Square, and we look forward to speaking to you again soon. Thanks very much. Operator: Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.
Operator: Ladies and gentlemen, good morning, and welcome to the SES Full Year 2025 Results Conference Call. [Operator Instructions] I will now hand the conference over to Christian Kern, Head of Investor Relations. Please go ahead. Christian Kern: Thank you, Gaya. Good morning, everyone, and thank you for joining us today. It is my pleasure to welcome you to SES Full Year 2025 Results Call on behalf of our management team. Before proceeding with the management presentation, we would like to inform you that the financial information contained in this document has been prepared under International Financial Reporting Standards. As usual, this presentation may contain announcements that constitute forward-looking statements, which are no guarantees for future business performance and involves risks as well as uncertainties. Also, certain results may materially differ from those in these forward-looking statements due to several factors. We invite you to read the detailed disclaimer on Page 2 of this presentation. The presentation is also available on our company web page. Today, I'm joined by our CEO, Adel Al-Saleh; and our CFO, Lisa Pataki, who will take you through the presentation, followed by a Q&A session. Adel, without further ado, over to you. Adel Al-Saleh: Great. Good morning, Christian. Good morning, everybody. Thank you. Good morning, good afternoon. Thank you for joining us. Look, I'm going to start our presentation before we get into the results with a little bit of an overview of the direction of travel of our network. You've probably heard us talk about our next-generation MEO in different events, and I thought it would be probably important to talk to you as analysts, investors, colleagues on this call to repeat the message and maybe clarify the direction of travel that we have as a company. So if we go to Slide #3, especially given the latest events over the weekend, I want to emphasize that our largest vertical or market opportunity is the defense sector. And what we've seen over the last several decades, a dramatic shift in the defense and how defense uses SAT communications to enhance their capabilities. So if you rewind back between 2000 and 2010, really the function of SATCOM was basically strategic long-haul pipes, so important communication links between the command center and the theaters of operation. During that period, the dominated technology was GEO, right, with very large terminals, with limited bandwidth and early steps into communication on the move. If you fast forward into 2010 and 2025, space evolved into a contested theater as adversary begin to build counterspace capabilities. So militaries had to adopt a different approach. Specifically, they started thinking about hybrid architectures, combining commercial military capabilities, they started looking at different orbits, looking at different throughput. But predominantly, the networks remain siloed. So the LEO network would be siloed from the MEO, from the GEO, from the different application and so on. But that began to evolve very, very quickly, especially in the last 3, 4 years. Now if you look at 2026 going forward, it is now very clear that space is a war-fighting domain. It is no longer a contested domain. It is a war-fighting domain, requiring superiority across all orbits. This domain is now looked at the same as they look at air, navies, cybersecurity, et cetera, et cetera. So the applications using space have begun to evolve dramatically. So if you look at the complexity of what is being done today, it's dramatically different than the past. I'll give you a couple of examples. So in the past, being able to capture images across earth and deliver them to the right hands to be able to make decisions is changing into continuous observation of earth, real-time image processing on the fleet to be able to issue commands. Missile defense systems, missile tracking like Golden Domes and European Space, Defense Agencies, that's absolutely now a requirement. And not just predicting the launch of the missile, but actually being able to acquire that launch from the beginning all the way to strike in a persistent way. And then sharing that information across multiple domains within the defense and the armies. And the third -- the last example I'll give you is this control center -- the command centers are becoming extremely complicated, extremely diverse, connecting many different aspects of data from space, from the ground to be able to compile it and be able to deliver the right level of intelligence to the folks that are in theaters. These kind of command complications require an integrated network. It requires more sophisticated capabilities in order to deal with it going forward. So if you go to the next slide, that dynamic that I just described is really shaping our direction of travel as a company. And although the slide is a little bit complicated, we're hoping to do it in a build slide, I'm going to try to explain it to you. So the first layer of space continues to be this proliferated LEO capabilities, right? And that will continue to grow. SES is not in proliferated LEO domain. We use partners to access LEOs when we need it in order to provide services to our clients. We will have our own micro LEO capabilities like quantum key distribution when we launch that constellation, but we predominantly use that as a partner network. If you look to the next layer with -- the light green layer, that's our MEO layer. And you got to keep in mind that MEO, although pictorial looks like it's between GEO and LEO, it's actually very close to LEO. It's much further away from GEO than it is from LEO, which gives it that unique capability to cover earth with less satellites, but also have an attractive latency period, which is about 130, 150 milliseconds. Our focus as a company is to continue to build that backbone of the network. And I'll come back to that in a second. And if you think about GEO, our focus in GEO will be on very specific applications where GEO continues to be the superior medium to be able to transfer data or connect people like media distribution or very specific governmental applications. So why do we like MEO? MEO is the backbone for us of this network. The future is going to be connecting all these networks to optical links. That's what we develop. So we'll be able to talk to LEOs. We'll be able to talk to GEOs. We'll be able to talk to earth. We'll be able to talk between our constellations, but also connect to other constellations to move data. It provides a high-speed backbone capability and a very attractive, resilient layer to the network that without it could be weakened. So this mesh network combined with our ground infrastructure, which is one of the largest ground infrastructures in the world, gives us that an edge and a differentiating capability to provide that multi-orbit service to our customers. So if you go to the next page, now I want to talk about what are the design principles as we evolve this meoSphere network. So first of all, when we think about MEO and the new name of the network will be meoSphere, we think big. We don't think small. We think big satellites, we think satellites that could do multiple things, we want more power on these satellites in order to accomplish some of the things that I'll talk about in a second. We also believe it's very critical. We take control over some of the supply chains that are critical for innovation and control of our destiny. So therefore, we will be doing more vertical integration as a company, creating this new layer of resilience and new layer of a backbone in space. This network will be ideal to be able to connect to the different networks to create that backbone that I keep talking about, which just opens up multiple partnerships that we have today to enhance this partnership further, but actually new partnerships for people who want to enhance their networks to drive these capabilities. It enables multi-orbit resilience for sure, right? We will be able to move signals from one layer of the network to the next layer between satellites in order to make sure we avoid jamming and we avoid direct attacks, which is happening, ladies and gentlemen. It also is ideal for the critical -- for the mission-critical applications because the next level of satellites are going to have a combination of commercial and military capabilities requiring security to be built in beyond what we currently have, mixing the military capabilities that we currently have in our military satellites with the commercial capabilities to give us that ability to drive these important missions. And the last point is really important. With the size of the satellite, with the flexibility of the satellite, we will be able to do multi-mission capabilities. The platform will always have the capability of having a communication as the foundation of the capability. But actually, there's the additional missions, the additional capabilities that the satellite will provide is a growth opportunity for us. So what are these missions? So if we go to Slide #6, these are some examples of missions that we can host on our satellites, on our meoSphere capability. Number one, data, space data relay. This is something you remember, we talked about demonstrating when we did a project with NASA and Planet Labs using RF at that point in time with not optical links to be able to move data from Planet Labs' earth observation satellites to meoSphere -- to the MEO layer and then delivering it to our customers wherever they want to deliver real time, which reduced the time of getting the signal to the right people and demonstrating that we can actually move those very, very quickly in real time. The next generation of our meoSphere will have these optical links within the satellites. The other potential hosted missions will be missile warning and missile tracking. I described that being able to build sensors on these satellites to capture capabilities, to capture things that are happening on earth. The third area, an example is being able to slice the network to provide governments a sovereign network slice of the overall network, giving them control and giving them the sovereignty that they're looking for. Of course, military communication channels and all that like X-band, Ka-military bands, UHF, that's something we'll be able to do on these satellites as well. Space situational awareness, again, not just tracking an object, but being able to connect the intelligence across the -- across space and deliver it with AI to decision-making systems to be able to track everything that's happening around us in space and combine that with our partners. Imagine the ability to combine our space situational awareness data with, for example, Starlink situational awareness, which they announced creates an incredible intelligence available for space. And of course, the last one is the AltPNT capabilities that we require in order to have more accurate positions within space and within the earth. So these are some important government missions that we will host on ourselves, and we see incredible demand for these capabilities. Our government customers are excited about this next generation of MEOs that we will be launching very, very soon. So if you go to the next page, obviously, we're working on getting this project off the ground. And we're thinking about it in a very different way compared to the traditional way of a waterfall development of creating requirements and then waiting for 5 to 7 years to be able to launch the constellation. We're going to do it in a different way. So first of all, this is going to be an iterative phased approach as we build up this capability. We're not going to do everything in one go. That's number one. Number two is we're going to use space to actually test the capabilities as they evolve. So instead of waiting and just testing in the labs and on the ground, we'll be launching missions to start testing portions of our design as it becomes available. And I'm happy to deliver, and I think we announced it earlier that our first test flight is going to be Pathfinder 1 at the end of March 2026, so the next couple of weeks, launching our bus as well as some of the payload capabilities already to be able to test it. And we have that scheduled every year until we get to a point where we're comfortable with the production of the final systems. It is also going to be a very disciplined milestone-based investment approach, both based on demand we're getting from our customers as well as the investment we'll continue to be putting in building up and scaling the capability. And all of this is going to be done with a very disciplined approach based on data and our customers' reactions. We're going to be leveraging new space capabilities and our deep experience to drive innovation. SES is well known with many firsts in the industry, many innovations that we have driven. Combining that with new space capability, their agility, their speed and their ways of development is going to be very, very helpful as we go forward. And of course, this investment that we're going to be deploying is contained in our CapEx guidance. We see meoSphere as an important evolution of the company, and we see IRIS2 being the first phase of meoSphere. And we'll talk a little bit more about IRIS2 a little bit later in the deck. So let me just end this section by going to Slide #8. So what we're doing, obviously, is we're sticking to our strategic focus of multi-orbit capability by building this next-generation MEO in a very different way than what we've done in the past, partnering with new space capabilities and leveraging the experience we have across the world. We're taking control of the supply chain to make sure that we capture our IP and our strategic advantage and keep it within the company. And with this approach, we're driving towards our North Star, which is building and evolving the company to advanced space solutions company with defense being a very important vertical within that solution capabilities. We drive solutions beyond communications, while communication continues to be a very important component of the overall portfolio. And of course, controlling supply chain and customer relationships is a very important point that we need to keep driving. So that's what I wanted to share with you before we get into actually our financials and what we're doing. And now let's get into the financials. Let's go to Page #10. So on this slide, we summarize our full year 2025 business highlights and financial performance. With the closure of the Intelsat transaction on July 17 last year, these full year 2025 results are shown on a reported basis, with Intelsat contributing roughly 22 weeks to the combined company. On this reported basis, we delivered 2025 financial performance within our financial targets with lower-than-guided capital expenditures. 2025 revenue of about EUR 2.6 billion was up 34% year-on-year with growth in all verticals. 2025 adjusted EBITDA of close to EUR 1.2 billion was up 19% growth year-on-year with a margin of 45.4%. Capital expenditure of around EUR 560 million were lower than guided, demonstrating faster-than-planned execution of our CapEx synergies. We generated EUR 229 million of adjusted free cash flow, another year of positive cash generation. Over the last 12 months, we have secured EUR 1.8 billion of renewals and new contract -- new customer contracts with the majority coming from our growth segments. This has supported our gross backlog of EUR 6.6 billion, which has been impacted by the weaker U.S. dollar and intercompany eliminations. 2025 is a milestone year for SES, with major progress and a step change in SES' scale, having combined 2 major companies with multiple platforms. We've been working on various scope changes, intercompany eliminations and some different accounting conventions. So this has been a rather complex reporting year. With the financial performance in the second half of 2025 below our initial expectations for the first year of the combined company, we're facing these challenges head on and are building a stable foundation for future growth. In terms of like-for-like financial trends, revenue was down 1.6% year-on-year and adjusted EBITDA declined around 12% year-on-year. These like-for-like trends are due to key business factors that are unchanged from what we've previously discussed. Lisa will cover those in more detail. Let's go to Page #11. Across our businesses, we integrated operations, continued to innovate and supported customers at scale as OneSES. We are a trusted partner to customers worldwide in over 130 countries as evidenced by our strong customer base and notable wins in 2025. Starting with our media business, now operating at greater scale following the Intelsat acquisition. We serve more than 2 billion people around the world and nearly 700 million households with a strong cash generation profile. We're securing long-term renewals well into the next decade. And despite industry headwinds, our strategy is clear: defend and optimize high-value neighborhoods by leveraging our industry-leading reach while expanding in market growth segments like Sports & Events. In 2025, we signed close to EUR 450 million in renewals and new business, including multiyear agreement with Sky, RTL, ORF, Telekom Srbija, Warner Bros. Discovery, Dish Mexico, Arqiva, PGA TOUR and QVC. We're winning new businesses by leveraging our combined satellite and ground network, including major new media customer in North America. We launched our new free-to-air/free-to-view offerings in Mexico and Spain, opening new markets with our compelling channel offerings. Let's now shift to our government business. We continue to see strong and growing demand for our resilient secure communication solutions from government customers around the world. We built a government solutions business of scale on both sides of the Atlantic, being a true space partner to over 60 government organizations, including European and U.S. agencies. We're well positioned to tackle the sovereign capabilities, which governments now demand with multi-orbit networks. I just described it a few slides ago. With space and defense budget increasing both in the U.S. and among NATO allies, we view the government vertical as one of the strongest growth levers over the next few years. For example, the IRIS2 program continues to progress well through Rendez-Vous 1, reinforcing SES as the European Commission's trusted partner for its flagship sovereign connectivity network. IRIS2 will become Europe's multi-orbit network of choice and supports the future expansion of our differentiated multi-orbit architecture, enabling profitable growth from 2030 onwards. Another important milestone was the announcement that SES and Luxembourg government will develop and launch GovSat-2, the second satellite under the LuxGovSat public-private partnership. We also extended a long-term hosted payload contract with Australian Defense Force. The French Navy's aircraft carrier, Charles de Gaulle, utilized SES O3b mPOWER services during the Clemenceau mission. In the U.S., we secured important new contracts, including being selected as 1 of 5 companies on the U.S. Space Force's $4 billion Protected Tactical SATCOM global PTS-G IDIQ contract and a strategic award from the Defense Innovation Unit for secure integrated multi-orbit networking. These strategic wins highlight our commitment to innovation and growth in the government sector. Turning to aviation. Millions of passengers rely on SES multi-orbit multi-band connectivity that delivers reliable, consistent performance in the air and on the ground. We're winning new airline customers around the world who are choosing SES because of our clear differentiators. These include our electronically steered antenna solution we call ESA, which uniquely enables access to GEO and LEO orbits, delivering broad coverage, low latency and unmatched resilience. We also offer multi-band flexibility across both Ku- and Ka-bands and solutions tailored for both narrow-body and wide-body aircraft. Our flexible commercial models further strengthen our value proposition. In 2025, our aviation business was supported by important customer wins and ramp-up in equipment installations. 16 airlines have committed to our multi-orbit ESA solution on more than 1,000 aircraft with many awards secured in recent months, including American Airlines, Air Canada, avianca, JAL, Skymark, Royal Brunei and others. While competitive pressure from LEO providers remains, the market continues to support multi-providers with differentiated offerings. Shifting to maritime. We are the leading provider of connectivity at sea, keeping passengers and cruise connected, informed and competitive in fast-moving world. We're confident in our maritime platforms, which position us well despite facing pressures for some partners moving to LEO solutions. Our strategy is focus, defend and rationalize supported by selective investments. Our direct maritime business remains strong and resilient despite mega LEO's entry into the market. We secured renewals with multiple major cruise lines and continue to serve 5 of the 6 global leaders. In 2025, we supported the largest cruise fleet transition from GEO to SES Cruise mPOWERED and continue to see strong demand, for example, from MSC, Virgin and other major cruise lines. Our FlexMaritime platform performs well and connects over 13,000 vessels across the world. Finally, our fixed data business. Fixed data saw intense competition in 2025. We have taken several actions to transform the business and focus in areas where we have market-leading offerings and the right to win. Our fixed data business serves 8 of the world's top 10 mobile operators and numerous global energy companies. We expanded digital inclusion in Brazil with Telebras and made meaningful progress in Africa, expanding 200 Africa mobile network sites, reaching 500,000 people. We won additional business with Orange across multiple countries and closed our first SES Intelsat combined fixed data deal in Chad. In recognition of our impact in Africa, we're honored with a Changing Lives Award at Africa Tech Fest for connecting schools in South Sudan and Uganda. As you can see, we're creating a stronger, more agile, more competitive SES, one built to lead across orbits, markets and technologies. Let's go to Slide #12. This slide highlights our fast-track synergy progress and integration efforts. We began delivering synergies from day 1. The integration of the 2 businesses is well on track. The organization design and structure is complete. Leadership is in place on all levels of the company and the new operating model across the combined business is established, enabling faster decisions and clear accountability as one company. Leveraging these operational changes, we're progressing well with fast tracking our initial synergy plan. On OpEx, we're crystallizing synergies more rapidly and are taking well -- and tracking well towards the EUR 210 million annual run rate target. Both labor and nonlabor savings are already flowing through with contracts rationalized, office footprints consolidated, automation scaled, procurement efficiencies captured and IT consolidation progressing to plan, always delivering these efficiencies with utmost care and transparency to support our teams as we align on the needs of our scaled business operations. On CapEx, we're also fast tracking the annual synergy run rate of EUR 160 million. We're confident to achieve this target sooner than initially planned to focus on our growth priorities, smarter asset use, non-replacement of certain satellites as well as rationalizing of networks and ground infrastructure. Already in 2025, we're able to save around EUR 100 million in CapEx versus the midpoint of our guidance. Our labor costs were down 7% on a like-for-like basis in 2025, accelerating the decline in fourth quarter. As you can see, we are executing with discipline and precision on our synergy targets. This positions us well to unlock the full value of OneSES. With this, I'll hand over to Lisa, who will share with you more details of our 2025 financial performance. Elisabeth Pataki: All right. Thank you, Adel. Good morning, everyone. Before I begin my remarks on the financial performance of the combined company, I'd like to remind you that our full year 2025 press release, which can be found on our company website, includes supplementary financial information with like-for-like revenue per vertical and adjusted EBITDA at the group level as if the Intelsat transaction had consolidated from the 1st of January 2024. We hope this additional disclosure helps you better understand the underlying performance of the combined business and complements your financial modeling going forward. Let's turn to Page 14 for our financial highlights. Overall, as Adel mentioned, both revenue and adjusted EBITDA were in line with the outlook we provided last quarter. I'll start by walking through our company results on both a reported basis as depicted throughout the presentation as well as on a like-for-like basis at constant foreign exchange rates for comparison purposes. Reported revenue was EUR 884 million for the fourth quarter and EUR 2.6 billion for the full year, resulting in a full year growth rate of 33.9% when compared to the same period last year. On a like-for-like basis, with constant foreign exchange rates, full year 2025 revenue was down 1.6% compared to 2024. We saw lower revenue in our fixed business as well as in media, partially offset with growth in our aviation and government businesses. As previously discussed, the fixed data business has been facing a challenging competitive environment. And within Media, the decline was driven by structural headwinds and the effects of a Brazilian customer bankruptcy. On reported adjusted EBITDA, Q4 was EUR 358 million, resulting in EUR 1.2 billion for the full year 2025, showing growth of 19.1% year-over-year with margins of 40.5% for Q4 and 45.4% for 12 months. On a like-for-like basis, full year 2025 adjusted EBITDA was down 12.1% compared to 2024, consistent with the outlook we provided on our last earnings call. The decline was driven by a few factors in line with what we've previously discussed. First, within our aviation business, we delivered over 450 electronically steered antennas in 2025, which is an important milestone for this business, and it's worth mentioning that we have another 600 ESAs still to be installed. This revenue is initially profitability diluting before enabling higher-margin service revenue after installation. Additionally, as expected, we did see some impact from timing differences between onboarding and decommissioning certain airline customers. Next, the Intelsat IS-33e anomaly, which occurred in the fourth quarter of 2024, resulted in higher third-party capacity costs in 2025 as affected customers were retained. And in Government, we had some timing impact mainly due to the U.S. budget delays at the start of last year, contract rationalization by the U.S. Department of Government Efficiency, otherwise known as DOGE and some postponements of large contracts, in part due to the U.S. government shutdown in late 2025. The good news is these awards are merely timing issues, and several are expected to materialize this year, underpinning our confidence in future growth. Lastly, with structural declines in media and difficult market conditions within the fixed data business, margins are impacted by the change in overall company mix. We expect the decline in Media to improve going forward. And on fixed data, we are focused on restructuring the business by securing the most value-additive deals, supported by disciplined capacity allocation. Moving now to Page 15. I'll discuss in more detail the top line financial performance of our vertical segments. Media's reported full year 2025 revenue was EUR 977 million for the year, up 7.9% over prior year as inorganic growth more than offset anticipated segment contraction in this business. On a like-for-like basis, Media was down 12.6%, driven by structural declines with capacity optimization in mature markets, standard definition channel switch-off and the full Q2 to Q4 impact of a Brazilian customer bankruptcy. Despite the year-over-year decline, the media business ended the year with a solid backlog of EUR 3 billion and serving close to 2.3 billion viewers worldwide. As the company's largest segment, Media carries strong margins, resulting in solid cash flow. In 2025, this business closed on roughly EUR 450 million of new business and long-term renewals, which span into the next decade, reinforcing customer confidence in our solutions. It is important to note that although global TV viewing is evolving and linear consumption is structurally declining, we expect the trend in our media business to improve. Free-to-air, free-to-view and Sports & Events remain resilient, while satellite continues to provide most efficient and reliable access in many remote regions. Moving now to Page 16. Our Networks verticals comprised about 60% of total company revenues for the full year 2025, with reported revenue up 55% year-over-year. On a like-for-like basis, Networks revenue increased by 6.6% versus the prior year, representing the fourth consecutive year of growth for Networks, driven by increases in both the Aviation and Government segments. Within Networks, the government business had revenues of EUR 726 million for the full year, up 47% over 2024. On a like-for-like basis, Government grew 17.3% year-over-year, driven by demand in European global governments and the IRIS2 program. This growth was partially offset by timing impacts and budget cuts within the U.S. government portion of the business, as I mentioned earlier. As we look ahead, we expect growth in both the U.S. and global government segments, driven by rising demand for our secure multi-orbit resilient and sovereign solutions, particularly meoSphere. Geopolitical tensions and shifting defense priorities, especially in Europe, are accelerating government investment in sovereign space capabilities and robust communications infrastructure. With proven multi-orbit solutions and a strong track record serving European, U.S. and allied global governments, SES is well positioned to capture the surge in demand. Our aviation business continues to show solid growth, supporting around 3,000 aircraft tails, thanks to our strong pipeline of ESA antenna installs and subsequent service revenues. For the full year 2025, Aviation revenue on a reported basis stood at EUR 382 million, more than doubling the size of the business. On a like-for-like basis, this segment has seen a 29% growth versus prior year with continued momentum in securing global airline customers and commercial traction around our multi-orbit ESA antenna. This strong commercial momentum supported by new installs and subsequent service revenues underpins our future revenue growth and highlights the strength of our value proposition in a competitive market. And on our fixed and maritime business, reported revenues totaled EUR 530 million for the full year. On a like-for-like basis, revenue declined 15% due to competitive headwinds, primarily in our fixed data business. We continue to navigate these headwinds with a disciplined approach, which includes rationalizing and prioritizing capacity in our growth segments. In our Maritime segment, demand for MEO capacity remains high, evidenced by solid cruise renewals as well as in commercial shipping, where we serve more than 13,000 ships globally with our Flex platform. Finally, Networks combined gross backlog stood at EUR 3.6 billion at the end of 2025, having secured close to EUR 1.4 billion of new business and renewals last year with a strong Aviation and Government pipeline as we look ahead. Our solid backlog and robust pipeline underpin our financial outlook and future growth momentum, reflecting sustained market demand for our multi-orbit solutions globally. Now let's turn to Page 17 for a more detailed view of our capital allocation priorities and our debt maturity profile as of December 2025. Our combined like-for-like adjusted net debt to adjusted EBITDA ratio at the end of 2025 stood at 3.9x. This includes cash and cash equivalents of EUR 674 million, excluding EUR 401 million of restricted cash, which is related to the SES-led consortium's involvement in the IRIS2 program. It's important to note that we remain committed to deleveraging and returning to investment-grade metrics while meeting our near-term debt obligations. We maintain a solid liquidity position supported by prudent planning and stable market access, which provides us with flexibility for future financing decisions. In terms of our debt maturity profile, we have EUR 1.3 billion coming due this year, including EUR 525 million of hybrid notes. The current debt portfolio carries a weighted average cost around 4% with approximately 80% of SES debt at fixed interest rates. Furthermore, the weighted average maturity of our debt facilities stands at approximately 5 years, providing a solid foundation for financial flexibility and long-term planning. In terms of capital allocation priorities, as we've said before, our objective is to pay down debt to 3.0x or below net leverage. We continue to make solid progress in our insurance settlement discussions related to the first 4 mPOWER satellites. In 2025, we successfully collected approximately USD 189 million or EUR 164 million. We'll continue to provide updates as the last settlement negotiations progress. We continue to invest in our MEO capabilities and as Adel mentioned, our next-generation multi-mission MEO network, meoSphere, supported by new space innovators. This is underpinned by strong financial discipline to drive sustainable growth with a focus on new space technologies while transforming our approach to capital deployment. Capital expenditures for 2025 totaled EUR 559 million on a reported basis and EUR 707 million on a like-for-like basis, primarily reflecting milestone achievements in the mPOWER satellite program. The EUR 559 million is below our prior outlook as a result of our continued focus on CapEx synergy delivery as we work towards optimizing our fleet and ground infrastructure. Further, the company has introduced a dedicated CapEx task force at the Board level designed to enhance oversight and ensure disciplined capital allocation aligned with long-term strategic objectives. SES continues to be sector-leading in shareholder returns. We paid the interim 2025 dividend of EUR 0.25 per A share and EUR 0.10 per B share in October of last year. We expect to follow this with the final 2025 dividend of EUR 0.25 per A share and EUR 0.10 per B share to be paid to shareholders in April 2026, subject to shareholder approval at the upcoming Annual General Meeting on April 2. As we've said before, once the company meets its net leverage target, at least the majority of future exceptional cash flows of the combined company will be prioritized for shareholder returns. We remain focused on improving the company's financial metrics as we look ahead. Our priority continues to be deleveraging with a return to investment-grade metrics while being selective and disciplined as we pursue opportunities to drive growth, focusing on investments where returns are clear and accretive. Slide 18 outlines how our disciplined financial management strategy supports long-term value creation for shareholders. 2025 was a pivotal year for us. We began integrating 2 major companies, rolled out best-in-class processes, initiated the consolidation of our ERP systems and strengthened compliance with SEC-aligned controls. These actions accelerate decision-making, improve data quality and help us capture synergies faster. We remain focused on disciplined capital deployment, ensuring every investment aligns with our strategic priorities. We continue to tightly manage discretionary spending through automation, labor arbitration, cost efficiency initiatives and synergy delivery. These actions will structurally lower our cost base and drive margin improvement. Cash flow continues to be a core pillar of our value creation strategy. We have further enhanced our cash discipline with tighter integration of cash metrics into operational decisions. Alongside disciplined capital allocation and focused working capital initiatives, these actions are driving more consistent and sustainable cash generation. Together, these actions reinforce our capacity to invest, drive profitable growth and deliver attractive returns. And finally, I want to thank the entire SES team for their dedication and exceptional execution throughout this complex integration. And with that, I'd like to hand it back to Adel for his closing remarks. Adel Al-Saleh: Thank you, Lisa. I echo your thanks to the team. It's been a heroic effort, right, bringing the 2 companies together and getting the results and getting the financial statements and all that stuff. Okay. Let's go to Page #20. I'd like to present our 2026 financial outlook. After a challenging 2025, we're expecting our business to stabilize in 2026. Some of the headwinds we faced last year are likely to continue into the first half of 2026, but we're executing firmly on our initiatives to offset their impact. This positions us well for the next phase, returning to sustainable growth. In 2026, we will accelerate integration, execute on synergies, grow in key markets and continue innovating across our global multi-orbit architecture. As such, as on a like-for-like basis, with a full year consolidated Intelsat, we expect both revenue and adjusted EBITDA to be stable as compared to 2025 on a constant FX basis. As a reminder, 2025 like-for-like numbers are shown at reported rates of EUR 1.12 per U.S. dollar exchange rate and more recent rates are in the EUR 1.18 to EUR 1.19 range. As we continue to fast track our CapEx synergy delivery, 2026 capital expenditures at the euro-U.S. exchange rate of 1.2 is expected to be around EUR 700 million. This will include IRIS2, which is the first phase of meoSphere. This is around EUR 100 million lower than our prior guidance. Our network of the future, meoSphere, supported by new space innovators and IRIS2 are part of this CapEx guidance. A quick update on IRIS2. SES is currently progressing through Rendez-Vous 1 of the IRIS2 program, working closely with the European Commission and our SpaceRISE partners to validate project costs, technical requirements and delivery time line. SES remains fully committed to the European Union's vision for a sovereign secure and competitive space-based connectivity infrastructure. The project -- I'm sorry, the project must work for both, the European Commission and the SpaceRISE consortium. We have clear objectives on how to make that happen. As the lead member of the SpaceRISE consortium, SES collaborates with all partners to ensure the timely and successful delivery of IRIS2. Let me also give you a quick update on the well-advancing C-band process. The draft notice of proposed rulemaking, also known as NPRM was published by FCC last December and was followed by a round of stakeholder comments. SES filed its comments on January 20 and reply comments on February 18, supporting FCC's proposal for upper C-band clearance. SES remains fully committed to collaborating with FCC and all stakeholders to identify and implement the most effective technical solution that delivers mutual benefits for all parties involved. It is FCC's stated intention to auction up to 180 megahertz of spectrum in the upper C-band. The One Big Beautiful Bill requires the FCC to complete a system of competitive bidding for at least 100 megahertz in the upper C-band no later than July 2027. FCC ruling is expected in the second half of 2026. This process continues moving on an accelerated time line, and we'll keep you updated accordingly. Before moving to Q&A, I would like to conclude today's presentation on Page #21. Our vision is building a leader in space-based solutions. 2025 was a foundational year with the integration of a new company. Our focus was in getting the basics right and building a platform for the future that is scalable. Operationally, we're strengthening the network as we start building and scaling our multi-orbit next-generation network with meoSphere, building on our success of O3b mPOWER constellation and supported by new space innovators. During 2025, O3b mPOWER Satellites 7 and 8 entered service and more recently, Satellites 9 and 10 started providing much needed capacity. The launch of Satellite 11 to 13 is on track and planned for second half of 2026. The year 2026, it's not just the continuation of integration. It is for us, the acceleration of the new SES, building an industry leader. We're looking to stabilize the business and prepare it to grow by reshaping our portfolio to concentrate on the markets where SES has the right to win with customer-driven solutions, relentless focus on operational excellence and financial strength underpinned by synergy delivery. As we enter 2026, we'll move with momentum, accelerating integration, executing on synergies, growing in key markets and continue innovating across our global multi-orbit architecture. Through this momentum, we're positioning SES to operate at a new scale and lead in business performance, innovation and expansion. We're focused on delivering differentiated end-to-end capabilities across our segments as a global space solutions company. Our vision is clear: to lead the next chapter of space solutions industry, driving innovation, sustainable expansion and compelling value creation for both shareholders and our customers. With this, we're now ready to take your questions. Operator: [Operator Instructions] The first question is coming from Aleksander Peterc from Bernstein. Aleksander Peterc: I just have a couple, please. So first one is on the margin outlook for the current year, presumably in '26, you have a lower impact from the IS-33 failure that may have had an impact on Intelsat side of the operations in '25. So I would assume this would be a tailwind also equipment revenue was quite high in '25. Is that coming down? And you also have synergies that are already in play and will accelerate. So I'm just wondering what are the headwinds here to the margin for you to predict a flat year-on-year margin. That will be the first one. And then the second one, just very briefly, if you could tell us anything new on the upper C-band's process in terms of time line and amount of spectrum do you think you -- that could be in play here? Are we still talking about 160 megahertz as being the base case scenario here? Elisabeth Pataki: Yes. So I'll start with the margin outlook for '26 and then hand it over to Adel on the C-band. So EBITDA is stable from '25 into '26 with stable revenue while synergies are on track. So the reason that you don't see all of the synergies drive the growth in 2026 adjusted EBITDA yet is really driven by the company mix across the verticals. So as you noted, we still have strong equipment sales going through the aviation business. Maybe a way to think about it is we've got about 40% of that business is in terms of equipment sales. We ramped the ESA antenna installation significantly in the second half of 2025. And we still have quite a bit of equipment sales going into aviation into 2026. Also, we do have a bit of a mix dynamic when it comes to some of our highly profitable businesses like media, which is in a structural decline, with the fixed business -- fixed data business that is also declining that we've taken active steps to rationalize how we're performing in that business and streamline things, make sure that we're allocating capacity over into the right areas. So if you kind of look at it from a mix perspective, we are offsetting some of that decline with synergies. We're well on track when it comes to synergies, and we're feeling very good about our performance. But overall, given where we're at, we're stable on both revenue and EBITDA in 2026. Adel Al-Saleh: Great. Thank you, Lisa. And Alexander, just to clarify, the IS-33 third-party capacity is still in our numbers. On a compared basis, obviously, it gives us a little bit relief, right, because we didn't have it in 2025 compared to 2024. So that gives us a little bit of a relief. But it's still in there, and we're working hard to move that traffic on fleet, but given the demand for our fleet, it's not so straightforward, right? As soon as we find the capacity to move it, we will do that. And by the way, the equipment -- I mean one thing we need to keep highlighting is this equipment headwind we have from airlines is translating into a service revenue. And we see it. So for example, one of the large airlines that did install over 400 kits in 2025 when we look at their margins in 2025 installation, if you look at their margin in 2026, it is significantly better. But as Lisa said, because of the success of sales, we have a good backlog of more than 600 terminals to install in the year. But so those dynamics continue. Look, on the C-band, I mentioned it already, it's progressing very, very well. The replies to the comments have now closed. We expect now FCC to move in second half of 2026 to issue their ruling. FCC has clearly said they want to go as high as possible up to 180 megahertz, Alexander, you've seen in our comments, we would like them to go up to 160 megahertz leaving some C-band for very specific applications that we think will be beneficial. But as I said, we are working closely with FCC and we will support them with their objectives, ensuring that our customers get the services that they need to have. So it's progressing. It's picking up speed actually. Operator: The next question is coming from Roshan Ranjit from Deutsche Bank. Roshan Ranjit: I've got 2 questions, please, and perhaps following up on the previous around the synergies. Now clearly, Lisa, you're very confident on that progression. I think that's been clear from day 1. Now you're talking about fast tracking. So if I think about what you previously said, I think 70% of the run rate by year 3, I suppose just to give a sense of how fast track this is. And given that the run rate should be achieved faster. Should we be thinking about an NPV higher than the 2.4 or are there kind of associated higher costs and maybe moving a bit faster and extracting those synergies? And the second question is around the midterm. Now I know you did comment at Q3 stage on those midterm targets because of the many moving parts. Is that still the case now? And when can we expect any details around the midterm targets within the integrated group. Elisabeth Pataki: Yes. So sure. So on the synergies, if I take that one first, we did fast track the execution of some of the key labor synergies early in the first 6 months of this integration. Obviously, as you work through those things, they are hard decisions to take. But as Adel mentioned in his prepared remarks, we took those decisions quite quickly. It's very important for us to have been able to stabilize the organization, and that did result in quite a number of our employees exiting the organization. Now at the same time, we've taken a very hard look at optimizing our fleet, and that includes satellites, satellites that we have on order and our ground infrastructure. To make decisions on that, it does take a bit of work. So we've started -- we've accelerated our process in terms of making those decisions. And I think you'll expect to hear some more things from us probably within the first 2 quarters of this particular year. So all in all, we are completely on track with respect to synergies. I don't anticipate that we are going to increase our expectation of what we're going to accomplish for synergies. It's just that we're going to try to execute those things as quickly as we possibly can. And then in terms of midterm guidance, obviously, 2025 was a milestone year for SES. It was a year of major progress, step change in the company's scale, decisive actions while integrating Intelsat, we've been delivering on our synergies since day 1. Some of those things, like I said, are under rigorous scrutiny. We're putting in place some of the ground rules for how we operate a business and who make investment decisions going forward. We are in the middle of the IRIS2 Rendez-Vous 1 process. So we expect to have more clarity as we round out that process. We're also going to host the Capital Markets Day later this year. And at that point in time, we'll be better prepared to give more midterm guidance. Adel Al-Saleh: And we look forward to that, right? Elisabeth Pataki: We look forward to that. We absolutely look forward to that. Operator: The next question is coming from Ben Rickett from New Street Research. Ben Rickett: I had 2 questions, please, if possible. Firstly, just to help with the sort of cash flow modeling for 2026. Can you say what we should be expecting in terms of lease expense? And also, I think there was some noncash EBITDA Intelsat. If you can quantify what that would be in 2026? And then second question, just on the media revenue trends. So in the second half, they were down 16% year-on-year. Is there any one-offs within that? Or I mean, obviously, you're impacted by Brazil. But I mean are you still expecting the midterm trends there to be mid-single-digit decline? Or could that be a bit worse now? Adel Al-Saleh: Then that was on the media. The last part was on the media, right? Ben Rickett: Exactly, on the media revenue. Adel Al-Saleh: Yes, it wasn't decline in 16%, it was about 12%, but we got it. Elisabeth Pataki: Okay. Yes. So cash flow. So 2026 cash flow, fairly from a lease expense perspective, noncash EBITDA perspective, fairly stable from what we've communicated previously, just off the top of my head, and you'll just have to check the press release, but noncash EBITDA is around EUR 200 million. We expect that to decline about EUR 20 million to EUR 30 million each year as we go forward. And then on some of the one-offs, I think as you know, every year, we have a number of one-offs. So I don't expect 2026 to be any different than 2025 at this point. It's fairly stable when we look at one-offs year-over-year. We are going to be quite happy to have the Brazilian activity behind us at this point going into 2026. So while media declined 12.6% from '24 into '25, we do expect that decline to kind of taper off a bit in 2026. Adel Al-Saleh: And just to add to that, Lisa. So Ben, we do expect media to be back to where we talked about, which is kind of a mid-single-digit decline. That's the model, right? And we see it now coming back to normal in 2026 after this bump that we had in 2025 was what Lisa described. Ben Rickett: That's great. Just on the first question, you can't say anything about the lease expense you're expecting for 2026? So I know Intelsat was quite significant lease expense. Elisabeth Pataki: I don't expect any changes between '25 and '26. Adel Al-Saleh: Can we follow up with Ben on it? Ben, we can follow up with you on that. But, we don't see anything abnormal happening in 2026. So what is it? Is it decline? Yes, it's going to -- the team here is saying it's going to be going down. But let the team follow up with you to give you the exact number. Operator: The next question is coming from Nick Dempsey Barclays. Nick Dempsey: I've got 3 left, please. So first of all, where could you see a help to your revenues this year from what has been happening currently in the Middle East this weekend? Of course, the U.S. military always takes capacity with a view to having flex to conduct operations. But are there areas where you could achieve extra services revenues or could this situation help you to fill SES 9 and 10 more rapidly? Second question, you said I think you're expecting a ruling on C-band in the second half '26, just so that I understand what we're talking about, do we mean that in that time frame, the FCC would talk about how much satellite operators would be paid to clear a specific amount of space in the band. Is that exactly what we mean by a ruling? And then on risk weight, you talked about the Rendez-Vous. Is everything on track in terms of timing as you'd hoped a year ago? Are there any risks that this project takes longer and could end up costing more? Adel Al-Saleh: Very good. Well, thank you, Nick. Look, a couple of things. Let me start with the first question, right? So it's very difficult for us to comment on what we're going to be able to do in conflict scenarios, right? However, the demand for our services continues to surge. And we have multiple capabilities and multiple contracts, both with NATO and the U.S. government and the European Commission that is able to use that capacity when they need it. And when they do, and there's a search, there's obviously an opportunity for us to deliver better performance in our government business. It's also important to mention that although the U.S. had headwinds in 2025, the ones that Lisa explained and the one we talked about in November last year, the European business and the global business had a fantastic year with double-digit growth. And that will continue. So we see that happening going forward. So I'm not giving you the exact answer, but the outlook is positive and is accelerated with conflicts, but not even without conflicts, the buildup of sovereign capabilities is now a big priority for many nations and continues to be an important element of Space Force activities. Look, on the C-band ruling, so what we expect when the ruling comes out, is FCC to decide how are they going to handle incentive payments and reimbursement payments for relocation costs. And as you've seen from our filings and filings of many, many others, there is big support to follow the same process that was used with what we call for C-band 1.0 to the final hearing, right, with how the incentive payments are calculated and who is incented as well as the relocation costs that need to be reimbursed. So we expect when the ruling comes out that FCC would clarify those elements of the ruling, right? And they can't really predict exactly what FCC will do, but that is expected to be part of the ruling. And then the final point on Rendez-Vous 1, yes, things are progressing, working very, very hard as we adjust the solution with the technical results and the outputs that we have from all the testing and the costing that we have done. And as I said, look, this is not something we want to rush, right? We want to make sure we do it at the pace that's required to ensure that it's a win-win. We are not going to do a project that's a lose-lose or lose-win. It has to be a win-win. And therefore, we're working diligently with full commitment to the commission and the objective of building a European sovereign capability. And we're excited about, right? Because that whole architecture of IRIS2 is exactly what we've been pitching to the world, a multi-orbit architecture with connections between the satellites and different orbits with resilience. And obviously, it's an enablement for our meoSphere ambition to be the first phase of that project. So that's how it's going, Nick. I hope that answers your questions. Operator: [Operator Instructions] The next question is coming from Paul Sidney from Berenberg. Paul Sidney: Two questions as well, please, if I may. Firstly, just sort of building on the discussion we've been had on the call and I think following on to Nick's question on government. Clearly, very rapidly evolving geopolitical situation we're seeing. But is there also -- are we starting to see a mix shift away from Starlink and towards yourself other non-U.S. satellite networks? I understand obviously government appetite demand is growing very fast. But there also that mix shift that we're seeing, if that's starting to happen? And then just a question, at least on the CapEx guidance. If I understand rightly, it's sort of underlying EUR 500 million now ex IRIS2 components. Is that the sort of run rate we should expect going forward? I know you'll update us later in the year and give us more detail. But again, just building on all the CapEx discussion we've been having on the call so far. Is that EUR 500 million now a bit more realistic than the EUR 600 million to EUR 650 million? Adel Al-Saleh: So Paul, look, the -- keep in mind, look, the conflict that we're seeing today clearly accelerates and drives demand in short term. However, the macro dynamics are such that the requirement and the acceleration of space demand has been happening before these conflicts, and it's happening at scale. And it's because, as I described in the beginning of the presentation, space is now a war domain. It's a war-fighting domain, right? It's no longer a contested domain. There is an acceleration across all nations around the world, especially the United States and European Union to build up these capabilities at scale. And it's part -- of it is being able to build your own sovereign capabilities. Europe is looking at space as part of their NATO objectives and how to reach the NATO levels of spend that is required but also with the objective of making sure that their presence is competitive, right, because it is a war-fighting domain going forward. And we, as a company, are moving ourselves to be more and more exposed to that government opportunity. We feel our architectures, our solutions capabilities with the meoSphere expansion with what we have in GEO assets positions us extremely well, right? And that's what's going to happen. Now I don't believe the mix is going away from Starlink or other American players. I think the overall demand in the market is expanding. You will see Starlink and Amazon and others growing as well in this segment because there is a massive demand requirement across the world, especially in allied nations to keep building that volume and capability out. So don't see it as money moving from one to the other, seeing as a major expansion of the overall opportunity and the European nations deciding that they need to have their sovereign capability as well, right? They will use the other partners, but they need their capability as well, and that works very well for us, especially with the architecture that we're building. Remember that idea that I put on the table, which is no longer an idea, it's design principle, we can give slices of our network as sovereign networks to different nations, where they control the traffic, when they control how it lands in their systems under their security capabilities. And that's a very unique thing that we are doing as a company compared to some of our other players. And look, we are leveraging and expanding our partnership network. So for example, a great company that's called Kratos, who's been an expert in defense capabilities is now a partner. We're working with them on figuring out how do we virtualize the networks that we have. How do we take our capabilities to the next level. And I think the Kratos CEO in their earnings comments mentioned SES, and I want to make sure we mentioned it as well here because those are the type of partnerships that creates this unique solutions in an open collaborative environment versus having closed systems, right, that are specific to what you can deliver. Look, in terms of CapEx guidance, and Christian will help me here for a second. We've always said that our base CapEx for the company going forward is between EUR 600 million and EUR 650 million per year, excluding IRIS2 and excluding meoSphere. And we had given guidance in the past that meoSphere plus IRIS2 would be about EUR 200 million in 2026 and then growing to EUR 400 million in subsequent years. So what are we doing with that? You can see it already in 2026, if you look at our EUR 650 million base CapEx plus EUR 200 million of IRIS2 CapEx adds up to EUR 850 million. Our guidance is EUR 700 million, to be clear. Why is it EUR 700 million and not EUR 850 million, because of the synergies that Lisa talked about, we're accelerating the network synergies. We have decided not to spend money on certain areas. We're optimizing the ground investments. We're looking at ways of moving the money away from legacy into the growth areas, right? And that is what's helping us to contain this CapEx. Now the team is going to give you more guidance in terms of future, especially as Lisa said, when we have our Capital Markets Day in the second half of the year, we are going to show you the profile of how we're going to build meoSphere, how we're going to expand it. But again, I want to reiterate, the way we're going to build meoSphere with IRIS2 being the first phase is an iterated phased approach. We want to get customers on board, want to have customers sign up before we go into larger CapEx spends, right, in a very controlled way. That is what we are going to do as a company. So I hope, Paul, that answers your question. Lisa, do you want to add anything? Elisabeth Pataki: No, I think you hit it. Christian Kern: Can I just add, Paul. Adel has shared online the various visits of the several ambassadors, which have visited us here in Betzdorf and also EU Commissioner Kubilius more recently, right? So that... Adel Al-Saleh: The European Commissioner Kubilius, who is the commissioner of Defense and Space. We had Supreme NATO Commander who was here with us. It's all public information. We had multiple defense ministries that come over. I mean, this just shows you the demand and the importance of SES in the government and defense sector. It's really important to recognize that, right? Because people see that multi-orbit architecture is absolutely a requirement. MEO plays a very important role in the resilience, the ability to move traffic, the ability to create alternatives and the ability to carry traffic for very specific missions. So that's what we're seeing in the marketplace, Paul. Paul Sidney: That's very clear. Could I sneak in a very quick question at the end, please. So we saw reports of Norway joining IRIS2 projects, even the U.K., and I think there were some headlines potentially joining as well. Does that make the project more likely? And does it potentially change economics? Adel Al-Saleh: Look, the project -- Paul, so first of all, when I say win-win, that's what I talk about economics and others, right? It's got to be right for us as a publicly listed company. And I've always been very, very vocal. And the European Commission knows our requirements, right? They know that in order for this to be a success, we have to be successful, right? We cannot have a project that burdens our financial position. So that has always been the case. It will continue to be the case. And I have much confidence that we will be able to figure out the path. And the European Commission is very committed to this project. Where you're seeing the countries joining, I believe that will continue. And I believe that you will see beyond the European Union and the European Union member states, other allied nations joining the project over time, right, given the importance, being the ability to connect to that network and expand it. And outlook, our goal is when we think about meoSphere as an example, right, we have a unique position to build out that backbone of the network with MEO part of the IRIS2 capability. We are not -- our goal is not to stop at the IRIS2 requirement because the demand is expanding. So our goal is to keep building and expanding in a phased approach based on the demand that we see in the market. So what's happening, IRIS2, and by the way, the same thing applies to Eutelsat. It gives us the opportunity as the consortium to develop the new systems, the new capabilities as the first phase and then build on it going forward, and that helps the economics significantly when you start adding incremental capabilities without having to repeat the nonrecurring expenses, if you will, that you incur when you're building a new system. Operator: The next question is coming from Halima Elyas from Goldman Sachs. Halima Elyas: I wanted to follow up again on defense. So growth has been clearly supported by changing global attitudes towards defense spend. But when do you think we will see this translate to more meaningful tailwinds? And how will it manifest? So is it most likely to be reflected in higher capacity demand? Or do you think there's potential to either accelerate or maybe expand the scope of projects like IRIS2? And then on the flip side, has there been any notable change in U.S. attitudes or spend towards European solutions over the past year? Adel Al-Saleh: Halima, thank you for the question. So let's start with the first one, right? So our government business has been growing double digit now for several years, right? And it's accelerating. We had a bump in 2025 with the U.S. government shutdown, the DOGE initiatives, which hurt us in certain areas. And on the same time, we won multiple projects that will drive the future growth. I believe with the system, we're proposing the expansion because what we're trying to do, Halima, is expand beyond communications capabilities. There is a massive demand -- and by the way, I want to make sure, again, everybody understands in the call. The demand is not driven by the current conflict. The demand for space is driven by the fact space has become a war-fighting domain, just like ground, air, sea and cybersecurity. These are the different domains of the defense organizations. Space is the domain to be treated the same exact way. So as forces think about strengthening their ground capabilities, strengthening their air capabilities, they're thinking the same way in space. So before any of these conflicts happen, that's been a decision from an architecture point of view of how to create better deterrence, better defense and better strength. And that's where European Union and other nations have decided they're going to have to significantly increase their spending in space. And that is driving the demand, right? The conflicts obviously drives spikes in demand for a certain period of time because people need the capacity and so on. So our strategy, as I described with meoSphere, is to expand beyond communications because the satellites that we will be introducing part of the next-generation MEO networks, have the real state and the power, Halima. So today, our empower satellites had less than 10 kilowatts power on the satellite. Our future satellites will have 20 kilowatts. We're doubling that. The real state of satellite, which is why I said why we like bigger satellites rather than smaller satellites is enough to have more, what we call hosted payloads to do missions beyond communications. And I described some of these missions, missile defense, missiles tracking, relay between different orders, right, slices of the network, space awareness. Those are all new opportunities for SES to enter over the next few years, and this will drive growth -- significant growth in the government sector that we currently cover today because we are not exposed to that today. With our future platforms and customers signing up will be exposed to that opportunity as well. And that is absolutely required. And I'll give you an example. Golden Dome in the U.S., which is a protective shield against ballistic and other kind of missiles. That is in billions of investments. We believe our MEO capability could be enhancing that beyond the military specific investments that will be made. The same thing, Europe, we'll be building a very similar shield for Europe, and we will be a partner and a player in that capability as well. And we're building the satellites that add this functionality. So we are very excited, right, about the opportunity going forward. And you can't think of it as because there's conflict today that demand is going. It's actually a fundamental shift because space has become a war fighting domain. Now your question second about have we seen notable U.S. spend shifts? No, we have not, right? We believe the U.S. is open to use allied capabilities. SES is positioned in the U.S. very well. We have an established capability that we've been working there for 40 years with specific clearances that's required in order to be able to participate in some of these different opportunities. So we have not seen that yet. We hope not to see it. We're proud to be an allied nation and allied company that works on both sides of the Atlantic to bring capabilities to both, of course, our home nations and European Union and those capabilities, but also in the U.S. as an allied for these forces. Operator: There are no more questions at this time. So I hand the conference back to Christian Kern for any closing remarks. Christian Kern: Thank you so much for joining today's call. I think it was a very clear message that 2025 was bringing -- was about bringing the companies together. 2026 is stabilizing it, and then we take it from there in terms of teeing it up for growth. The overall layer in terms of the defense thing has been very well reflected by our top management team. If you have any follow-up on this, please reach out to the IR team, we are there to help. And again, thank you very much for joining us today. Operator: Thanks for participating to today's call. You may now disconnect.
Raquel Cardasz: Good afternoon, everyone, and thank you for waiting. I'm Raquel Cardasz from IR, and we would like to welcome everyone to Pampa Energía's Fourth Quarter of 2025 Results Video Conference. We would like to inform you that this event is being recorded. [Operator Instructions] Before continuing, -- before continuing, please read the disclaimer on the second page of our presentation. Let me mention that forward-looking statements are based on Pampa Energía's management beliefs and assumptions and information currently available to the company. They involve risks, uncertainties and assumptions because they are related to future events that may or may not occur. Investors should understand that general economic and industry conditions and other operation factors could also affect the future results of Pampa Energía and could cause results to differ materially from those expressed in such forward-looking statements. Now I will turn the video conference over to Lida. Please go ahead. Lida Wang: Hello, Raquel. Thank you very much. And hello, everyone. Good afternoon. Thank you for joining our call. I will make a really quick summary so we can spend more time on questions with the management today. Q&A, we have our CEO, Mr. Mariani; our CFO, Mr. Zuberbuhler; and our Head of Oil & Gas, Mr. Turri. So let's go ahead with the first slide where we make a quick summary of 2025. November 25, 2025, marked our 20th anniversary of Pampa and the creation of Pampa. Back in 2005, we did not produce any oil or gas or did not generate any single megawatt hour of generation, electricity. So 20 years later, Pampa accounts for 9% of the country's total natural gas production and reached a record daily production of 104,000 barrels of oil equivalent during the winter of 2025. This year also marked a steep change in our upstream profile. Our black flagship shale oil development at Rincón de Aranda began the year producing less than 1,000 barrels of oil per day and now reached a 20,000 barrel goal by December of last year. As a result, total annual average production exceeded 84,000 barrels of oil equivalent per day. This is 8% higher than last year and 73% up since 2017, the year after we acquired Petrobras Argentina, reflecting the sustained organic growth and disciplined capital allocation. In the Power segment, we consolidated a 15% share of Argentina's net electricity output, achieving an outstanding 94% thermal availability rate in 2025, reaffirming our position as the country's leading IPP and demonstrating a reliable, efficient fleet operating under a gradually normalizing market framework. At a consolidated level, EBITDA grew 8% year-on-year, surpassing the $1 billion mark, mostly driven by power, gas and Rincón de Aranda. While oil and gas and power each represent half of the EBITDA, we expect that ongoing growth at Rincón de Aranda will further expand Oil and Gas footprint in the EBITDA. So Pampa and its subsidiaries are deeply committed to the country's energy development. In 2025, we hit a new record high of $1.4 billion in CapEx, of which roughly half was testing to Rincón de Aranda, the largest single project development investment in our 20-year history. In 2026, we expect to set a new record high, allocating $770 million in Rincón de Aranda, very similar to last year to reach production plateau, plus another $400 million for maintenance across our operations and around $600 million for TGS'’ private initiative project. So moving on to the Q4 results. The quarter's adjusted EBITDA amounted to $230 million. This is a 26% year-on-year increase. Power generation was the main contributor, where, since November the new guidelines for the whole electricity market have allowed power producers to operate under a more decentralized scheme, improving price signals and enabling us to capture operational efficiencies and synergies with our E&P gas. Rincón de Aranda was the second key driver with this production ramping up -- ramp-up accounting for 23% of the quarter's EBITDA, supported by 10 active paths as of today. Our capital structure continues to strengthen following the issuance of our 12-year international bond. We closed the year with a net debt-to-EBITDA ratio of 1.1x and average debt life of almost 8 years. Quarter-on-quarter EBITDA decreased due to the gas seasonability -- seasonality, sorry, offset by Rincón de Aranda and steady contributions from our utilities, TGS and Transener. CapEx surged 81% year-on-year to $371 million in the quarter, of which $249 million were invested in the development of Rincón de Aranda. Okay. So moving on, on the Slide 6. The Oil and Gas segment adjusted EBITDA was $77 million in Q4, more than doubling last years, driven by Rincón de Aranda, increased gas exports and industrial demand. Higher transport and treatment costs partially offset these gains. Compared to Q3, EBITDA declined due to the gas seasonality, but was smoothed by Rincón de Aranda. Lifting costs averaged $8 per barrel of oil equivalent, slightly below last year due to higher crude oil output and stronger gas demand, offset by increasing gas treatment costs and the lease of temporary facilities at Rincón de Aranda. Quarter-on-quarter, lifting cost per boe increased due to this gas seasonality. Gas lifting costs remained flat year-on-year at $1.2 per million BTU, an average of $1 during the 2025, but rose quarter-on-quarter, again, because of the gas seasonality, while oil declined sharply to below $11 per barrel from $36 last year's Q4. This is because -- mainly because of Rincón de Aranda's ramp-up and the divestment of mature conventional blocks. Remind you all that last year, Q4, Rincón de Aranda was really a greenfield, produced only from one well. On top of that, we were recording trucking expenses, testing expenses, and we also held a lot of mature blocks that today are divested. Total production averaged more than 81,000 barrels of oil equivalent per day, up 32% year-on-year. This is led by Rincón de Aranda and Sierra Chata, partially offset by decreases at El Mangrullo and in nonoperated blocks as well as the divestment of El Tordillo. Quarter-on-quarter, production dropped 18%, again, explained by the gas seasonality. The production mix continues to evolve with oil rising to 22% of total output, driven entirely by Rincón de Aranda. Crude oil prices averaged nearly $61 per barrel in Q4. This is 10% lower than last year due to the weaker Brent prices. Without the hedging at Rincón de Aranda, our realized price will have been $53 per barrel. So focusing now exclusively on Rincón de Aranda, the ramp-up stays on track. In Q4, we reached the first goal of 20,000 barrels per day after tying two pads -- two new pads with an average quarterly production of 17,100 barrels per day. This is a 19% increase quarter-on-quarter. As of today, 10 pads are online, of which 3 of them are currently undergoing testing -- well testing. And -- plus we have another two pads, DUC pads and two other pads are under fracking. In 2025, Rincón de Aranda, contributed $126 million of EBITDA. Infrastructure build-outs, thanks to the RIGI incentive regime continues in parallel with the field development. Next month, we are installing an additional temporary processing facility with a focus on reaching 28,000 barrels by mid-2026, a key milestone toward the final production target of 45,000 barrels expected in 2027. So moving to Gas. Sales grew 10% year-on-year, but dropped 23% from Q3. This is, again, explained by seasonality. Mangrullo continued to lead the output, though its share shrank to 46%, while Sierra Chata grew to 38% share with production up 39% year-on-year, supported by a new pad that we tied in during the quarter. Together, they accounted for 84% of the total gas production. Gas prices averaged $3 per million BTU, flat year-on-year. Industry sales supported the pricing, offset by lower export prices due to the Brent underperformance and a drop in residential due to the lag tariff pass-through of the devaluation. In Q4 this year, 72% of our gas was sold under the Plan Gas GSA, CAMMESA and Retail, down from the 81% Q4 last year due to the transfer of certain rounds of the Plan Gas volumes to fuel self-procurement in power, which represented 4% of the total sales in Q4 '25. Now in December, we started to formally doing the self-procurement of gas in Genelba and Loma de la Lata. The self-procurement increased to 41% on average in January 2026. So as a result, Plan Gas GSA exposure shrank to 37%. With the new guidelines, in place, we expect 40% of this year's production to supply our own gas -- our own power generation, capturing margins and leveraging synergies between these two core businesses. Before moving from E&P, I want to just do a quick update on reserve. Total proven reserves rose 28% to 296 million boe, driven by our increased activity in Sierra Chata and specifically in Rincón de Aranda. Shale reserves grew by 55% year-on-year to 204 million barrels and with shale oil now accounting for 19% of total reserves. The reserve replacement ratio was 3.2x, extending the average life to 10.2 years. Since 2019, proven reserves have increased 118% with the most significant expansion coming from shale since 2023 when the year when we started to actively develop Vaca Muerta formation. Okay. So moving to power generations. We posted an EBITDA of $111 million in Q4, up 28% year-on-year, mainly driven by stronger spot prices under the new guidelines, especially -- partially offset by power dispatch at Genelba's new CCGT due to the program maintenance. Total availability declined to 91% due to the scheduled maintenance in Genelba and Loma de la Lata and the ongoing outage that we are experiencing in HINISA since January. However, Pampa's’ thermal availability continues to outpace the national grid under the new framework, also Energía Plus B2B contracts were discontinued, though we managed to recontract in the B2B market. So contract capacity remained stable year-on-year. With the new framework also performance balances between contracted capacity and the spot margin. So value creation also can be driven by efficiency and fuel management. Those units with high load factors and self-procure fuel will achieve higher margins. Turning to cash flow on Slide 11. We show the parent company figures because this is aligned with our bond perimeter. Despite the higher CapEx at Rincón de Aranda, we posted a limited $20 million free cash outflow in Q4, offset by strong EBITDA and working capital inflows mostly from winter collections. As a result, cash and cash equivalents stood at $1.1 billion at the quarter end. This is $210 million more than September close. Finally, on the balance sheet, gross debt was nearly $1.9 billion, down 9% since 2024 December. In November last year, we issued a $450 million international bond maturing in 2037 with a record 20-year tenure. This is the first long-dated issuance by an Argentine corporate over a decade and extending our average life to almost 8 years. The proceeds from this issuance and the 2034 notes that we issued in May were used to redeem all the outstanding international bonds, the '26, the '27, the '29 notes and some of the local dollar bonds. As a result, net debt reached to $801 million. This is 1.1 net leverage, maintaining a conservative capital structure while funding growth. Well, so this concludes the presentation. Thank you for hearing me. Now the floor is open for questions. [Operator Instructions] Lida Wang: All right. So we start -- Alejandro Demichelis from Jefferies. How do you see the evolution of production? Please split between oil and gas and of drilling and completion and lifting costs in 2026? Production, drilling -- D&C, lilfting costs. Horacio Jorge Tomas Turri: Okay. Good afternoon, and thank you, everybody, for joining. Regarding production, let's go first to oil. We are, as Lida mentioned, currently in around 19,000 barrels per day. Our target is to reach 25,000 barrels per day by the end of March, beginning of April and then keep on ramping up to 27,000, even 28,000 barrels per day as of the half of the year. All of this is coming out of Rincón de Aranda. In terms of natural gas, we just closed February around 14 million cubic meters per day. We will probably be reaching a peak of around 18 million cubic meters per day during the winter and an average of approximately 13.5 million cubic meters per day compared to 12.5 million cubic meters per day in 2025. In terms of drilling and completion, in Rincón de Aranda, we drilled 20 wells. We're going to be drilling 20 wells and completing 35. And in Sierra Chata, we will be drilling and completing 8 wells each. And I'm missing lifting costs, which are in the range of -- will be in the range of $10 per barrel. Lida Wang: Yes, until we get... Horacio Jorge Tomas Turri: Until we get the CPF. We are talking about 2026 and a little bit less than $1 per million BTU in our gas operations. Lida Wang: Great. So let's go to the next question. Next question comes from [ Guido Visocero from Nalaria ] about the hedging. How are the royalties settled? Are they include in the hedge? Or is that independent and settled at the market? Horacio Jorge Tomas Turri: No, royalties do not have any connection to the hedging. They are set at the market price. Lida Wang: All right. Next question, Alejandro Christensen from Latin Securities. How much impact have you seen so far from Resolution 425-25? And how much additional impact do you expect in 2026? Could you provide some color on the EBITDA growth outlook for this segment next year? Next year, I guess, '27, right? Gustavo Mariani: This year. Good afternoon, everybody. Thank you for joining. The impact of the resolution so far, it's -- I think what we have been saying in previous calls is between 10% and 15% vis-a-vis the EBITDA generation that we had in 2025. More or less. And that is what we expect for the segment as a whole when you compare 2026 vis-a-vis the previous year. Lida Wang: I guess 2027 is too early to say, right? Gustavo Mariani: Say it again. Lida Wang: 2027, it's too early to say. Gustavo Mariani: Too soon to say. Yes. What this resolution brings is also an improvement in our E&P business, and that is thanks to the fact that now we are self-procured. We are selling the gas and our thermal power use is provided by our E&P segment. So that also brings -- and again, we are expecting here, but it's so far what we have seen in January and February, a 10% increase in quantity in the natural gas produced by the segment, and that is thanks to the fact that we are self-procuring in our thermal plants. Lida Wang: We're kind of not putting much number of that profit, right? So we are -- the number you said is only for power generation, but the fact that we are self procuring this vertical integration, we are not putting a number so far ,an effect, right? An impact. Gustavo Mariani: Yes, that's correct. So that's -- in our projections, we expect on the power generation segment around 10% to 15% increase in EBITDA and another increase coming from the fact that the total gas produced by the E&P segment will also go up by around 10%. Lida Wang: That's right. All right. Next question coming from Alejandro. Alejandro as well he says, have you signed any PPAs with private counterparties for energy or capacity? Gustavo Mariani: Yes, we have been very active since November that this new resolution is -- our commercial team has been extremely active. If I remember correctly, I think that we have sold like 70 -- now you can sell energy and capacity. We've been active in both. Signed more than 100-something contract for a total of around 70 megawatts. So yes, we have been very active there. Lida Wang: All right. And then how are you seeing natural gas demand and pricing in the industrial sector, industrial evolving during Q1 '26? Horacio Jorge Tomas Turri: We see the industrial demand is stable. It accounts for less than around 10% of our overall production. And given the changes in the self-procurement it's not a segment that we are very familiar, we are not that interested. So it would have an effect in Pampa Energía. Lida Wang: All right. Next question coming also from Alejandro. What percentage of oil production remains unhedged throughout 2027? Gustavo Mariani: Throughout 2027 means until or until the end of 2027? Lida Wang: Probably it means until 2027 in English, right? But I don't know. Gustavo Mariani: So we are fully -- basically, we are fully hedged 1 year going forward. So until first quarter of next year, we are fully hedged. Lida Wang: All right. Next question coming from Bull Market, Felipe Collazo. Following the deregulation, has Pampa been able to start acquiring gas from its own wells? I think it's all self answer. Can you give a guidance of what the savings in fuel costs will amount during 2026? Savings in fuel costs? I don't see savings. Horacio Jorge Tomas Turri: We're making profit out of it. Lida Wang: We are vertically integrated. Horacio Jorge Tomas Turri: Exactly. Lida Wang: Yes. So we are producing more than before, right? Horacio Jorge Tomas Turri: That's right. Lida Wang: So January, we produced. Horacio Jorge Tomas Turri: We are particularly producing more during 2026 in the winter time. Lida Wang: Yes, it will be more like... Horacio Jorge Tomas Turri: We will have a flat curve. Lida Wang: But Q1 is already higher than Q1... Horacio Jorge Tomas Turri: We already said that February ended up with almost 14 million cubic meters per day. Lida Wang: Well, yes, last year first quarter, it was a little bit different because Q4, it was very bad, and they took -- CAMMESA took more gas. But even that, the production... Horacio Jorge Tomas Turri: Just taking into account that the overall average of '25 was 12.5 million cubic meter, and we're saying that only February is around 14 million cubic meters per day. So we will definitely be -- our estimation is that we will be producing around 13.5 million to 14 million in 2026. Lida Wang: How long do you expect the RIGI approval to take for the Rincón de Aranda treatment plant. We used to think that application has been filed by mid-2025 when it was first announced. But some news articles from about a month ago suggest it was just done last January. Could you clarify that? Gustavo Mariani: Yes. I don't recall when we filed the RIGI for upstream, but it was definitely third -- fourth quarter -- of last year. We haven't been approved yet. But recently, they have -- there was a new decree adding upstream of oil to the RIGI. So we are starting to file for an additional -- yes, an overall RIGI for the full development of Rincón de Aranda. Lida Wang: All right. Do you plan to fund the CapEx by via new debt issuance? Adolfo Zuberbuhler: Hi everyone. The base case scenario, the answer is no. The idea is we have a big cash position that we have been acquiring with our free cash flow and last year debt issuance. So the base case is that we use part of that cash to complete our CapEx investment of this year. That being said, if we decide to embark in new projects or any other new investments, we'll have to revalue that decision, and that base scenario. And of course, there is always-- I am very opportunistic. So if spreads keep tightening, that is something that we will look. But the base case scenario is that we will face the capital investments with our cash position. Lida Wang: Next question comes from Juan Ignacio Lopez from Puente. I think we haven't answered this yet. But what's the guidance about CapEx for 2026, Oil and gas and Power? Gustavo Mariani: Around total CapEx? Lida Wang: Sorry. Before that, we don't give guidance. But I will give you -- we will share with you what our Board approved by the budget -- for the budget, right? Gustavo Mariani: As Lida says, the restricted group only. So it's basically it's around $1.1 billion, basically $1 billion, the E&P segment and it's less than $100 million on power generation because it's only maintenance CapEx. So we don't have any project -- any new project going on, on that -- on the Power Generation segment. That answers? Lida Wang: And oil? Gustavo Mariani: Oil almost around... Horacio Jorge Tomas Turri: $1 billion. Lida Wang: Awesome. So next question, he says specifically, how much of that is maintenance and how much is scheduled for thermal plants this year? It's pretty much... Gustavo Mariani: Yes, it's around $80 million, and it's all -- maintenance CapEx, yes. Lida Wang: And second, guidance regarding free cash flow. Which, again, we don't do guidance, but we can share with you what it's approved by the budget. And what crude realized price are you assuming for your base case scenario? Adolfo Zuberbuhler: So we expect total CapEx, including maintenance CapEx, investment CapEx and the equity that we will deploy to our joint ventures. All that will imply more or less $500 million negative cash flow after all investments. So that is what will bring the cash position from $1.2 billion to $700 million roughly. Lida Wang: All right. What else? And the price of oil. The price of oil assumed for the budget. I think it was less than $58. Gustavo Mariani: Well, that's the one assuming the budget. But I think what is relevant here is the hedge price that is around $66. Lida Wang: Yes, that's correct. A little bit above $66, right? So the hedge is Brent, right? And then after discounts and export duty, which is 8%, it is roughly a little bit lower than -- roughly a little bit above $58 depending on the discount. Horacio Jorge Tomas Turri: Wellhead, you mean? Lida Wang: Wellhead and it's realized FOB. The wellhead, you have to account the transport -- okay. Next question. Cattaruzzi Matías from Adcap. How should we think the quarterly production ramp-up through 2026, particularly toward the -- around 24,000 barrels per day level by second quarter of '26 and around 28,000 by third quarter. Horacio Jorge Tomas Turri: We've been through that. That's exactly he's answering the question. Lida Wang: But then after -- so the [ 828 well ] in the chart, we put like it's like 20 and then sharply goes up to the plateau? Horacio Jorge Tomas Turri: No. It's not going to happen. Lida Wang: What do you think... Horacio Jorge Tomas Turri: It's not financially efficient. So it's going to be -- probably going to be a ramp-up curve going from 28,000 to 45,000 in around 5 to 6 months. Lida Wang: Okay. Matías is asking -- given that Pampa has more gas reserves that it can currently monetize, would you consider monetizing part of our -- of your gas acreage portfolio for farm out or farm downs or asset sales? Gustavo Mariani: We could consider it, but we are not actively seeking to do so. Lida Wang: Could you update us -- another from Matias. Could you update us on Southern Energy FLNG project, specifically timing, expected volumes and potential EBITDA CapEx contribution from Pampa and what the LNG FOB price assumption, it's basically the Coca-Cola, everything. Horacio Jorge Tomas Turri: In terms of timing, we are expecting the first boat by second half of 2027 and the second one by the second half of 2028 for a total demand of 6 million tons per year. That's around -- roughly around 25 million to 26 million cubic meters per day. We have 20% out of that. And the biggest capital or the biggest CapEx involved in the project now is the construction of the dedicated gas pipeline from Cartagena to San Antonio state, which will account for probably around $1.5 billion. Gustavo Mariani: Hopefully less than that. Horacio Jorge Tomas Turri: Hopefully less than that, from $1.3 billion to $1.5 billion. And out of which we could consider that 60% will be financed and maybe 30% to 40% is going to be equity. And out of that, we have 20%. So that's a major CapEx that we'll be facing. Lida Wang: Francisco Cascarón from DON Cap, he is asking what new opportunities do you foresee in the generation segment, if any? Do you expect... Horacio Jorge Tomas Turri: I'm sorry, just to add something that's relevant. We signed our first long-term contract with CFA, the German agency for 2 million tons per year. Lida Wang: It's binding? This is binding? Horacio Jorge Tomas Turri: It's already binding. Yes more than binding. Lida Wang: Great awesome. For sale? Gustavo Mariani: Binding for both. Lida Wang: Great. All right. Shifting to power generation. Francisco Cascarón from DON Cap, is asking, do you foresee any opportunities there? Do you expect to increase installed capacity this year or in the near term? Gustavo Mariani: Increase this year impossible because these projects take several years to be installed. What could be done in the short term could be something like batteries. And today [ Tamesa ] our Secretary of Energy announced a new auctions of batteries similar to the one that was done last year. The one done last year was within the Buenos Aires area, and this one is all around the country, but has been published today. Honestly, I didn't have time to take a look at it. Usually, these are small projects, very competitive. We have colleagues very aggressive on pricing. So not sure whether we are going to be actively in this auction. Lida Wang: That's it. Okay. So [ Houting Pacheco from, Maria ] he's asking, given the improvement in power prices under the new wholesale electricity market framework, are you now seeing higher returns in power generation relative to shale oil? What a question? Gustavo Mariani: Relative to shale oil. We are seeing higher returns on the power generation vis-a-vis previous year relative to shale oil. The power generation margins have improved. I still think that shale oil provides a higher expected returns than power generation. Lida Wang: There are two animal right? Gustavo Mariani: Yes, two different animal, exactly different risk -- exactly. But despite these changes, we are very comfortable with the development that we are doing in Rincón de Aranda and adding the oil segment to pump. That is where the question is... Lida Wang: Talk about, yes. Well, with the recent extension of the, RIGI, are you thinking to apply? I think we answered that. Gustavo Mariani: Yes. We are starting to apply for the upstream part of Rincón de Aranda. Lida Wang: He is asking -- I think it's too early to answer, but expected impact on project economics and timing. So we can give him a quick summary of the relief, if I may. So it's basically after the third year, you get export duties abolished removed, right, the third year. The tax rate goes down from 35% to 25%, accelerated depreciation, so the imposable amount, it's smaller as well. So that helps through the first years of the operation. BAT can be -- BAT credit can be monetized. What else, if I can remember -- pretty much that, right? But it's a 30-year time that they give you, right, the RIGI. And then, of course, free disposal of all the proceeds abroad. If you export, you can keep it. I think that's the key takeaways from RIGI. Gustavo Mariani: Totally. Lida Wang: That's not AI. We produce that. I have to think about it. So he said, well, congratulations from [indiscernible] He's asking the RIGI upstream, how broadens the scope of the Rincón de Aranda project and how could accelerate the development? Gustavo Mariani: He is asking... Lida Wang: The whole impact. Horacio Jorge Tomas Turri: Okay. The RIGI-- the possibility of the RIGI is going to give a significant, let's say, help to develop the northern part of Rincón de Aranda, which will have an impact both in the ramp-up curve and also in the total amount of oil to be recovered from the area. So we think that this is a major change in the overall economics of the project. Lida Wang: He's asking, should we expect any updated production guidance and timing, meaning adding RIGI or drilling capacity or having more capacity contracted? Horacio Jorge Tomas Turri: It will probably happen. It's not going to change the short-term curve, but it's going to have an impact in the medium term, something we're still analyzing and obviously, it's contingent to the RIGI application. Lida Wang: All right. Someone I don't know, like its name, it's Armando, which is very weired. He's asking a question that we will usually answer. Do the company is planning distribute any dividends in the near future? Gustavo Mariani: No. We're not planning to distribute dividends in the near future. As Fito explained, we have a negative free cash flow this year, and we expect still too early to say, but something that even or slightly positive in 2027. But we still see a lot of opportunities to continue growing. So because of this situation, we are not planning dividends in 2026. Lida Wang: From [indiscernible] asking he wants to double click on the CapEx estimates. For Rincón de Aranda $770 million budget for this year, how much is wells versus infrastructure? Horacio Jorge Tomas Turri: Yes, it's approximately $500 million in wells and the difference will be facilities. Lida Wang: How much in maintenance for generation is $80 million that we said. TGS, what we said is considering Perito Moreno expansion and maintenance, yes, it's $600 million of expansion of the Perito Moreno. Gustavo Mariani: This year. Okay. Lida Wang: No, no, no. Total, it's over $700 million. Gustavo Mariani: Okay. But we haven't talked about TGS CapEx. Lida Wang: Very briefly in the evolving chart-- evolution chart. Maintenance on TGS, like $90 million per year, more or less, total, right, the trunk -- the regulated trunk, the liquids and what is left for midstream. That's $90 million per year. What should we expect for next year? Well, for Rincón de Aranda, when we reach plateau, it's just maintenance. Horacio Jorge Tomas Turri: Yes. So I mean it's just drilling and completing for the -- to fill up the decline. Lida Wang: Gas, we are already. Horacio Jorge Tomas Turri: Gas, we already reached our peak, our plateau. Lida Wang: But when we have CISA, we will... Horacio Jorge Tomas Turri: When we have CISA, we need to decide whether we're going to be supplying all of the demand above CISA or we will be replacing some of our demand with CISA, something that we need to. Lida Wang: In power generation, we don't have any projects in the pipeline. So that's it. Next question from Ignacio. It's, what are the conditions of the B2B PPAs that you signed? Which is very, very broad, like we have some in HINISA, some in... Gustavo Mariani: Yes. Just to give you example -- information. But I think the volume is around 70 megawatts prices for energy in the mid-50s. Lida Wang: Yes, we are doing summer winter. We are doing peak, off peak. Gustavo Mariani: They are 1-year contracts. Lida Wang: Yes, 1-year contracts. We have first year -- mostly of that 70 megawatts is first year, which is mainly -- it's mandatory, but we have some second tier. That's it. Gustavo Mariani: Yes. In terms of capacity what the regulation has in order to incentivize the contractualization is that industries pay a higher capacity charge than what we collect. So that incentivize contractualization because we sell our capacity a little bit better than what we sell to CAMMESA and industries get a reduced price from what CAMMESA charge to them. Lida Wang: Yes. Well, Andresi Miliano from Balance. The liberalization of the power market contemplates procure energy by distributors. When do you consider this will be fully implemented? And how do you expect to impact your power segment? I guess the B2C conference is what he's asking, that we haven't done any... Gustavo Mariani: No, we haven't done any yet. Probably some of our colleagues, especially the hydro -- the recently -- the hydro units have that, but have not -- that is not yet a public information. So that is a market that we need to see how it will evolve. I don't have any clarity right now. Lida Wang: Another question comes from Andres Cardona from Citi. Regarding power generation, we already answered. The second question, is there any short to midterm M&A opportunity? Is there more likely to be for upstream or for power generation? Gustavo Mariani: There's nothing in the short term. So there's nothing in the pipeline. That is the question that we are studying neither in E&P or power generation. Harder to see how that is going to evolve going forward, but we are not actively engaged in any M&A opportunity. Lida Wang: This question was answered in previous calls, but well, there is always a new audience. Do you have any information about Rincón de Aranda. Specifically in the type curve, like, for example, with estimated URs, IP30, D&C cost per barrel? Horacio Jorge Tomas Turri: We don't give any guidance... Lida Wang: Very good. I don't know, it's like around 1.5 million. Horacio Jorge Tomas Turri: Okay. It's probably around 1.1 million barrels of EUR. And in terms of cost, we should be hitting $15 million per well approximately. Lida Wang: Well it's fully considered the whole thing. Horacio Jorge Tomas Turri: All of it, all of it. All the way to the collecting pipeline. Lida Wang: Correct. Which sometimes is different from the measure from other players. Horacio Jorge Tomas Turri: Yes, of course, of course. Lida Wang: Another question from someone I don't know is called [indiscernible] . How is Pampa involved in [indiscernible]? Gustavo Mariani: No, we are not involved. Lida Wang: Can you give us from, [ Santiago -- Valeria ] can you give us some color from the next maintenances in power plants program in the power plants? Usually, we do it when it's offpeak, right? Gustavo Mariani: No. Obviously, we do it either in autumn or in fall. I think there are plan -- and this year, I don't have anything in my mind for this fall, probably during -- sorry, Spring or fall. But I don't recall at this moment which plant has significant maintenance. Most probably will be Genelba and Loma de la Lata, those are the two2 relevant ones. Lida Wang: The legacy, right, the legacies. All right. Is there any change in 2026 CapEx considering the oil prices? This is a recent price of appreciation? No, nothing at all. Guido Visocero, his boss, he's asking urea project. Is there any further information to share about this project? Gustavo Mariani: No, not at this point, not at this point. We're still working a lot. But as it usually happens, there are delays. So it will take at least another semester to have more information about this project. Lida Wang: Gustavo Faria from Bank of America. He's asking a little bit different from the hedge, but he said how does the Pampa's oil prices hedge works in this new environment of high oil prices? Gustavo Mariani: I would say that last year, we realized like in average, $7 profit from... Lida Wang: Per barrel, right? Gustavo Mariani: $7 per barrel profit from our hedge strategy. This year and since today, we are probably losing $4 or $5 per barrel in our hedge strategy. But we will see how prices evolve throughout the remaining of the year. Lida Wang: Gustavo is also asking, are you open for new investments outside power and gas -- oil and gas? Within Pampa structure? Gustavo Mariani: As long as within the scope of energy of Pampa, we are open to anything. We are not studying apart from the urea project, we are not studying or not planning any different investment. Lida Wang: Okay. So Jonathan Swart from [indiscernible] is asking, why did you retire production from Plan Gas Round 1 and Round 3? Horacio Jorge Tomas Turri: Reallocated to our power generation. Lida Wang: To vertically integrate. Horacio Jorge Tomas Turri: To vertically integrate. Lida Wang: We still have some from the last round, the 4.2, right? Horacio Jorge Tomas Turri: Yes, we still have that... Lida Wang: Which... Horacio Jorge Tomas Turri: We're still negotiating eventually the handing over of that gas back to Pampa to be able to, say again, decide what to do with that gas rather than sell it to NASA. Lida Wang: Well, he's asking also, could you explain about the $55 million positive impairment, so recovery of impairment in generation? Yes. So Central Piedra Buena, our 620 megawatts in Bahía Blanca, it's a 2 steam turbine that load factor is very low. This -- last year was high because it was a dry year, but usually it's low. So under the legacy scenario under the old regulated remuneration, they have an impairment. Now that we have this new scheme that also recognizes a big -- like a big -- it's a 30% boost in the capacity because Central Piedra Buena can also operate under alternative fuels. This is way better than anybody can pay. Just because of that flexibility, it's cash in more money and cash in more cash flow. That's why we reversed that impairment. I hope that was clear. Okay. Next, news on the fertilizer plant. Does the sale of Profertil to Adecoagro affects your decision? Gustavo Mariani: No, it does not. Lida Wang: Okay. The one-off offtake agreement mentioned by CISA, the German's price maturity? Horacio Jorge Tomas Turri: Okay. It's an 8-year contract until 2036. And the pricing has to do with a formula that takes into account ETF and Brent -- I'm sorry, Henry Hub and Brent. Gustavo Mariani: 50-50. Horacio Jorge Tomas Turri: 50-50. Lida Wang: With certain percentages of discount. I think we did it all, and it's 7:26 I can't believe it. So I will check -- she's pulling for questions. But we are doing this because we have agenda constraints. All the people that asked why the stock was halted in nicely because Argentina closed and we were not allowed to file after 6:00 p.m. Argentina, and that's 4:00 p.m. in New York, and we are not allowed. So it's trading hours in New York. That's why we were halted. No speculations here because people ask me a lot of things. No questions? No more questions. So, Gus, Horacio and Fito would you like to add something else that we didn't talk about? Gustavo Mariani: No. We covered it off. Thank you all for joining. I hope it was useful. Lida Wang: All right. Thank you very much. See you next May. Bye.
Stuart Togwell: Good morning, everyone. And for those here in person, thank you for joining our Half Year 2026 Results. I'd also like to extend a warm welcome to those joining by webcast and audio. So I'm Stuart Togwell, Chief Executive of Kier Group. And before we begin, I want to take a moment to say our thoughts are with our 9 colleagues and their families based in the Middle East. We are thinking of them at this difficult time and hope they remain safe and well. So turning to our half year results. I would like to start by saying I'm immensely proud and honored and energized to be leading Kier as its Chief Exec and speaking to you today to update you on our half year results and the strategic and operational progress we are making. I'm also delighted to be joined by Tom, our Chief Financial Officer since the 1st of January. Okay. This morning, I'll walk you through our highlights and touch on the strategic progress we've been making. I will then hand you over to Tom to talk through the group and divisional financial performance. I will then come back and take the first opportunity as Kier's new Chief Exec, to offer some color and context around these results and share my perspectives on our operational highlights and where we're leading as a group. We will then finish with a group summary and outlook before opening the floor for any questions you may have. Starting then with the highlights from the last 6 months. The period saw the group deliver a strong first half with good growth in both revenue and profits. The future prospects of the group also remains strong with our order book increasing by 5% in the period to a record GBP 11.6 billion, reflecting contract wins across our business and providing multiyear revenue visibility. Through our order book, we secured 94% of our full year '26 revenue and 78% of full year '27 revenue. And we have seen the momentum continue into the second half with a number of appointments to frameworks in our key sectors. Our Property division remains on track to deliver ROCE target of 15% by '28. We are continuing to convert profit into cash with a net cash position significantly improved to GBP 103 million. Most importantly, we have now delivered an average net cash position of GBP 17 million for the first time in 13 years. Our shareholders have and will continue to benefit from this strong performance. Due to our robust cash generation and in line with our capital allocation framework, we have announced a proposed increase in interim dividend up to 2.6p per share. In addition, I am pleased that we're able today to announce the launch of a new share buyback program, increased to GBP 25 million. This follows the successful completion of our first share buyback program worth GBP 20 million. We have also made a number of operational changes in relation to our new structure and leadership capability. If I may, I'd like to now take a moment to expand on this and reflect on the change we've made in line with the first few months since I became Chief Exec. Over the period, we've taken a number of steps to optimize our structure and leadership capability to maximize the market opportunities that exist for Kier, particularly in response to the government's 10 year infrastructure strategy announced in June 2025. We have strengthened our Executive Committee and be joined by Tom as Chief Financial Officer; Martin as the Group Managing Director for Construction, alongside the creation of new roles for Louisa as Chief Operating Officer; and James as Group Commercial Director. They give us industry-leading functional strength. We also brought together our 2 complementary divisions within infrastructure to form a combined infrastructure powerhouse, to create a more integrated delivery platform to meet our customer needs. The group has also introduced its Naturally Digital program to empower our people and improve productivity through access to the right digital tools and platforms. We are seeing strong operational delivery and opportunities within Kier's divisions, which I'll touch on later. And we're advancing our Kier 360 approach, which leverages the group's capabilities across the whole fund, design, build and maintain project life cycle and enables the most appropriate solutions to be achieved, tailored to meeting customer needs while meeting the environmental, social and digital requirements of national and local frameworks. These positive steps we are taking ensure we are poised for future sustainable growth. With that, I will hand you over to Tom to give our financial highlights for the period up to 31st December. Tom, over to you. Thomas Hinton: Thank you, Stuart. And I should firstly say that I'm delighted to be presenting to you for my first time as Kier's CFO. It's my pleasure to take you through our performance for the first half of FY '26. Let's begin with the financial highlights for the period. Revenue in the period, as you've heard, grew 2.6% and reflects good growth in activity levels, primarily in infrastructure services business, which I'll cover in more detail shortly. We delivered adjusted operating profit of GBP 71 million, up 6.6%, representing a margin of 3.5% and a modest improvement of 10 basis points from that achieved in HY '25. Allowing for our usual second half weighting of earnings, this margin is consistent with our target range of 4% to 4.5% on a full year basis. You'll see that the period end net cash position is materially better than the prior period at GBP 103 million compared to GBP 58 million at December 2024. This is despite increasing shareholder returns via our GBP 20 million share buyback and the increase in dividends paid. As we targeted, the group achieved average net cash over the period of GBP 16.8 million, a significant advance from the prior period average net debt of GBP 37.6 million. This cash and profit performance is all underpinned by our order book and framework positions, which provide us with the visibility over future revenue. Our order book currently stands at a record level of GBP 11.6 billion, having grown by 5% from June 2025. It represents 94% coverage of this year's revenue and substantial coverage of next year's forecast revenue, currently standing at 78%. The order book continues to be underpinned by long-term framework agreements, positions totaling GBP 150 billion. And within this, we have GBP 35 billion pipeline of work visible for this year and the next. You can see from the graph at the bottom of the slide, how our order book, combined with our framework positions provides revenue visibility covering a period of at least 5 years. Stuart will look at our pipeline, order book and long-term opportunities in more detail later. Now focusing on our revenue for the period. We delivered group revenue of GBP 2.029 billion, representing a 2.6% growth versus the comparable period last year. The main element of this growth comes from Infrastructure Services, which was up 4.9% to GBP 1.083 billion. This growth came primarily from the design and delivery of road capital projects, growth in rail work, including HS2 and a ramp-up of water activity under AMP8. Our Construction segment delivered GBP 920 million of revenue in the period, down slightly by 1.3% due to the recent transition to modular construction. Although as the off-site construction comes on-site, we will see these revenues bounce back in the second half of the year to full year growth. Property transactions grew modestly, although again, we expect a busier H2, which is a familiar seasonal feature of this business. In the same fashion, I'll now take you through the adjusted operating profit in the period. The revenue growth that we saw in Infrastructure Services translated into the profit growth of GBP 2.1 million to GBP 48.2 million. We maintained our strong 4.5% margin in this business. The Construction business also maintained its operating margin at 3.9%. The small increase in property volumes resulted in the operating profit growing GBP 1.2 million, and we also saw lower corporate costs in the period. Overall, we delivered adjusted operating profit growth of 6.6% to GBP 71 million. There are some specific costs excluded from our adjusted operating profit figure, which I'd like to take you through. Excluding noncash amortization interest, the adjusted items amounted to GBP 10.7 million in the period and are now solely related to fire and cladding compliance costs. This is an increase on the same period in the prior year, and we expect this to result in a charge of around GBP 30 million for FY '26. We then expect this level of expenditure to continue into FY '27 as we remediate any remaining cladding and internal fire remediation works under the Building Safety Act. These specific remediations are treated as adjusted items and are provisioned gross when the liability is recognized and can be reliably quantified. Further, we recognize insurance or third-party recoveries once they are confirmed, therefore, creating a net provision in adjusting items. We expect the adjusting items to reduce post FY '27 and for these claims to be resolved by the end of FY '28. The interest costs here are recognized under IFRS 16 relating to the exit of leased office space. Turning now to free cash flow. Starting with adjusted EBITDA, which in HY '26 was GBP 101 million. Working capital outflow in the half was GBP 107 million, in line with HY '25, slightly lower in fact. As you'll know, we expect to see our usual working capital inflow in the second half with the higher activity levels of the spring and summer months, combining with government spending and budgeting cycles. CapEx in the period amounted to GBP 24 million, with the majority of this relating to lease payments capitalized under IFRS 16. Net interest and tax paid were just slightly above the prior period, with the group continuing to utilize its significant long-term deferred tax asset. You may remember that the tax asset of GBP 130 million relates to past losses, allowing us to offset half of our tax charge in any given year, which we anticipate to take around 7 years to fully utilize. Altogether, this results in a free cash outflow of GBP 42 million, slightly improved on that of the prior year period in what, as we have said, is a seasonally disadvantaged half of the year. Then taking this free cash flow to the net cash flow, net cash movement in the period. We started the period on the left at the end of June 2025 with GBP 104 million of cash. This free cash outflow of GBP 42 million then reduces our cash balance. The cash impact of the previously mentioned adjusting items equate to GBP 4 million as our insurance recoveries offset a lot of the cash fire and cladding costs in the period. We contributed GBP 3 million in the period to our smaller pension schemes, which remain in deficit, with the schemes we inherited through acquisition around 10 years ago. The net cash bridge neatly shows a significant return to shareholders as well. GBP 23 million of dividends paid in the period and GBP 14 million of share buyback. We also purchased GBP 15 million of shares for the group's employee benefit trust for share-based employee incentives. This resulted in a net cash position of GBP 103 million, lower than at June 2025 due to the seasonal working capital outflow, but importantly, a significant increase over the last 12 months compared to GBP 58 million of cash at December '24. The second half of the financial year has started well from a cash perspective, and we expect this uplift in cash position to roll into the full year net cash. So staying with cash, we consider the average net cash position to be a critical measure. It's been a key target for the business for several years, and I'm delighted to report that we achieved a milestone in this most recent period. We've always defined average net cash as the average month end position. The average net cash is therefore the average over the month ends in the half year. You can see here how over the last 4.5 years, we have steadily reduced average net debt and debt-like items by GBP 600 million, so that we now have GBP 70 million of net cash. It represents a significant mark for the group and provides an excellent foundation for our growth plans. Looking now at our financing arrangements. This slide sets out the structures we have in place to provide flexibility and optionality as we pursue our growth strategy. Last October, we completed out the refinancing of our revolving credit facility with a new 3 year GBP 190 facility. This represented a GBP 40 million increase on the size of the previous facility, including an option to extend for 2 more years as we strengthen further our debt maturity profile. In October, our credit ratings are reviewed with S&P upgrading us to BB+ and Fitch upgraded our outlook from stable to positive, maintaining us BB+. This affords us the optionality as we review the financing requirements for the group. Now to my final slide, I thought I'd remind everyone of our capital allocation framework and its clear priorities. Overall, we are focused on optimizing shareholder returns while maintaining a disciplined approach to capital allocation and an ever-strengthening balance sheet. In short, our capital requirements are minimal. We target dividend cover of around 3x earnings through the cycle. We plan to invest further in our property business to generate consistent returns over time, deploying up to GBP 225 million of capital and targeting a consistent long-term ROCE of 15%. With regards to acquisitions, we will continue to consider value-accretive acquisitions in our core markets. And then lastly, having completed our first share buyback program of GBP 20 million in December, I'm pleased that we're now able to launch a new GBP 25 million buyback program. This, alongside the interim dividend demonstrates that our shareholders will continue to benefit from Kier's significant financial improvement as well as the renewed strength of the group's balance sheet. And now I'll hand back to Stuart for the market update. Stuart Togwell: Okay. Thanks, Tom. What I'm going to do now is give you some insights into how the business is doing and provide the confidence in terms of us do long-term generation of cash to give Tom loads of options in terms of what he's going to do with the money. So many thanks, Tom. Turning now to our operational update. It would be a good opportunity to reintroduce our divisions, particularly in light of the structural changes we have made and to give a sense of their size and scale and how that gives us confidence of our ability to continue to meet our medium-term targets. I will share an update on the breakdown of our order book and the considerable pipeline of opportunities beyond that. And I really want to highlight is our capabilities and to remind you of those. And the way we leverage them together across the group positions us strongly to benefit from the opportunities in front of us. We really do have a resilient order book, a healthy pipeline and a set of complementary strengths that continues to support delivery in our chosen sectors. So let's start with the Infrastructure Services. Infrastructure Services has an order book of GBP 7.1 billion, which is up 6% and provides 92% of secured work for full year '26. The business continues to win work across its chosen sectors. The most recent examples include National Highways Legacy Concrete Framework that's over GBP 900 million, where we're 1 of 3. Project to upgrade Thames Water treatment works at Maple Lodge, that's GBP 280 million. In nuclear, we've also been awarded a 2 year extension on the Hinkley Point C. We've made progress in aviation with an appointment to the British Airways Better Buildings framework. And if you look at the new graphs we provided on the right, which go to explain the gap between the GBP 150 billion framework position and the GBP 11.6 billion order book, you can see the scale of further opportunity. By the way, pipeline includes further material work even within preferred bidder stage and known tender opportunities. I've only included those that cover the next 2 years in terms of work opportunity winning. There is a clearer material pipeline emerging, particularly across water, defense and rail, which gives us real confidence as we move into the later stages of our HS2 delivery. Importantly, our 750 strong in-house design team gives us a fully integrated design-led delivery model. It means we can engage early with customers and shape solutions around what they genuinely need. In addition, our infrastructure division is driving innovation, whether it's around how we manage environmental risks through sustainable drainage techniques or through digital innovations such as our QuikSTATS, which delivers high accuracy digital data at scale, lowering strike risk, delivering measurable efficiency gains across major programs. Given the scale of the pipeline ahead and Kier's geographical footprint, we have robust strategic workforce plans in place to support us to pivot resources as required. Some of these capabilities are genuine differentiators for Kier and strengthen both the value we bring to customers and the quality of work we convert into the order book. But it doesn't stop there. So moving to our Construction business. We have an order book of GBP 4.5 billion, which is up 5% and 96% is secured for full year '26. Construction's approach to building long-term relationships and its track record means we have good visibility of repeat business on key infrastructure frameworks and also within the private sector commercial sector. Recent wins include a place on the GBP 37 billion new hospital program 2.0 Alliance framework, a place on the DfE's new GBP 15 billion CF25 framework for schools, universities further in technical colleges to deliver high-value projects over GBP 12 million in the North and South of the country. Now this is on top of the work we are delivering for the existing Department of Education or CF21 framework, including 8 schools within preconstruction agreements awarded in quarter 2 alone, and they are not yet reflected in our order book. Other notable wins include the construction of the flagship Government Property Agency Hub in Darlington worth GBP 85 million. You can see that there is a strong pipeline visibility ahead with opportunities to convert frameworks to projects in health, education and defense and of course, in the London private sector commercial market. Also part of construction is Kier Places. Now this represents 15% of the '26 revenue. It's an annuity type business providing long-term FM, housing maintenance and specialist critical school works under GBP 10 million, often from existing frameworks and often from direct award. Kier Places also plays a central role in our 360 approach. A recent example is a way their operational footprint and proven delivery of the Heathrow Quieter Neighbourhood scheme directly strengthened our proposition and help secure the BA Better Buildings win in infrastructure. This demonstrates how our integrated model drives differentiated value for our customers. Our construction capability is anchored in our national coverage and regional delivery model and the strength of our long-term supply chain partnerships with delivery projects from GBP 1 million to GBP 683 million, the strength of our dedicated clients and markets team and the access to call-off contracts under 2 stage or direct award. The construction offering is further strengthened by our in-house mechanical and electrical capability, which is supporting projects of circa 40% of the '26 revenue across all regions of the U.K. Using in-house capability allows us to self-deliver complex projects, reducing risk and removing reliance on Tier 1 external subcontractors. It also enables better engagement with customers, coordinated solutions, ensuring a smoother transition from construction to operation and our input to long-term building performance through our digital twinning capability. Finally, our product capability is critical to outcomes-led solutions and ensuring satisfaction and repeat business from our customers. I would draw your attention to our Deyes High School in Liverpool. It's a great example of how we do this. By taking an outcomes-led approach and working in partnership with the customer, Kier has delivered 7 extra minutes of learning time per lesson. And we did this through the design of the school. It's also delivered energy-efficient performance well above target and has driven high levels of customer satisfaction. There is a video that is available on our website and it is well worth watching. Property. Lastly, let's look at our Property business. Invest and develops commercial and residential sites, largely operating through public and private sector joint venture partnerships to deliver urban regeneration projects across the U.K. As you can see from the slide, property has a gross development value of GBP 3 billion. There has been considerable progress made across the portfolio as developments move through their cycles. For example, 60% of sites now have planning permission. 6 sites are in construction and 4 schemes that we are actively marketing for sale. There is considerable capability within the Property division, which drives future opportunity and create synergies with the other business divisions. Kier Property has trusted public sector relationships built on delivering outcomes-led development and regeneration. It also has a deep understanding to what is needed in terms of responding to changing market needs in business and retail that leads to the efficient recycling of funds. An example is the growing need for net zero and energy-efficient office space, for example, our development 19 Cornwall Street in Birmingham. Looking ahead, these long-standing relationships with public and private joint venture partners will leverage funding that can be turned into delivery. Kier Property is also critical to our 360 approach. The historical PFI and urban regeneration expertise will support Kier to influence the early-stage vision and structure long-term investment models set out in the 10 year infrastructure strategy that is moving toward blended finance and PPP type models, particularly in areas like community health care and environmental resilience and from which Kier could create predictable, durable revenue streams. The momentum we currently have and the future opportunities that exist supports our confidence in delivering our target of 15% ROCE by full year '28. I thought it'd be worth just touching on some of the things that I've spoken about in the past. So I would like to just give a more of an explanation around our 360 approach. It's really cool. Simply put, it captures the breadth, depth and scale of Kier and enables us to leverage the group's capabilities across the whole fund, design, build and maintain project life cycle. It enables the most appropriate solutions to meet customer needs while meeting the environmental, social, digital requirements of national and local frameworks. This drives tangible customer benefits because due to the breadth of our national footprint, we can deploy capability consistently wherever it's needed. We combine that breadth with real depth because we can fund, design, build and maintain. We solve customer needs end-to-end. We can offer customers choice of solution, what we call Choice Factory. That focuses on the flexibility needed to deliver true value for money and high-quality outcome-led solutions. One example is MMC. Now Kier doesn't own a manufacturing facility. That means we don't need to keep it full. Instead, we have a broad supply chain, and we can curate a choice of factory-based solutions. This has allowed us to select the optimum system for each project, improving value for money, managing risk and delivering with greater certainty. Harnessing digital is also fundamental for improving customer experience. Digital processes and data-led approaches drive productivity, improving accuracy, program certainty and building performance, e.g. digital twin. And crucially, our work delivers more than just assets. We support customers to generate social and economical benefits such as creating jobs, training, supporting SMEs and creating greater equality. This all reinforces our position as a trusted industry partner, strengthens repeat business and enhances margin certainty. I would also like to expand on the environmental and social benefits as environmental and social performance, they're not an add-on, they're integral to long-term value creation. They are both a key requirement for government contractors and a direct driver of employee engagement. The Kier recent highlights include achieving the first Carbon Disclosure Project A rating for climate disclosure, placing us in the top 4% of companies globally. First in sector in the FTSE Women Leader's review for women in senior leadership positions, strengthen our safety performance through Kier Cares, our new health and safety well-being strategy and through adopting predictive digital tools to help us prevent incidents even before they happen. Average supplier payments down to 32 days, and we achieved 95% of payments within 60 days. We have 532 people engaged in apprenticeship programs, and we were included in the top 100 Apprenticeship Employers list. We are also signatories of the government's Youth Guarantee. For those who are financing within the room, I thank you for your patience of going through that slide. Moving on to drive shareholder value. That all points to how we now continue to drive shareholder value. Before I come to our summary, I thought just to remind everyone of our medium-term financial targets, which are set out here. And actually, there's no reason to change these, they're still applicable today. So we target revenue growth above that of GDP, an adjusted operating margin of between 4% and 4.5% cash flow around circa 90% conversion of operating profit and an average net cash position, a sustainable dividend policy of circa 3x earnings cover through the cycle. And then finally, in summary, the group delivered a strong first half, along with the significant achievement of average net cash for the first time in 13 years and revenue, profit and cash all continue to grow. Our order book stands at a record GBP 11.6 billion, and we have further excellent visibility of future performance. Significant increase in shareholder returns, we're able to announce the launch of a new larger GBP 25 million buyback program and a 30% increase in our interim dividend payment to shareholders. Finally, in terms of outlook, building on our half year '26 performance, we have seen this momentum continue into the second half, and we are trading in line with Board expectations. Full year expectations remain unchanged. We are building and leveraging capabilities through 360 approach, which underpins a 4% to 4.5% margin target range. We are confident in our ability to pivot at scale and pile sustainable growth through delivering social and economical infrastructure that is vital to the U.K. So with that, I'd like to open up the meeting to questions-and-answers. Questions from the room first, please, and then we'll take questions from the call. Thank you. Robert Chantry: Rob Chantry at Berenberg. Just 3 questions. I suppose, firstly, for both of you. Could you just share your views on the optimal balance sheet structure medium-term for Kier, I guess, in the context of the potential bond refinancing this year, the recent cash generation, the move to an average net cash, just how you see that evolving on a 3- to 5-year view? Secondly, just touch on building safety costs. I think it's fair to say that's a step-up versus where the guys thought it was a year ago. I think you're now talking GBP 30 million this year, GBP 30 million next year, a bit of a balance in '28. Can you talk a bit about what's driven that change and happy it goes no higher thereafter? And I suppose, thirdly, really interesting going through the different structural dynamics of your market share. Could you just kind of highlight to us, I guess, where you think you're a genuine market leader in these markets and where you think there is a gap to the top and how you might think about if that's a gap you want to fill with potential M&A or more investment? Stuart Togwell: Do you want to take the first 2? Thomas Hinton: Yes, a couple of questions there. Can everyone hear me okay? So let's start with the balance sheet one. I guess, firstly, let's reflect on where we are. So we're at this average net cash positive position, which I think everyone is very pleased with. It's been an enormous journey to get there. And then if you reflect on our cash flow, here we have strong cash flow, and we expect that to build over time. We've obviously come out there and said, we'd like to continue with the share buyback. So we've continued the share buyback. So the implication there is that if you look at our cash flow, we are kind of returning the dividend. We're doing the share buyback. That does mean we have spare cash. So that does mean it will build. So we expect the cash to build over time, and that's what we'd like it to do. So we would like to continue to build -- we'd like to continue to strengthen our balance sheet in the medium-term. So what I can't say is here's the cash number we're going to aim towards. We haven't got that. What I can say is that we want to keep it positive, and we would like to continue to strengthen the balance sheet. That's our plan. And then the point on the bond, I think you kind of reflected on the bond quickly. So we've got a bond. It's at 9%. Kind of I alluded to it in the slides that there is optionality around that bond, and we will look to potentially go to market on that at the kind of end of the first quarter. So like in the next few weeks, let's see what happens. But ideally, we'd like to come to the market with the bond later on. So that's the bond side, the balance sheet. So fire and cladding. So you saw there in the half year that we've got GBP 10 million adjusting item for fire and cladding. And I also said that we expect that to be around GBP 30 million for the full year. So your question then was, well, how you got comfortable with this? So what we've done is look through every project that's got any exposure on fire and cladding. And each one is bespoke. Everyone is unique, each one is discrete, and it all has different insurance recoverability against it as well. So -- and we have to wait to see if the liability is going to crystallize. So we're going through each one to try and work out, is there a liability? Is it going to crystallize? And then those numbers that I've kind of alluded to are an estimate on how that liability could crystallize over time and an estimate on how we could get recoveries on insurance against them. So that's a kind of net estimate against that. And the challenge, of course, is that you can't take it all today because you don't know the liability is going to crystallize and you don't know the scale of it. So that's the best we can do is estimate what that adjusting item is going to be this year and next year. Stuart Togwell: If I pick up in terms of the market and the sectors, it's a great question. Thank you. If you think about it in terms of Kier stalwarts, that still remains around education, highways and at the moment, MoJ work that's passing through. We are seeing through the slides I put up there, the growth opportunity through the pipeline in defense, the water contracts are starting to come through and working with the water companies in terms of their cycle of funding coming through. Certainly, a huge opportunity in health, particularly off the placement in terms of the new Alliance framework, but there's also other health spend that's going on with the trust that haven't been privileged enough to be one of the 11 hospitals. And we're seeing entry into the nuclear sector, which is a slow burn. It takes time, but we are there and positioned well. In terms of areas in terms of future, rail is an area that I'd like to do more in. There's certainly going to be some spend. Certainly, when the money starts being diverted onto HS2, we're looking about where that's going to go. The London -- the views out here, the London private sector is starting to wake up. And we have a dedicated team in London that is delivering very well at the moment, and I see further opportunity there. And finally, the Places business. I made a point today, I've actually explained a bit more around that business particularly being annuity and the opportunity we have through FM, housing maintenance and also the specialized work we do around small works. As I said, that's often work that's coming through existing frameworks or direct award. It's critical work to the client and often it leads to either repeat business within places or across the group. Longer-term, I've often said around, I felt the opportunity was going to be there for PPP and urban regeneration. And what we're doing about it? Well, we're starting to have conversations. We had a conversation yesterday with NISTA and cabinet office and other CEOs around how the construction industry can feed into the models going forward to make sure that we learn the lessons, the good and bad of previous PFI. But I also look to, at the moment, I've got a Property business that has expertise from the previous PFIs. We certainly have the ability to draw on funding and with the relationships with the public sector. And we have a Places business that is already currently working on 22 contracts under PFI arrangements. So we have all the bases covered. Jonathan William Coubrough: Jonny Coubrough from Deutsche Numis. Can I ask perhaps on the change in mix within Infrastructure Services and it looks like water is clearly expected to be a big growth area also defense. How do you view the contract terms in those markets and also potential margins relative to transportation? The second question would just be on central costs and why they fell in the period. And then third question on Kier 360. Do you think there are opportunities to broaden that out across your markets in terms of increasing your activities at the front end of projects and improving margins there? Stuart Togwell: So if I take 1 and 3 and leave you on 2. Yes, I leave you 2. So the margin risk in terms of these new areas, we've used the word pivot quite a lot. So what we look for is work that is procured on a similar basis through framework that it plays into our strength of having the U.K. coverage, plays in our strength in terms of that we have the local presence that we can bring the environmental and social benefits. Generally, in terms of the frameworks, the risks are going to be proportionate to what we do elsewhere. And it really plays into then us bringing -- being able to bring in the other capabilities we have across the group. So I see those very much in terms of being just same as just a different sector. And that's the strength of the model that we have going forward is that we have the visibility where spend is going to be. We start thinking about those sectors way before they come to market in terms of frameworks. It gives us time to think about the capabilities that we need to understand the customer needs. And we also have a model now that we can really look at our workforce in terms of how we move it around to suit these new streams of work. If I touch on the last point in terms of Kier 360, the answer is actually both. If you think about it in terms of the infrastructure business, our 750 strong designers predominantly are based on the highways business in terms of transportation. Now by combining those 2 organizations together, I've opened up that ability to move it quicker into serving things like water and defense going forward. Now if I look in terms of the construction capability around M&E design, again, I'm looking at 40% of the construction business. But there's no reason why I can't start looking in terms of how do we help that, particularly around the water sector to drive better efficiencies and confidence around that. So both internally and externally. The feedback we had from our one government day when we're talking about the departments about ability to bring, say, environmental understanding into any scheme because most schemes at the moment will have some form of water problem in terms of how they deal with the current water or how they make sure it goes away. Or they're going to have issues in terms of how do they get power in and make sure the energy supply is there sufficient for them. They might be looking for funding solutions because they haven't quite got the funding. And they might need be talking about, well, how do we maintain these buildings in the future? Are you Kier interested in doing the future maintaining? If you're not, can you make sure that the base specification reflects your knowledge of operating these buildings elsewhere? And if you want to put it all together, go and have a look at the Deyes High School. So an outcomes-led design. And you can only do that by bringing all these skills together, look at it in terms of how the building works in terms of energy efficiency, how you actually transfer children more effectively around and teachers around the school classrooms. And that's delivered, as I said before, 7 minutes improvement per lesson. That's [ Kier 360 ] in work. Thomas Hinton: Okay. On the corporation costs, I mean they're relatively flat year-on-year. I think there's a slight improvement. I think the only change is kind of -- I think it comes down to things such as what's the level of bonus accrual you put into the corporate costs, Jonny. I don't think it's much -- there's not much more than that. There hasn't been a deliberate cost drive in the corporate center to date. So it's not different from that. It's more kind of smaller assumptions driving it. Andrew Nussey: Andrew Nussey from Peel Hunt. A couple of questions. Useful disclosure around sort of the pipeline. I did observe that you've got defense sitting in both sectors. How do you sort of draw the line? And does that create some inefficiencies having it sort of sitting in both buckets? And secondly, in construction, modular construction is becoming a feature of the industry and there was an implication of being the revenue sort of slightly lumpy. Is that going to be an ongoing feature as one would imagine your projects get bigger and more modular? And is there any impact on the cash flow from that shift? Stuart Togwell: Okay. I'm happy to say both, and you can then correct me in terms of the second one. Good spot on the defense. The distinction is one is nuclear defense and one is anything else that isn't nuclear defense. Nuclear defense has a particular requirement in terms of your capability, obviously. And it tends to be more large infrastructure complex schemes like Hinkley. So that's why we keep that within that side of the organization. We do, though, share knowledge between the 2 and the relationships and make sure that if there is any joint learning or joint sharing of design or joint sharing of M&E that we do the crossover. But that's the reason we do that. In terms of the MMC, I think you have to remember in terms of the big impact there is in terms of the Glasgow, in terms of the size of it, in terms of timing. I personally don't see it as being -- having a lumpy impact on us. And our approach to MMC really has been embedded in the organization from what we've learned around MoJ in terms of the mill site. And we will continue working through it. Anything else you want to add? Thomas Hinton: No, I think as you said, it does suppress the revenue a little bit on one side versus the other. But what it does do is large construction, you can actually achieve bringing that cash in slightly earlier, if anything. So if anything, it's positive from a cash perspective. So you've got kind of large construction activities, then that can be advantageous for cash actually. Adrian Kearsey: Adrian Kearsey, Panmure Liberum. Three questions, if I may. In terms of water, which kinds of projects have you got in the pipeline and which looking beyond the current AMP do you see sort of coming through? Kier Places 15% currently in terms of revenue of the division, where do you think that can go? And what kind of -- do you think you need to expand your capability within Kier Places in order to grow that? Or is it more about just winning more -- just more of the same kind of work? And then the last one, frameworks, your position within frameworks is not equal across all of the participants within the framework. Which particular frameworks do you think you'll win a greater share? Stuart Togwell: Okay. Again, I'll do my best. Yes, I thought you'd say that. Water, I like the [ time ] there in terms of pipeline. So capital works, we went to the water treatment works. Some of us went to the water treatment works. We're seeing more of that, which is what Maple Lodge is. So more around the capital works. In terms of places, no, we have the capability. It's more of the same. I held back in terms of housing maintenance because that became quite awkward in terms of price per property programs that were in the last 5 or 7 years. But definitely, there is going to be a need to upgrade in terms of housing maintenance properties across the country. And the FM, generally at the moment, we're staying within public sector. I'd like to see if that opens up more opportunities around, particularly around the PPP work going forward. Frameworks, are we equal? There are some that we are more equal than others. That is correct. But generally, the approach with any framework that we go on that we've discussed this morning, we try to have a position in 1 of 3. So if we can get a position in terms of 1 and 3, you have the real opportunity to influence in terms of the customer. You start being able to bring forward your views around outcomes-led design, and it often allows you to work very closely in terms of the alliancing work about what's going forward. Generally, if you look in terms of longevity in the past, education and highways are a stalwart of what we've done. Alongside that, I took a trip down to Bridgewater to look at the environmental work we were doing. We do somewhere between GBP 50 million and GBP 100 million a year on that. Smaller organizations will be talking about it because it will be a larger proportion of their works. But some of the work we do that in terms of our understanding in terms of the environment and how we work with local communities to make sure that we manage water, wildlife, et cetera, is a real strength that we have. And I can see us leveraging that expertise across the other divisions. Maximillian Hayes: Max Hayes from Cavendish. So first, looking at the in-house design consultancy, just looking at the potential to sell these services externally. And then also the improvements in net cash and average net cash balance, has that supported access to any certain frameworks and help develop the pipeline? Stuart Togwell: Okay. In terms of cash, no. But what it has done is reduce the number of questions we've had about net debt with some of the people in the room. But I do see it as a positive sign in terms of where we are. Generally, the turnaround has been accepted. We've closed that off in terms of the frameworks. What this does do, though, is draw people into, okay, Kier, PPP, okay? You get into a position in terms of having surplus cash at some point in the future. We will have conversations with you in terms of how should we be thinking about Kier in those conversations. So, positive. In terms of design, at the moment, we have so much internal. It's a benefit to us. We like to keep it internal. The other benefit we have in terms of the internal model is that when we go to customers, if you like, our outcome is revenue for the other divisions. It's not time on the clock. It brings a different focus in terms of what our design capability do. So I wouldn't want them to move away from that focus and all the work they do for us, moving into an external place where quite often it's time on the clock. So for now, internal. Okay. I think this is the last question. Alastair Stewart: Alastair Stewart from Progressive. A couple of questions. First, following on from Andrew. Defense, very small in terms of the current order book as a percentage, but very big in terms of both pipelines. Have you been getting a sense that, that pipeline is getting more urgent from your clients? And specifically, have you had any incoming calls in the last few months and more particularly -- more particular in the last few days that could move that forward. So that's question one. And question two, GBP 197 million capital employed in property. Given the move to average net cash and the comments on PPP, do you see that GBP 225 million ceiling moving up in the mid-term? Stuart Togwell: Do you want to take that one? Thomas Hinton: Yes, I'll do the last one first. So let's start with the -- you can talk to the defense kind of point, your phone is booming this morning or not. On the property, I said GBP 197 million at the moment. And we were quite clear, we want to get to a 15% ROCE. So we kind of need to prove that. We need to prove it to this room. We need to prove it to ourselves. We need to show that this business can get up to that kind of sustainable return level. And we're confident we can get there, but we need to kind of prove that. I think once we prove that, then you can look to invest further. And to what Stuart said earlier, that doesn't necessarily mean that it's the current kind of design model. It could be slightly pivoted model into other investment areas. It could be a PPP. It could be a specific focus on urban redevelopment. But that's what we're thinking about it. It's about how do we use our cash, let's get the returns, let's prove the returns of the business, and then let's move from there. Stuart Togwell: There's a subtlety that I'm looking for is to make sure it generates revenue across the divisions. So we can actually see it more as in terms of being integrated solution we have. Just going back to defense, I've got to start by saying it's most important that we -- at this time, we think about our people, the 9 employees we have -- employees that we have over in the Middle East. And also, we have -- many of our staff have friends and family of that region. In terms of the urgency, it's been urgent for a while in terms of the need they have, whether it's in terms of providing the nuclear safe havens for submarines or warships, along with improving the living accommodation for -- under the SLA or in making sure that we've got proper safe havens for storage in terms across the country. So there has been an urgency for probably the last couple of years. But what I would say is that Kier saw this as an area of undoubtedly, there was going to be some spend that was going into it, that they were going to start changing their way in terms of the way they approach more to an alliance in way and procuring work through frameworks. So it's a reason why we -- and we needed something to continue the work that we created in terms of the MoJ and defense became a natural place to start moving our resources probably a couple of years ago to be ready for this growth. Alastair Stewart: Specifically, is that urgency getting more urgent? Stuart Togwell: No. Okay. I think we are done. So thank you very much for coming. Thanks for your time. And I'd love to share a coffee with you next door if you've got time. Thank you very much.
Lars Reich: Yes. Good morning, ladies and gentlemen, and thank you for joining our media and analyst conference today. Thomas Erne, our CFO, on the table to my right, and I are pleased to present our results for the 2025 financial year and to discuss them with you. Before we move on to the results, I would like to say that it was a great honor for me to take over the management of the Feintool Group as CEO on June 1, 2025. Let's now take a brief look at today's agenda. First, I will provide a short review and outline the most important market developments and their impact on our business areas, followed by some background on our operational highlights in the 2025 fiscal year. Our CFO will then present the financial figures for the 2025 fiscal year. I will conclude with our outlook, key messages and a strategy update before we move on to the Q&A session. Let's start with the review. All the supporting materials will be available on our website. And after the presentation, you will also find a video of the conference call on our website. The Feintool Group's business performance in the 2025 financial year reflects a market environment that remains challenging with differing dynamics across regions and technologies. In this persistently challenging market environment, Feintool delivered a resilient operating performance in the 2025 financial year. Group sales amounted to CHF 661.4 million, despite the lower volume base, Feintool achieved a positive operating results EBIT of CHF 4.7 million. This reflects the effectiveness of the restructuring and efficiency measures implemented across the group, which have significantly reduced the breakeven level. With an equity ratio of 55.6%, Feintool continues to have a robust financial base. Structural shifts towards Asia are continuing and becoming more pronounced. Feintool is strategically well positioned to benefit from this trend, especially with our e-motor core development and production capabilities. While the pace of electrification in the U.S. and Europe has moderated, the long-term transformation towards electric drives remains intact. In the near term, hybrid and combustion engines application continue to play an important role in these regions. Market dynamics differ by country. Hybrid vehicles dominate in Japan, battery electric vehicles in China and combustion engines in India. Across all those markets, e-lamination stamping remains a key enabling technology for electric and hybrid powertrains and a core competence of a wide range of electrified drive systems for industrial applications. Overall, business development in the 2025 financial year was characterized by a broadly saturated demand environment across regions. With this context, Feintool was able to find its position in the core automotive markets, selectively gain market share in industrial and green energy applications. Our core strategy has proven successful. We are strongly positioned in our core technologies, fineblanking, forming and e-lamination and continue to benefit from solid demand across all drive types and regions. At the same time, we are systematically expanding our activities in electric mobility and renewable energy solutions. With our global production network of 18 plants, we ensure close proximity to customers worldwide and follow a local-to-local strategy. The strategic relevance of e-lamination stamping is underlined by the current order intake. Around 60% of new orders relate to e-motor core projects in Europe and Asia. This includes, among others, a major contract for e-motor cores from one of our largest Chinese commercial vehicle manufacturers as well as a significant new project in Europe for e-stamping applications. In Europe, the Feintool generated sales of CHF 383.5 million in the 2025 financial year. This is 12.4% or 10.8% in local currencies below the previous year. The decrease was mainly driven by the sharp drop in demand for laminated components for electric vehicles. Market overcapacity led to the postponement, downsizing or cancellation of vehicle programs. During the course of the year, the focus on stabilizing the business and the restructuring measures in Europe begun to show initial effects. The restructuring of the stamping Europe business unit, including the sites in Sachsenheim, Germany, Tokod, Hungary has also been completed. The full annual earnings contribution from those measures is expected to be realized from the 2026 financial year onwards with the associated annual savings of around CHF 12 million. While sales in the first half year of 2025 were down 17.5% year-over-year, the decline in the second half moderated to 6.1%. Also, the market environment remained challenging, the slower pace of the revenue decline in the second half indicates that the pace of the decline in Europe began to ease in the course of the year. The U.S. accounted for sales of CHF 199.8 million in 2025 compared with CHF 194.3 million in the prior year, corresponding to an increase of 2.8% or 9.6% in local currencies. The reported decline seen in the first half of 2025 was primarily due to lower raw material prices, which account for around half of our product prices as well as the weakness of the U.S. dollar, while volumes sold were significantly higher year-on-year. During the course of the year, the U.S. business showed market improvements. The second half experienced a year-on-year increase of around 15%, reflecting stronger underlying demand, the start-up of new programs and the benefits of Feintool's market-leading position in fineblanking and forming, particularly in application for vehicles with conventional hybrid drives. The picture here shows our plant in Nashville, Tennessee. We just finished the fourth expansion on this plant and have added in the back of the building, and this investment is completed. In Asia, the Feintool Group generated sales of CHF 80.7 million in the 2025 financial year. This is 10.3% or 5.2% in local currencies below the previous year. The decline was driven by intensified competition in the automotive market in China, which led to market share losses at the end customers supplied by Feintool. During the course of the year, the pace of the decline moderated. While sales in the first half year of 2025 were down 12.5% year-on-year, the decline in the second half slowed down to around 8.3%. Although the market environment in Asia remained challenging, this moderation mainly reflects that projects already in the pipeline started to ramp up later and a slower pace than anticipated, leading to a more gradual improvement in volumes in the second half of the year. In India, the timing of the construction of our new production site in Pune is proving favorable. As the opening is scheduled for June 2026, and the group is recording significant interest and quoting activity for production in the new plant. We are on schedule to open our first Indian production plant in Pune on June 24. Due to geopolitical shifts, we see a lot of interest in our newest manufacturing site, especially from Japanese OEM and Tier 1 suppliers. You can see here the opening in September 2024, then an update in October, and now we are nearing completion of the plant. This is a new picture. Roof is on and the sites are on, and as I said, on schedule to open in June 2024. At this time, I would like to hand over to our CFO, Thomas Erne, for the presentation of the financial results of the fiscal year 2025. Thomas? Thank you. Thomas Erne: Thanks a lot. Thank you, Lars. So we start, as you have already heard, I mean, part of that was already mentioned, but we start with the top line. In 2025, you see that we delivered a solid result actually in the market environment that was remaining challenging. Our group net sales came in 8% below prior year. However, on a currency adjusted base, this decline was limited to around 4.5%, demonstrating the underlying resilience of our business. Our performance in the United States was particularly strong, excluding FX effects, as Lars mentioned already, we recorded robust organic growth of 9.6%, highlighting continued demand for our technologies and the strengthened competitive position in this strategically important market. In Europe, the well-known effect in the automotive sector affected our volumes. That said, we took decisive actions to optimize our cost structure, streamlined our footprint and improved operational efficiency, actions that position us well for margin recovery as soon as the market normalize. The diversification strategy remains on prior year's level. Non-automotive sales are around 16% in 2025, which is supporting our strategy to diversify and grow also in markets like industrial application and energy. Overall, we remain confident in our strategy. We're strengthening our geographic balance, expanding into new segments and investing in technologies that will support profitable growth. With this foundation, we expect to benefit from our gradually improving demand environment as we move throughout 2026. Now looking at the EBITDA. In 2025, we delivered CHF 55.6 million of EBITDA compared with CHF 51.9 million in prior year, which is an increase of CHF 4.7 million prior year, excluding the one-off effects that we have done through the restructuring. The improvement came despite lower sales and demonstrates the effectiveness of our cost and product mix management. Also, revenue declined by CHF 58.2 million, we were able to more than offset this through disciplined cost control and a favorable shift in our product portfolio. Our material cost ratio improved to around 47% coming from 52% last year. This reflects a more profitable product mix and targeted sourcing initiatives. Personnel costs decreased by CHF 6.6 million as a result of the structural adjustments, which we have done in 2025 and ongoing efficiency measures across the group. Regionally, the performance was mixed. The U.S. operation showed a stable contribution, while Europe delivered a substantial improvement due to the earlier restructuring efforts that we have done. Asia remained under pressure, but in line with the market environment and our expectation. Overall, the EBITDA development demonstrates that our focus on operational excellence cost discipline and margin quality is paying off. These actions strengthen our resilience and position as well to capture earnings upside as volumes recover. On the EBIT level, you see a similar picture as on the EBITDA. We are reporting CHF 4.7 million EBIT for the group compared to CHF 49.3 million with restructuring costs. And if you take off the one-off effects in 2024, we reported an adjusted EBIT of minus CHF 2.2 million. So if we compare that to the drop in sales, you see the same picture as on EBITDA. We are operationally much, much better in shape with a different cost base, and we see already the effects now on EBIT level. The question, I answered that already so that you don't have to ask it is what kind of one-off effects did we have in 2025? Yes, you will see in our annual report that we have released accruals that we built in 2024 for the restructuring because we didn't use all of them. But we had also a one-off effect due to the ramp-up of business in approximately the same amount. So we can say the CHF 4.7 million that you see here is really an operational result, one-off negative set of one-off positive. Looking at the net income. Net income is at a loss of CHF 8 million. You see the EBIT with CHF 4.7 million. Then we have a financial result of CHF 10.8 million. Last year, the financial result was at CHF 7.9 million. Those are mainly interest effects and overall financing structure impacts. So we report a loss of minus CHF 8 million compared to last year's almost minus CHF 50 million. Our balance sheet assets decreased to CHF 770 million, mainly driven by lower receivables, reduced inventory and a decline in noncurrent assets. These developments reflect our disciplined approach to working capital management and selective capital spendings. On the liability side, our balance sheet remains also very solid. As Lars already mentioned, the equity ratio is at 55.6%, confirming our strong capital structure despite the challenging environment. Net debt increased slightly to CHF 57.7 million, which is still at a comfortable level and reflects our disciplined investment and working capital management. Overall, the group maintains a robust financial position that provides sufficient flexibility to execute our strategy. Equity, as said before, remains at CHF 55.6 million. Equity decreased to [ CHF 430 million, CHF 428.1 million ] mainly driven by CHF 8 million of net result and significant foreign exchange impacts, which were partially offset by IAS 19 valuation effects. So despite these movements, our balance sheet, as I said before, is solid and provides stability and flexibility going forward. Now last slide from my side, turning to cash flow. Operational cash flow was positive with around CHF 27 million, supported by around CHF 28.5 million contribution from working capital management. As planned, we continued our investment program, particularly in the U.S. and Asia, resulting in operative investments of CHF 55.7 million. These investments support future growth and mark the end of our high investment cycle in 2025. Overall, we generate a nearly neutral free cash flow, reflecting disciplined operations and targeted strategic investments. To summarize, 2025, was a year in which we strengthened the fundamentals of the company. We improved profitability with higher EBITDA and returned back to a positive EBIT despite a softer market environment. The net result was impacted mainly by financial and FX effects, but operational performance clearly moved in the right direction. Our balance sheet remains solid, strong equity ratio. We have a disciplined working capital management and the targeted investment are supporting the future growth. Overall, we enter 2026 as a leaner, more efficient and financially resilient organization, well positioned to capture opportunities as market conditions will start to improve. And now for the outlook, I hand over to Lars. Lars Reich: Thank you. I'd like to continue with a brief outlook. The outlook for 2026 remains cautious. Feintool expects an uneven development across its markets with a challenging environment continuing in Europe, while in the U.S. and in Asia, the group aims to build on the positive momentum of the second half of 2025. As a result, Feintool anticipates further improvements in EBIT margins in local currencies with the completed expansion in China and as well in North America, we are anticipating a much reduced capital spending budget for 2026 and as a result, concentrate on free cash flow. Structural shifts towards Asia are expected to continue and intensify the new production site in India scheduled to open in 2026 will therefore strengthen the group's positioning over time. Looking ahead, Feintool remains confident that the global megatrends towards low-carbon energy generation storage and mobility remain intact and continue to offer attractive growth potential for its technologies. Against this backdrop, Feintool reaffirms its midterm target of achieving an EBIT margin of more than 6%. Let me give you a few examples why we are remaining optimistic. Price sensitivity, energy costs and charging accessibility and range concerns are making hybrids from mild hybrids to full hybrids increasingly attractive as a middle ground. These technologies offer quick wins for consumer and fleets alike without demanding major behavioral shifts. An example of a modular transmission architecture that is hybrid capable is the highly successful 8HP transmission from ZF. Globally produced at an annual rate of approximately 3 million transmission, Feintool supplies components in all 3 continents. The newly signed multibillion contract between ZF and BMW ensures a production life of the 8HP transmission well into the late 2030s. With a wide variety of fineblanking and fork components on the 8HP platform in all regions we serve, Feintool is well positioned to profit from extended life cycle for many years to come. The new all-electric EX 60 changes the game in terms of range, charging and price and represents a new beginning for Volvo Cars and our customers says Hakan Samuelsson, CEO of Volvo Car in January of this year. The e-motor core produced by Feintool boosts Feintool proprietary glulock joining technology for e-motor cores, which enables higher motor efficiency, improved performance and more compact designs while offering a scalable and energy-efficient manufacturing solution. The new Volvo EX 60 launches mid-April 2026, and the motor core is produced by Feintool at our Tokod, Hungary location and it also can be seen outside here on our tables. Furthermore, Feintool profits from the RE data center boom that is accelerating rapidly with global capacity projected to double by 2030. The immense energy demand is straining grids. Server use electrical energy to perform calculation and store data with some of that electricity energy lost as heat. This heat must be removed to prevent the equipment from overheating and breaking down. With up to 5,000 high-efficiency fans in each data center, Feintool profits from the need of motor cores for the cooling fans and secured a major order for e-motor cooling fan cores in North America. This is a significant milestone as it marks Feintool's market entry into the North America with e-lamination stamping technology. For 2026, we call it one destination many routes. The global transition toward cleaner propulsion is continuing, but not as a single unified shift. Instead, 2026 reveals a world where each region is taking its own path, shaped by economics, policy and consumer behavior. Feintool follows those trends closely. Three strong and independent regions, 18 production plants uniquely positioned Feintool to adapt and profit from the regional needs and developments. In the U.S., we'll be launching the first motor core production for data center cooling systems. In Europe, we'll supply the latest generation of BEV vehicles with glulock joint motor cores -- and in Asia, we position ourselves in some of the fastest-growing markets with our own plant in Pune, India. What ties all together is the recognition that our business and electrification is not a one-fits-all journey. The destination may be shared, a lower emission future, but the ways we get there will be as varied as the markets we serve. I want to close with a thank you. The Feintool Group's development in a difficult and challenging market environment affects you, our shareholders. We sincerely thank you for your trust you have placed in us and our strategy. We are aware that the adjustments to the European business pose major new challenges for our employees. We would therefore like to thank them for their commitment and dedication. We also thank our customers, worldwide employees and all our business partners for their long-standing and trusting cooperation because we make more than parts, we make commitments. Thank you very much. Lars Reich: At this time, I would like to invite you any questions you might have towards Thomas Erne, our CFO or myself, and we're more than happy to answer the questions as good as we can. Unknown Analyst: [indiscernible] Lars Reich: You will see both products that we have. We have EX 60 motor core brand new, just came off, still warm almost from our production lines in Tokod, Hungary and then as well the motor core for the data center cooling fans is out there. But we also see still a lot of our traditional hybrid capable parts where we really see extended life cycle. I think that helps a lot Feintool maybe I want to continue in that course that we see -- on one side, we see a clear shift towards electrification, but it's much lower than anticipated, especially in Europe and North America, much lower volumes. But at the same time, the strength of Feintool is that we never gave up our traditional business. And we profit from existing programs that will have now extended life cycles of 5 to 10 years that we see already. For example, 9-speed on Mercedes transmission, was scheduled to end by 2028, extended to 2035. You saw an example, with the 8-speed extended to the end of 2030. So I think this is a very strong strategy that we are remaining in the traditional technologies, live on with the extended life cycles and invest heavily in electrification and also in the right markets. I can say personally, I'm in China next week and will be in June in India. We have a lot, a lot of interest in India. India will be the large -- fourth largest automotive market by next year with 5.5 million vehicles. And we see this as a hub for many companies, especially Japanese who want to invest less in China as an alternative as a geopolitical shift. So this is -- I think we have done the right decision and are now ready June to start production by September in India. Time completion is end of June and production equipment will be ready to produce in September 2026. And the plant we have, it can be doubled in size. We do a Phase 1 with about 5 fineblanking machines. So we will start in the automotive sector on seating components mainly and transmission components and then have the possibility to double the size of the plant when we see the growth. Yes, please. Unknown Analyst: One question. You said you're losing market share in Asia. And I was wondering what measures you're taking to kind of. Lars Reich: Yes. This is a very important point because we have not really lost any programs. I was talking about our customers. The difficulty we find to, we don't really have our own products. We are 100% producing components for OEMs, Tier 1. And we, of course, always at the mercy of the development of the programs we are on. And sometimes we are lucky because the same part gets as a platform going to several more vehicles or sometimes it happens something else that they get reduced. And the reduction was really due to effects from our customer side. We have not lost any major programs. But some of our customers have phased out certain or pushed out by a competitive situation. China is very, very competitive. And so it's a very strong market. But there's also one -- the sign of success is in China, if you not sell to European companies or German OEMs, but if you are able to produce and sell to Chinese OEMs and -- we have 4 years ago, we have started the electrification with the e-motor components and will be close to CHF 10 million sales already on e-motor, selling to Chinese OEMs. The big order we got was for a commercial like light delivery trucks like those FedEx or those light delivery trucks, and that's sold to a Chinese OEM. So we are -- we will be growing. We just had some market share loss from our customers. Good. I also would like to thank Joel and his team. For putting the conference -- thank you very much. Joel is our Media Director for the Feintool Group Communications specialist. Thank you very much.
Operator: Greetings. Welcome to Versant Media's Full Year 2025 Operating and Financial Results Conference Call. [Operator Instructions] Please note, this conference is being recorded. At this time, I'll turn the conference over to Wylie Collins, Executive Vice President, Investor Relations and Treasury. Thank you. You may now begin. Wylie Collins: Thank you, and good morning, everyone. Welcome to Versant Media's Fourth Quarter and Full Year 2025 Operating and Financial Results Conference Call. Joining us today are Mark Lazarus, Chief Executive Officer; and Anand Kini, Chief Financial Officer and Chief Operating Officer. Also with us are Jordan Fasbender, General Counsel; and Natalie Candela, VP of Investor Relations. Before we begin, I'd like to remind you that certain statements made during this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For a discussion of these risks and uncertainties, please refer to Versant Media's filings with the SEC and today's earnings release. All forward-looking statements are made as of today, March 3, 2026, and we undertake no obligation to update them. During today's call, we may refer to certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP measures are included in today's earnings release and in the materials posted in the Investor Relations section of our website. With that, I'll turn the call over to Mark. Mark Lazarus: Thank you, Wylie, and good morning. We are pleased to report Versant's 2025 operating and financial results as an independent, well-positioned media and entertainment company. 2025 was a pivotal year for Versant. We completed our transition to a stand-alone public company while advancing our clear and deliberate strategy, continuing to win with premium content, extending the reach of our iconic brands and accelerating the growth of our digital platforms. We operate in 4 large and growing markets: business news and personal finance, political news and opinion, golf and athletics participation and sports and genre entertainment. In each, our brands hold leadership positions with clear opportunities to extend beyond pay TV. Versant enters this next phase with meaningful scale, reaching an average of approximately 100 million people every month. Our live news, live sports and premium entertainment programming continue to attract large engaged audiences and generate robust advertiser demand. Approximately 60% of our audience comes from news and sports, which is most valued by audiences and advertisers. In 2025, CNBC solidified its position as the #1 global business media brand, delivering exclusive breaking news and more than 6,000 hours of live on-air coverage. That leadership was on full display in Davos last month, where viewership surged across all 3 days of coverage as CNBC was at the center of the world's most consequential business conversations. We built on that position of strength in 2025 with a multiyear partnership with Kalshi, integrating real-time prediction market data directly into CNBC's editorial coverage. This important commercial relationship introduces new revenue streams and connects us with a younger, highly engaged and data-driven investor audience. We're extending that strategy even further. CNBC will launch a next-generation direct-to-consumer subscription service tailored to retail investors, a fully integrated platform combining CNBC editorial insights, investment recommendations, portfolio tracking, advanced charting, AI-powered analysis and powerful decision-making tools, all built on a brand and talent that investors trust. We believe this service addresses a significant market need with a product only CNBC can deliver. On election night in 2025, MS NOW was the most watched network across all of cable, reinforcing the strength of the brand at the most consequential moments in politics. Since the rebrand to MS NOW in the fourth quarter, that momentum has not only held, it has accelerated with double-digit growth in total viewers since November. That momentum extends well beyond traditional television as well. In 2025, MS NOW generated nearly 8 billion views across TikTok and YouTube, along with more than 140 million podcast downloads, demonstrating the depth and demand of a highly engaged audience. To build on that engagement, later this year, we will launch a new MS NOW direct-to-consumer platform centered on community, access and exclusive content, extending the breadth and depth of MS NOW's audience reach. The Golf Channel is the #1 golf media outlet. And in 2025, we aired over 2,000 hours of live coverage across more than 200 events, accounting for 35% of all hours watched for golf. The inaugural Golf Channel games aired in December, and we also extended our USGA partnership through 2032 and our PGA of America partnership, including the Ryder Cup through 2033, securing long-term rights and reinforcing our leadership in golf for years to come. Beyond pay TV, our tee-time platform, GolfNow, delivered a record year with 40 million tee-times booked over 9,000 courses globally, demonstrating Versant's scale in the broader golf ecosystem. Across our broader sports portfolio, USA Sports added Pac-12 football and basketball and expanded our leadership in women's sports through long-term agreements with the WNBA and League One Volleyball. Last month, we also brought the Olympic Winter Games from Milan Cortina to audiences nationwide on USA Network and CNBC, and we'll provide more on that during our first quarter call. In entertainment, USA delivered the #1 scripted cable original premiere of 2025 with The Rainmaker, and it has already been renewed for a second season, reinforcing our ability to launch and develop premium franchises. We also broadcast the Critics Choice Awards, which delivered their strongest ratings since 2022, a reminder of the enduring appeal of live unscripted entertainment. At Fandango, we will launch new ad-supported streaming service later this year, enabling audiences to watch films and television series for free, leveraging Fandango's broad distribution footprint, scaled customer base and Versant's strong library of content. This is a natural extension for the Fandango platform, growing audience and deepening engagement while driving incremental monetization. In addition, we completed the acquisition of INDY Cinema Group, expanding our offering for cinema operators with a cloud-based operating system now deployed across theaters worldwide. We also added Free TV Networks to our portfolio with national over-the-air distribution, expanding our presence in the fast-growing free ad-supported market and extending our footprint beyond traditional pay television. These acquisitions reinforce our strategy of building on our leadership in our core markets by expanding distribution, deepening engagement and developing new audience touch points through both existing and new platforms. We view revenue mix as a critical indicator of our strategic transformation. In 2024, 17% of our revenue came from non-pay TV platforms. In 2025, that increased to 19%, and that was achieved without the benefit of the new initiatives launching this year. Our target is 33% over the next 3 to 5 years and over time to get closer to 50%, positioning Versant to a platform for growth over time. We are committed to continue investing in the business and returning capital to shareholders. Our Board has declared the company's first dividend and has also approved a $1 billion share repurchase authorization. This program reflects our confidence in the business and our strong balance sheet, which provides us the flexibility to invest in growth while also delivering meaningful shareholder returns. As we move forward, we have a clear strategy and the infrastructure, operating discipline and leadership required to win. We enter this next chapter from a position of strength, profitable, scaled and disciplined. None of this would be possible without our team. Across every part of our company, our people executed at a complex separation while continuing to deliver for audiences, partners and shareholders. I am incredibly proud of what we have built and even more confident in what we will accomplish next. With that, let me turn it over to Anand. Anand Kini: Thanks, Mark, and good morning, everyone. As Mark noted, we are focused on disciplined execution and positioning the company for long-term value creation. I'll review our full year 2025 results, discuss key performance drivers and provide our outlook for 2026. Unless otherwise noted, all comments reflect stand-alone results, meaning a view of 2025 and 2024, as if we were already operating as an independent company, aligned with how we presented at Investor Day and how we will report going forward. 2025 performance is consistent with the forecast we shared in December with strong profitability, healthy margins and significant free cash flow generation. Total revenue was approximately $6.7 billion, down 5% year-over-year. The decline primarily reflects ongoing secular pressure in pay TV and advertising normalization following the prior year's presidential election cycle, partially offset by growth in our platform's businesses. Stand-alone adjusted EBITDA, which excludes transaction and separation-related costs, was about $2.2 billion, down 9% year-over-year. Stand-alone adjusted EBITDA margins remained above 30%, consistent with the framework outlined at Investor Day. An estimated stand-alone free cash flow totaled a healthy $1.5 billion for the year. Turning now to revenue details. Linear distribution revenue was $4.1 billion, down 5% year-over-year, driven by continued moderate cord cutting, partially offset by contractual rate increases. Importantly, more than half of our pay-TV subscribers are under agreements not subject to renewal until 2028 and beyond, providing meaningful revenue visibility. Advertising revenue was approximately $1.6 billion, down 9% year-over-year, reflecting ratings declines and post-election normalization in use. Quarterly growth trends were affected by sports timing differences and certain assumptions related to the impact of the 2024 Paris Olympics on our stand-alone results. Platforms revenue, primarily GolfNow and Fandango, increased 4% to approximately $826 million. GolfNow delivered another strong year with growth in bookings, payment volumes and subscriptions. Fandango performance reflected a softer-than-expected theatrical slate, particularly in the second half. We expect platforms to return to high single-digit revenue growth organically in 2026, supported by a stronger box office slate and continued growth at GolfNow. Additionally, we anticipate favorable contributions from our recent INDY Cinema acquisition. Content licensing and other revenue was approximately $193 million, down 9% year-over-year, primarily due to timing of entertainment licensing agreements. On expenses, cost of revenues declined by about $130 million in 2025 driven by programming cost savings, including from a new long-term NASCAR agreement. SG&A, excluding transaction and separation-related costs, was slightly lower year-over-year and reflects the resources required to operate as a stand-alone public company. Turning now to the fourth quarter. Results were broadly consistent with the full year trends. Revenue was $1.6 billion, down 7% year-over-year. Stand-alone adjusted EBITDA was $521 million, down 19%, impacted by production tax benefit in the prior year quarter. Full year results better reflect the underlying financial profile. We began the year with approximately $850 million of cash and total liquidity of approximately $1.6 billion, including availability under our $750 million revolving credit facility. Gross debt totaled approximately $3 billion, resulting in net leverage of 1x trailing 12-month stand-alone adjusted EBITDA, providing substantial financial flexibility. With respect to capital allocation, returning capital to shareholders remains a top priority for us, alongside disciplined investing to support long-term growth. As Mark noted, the Board has authorized a share repurchase program of up to $1 billion and has declared a $0.375 per share quarterly cash dividend, representing an expected annualized dividend of $1.50 per share. Our 2026 outlook remains consistent with the framework provided at Investor Day. We expect revenue between $6.15 billion and $6.4 billion supported by midterm political advertising and new product initiatives. We expect adjusted EBITDA between $1.85 billion and $2 billion as we continue to invest in growth with some quarterly volatility caused by sports rights timing, particularly in second half. Depreciation and amortization will remain elevated in 2026 largely due to amortization of intangibles related to the 2011 Comcast acquisition of NBCUniversal. This amortization will be substantially complete by year-end 2026. We anticipate our cash tax rate for 2026 to be approximately 26%, excluding the impact of intangibles on the balance sheet. From a capital expenditure standpoint, we expect 2026 CapEx to be modestly above stand-alone 2025 levels. The increase primarily reflects the build-out of our new Manhattan headquarters and targeted investments in our platforms and other growth businesses. Over the medium term, we expect capital intensity to normalize following completion of these projects. We continue to expect free cash flow between $1 billion and $1.2 billion in 2026. Free cash flow conversion will be modestly lowered in 2025, reflecting working capital timing, onetime cash tax benefits in 2025 and the incremental capital expenditures I just outlined. On working capital, we anticipate quarterly variability, particularly in the fourth quarter. This is principally caused by separation-related timing effects, including NBCUniversal's prefunding of certain receivables at separation, which increased our opening cash balance with a corresponding Q1 working capital impact. With that, I'll hand it back to the operator to open the line for Q&A. Operator: [Operator Instructions] And the first question comes from the line of Michael Ng with Goldman Sachs. Michael Ng: Congratulations on your first quarter as a stand-alone public company. I just have 2 questions, if I could. First, platforms is obviously a critical part of getting to your revenue diversification goals. Can you talk a little bit about your confidence in achieving that 1/3 of revenue from non-pay TV over the next 3 to 5 years, key new product launches and features that you expect to be the most meaningful in the next couple of years here? Mark Lazarus: Yes, sure, Michael. Thanks. So we're really confident in our platforms business. As we mentioned earlier, though the results for 2025 were a little bit impacted by a slightly softer film slate for the industry. And Anand mentioned, we expect high single-digit revenue growth for 2026, which is consistent with the history that we have with these businesses. So we're very bullish on strong growth, both top and bottom line long off into the future. When you think about those core businesses, GolfNow and Fandango are established leaders. They're really strong, you'd say, preeminent brands in their respective markets. And they still have a lot of room to grow organically and to grow penetration. GolfNow, for example, represents less than 10% of the total rounds booked and it's very early on in the international expansion trajectory that we've undertaken. We can extend these businesses very easily into adjacent markets. We're launching a free AVOD service as part of Fandango, which will complement the movie ticketing and the home rental business. And we purchased INDY Cinema, which we mentioned, which enables us to offer the industry's best operating software to the same cinema operators who already use our partners in the ticketing business. So there's a lot of -- many more expansion opportunities for Fandango and GolfNow. We'll also launch brand-new platforms associated with our brands. CNBC's D2C is targeted to the retail investor. MS NOW D2C will be offering community insights perspective relevant to that brand. These are big powerful brands. We've got big existing audiences, and we're in a great position for these to be adopted at scale around D2C places we have not really invested before. Anand Kini: Yes. The only thing I would just add is, I think as Mark mentioned, Michael, it's a good question. And for us, it's a combination, as you saw, of organic investment where we're making quite a bit as we just talked about the different brands. And then also M&A, our bar is high. I think INDY Cinema is a good example of an M&A opportunity that we found very compelling, very good use of capital, significant value creation, fits with our brands, fits with Fandango. It's kind of an opportunity to add incremental value right away because we already have a sales channel to those exhibitors who buy our Fandango ticketing products. So I think that between the organic investment and then selective inorganic just kind of reinforces how confident and how bullish we are about our platforms business. Michael Ng: Wonderful. And just as a follow-up, could you just provide an update on the SportsEngine strategic review process and the M&A point to support platforms? Just some clarity on kind of tuck-ins versus maybe something more midsized? Anand Kini: Sure. I'll start with SportsEngine. So as we discussed, we're evaluating kind of value-maximizing alternatives for that business. So just to be very clear, we see a lot of consolidation in youth sports market-wide. So we think it's the right time for this review, but we haven't made a decision yet. We -- just to be very clear, we like SportsEngine. It's been a very good business for us. It is a very good business. And so we're only going to pursue opportunities that genuinely maximize value for the long term. Broadly on M&A, we will consider, obviously, all opportunities that add value. I think INDY Cinema is a very good example of a tuck-in, as you called it. And we think there very well may be more. I mean, for example, GolfNow, we built GolfNow over time. It was really a roll-up of a lot of independent operators. You can kind of consider that in some ways a tuck-in type as well. So definitely, we'll look at those. Could there be something bigger? Sure. But I think the key point is our thresholds here are very high. As part of our capital allocation, M&A is one area, but the brand fit, the ability to drive value right away and the synergies are something that we obviously consider very carefully. And so it has to kind of satisfy all those thresholds and make sure it delivers premium returns, and we will continue to be very disciplined in pursuing that. Operator: Our next questions are from the line of Brent Penter with Raymond James. Brent Penter: First one for me. Good to see the shareholder return plans in the buyback authorization. What's your philosophy going to be on buybacks? Do you plan on being pretty opportunistic? Or should we expect them to be pretty regular? And is there a 10b5-1 program in place already? Mark Lazarus: Yes. At this point, we're going to be opportunistic. We're going to be thinking through the total capital allocation program sort of holistically, and we'll handle it that way. Brent Penter: Okay. And then realize it's very early into your journey as a stand-alone company and majority of your renewals are beyond '26 and '27, but can you just update us on your confidence on the affiliate fee trajectory and what you might be hearing from distribution partners at this point? Mark Lazarus: Well, we were able to execute a bunch of deals last year when we were long announced as a stand-alone company, and we were able to do that on terms that work for us and work for the distribution partners. We have a few deals up later on in this year, and we anticipate being able to have very productive and similar discussions with them at that time. Our live portfolio of news and sports we think plays into what people are still looking to watch on linear television, and that's a big part of our asset play. Brent Penter: Okay. Got it. And then final question for me. The Warner Bros. Discovery process, obviously kind of moving into the next phase now. Watching from the sidelines, what have you all learned from this process in terms of the industry in terms of some of your competitors in terms of valuations? What does all this mean for Versant? Mark Lazarus: Well, we have our plan to go as an independent company. We have a strong set of assets. We're very focused on our vertical markets. And the wider view was it was interesting because the assets from Warner Bros. were interesting to a couple of people in a couple of different ways, and we look at that as being reinforcing of the value of our company. Anand Kini: I think the only other thing I'd add is I think maybe what we learned is as you kind of went through that process, the assets that had a tremendous amount of value often were around news and sports. And I think you've heard us say before that, that's about 60% of our audience is news and sports. So we think in many ways, that process validates, a, the quality of our brands and our portfolio and the strategy that we're pursuing to kind of continue to drive those businesses, which are supremely positioned within the pay TV ecosystem, and it also gives us the opportunity then to extend them outside of it. So we think, in many ways, kind of validated the approach that we have. Operator: Our next question is from the line of Peter Supino with Wolfe Research. Peter Supino: A couple of questions about the way your brands go to market. First, I wondered if you could talk about the size of the audience that you're reaching in linear pay TV. We obviously can see ratings data on individual shows, but I wonder how many households are engaging with your news and sports content every month and with enough frequency to be important to your negotiations with pay TV distributors. And the background of that question is we just hear in our conversations with clients and enormous preoccupation with the possibility that you all might have -- I mean it might someday lose a distributor. And then a second go-to-market question relates to your brand's DTC opportunity. Could you talk about your economics streaming CNBC and MS NOW direct-to-consumer and whether someday a partnership with a third-party streamer with a massive audience might be interesting. Mark Lazarus: So on the audience engagement, we have big brands that are well known and ubiquitously known to the marketplace. We reach around, as we stated earlier, 100 million people each and every month with our brands. If you look at some of them individually, MS NOW has doubled its audience in prime time in the last 10 years. We're reaching over 1 million people on average, 1.2 million people on average in prime time on MS NOW each and every day. So that's massive scale. And those people are watching with huge engagement, they're watching roughly 8 to 9 hours a week, which is the second highest engagement across the entire media TV landscape. CNBC similarly has a large loyal following in the financial sector and with retail investors, and you'll see that as we talk about the D2C and eventually launch that in the future. Across our sports, Premier League, WWE, NASCAR, WNBA, the Olympics was -- we were reaching 2 million, 3 million, 4 million people at a time with USA Network over the last few weeks. So we have scale, and we do it by both on individual networks and the accumulation of the total audience across our portfolio. On the D2C programs on the economic profile, we feel very confident that we already have an infrastructure. So the build-out of these is not a massive capital -- not massively capital intensive. We're creating product suites that will appeal for CNBC to the retail investor and the MS NOW to that highly engaged audience. Anand Kini: Yes, that's right, Mark. I think, Peter, what part of that also kind of may be implicit or embedded in your question is, would we go to market in different ways. And I think that answer is yes. So sure, we're going to offer it direct to consumers. But clearly, we're open to different opportunities to distribute through other partners, whether that's bundling or packaging or other distributors. And we will, in fact, be active in kind of striking that. I mean it's all about kind of driving value and driving scale. And there's actually a lot of folks that are interested, frankly, in working with us on that. And those conversations, we'll discuss them at the right time, but they're ongoing. Operator: Our next question is from the line of Jessica Reif Ehrlich with Bank of America. Jessica Reif Cohen: Two questions. First one is on advertising. So in addition to your existing business, which obviously has a big advertising component, your new businesses, whether direct-to-consumer or free TV or dependent, at least in part on advertising. So could you give us a little bit of color on the current market and talk through some of the levers that you can control to maybe improve the advertising trajectory in the current year, whether pricing or sell-through, cross-platform packaging, measurement, et cetera, data, so that would be great if you can give some real color. And then secondly, second completely different topic, but on sports, with the larger media companies facing what's likely a very expensive NFL renewal, does this open the door for you to buy what would be considered secondary or tertiary sports, but growing sports, whether like women's sports or upcoming sports and maybe bigger picture, I mean, sports is obviously a focus. How do you think that your sports strategy will evolve? Mark Lazarus: So why don't I take the second one first. And yes, as the NFL comes to market and we'll discuss new arrangements with some of the other media companies, we believe that there will be and some -- one of our competitors actually said a rebalancing of the sports portfolios. We believe that there will be a rebalancing of the sports portfolios and that, that will leave opportunity for us who have a heritage in sports, who have strong sports properties and legacy to begin with, but we also have broad reach. And with USA Network in particular, it's as broad a reach vehicle as any other cable television asset and/or pay television asset. And we believe that there will be opportunity for us to get involved in properties that we might not have otherwise gotten involved with. We're open to conversations. We're having ongoing conversations. We've built out our own production unit, and we are prepared for the sports landscape to be shifting, and we will be in the middle of that. We will be disciplined, but we'll be in the middle of that. As it relates to advertising, I'll start out. I mean, I think we're still -- for the next 2 years, NBCUniversal is representing us. That has been a very strong and proven go-to-market strategy, not just for us, but for them to have the scale of our assets and their assets under one umbrella. That's the way we've done it for the last 15 years, and it's been a very successful model. We will continue that at least for the next 2 years, and then they will -- they and we will decide on the right future strategy for our ad sales and theirs. We are moving some of our advertising outside of pay TV, and you mentioned DTC and free TV networks. That allows us to reach other marketers. It allows us to be involved more in the programmatic sales and to more of -- the more technology-driven sales with Fandango, with GolfNow, we have a lot of data and information about our customers and we'll to use that to target advertising in the free TV and the digital spaces. Operator: Our next question is from the line of Kutgun Maral with Evercore ISI. Kutgun Maral: I just had a follow-up on linear distribution. I think we're all aware of the secular challenge across -- challenges across the industry, along with more skinny and genre-based packages coming to market. But as you go into your future negotiations, do you see any offsets to some of these industry-wide headwinds when it comes to pricing, for example at networks like MS NOW, which seems quite underpriced in terms of affiliate fees per subscribers compared to its cable network peers or cable news network peers. And is there anything more specifically you can share on expectations for linear distribution revenue growth in 2026 specifically? Mark Lazarus: Well, on the broader question, I mean, sure, we all believe all of our networks are underpriced, but thank you for recognizing that. We -- listen, news and sports have been the predominant focus on the new packaging. We are fortunate or we are strategic in having both of those sets of assets. We have 2 news networks and 2 networks that are sports with Golf Channel and USA Network. So we're in all of those packages, and that has been very helpful for us in retaining our distribution and our revenues. I think those kind of packages will continue. And Anand kind of talked about it a little earlier on the D2C side. We're a new stand-alone company. We don't have as many competing constituencies as we had in the larger company. So we will be as flexible and creative as we can be while making sure we retain the value that we are able -- that we think our networks deserve and that the audiences have shown that they deserve. Anand Kini: And on the 2026 question, we have pretty good visibility here. We have actually very good visibility, I should say. I think we've mentioned that we have about 16% of our subscribers are up for renewal, but obviously, that means 84% are not that we have kind of security on that. And so in terms of what the kind of trajectory would be, what we assume is that the pace of cord cutting is -- it's not been getting worse. We assume that it's kind of roughly the same that we've seen now for a while, kind of that high single digits then offset by some contractual rate increases. So that probably dimensionalizes in terms of what we're kind of looking for as you look forward in '26. Operator: Next question is from the line of David Joyce with Seaport Research. David Joyce: A couple of clarifications and other questions. On the affiliate fees, are you starting to negotiate your carriage on your own as they expire? Or was there a complete separation already versus the Comcast and Universal -- NBCUniversal deals? And then secondly, on your various other platform companies, do you anticipate providing trends on the data of the users or subscription numbers. Just wondering what we could look for in terms of some more data points and trends there. Mark Lazarus: So on the distribution question, yes, we have our own distribution negotiation team, and we are handling all of those deals on a going-forward basis ourselves. We're already in -- we have an established group of people that came to us some from Comcast, from NBCU, some from outside and have strong relationships across the industry, and we're out there in the marketplace, building upon those relationships. Anand Kini: Yes. I think in terms of then the kind of the platforms revenue, like right now, we're just -- we're going to continue to report, of course, kind of good visibility in the platforms revenue line, which we think provides a good meaningful indicator of how that business is scaling. Again, just to be very clear, what's in there is kind of the big businesses are GolfNow, Fandango, SportsEngine and some of the new D2C initiatives that we just talked about. And like over time, again, we'll provide a little color commentary as we launch these services. I think Mark referred to earlier with a few launching in 2026. So expect to talk a little bit more about them. But like I said, we think right now that the way we're running the business is really looking at that platform's revenue in total and also then looking at our revenue mix as well. I mean we referred to earlier the percentage of our revenues that come from outside pay TV, which platforms is a big percentage going from 17% to 19%. And our goal is about getting that to about 33% over 3 to 5 years. So we'll continue to provide visibility on that as well. David Joyce: Okay. I appreciate that. And one final question, actually. On the Fandango AVOD service that you're going to be launching, what's the anticipated library availability there? Is there anything that you have exclusive? Or what are the kind of the windowing availabilities that are going to be on there? Mark Lazarus: Yes. It will be a combination of content we own, content we license. As part of our linear deals, we have licensed content from a lot of different studios, in particular, Universal and where we will be able to use part of our windows that we -- that were met for the linear networks to run on our -- on the new AVOD service. So the combination of those and then other third-party deals. Anand Kini: Yes, that's right. So some of it will be -- as Mark just mentioned, it will be kind of exclusive in a way to Versant sometimes where it may be available, as you just said, on our television networks as well as then the Fandango AVOD, but you wouldn't be able to watch it anywhere else. And then other types of programming, it may be available also on other platforms, too. The thing that we've seen on AVOD success is, a, that you don't need to be exclusive for the vast preponderance. The market doesn't really necessarily want that or I should say need that. A lot of it's about the brand and Fandango is a really big brand, having a great user experience, and we're continuing to invest in that so you can actually discover the programming that is there. And then also a lot of knowledge of the customer. And one of the big advantages we have in our -- in Fandango AVOD is we already know the customer. These are scaled services where people are logging on to their connected TV. So we can provide recommendations to them. The advertising will be targeted. And so we think there's a lot of areas not only on content, but in other features where we have a real look. Mark Lazarus: I think to enhance one of Anand's point is Fandango is already a big broad brand. It's already on people's phones and connected TVs because of buying moving tickets and also it's a top 5 home video service for buying and renting movies and TV series. So we already have a large installed base. It's now a matter of converting them and showing them to -- that we have a strong free AVOD service, something that we have seen the trends across the industry as a growth vehicle. And we believe that the combination of our brand and our content and our large installed base will help us grow quickly. Operator: Our final question today comes from the line of Doug Creutz with TD Cowen. Thank you. Ladies and gentlemen, this will conclude today's conference. We thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.
Operator: Welcome to the Harrow Health, Inc. fourth quarter 2025 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Please note that this call may be recorded. I would like to turn the call over to Michael D. Biega, Vice President, Investor Relations and Communications. Please go ahead. Michael D. Biega: Good morning. Welcome to Harrow Health, Inc.’s fourth quarter and full year 2025 earnings conference call. My name is Michael D. Biega, Vice President of Investor Relations and Communications, and I am excited to be introducing today's call. The company's remarks may include forward-looking statements within the meaning of federal securities laws. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond Harrow Health, Inc.’s control, including risks and uncertainties described from time to time in its SEC filings, such as the risks and uncertainties related to the company's ability to make commercially available its FDA-approved products and compounded formulations and technologies and FDA approval of certain drug candidates in a timely manner or at all. For a list and description of those risks and uncertainties, please see the Risk Factors section of the company's most recent annual report on Form 10-K filed with the Securities and Exchange Commission. Harrow Health, Inc.’s results may differ materially from those projected. Harrow Health, Inc. disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of today. Joining me on today's call are Mark L. Baum, Chief Executive Officer, Andrew R. Boll, President and Chief Financial Officer, Patrick Sullivan, Chief Commercial Officer, and Amir Shojaei, Chief Scientific Officer. With that, I would like to turn the call over to Mark. Mark. Mark L. Baum: Good morning. Thank you for joining us. Over the past five years, Harrow Health, Inc. has undergone a fundamental transformation. Harrow Health, Inc. now owns one of the largest portfolios of prescription ophthalmic products in the United States market. We have been the most prolific acquirer of ophthalmic pharmaceutical products in the U.S. market, having completed more than a half a dozen transactions, integrating over 15 branded products into our scalable commercial platform that reaches every populated county within the United States and touches with impact nearly every key ophthalmic disease segment. As you will note in my letter to stockholders, I am proud of the fact that during the last five years, hundreds of members of the Harrow Health, Inc. family, including my incredible leadership team, drove real economic accomplishment and stockholder value creation, which resulted in a more than 700% appreciation in the Harrow Health, Inc. stock price during this period. As a founder and a large Harrow Health, Inc. shareholder, I am proud of our track record and the returns we are providing to stockholders who have had the patience to let this team do its thing. This team is not done, and frankly, we have only just begun. I cannot guarantee where our stock price will be five years from now. However, I can say with nearly absolute certainty that Harrow Health, Inc. will be a larger and more powerful enterprise, positively impacting the lives of millions of Americans. I resolutely believe that then we will be selling more of every one of our key products like VEVYE, IHEEZO, and TRIESENCE. I predict we will also sell many more units of other products that many stockholders have not thought too much about. I also predict that we will complete compelling new acquisitions of products and or businesses structured to appropriately balance risk and potential reward. Finally, I can say confidently that one or two product candidates from our recent Melt Pharmaceuticals acquisition, specifically what we are now calling G-MELT and YOCHIL, will be approved for marketing. That if they are coded and reimbursed in the way that we expect, they will make massive improvements to the standard of care in ocular surgery and more generally in the lives of so many Americans in need of an alternative to IV and opioid-based medicaments for sedation and anxiety. It is a very large market. Of course, these assets, as I reflected in my letter to stockholders, should in due course, become our largest revenue products. My bet is that if we do all of that and maybe even a little bit more, patient stockholders should be handsomely rewarded. I invite you to join me for the ride because our best days are absolutely ahead of us. Now, let me provide a bit of color on our business as things stand today. We are entering the final phase of our current 5-year plan, and we are doing so with momentum. The portfolio we have assembled, the pipeline we have advanced, and the commercial infrastructure we have built were designed for scale. This is not a single product company or a single product story. We are meaningfully diversified. Our commercial platform is built for durability, operating leverage, and sustained growth. Today, Harrow Health, Inc. operates as one Harrow Health, Inc., one strategy, one commercial engine, one unified organization. We have constructed a diversified ophthalmic franchise focused on expanding patient access, improving affordability, and delivering strong clinical outcomes. In the fourth quarter of 2025, we saw clear validation of that strategy. For the first time, all of our core growth drivers accelerated simultaneously. That alignment reinforces our confidence and supports our goal of exceeding $250 million in quarterly revenue by the end of 2027. Financially, 2025 was a strong year. We delivered great top-line growth and demonstrated operating leverage, underscoring the earnings power embedded in our model as revenue scales. Let me briefly highlight some of the key drivers. VEVYE is positioned for revenue acceleration and increasing new prescription velocity. Expanded payer coverage is now in effect. We are doubling the VEVYE sales force to ensure that we fully capture the opportunity to build a product with peak sales potential of multiples of last year's numbers. More sales professionals will equal more prescriptions. This should correlate to increasing profitable revenue growth. Our data backs this up. With covered patients averaging approximately 9 refills annually, effectively a full year of therapy, this reinforces the durability of the demand for VEVYE. As access continues to expand and commercial intensity increases, we expect total prescription growth to continue this year and for many years to come as VEVYE finally becomes a 9-figure revenue product this year. IHEEZO delivered a record quarter driven by real traction in a growing number of retina specialists' offices. We have broadened our addressable market by focusing on in-office procedures, effectively increasing our procedure volume TAM by more than 2.5 million units annually. We are also expecting IHEEZO price improvements to begin in the second half of this year as we release a new retina-focused packaging format. At around the same time, we expect retina-specific data readouts from studies underway to show from a patient's perspective the difference between IHEEZO and legacy anesthesia modalities. This is only going to help us, we believe. We have to see what the data says. These 2026 activities should further enhance financial performance. With multiple growth levers now in place, IHEEZO represents a durable and critical part of our long-term strategy. TRIESENCE generated its strongest quarter since relaunch, reflecting accelerating adoption in the very large ocular inflammation market. Based on what I am seeing this quarter, with new account trials starting in numerous potentially very large accounts and growing confidence in market access, I have asked our talent team to at least double the dedicated TRIESENCE sales force to deepen penetration in what remains a very large market. Momentum here is early, but it looks meaningful. Because of the origin of the revenue, it is likely highly sustainable. It is not easy to get a product like TRIESENCE added to a surgical treatment protocol. Once you do, and I have seen this happen many times over the years, if the product delivers exceptional outcomes, as TRIESENCE appears to be doing, then surgeons are often reticent to change. This is what I mean by the sustainability of the TRIESENCE momentum. On a related topic, for years, I have spoken about tracking the migration of elite sales representatives. This is nearly a surefire leading indicator of future success. You see, sales reps go where they can win, where they can make money, and provide for themselves and their families. Well, the word is getting out that TRIESENCE is on the move. These elite reps from around the country are hearing about our commitment to this product, and they know they will also be selling the G-MELT too if they can make it onto our team. A lot of folks want to get in on the G-MELT, believe me. So we are seeing a mushrooming inbound interest from some of the most prolific ocular surgery pharmaceutical representatives who want to take these coveted surgical positions at Harrow Health, Inc. on the TRIESENCE team. This is really good news. Now on to our rare specialty and compounded products. Behind the scenes, believe it or not, we have been planning a few positive surprises for our stockholders. From the part of our portfolio they would probably least expect. Yes, our rare specialty and compounded products. This portfolio is now under new sales leadership, and it will benefit from new resources we are providing to finally wring out the value we expect from this exciting and unique group of products. As I discussed more in my letter to stockholders, there are three products from within this portfolio that our team has been quietly doing great work on. One product is awaiting a coding decision from CMS, which we expect in April. There are no guarantees, but if this comes through next month, it will open up a very nice, attractive market for this product. Regarding another product in this portfolio, we have a key study underway that we expect to read out later this year. Our entire team is super excited about this opportunity. This is a big one. Based on what we know about this product, we expect the study to be able to highlight the opportunity that we have uncovered, and once the data is announced, it should fuel opening up, as I said, a very sizable and compelling market for this product. In fact, we are also simultaneously working out supply chain issues to ensure that if things work out the way we expect, that we will be able to supply the market adequately given the historically lower volumes that this product has required. There is a third product that we expect to be revived from this portfolio to also fill yet another nice but happens to be a smaller market opportunity, but a good one nevertheless. The bottom line is that I believe our stockholders may be positively surprised throughout the year and into next year as our plans for this portfolio are revealed. A few final points. In 2026, we will also launch two important products BYQLOVI and BYOOVIZ, further expanding our retina and specialty footprint and leveraging our commercial platform. Beyond commercialization, our pipeline continues to advance, and Amir will shortly speak about the great work he and his team are doing. In summary, Harrow Health, Inc. is a diversified ophthalmic platform with multiple accelerating growth drivers and increasing operating leverage. We have demonstrated the ability to build, integrate, and grow, and generate a heck of a great return for our patient stockholders as our five-year track record demonstrates. As I said at the outset, I really believe that we are still in the early innings of our growth and stockholder value creation story. With that said, I will turn it over to Andrew. Andrew? Andrew R. Boll: Good morning, everyone. I will begin with our fourth quarter and full year 2025 financial results. For the fourth quarter of 2025, consolidated revenues were $89.1 million, representing 33% year-over-year growth. For the full year, revenue was $272 million, up 36% versus 2024. The growth reflected continued strength across our branded portfolio and expanding commercial execution, particularly in the second half of the year. Adjusted EBITDA was $24.2 million in Q4 and $61.9 million for the full year, reflecting 54% year-over-year growth. This margin expansion demonstrates the operating leverage in our model as revenue scales faster than costs, even as we continue investing in commercialization and R&D. In addition, during 2025, we generated just under $44 million of cash from operations, which helped us end the year with $72.9 million in cash and cash equivalents. Overall, 2025 was a year of strong execution, improving profitability and disciplined capital allocation. Moving on to our core growth drivers. Starting with BYOOVIZ, fourth quarter revenues were $25.9 million, up 14% sequentially, bringing full-year revenue to $88.7 million, a 216% increase over 2024. Growth reflects expanding demand. IHEEZO generated $35.9 million in Q4 and $81.3 million for the full year, representing 64% quarter-over-quarter growth and 65% year-over-year growth. Performance was driven by increasing penetration across new and existing accounts, particularly in Retina. Based on the momentum we are seeing with TRIESENCE and other modest investments we intend to make in this franchise, we are disclosing this revenue separately for the first time. TRIESENCE fourth quarter revenue was $5.1 million, a 36% increase from the third quarter, totaling $9.9 million for the year, a 193% increase from 2024. The growth was primarily driven by accelerating adoption of TRIESENCE and ocular inflammation. Our rare specialty and compounded portfolio generated $22.2 million in Q4 and $92.3 million for the full year. The temporary compounding inventory constraint discussed last quarter is expected to be resolved in the coming weeks, and we expect inventory levels to normalize near the end of the first quarter. We do not anticipate a recurrence of this issue. For 2026, we are approaching guidance with greater transparency and structure and are committed to providing greater insight into the seasonality of our business and how we expect performance to build throughout the year. We expect full year 2026 revenue between $350 million and $365 million. For modeling purposes, we currently expect first half revenue in the range of $133 million to $153 million, and the second half revenue in the range of $203 million to $226 million, reflecting the expected phasing of demand, channel dynamics, and launch timing across the year. Adjusted EBITDA is expected to be between $80 million to $100 million for the full year, with the majority of the EBITDA generated in the second half of 2026. As in prior years, the second half is expected to be stronger, with that weighting being more pronounced in 2026. Historically, quarterly revenue patterns have been consistent, though 2026 will be slightly more second-half weighted. Like the past two years, the first quarter is expected to be our lowest revenue quarter, primarily due to stocking activity from the fourth quarter and insurance resets and a higher concentration of high-deductible plans. We estimated fourth quarter demand for IHEEZO resulted in approximately one and a half quarters of incremental inventory being built across the channel. That inventory is expected to be drawn down largely during Q1. As a result, although we are seeing demand grow for IHEEZO similar to the first quarter of 2025, because we are drawing down on Q4 2025 inventory within the channel, we do not anticipate meaningful IHEEZO revenue in the first quarter. VEVYE entered the year with expanded coverage effective January 1. While we expect improved access will increasingly drive prescription growth throughout the year, the first quarter typically reflects an increased mix of high-deductible plans, which creates near-term pressure for VEVYE and our branded portfolio. The financial impact of the coverage win will start to be more pronounced as the year progresses and once our expanded sales force is fully deployed. We typically operate with a disciplined, methodical approach to spend, and we have done that for a reason: to protect profitability, derive ROI, and preserve strong cash flow. This year, however, we see a clear opportunity to maintain that discipline while increasing the pace and level of investment to expand our revenue base for years to come. As a result, we expect SG&A to increase to approximately $185 million-$205 million from the year as we expand our sales force across our major products and categories, including VEVYE and TRIESENCE, and prepare to support the launches of BYOOVIZ and BYQLOVI. We plan to add roughly 100 new sales roles in the first half of the year, and we will pair that with increased promotional and marketing investment to drive awareness, adoption, and sustained growth in the back half of the year and into 2027. Importantly, even as we invest, we will continue to manage expenses with a careful eye toward profitability and cash flow, holding ourselves accountable to returns and managing the spend accordingly. We also expect R&D expenses to increase this year to approximately $30 million-$35 million as we complete studies required for the product candidates NDA submissions and as we invest in post-market studies that Amir will discuss later. Efforts we believe can support near and long-term growth across key products. Looking to the second quarter, we expect IHEEZO will lose pass-through status effective April 1, impacting the ASC market. Approximately 30% of 2025 units were generated in the ASC setting. We have been preparing for this transition through our retina pivot in 2024 and the recently announced in-office expansion strategy, which, as Mark said, added about 2.5 million annual procedures to our TAM. The continued growth in retina and the in-office utilization is expected to offset and ultimately exceed the ASC impact. We also plan to launch BYQLOVI in Q2, which will support incremental growth in our specialty portfolio. Looking at the third quarter. We typically experience some late summer softness due to both doctors, staff, and patients going on vacations. The third quarter will include the first full quarter of BYOOVIZ revenue contribution, which should provide incremental growth. We are anticipating that IHEEZO will also catch some of the additional tailwind as a complementary product to BYOOVIZ. Beginning in the third quarter, we expect to start to see the impact of our expanded and fully deployed VEVYE and TRIESENCE sales force driving growth for both products. Starting in the third quarter, we are expecting a pricing improvement for IHEEZO to go into effect. When you combine that with the continued retina growth and the in-office expansion, we expect IHEEZO to have a strong second half of 2026 and position us very well for 2027. The fourth quarter should remain our strongest quarter, driven by demand patterns, stocking activity, and patients reaching out-of-pocket maximums. Finally, as Mark discussed in his letter, as we intentionally transition compounded volume to FDA-approved branded alternatives, shifting revenue into our specialty portfolio, we expect compounded revenue to be approximately $60 million-$65 million for the full year, with Q1 the softest quarter as we exit the final stages of the inventory shortage. In summary, we expect a softer first half as we work through channel inventory, absorb the ASC transition, and navigate seasonal deductible dynamics. In the second half, we expect meaningful acceleration driven by a fully deployed VEVYE and TRIESENCE sales force, contributions from BYOOVIZ and BYQLOVI, improved IHEEZO pricing, expanding retina and in-office adoption, and incremental contribution from specialty products. I will turn the call over to Pat Sullivan. Patrick Sullivan: Thank you, Andrew. Starting with VEVYE, we exited 2025 with strong fourth quarter momentum at a clear inflection point as expanded coverage went live. Despite limited coverage throughout 2025, we delivered a 115% increase in prescribers writing VEVYE, underscoring strong underlying demand for the product. There is so much more opportunity for VEVYE growth in the large and growing U.S. dry eye category. With broader coverage now in place for our sales force expansion underway, we expect prescriber growth to continue. Consistent with the data shared in 2024, covered patients average approximately nine refills in 2025, effectively a full year of therapy. That level of persistence underscores VEVYE's differentiated clinical profile, rapid onset, sustained efficacy, and comfortable on-eye experience without the stinging and burning commonly associated with other treatments. The bottom line, though, is that we do not believe that any product in the category has this level of refill persistence. Since coverage expansion began, we have seen acceleration in new prescription trends despite navigating a challenging period with insurance benefits resetting and high deductible plans. We expect continued improvement as the year progresses. To fully capitalize on this opportunity, we remain on track to double the Veeva sales force by Memorial Day, expanding our Veeva presence among eye care professionals to drive higher prescription volume through 2026. Turning to IHEEZO. This product materially outperformed our expectations in 2025, with an impressive 56% growth in unit demand year-over-year. Growth was driven by our expansion in the new retina practices and deeper utilization within existing accounts. Ordering accounts increased 49% year-over-year. Retina specialists represented approximately 70% of fourth quarter unit volume, underscoring where adoption and clinical traction are strongest. Importantly, we believe we are still in the early innings of penetration with significant untapped market opportunity ahead as we continue to expand utilization and drive broader adoption. Looking ahead, in the second half of 2026, we expect a net price improvement, which we expect will further enhance the product's revenue and overall financial profile. Importantly, this comes as we prepare to launch BYOOVIZ in mid-2026, further accelerating IHEEZO's expansion into new retina accounts while deepening penetration within our existing customer base. We are also expanding IHEEZO into the office-based setting to broad utilization beyond retina. This initiative targets more than 2.5 million anesthesia relevant procedures that already benefit from established reimbursement pathways, reducing access friction. Turning to TRIESENCE, we delivered a record quarter driven by accelerating momentum in ocular inflammation and continued strength in retina. Despite formally launching in market on October 1, we saw a good portion of the Q4 unit volume come from ocular surgery accounts. We expect this large market will drive the majority of new volume going forward. Nearly half of the fourth quarter ordering accounts were new and helped drive quarter-over-quarter growth in unit volume. To extend this trajectory, we are in the process of doubling the dedicated TRIESENCE sales force. Based on current trends, we see substantial runway for continued growth in 2026 and beyond. Finally, our rare specialty and compounded portfolio performance rebounded in the fourth quarter as new commercial leadership took hold and execution improved. While we are encouraged by that momentum, I believe there is substantial room to grow this portfolio of everyday workforce products from current share levels. We are implementing several revenue generating initiatives tied to these assets, which we expect to detail later this year. In parallel, as Mark discussed in his letter, we are focused on converting compounded utilization into FDA-approved branded products through the launch of PharmaPack Max and PharmaPack Prime, further strengthening the long-term revenue profile of this segment. In closing, each of our core growth drivers accelerated in the fourth quarter, and we entered 2026 with clear commercial momentum. We are scaling the organization to support the trajectory, doubling the sales forces behind VEVYE and TRIESENCE, expanding IHEEZO into the office-based setting, and preparing for important launches this year. With strengthened infrastructure, expanding access, and a diversified ophthalmic portfolio, we believe we are well positioned to drive sustained growth and delivering increased value to patients and shareholders. With that, I will turn it over to Amir. Amir Shojaei: Thanks, Pat. I would like to turn to our pipeline, which we believe represents a compelling long-term value driver for Harrow Health, Inc. The next phase of growth is highly focused and capital efficient. We are advancing clinically relevant programs aligned with clear unmet needs in ophthalmology and tightly integrated with our commercial infrastructure and regulatory expertise. While there are several programs on this slide and more that you do not know about yet, I am only going to focus today on G-MELT, formerly known as MELT-300, and the ongoing IHEEZO study. G-MELT exemplifies our strategy. It is a fully opioid-free and IV-sparing procedural sedation candidate that has the potential to redefine that standard of care, and I believe has the potential to become our largest product. Today, procedural sedation often requires IV access and uses opioid-based regimens, introducing complexity, staffing burden, monitoring requirements, and longer recovery times. G-MELT has the potential to simplify that model. From a development perspective, we initiated the remaining pharmacokinetic work earlier this year and are advancing CMC activities with our CDMO partner. We remain on track for an NDA submission in early 2027 while continuing to evaluate opportunities to accelerate timelines. We view G-MELT as platform-level upside, a differentiated sedation solution with the potential to broadly improve procedural efficiency and create meaningful long-term value. In the ophthalmic market and eventually beyond. Pipeline value also comes from expanding the evidence base for marketed products, including IHEEZO. I am amazed that our team has been so successful with IHEEZO on retina, given its supporting data was in cataract surgery. I know from my experience developing back of the eye products that retina professionals who are the primary users of IHEEZO want to see specific data based on procedures they need IHEEZO for, namely intravitreal injections. We are investing in clinical data generation to support adoption strength and differentiation and reinforce long-term positioning with both clinicians and payers. While this slide highlights IHEEZO, similar work is underway across the portfolio. High quality evidence builds clinical confidence, drives utilization, and supports sustained reinvestment in the franchise. For IHEEZO, we are sponsoring multiple complementary studies in intravitreal injection procedures. The first and most near-term data is an investigator-initiated randomized trial led by Dr. Sabin Dang comparing IHEEZO to standard anesthetic approaches, evaluating pain and ocular symptoms with data expected at ASRS this year in July. You can see the quote he provided us with on the bottom left of the slide. For our own Harrow Health, Inc.-sponsored IHEEZO study, my team has put together a Phase 4 multicenter randomized trial assessing patient-reported pain and safety across approximately 240 patients. We initiated the study in the first quarter of 2026 under the IND and expect to have data available by the end of 2026. Together, these studies are designed to generate clinically meaningful practice-relevant evidence that supports further and more broad-based adoption, reinforcing IHEEZO as a durable long-term growth driver. In summary, Harrow Health, Inc.’s pipeline is focused, efficient, and impactful. It complements our commercial momentum, expands our addressable markets, and creates multiple pathways for long-term value creation. We are building not just individual products, but a sustainable innovation engine that positions Harrow Health, Inc. for continued growth. With that, I will turn it over for questions. Operator: Thank you. We will now open for questions. If you would like to ask a question, please press star 1 1. If your question has been answered and you would like to remove yourself from the queue, please press star 1 1 again. Our first question comes from Chase Richard Knickerbocker with Craig-Hallum. Your line is open. Chase Richard Knickerbocker: Good morning, team. Appreciate the candid thoughts in the shareholder letter and thanks for taking the questions here. Mark, you kind of mentioned in the letter that you expect, you know, kind of continued commercial growth and commercial mix improvement for VVI kind of through the year. What have you seen so far from a commercial mix perspective in Q1? Can you walk us through what your ASP assumptions or direction of ASP for VVI is in the 2026 guide kind of versus volume? Thanks. Mark L. Baum: Yeah. Regarding ASP, I think I will answer the second question first. On ASP and net pricing, you know, the only comment that we have made and that we intend to make is regarding the buoyancy and the slight uptick in ASP, which I had forecasted probably a quarter or two late. Nevertheless, as I said in the letter to stockholders, we saw that direction of travel and we eventually got there. With a more sustainable and buoyant net pricing for VVI, that coupled with some of the things that we are seeing on the commercial side with this new coverage, we have initiated this program to more than double the VVI sales force. In terms of the build and what we are seeing on the ground today for VEVYE, as I said also in the letter to stockholders, even in the fourth quarter, we started to see a little bit of momentum build. I think I have said in the past that CVS had actually sent out letters to thousands and thousands of eyecare professionals around the United States alerting them to the new positioning, the preferred positioning for VEVYE on their formulary. That alone, I think began the positive momentum that we are also seeing a little bit in the first quarter. What I can say regarding the first quarter is that typically it is a weaker period and we are quite surprised with, you know, the new prescription volumes that we are seeing today relative to what we thought we would see, which is to say that the new prescription volumes are meaningfully better than what we thought we would be receiving at this point in the year. We expect that to build throughout the year. As I said in my prepared remarks, we have data that demonstrates very clearly that more reps in the field for this particular product, given the persistence of the product and the market interest in the product, yields more prescriptions. For us, building those new prescriptions, ultimately leads to more and more total prescriptions and more revenue. We are bent towards building volume in VEVYE, and that is how we are set up for this year, and that is what you should expect. Chase Richard Knickerbocker: Helpful, Mark. Just for my second question, another multipart just on the TRIESENCE Phase 3 cataract announced this morning. You know, obviously a large potential volume opportunity. Just a couple of questions to help us understand the magnitude. What % of the cataract market do you think is kind of the sweet spot for TRIESENCE as it relates to kind of the value prop versus the multi-drop regimens that are pretty pervasive today? How should investors kind of think about the TAM expansion from this label expansion kind of within cataract for TRIESENCE? Second, I think investors often have kind of question on duration of opportunity with pass-through products in the ASC. Can you just remind us or discuss the unique aspects of TRIESENCE that may allow for longer, term payment outside the bundle or how you plan to approach pricing there? Mark L. Baum: Sure. you know, once again, I will take the second question, the second part first. In terms of reimbursement for the product, TRIESENCE has a very unique label in that it is both used in the office setting of care, and it is also used in the hospital and outpatient department setting of care. As a result of that, and I do not want to go into the nuances of reimbursement policy, but we believe that TRIESENCE will not be limited by a TPT or a temporary pass-through period. Regarding the first part of the question, in terms of what the TAM expansion might be for this study that, you know, Amir just received clearance on, I believe, yesterday. I go back to, I think, another comment that I made in my prepared remarks, and that is that our vision for cataract surgery is that in the future, patients in the United States should have an IV-free, opioid-free, and even an eye drop-free procedure. That is what I would want my mother to have. That is what I would want anyone that I love to have. Not to have to put eye drops in their eye multiple times per day, multiple different eye drop bottles. That is assuming you are using an FDA-approved product, of course. That should be the ideal, and that is what we are working towards. That is what the G-MELT is about, and that is what this expansion with TRIESENCE is about. It is about putting power in the hands of the surgeon to deliver the anti-inflammatory into the eye so that the patient does not need to administer these post-surgical eye drops. What is interesting is, anecdotally, what we see is that for patients who are using this on label, which is a subsegment of the cataract surgery population, it is those patients who really cannot administer eye drops, who have other comorbidities. What we decided to do, because those patients are having such exceptional results, is to invest in expanding the label so that all cataract surgery patients have access to this therapy. What is terrific is, as I said, we have got reimbursement. We have an exceptional clinical outcome. With this amazing study that Amir and his team are going to execute, we are going to have a very broad-based label that will finally give cataract surgeons access to an easy-to-administer, highly efficacious post-cataract surgery anti-inflammatory that they themselves can inject. Here is the best thing for consumers, for patients: It has the lowest out-of-pocket of any injectable steroid at around $37 per unit. It is affordable, it is accessible, it is highly efficacious, and we are going to invest for a very small amount of money in a study that will significantly expand the number of patients who will have access to it. In the United States, by the time this data reads out, that should be about 5 million procedures annually. It is a very large market opportunity. As I have said for a couple of years, you know, TRIESENCE is a slow grower. We have got a lot to prove there for sure, but this is a product that in the next couple of years is gonna be a meaningful value driver for our stockholders. Chase Richard Knickerbocker: Very helpful, Mark. Thank you very much. Operator: Thank you. Our next question comes from Timur Ivannikov with Cantor Fitzgerald. Your line is open. Timur Ivannikov: Yes. Hi, thank you. This is Timur Ivannikov on for Steven Seedhouse. First on IHEEZO, I think you mentioned price improvements in the second half of 2026. Could you clarify, is that a price improvement from Q2 2026 or from Q4 2025? Do you expect Q2 2026 ASP to be significantly lower? Thank you. Mark L. Baum: Andrew, you wanna take that? Andrew R. Boll: Yeah. I just to try to make sure I answer the question correctly. We expect by the time we get to Q3 of 2026, pricing for IHEEZO will be better than what it was in 2025 and in the first part of 2026. Timur Ivannikov: Okay. Okay, got it. Second question is on the TRIESENCE cataract trial design. I just wanted to understand the trial a little better. I think you mentioned the trial design versus placebo. Could you talk about the use of anti-inflammatory eye droplets in both groups? I mean, are you allowed to, you know, dose the droplets in the treatment arm and the control arm? Thank you. Mark L. Baum: Amir, can you handle that one? Amir Shojaei: Yeah. Hi. I think the protocol design is pretty clear. We are gonna have a control arm which will not get the TRIESENCE. What we do have rescue criteria already built in. Rescue criteria would allow drops again, per protocol. Timur Ivannikov: Okay. Thank you. Appreciate that. Operator: Thank you. Our next question comes from Mayank Mamtani with B. Riley Securities. Your line is open. Mayank Mamtani: Yes. Good morning, team. Thanks for taking the questions and appreciate the helpful go forward guidance framework. On VEVYE, NRX improving and the commercial mix also improving. Mark, are you able to share with us any end of year or second half loaded kind of market share targets that you may have so, you know, we can understand, you know, the growth in the market? Obviously, you know, multiple companies investing here on the penetration side, but also want to understand how you are thinking about share gains in both the cash pay and also obviously the commercial mix markets. I have a follow-up on IHEEZO. Mark L. Baum: Sure. Yeah. We have three goals for VEVYE. First of all, I just want to say that the dry eye market in the U.S. is, Pat said, a very large market. We believe it still continues to be under-penetrated, and we continue to see data that demonstrates that there are large segments of the dry eye patient population that are receiving products on a monthly basis that burn and sting, cause pain, sneeze. I mean, the list of these effects are too long. When we see that patients are getting access to these non-optimal therapies, for whatever reason, whether it is coverage or, they are just not aware of VEVYE, we see that as opportunity, to convert those patients to a therapy that does not burn and sting and that has all of the positive benefits that VEVYE offers, including now these enhanced coverage metrics. In terms of what our goals are, to be clear, the first goal is we believe VEVYE will be the number one cyclosporine in the U.S. market. Cyclosporine is the most trusted active ingredient in, the dry eye market, and we aim to be the number one cyclosporine. Second to that, we believe we can capture, the anti-inflammatory market, so any product that actually has an active ingredient in it that would be an anti-inflammatory. We believe all forms of dry eye disease, you know, we do not care which one you choose, have an inflammatory component to them. We aim to be secondarily the number one anti-inflammatory. Eventually, and it is not gonna happen overnight, we think we have the opportunity with this particular product to be the number one most prescribed dry eye product. For the last couple of years, our competition has had a sales organization, you know, that even the most inferior products in the market have had much larger sales organizations than we have had. We are now, as I said, more than doubling our sales force. I think we are more than halfway there. I am actually surprised. The talent team is doing a great job. There is just a lot of people that wanna join this Maria's team, sell VEVYE. In terms of specific market share percentages, we are not giving those goals. I think to be the number one cyclosporine in the market, we probably need to have just north of 20% market share. That gives you a sense of what we think is achievable. By the way, in many markets we are already there. The problem is that we touched historically so few markets with a sales organization of just under 50 people, that even if you have better than 20% market share in the greater Cincinnati area, which happens to be the case, you... There are many other markets where you just simply do not have that level of market share. With this enhanced sales force now, numbering close to about 100, we will touch more markets. We will increase our market share, I believe, and we will get closer and closer to that goal of being the number one cyclosporine. Pat, do you want to add to that at all? Patrick Sullivan: Thanks, Mark. I think, you know, one of the things we are most optimistic about, as we stated in our earnings, is the increase in writing that we see. We saw 115% growth in our writing. I think as Mark mentioned, the feedback that we receive from our eye care professionals and from their patients is extremely positive around the fact that VEVYE uniquely manages inflammation, how rapid it works, and at the same time, is the unique tolerability profile. We are extremely encouraged in our next phase of expansion to cover a much larger portion of the market and increase VEVYE's presence to really grow this product to be the number one cyclosporine. Mark, we are well on our way to building our next phase of growth for VEVYE. Mayank Mamtani: On IHEEZO, obviously a lot going on here. ASC pass-through status expiration, but also price per unit improvement that you mentioned. There is also some data generation activity you noted at ASRS conference middle of the year. Was just curious, you know, to contextualize its contribution to the guidance. Are you also thinking like VEVYE, this is a 9-digit revenue contributor for this year, or is it more a reasonable target for next year? Mark L. Baum: Yeah, I do not wanna comment on the revenues for that product. I think the only product we have given guidance on specifically is VEVYE, which is clearly, you know, on the road to nine figures. What I will tell you is this. Just as a reminder, in 2024, we had absolutely zero retina presence. We did not have a retina sales force. We did not have any products in that market. Only a couple of years ago did we hire that sales organization. In really August of 2024, we began what we call the Retina Pivot, where we were able to attract great people from much larger companies that had tremendous backgrounds in retina, and we built this organization. I remember going to ASRS in Stockholm. Nobody knew who Harrow Health, Inc. was. We had no presence in that market. It is a very tight community, the retina community. What I can tell you is over the last year and a half, two years or so, I think if you go to retina professionals now and ask them if they know who Harrow Health, Inc. is, they really know who Harrow Health, Inc. is. I have to say another thing about IHEEZO specifically, because it is amazing what Ali and her team have done. Taking a product where the clinical studies supporting the NDA were in cataract surgery, and they have been able to adapt that data to the intravitreal injection market now with more than 70% of the unit volume for IHEEZO in the retina market. What is really exciting is what Amir talked about with the DANG study. What Ali has wanted for well over a year, we have had numerous conversations, is specific data related to the performance of IHEEZO in the intravitreal injection procedure. We had all this anecdotal information, you know, doctors would tell us how it performed. You know, some doctors had other benefits that they experienced from the product, including efficiency in their workflow. What I think you are gonna see in the middle of the year, finally, for Ali and her team, is a data set that will demonstrate the real difference between IHEEZO and these legacy modes of providing these patients with anesthesia for these intravitreal injections. I have to tell you, if you are a patient getting these injections, the anesthesia and pain control really matters. We think we have a product, at least anecdotally, we have received tremendous information from accounts that use this product about its performance. In the middle of the year at ASRS, and he got a late breaker, by the way. I mean, it is not easy to get these. You know, he is going to present this data, and I think that is going to fuel significant demand in the retina market for this product. In terms of how IHEEZO fits into our overall guide this year and certainly in 2027, depending on how this data comes out, this is an opportunity, I think, to significantly improve the unit volume demand for IHEEZO. As Andrew said, that coupled with this new packaging format that is specifically for retina and a meaningfully improved price, you know, I think that by the end of next year, you know, you are gonna hopefully be surprised at what we think we can generate from this particular product. Mayank Mamtani: Thank you, Mark. Lastly, very quickly, the OpEx expansion, you know, you are seeing your R&D was higher in fourth quarter. Is it sort of a first half loaded kind of dynamic? Is it a steady state OpEx spend, Andrew, you are trying to get at some point this year? Thanks for taking my question. Mark L. Baum: Thank you, Mike. Andrew, do you wanna tackle the OpEx? Andrew R. Boll: Yeah, absolutely. Thanks, Mike. I want to be sure to note in Q4, in the P&L, there is an $8.5 million charge for acquired and processed R&D, which was associated with the Melt acquisition. Those are upfront costs and some of the transaction costs associated with the deal. None of that acquisition cost was capitalized. It all ran through the P&L and ran through R&D according to GAAP rules. We also did not back it out or add it back in, I should say, to the EBITDA number for 2024. Kind of looking forward. Mark L. Baum: The adjusted. Andrew R. Boll: The adjusted EBITDA, pardon. Mark L. Baum: Go ahead. Andrew R. Boll: The- Mark L. Baum: Yeah. Andrew R. Boll: Looking forward at the OpEx spend, Mike, I am gonna kind of break it into two parts. You have got the SG&A side, which we are adding that sales heads right now. We have been adding them aggressively in Q1. We will continue to add them in Q2. We have also been preparing. We are preparing from a marketing and promotion standpoint, which is also increasing that spend. We are kinda trying to get ahead of a lot of that as well, so that when these people get hired and trained, they are hitting the ground running with VEVYE. TRIESENCE for that matter. From an R&D perspective, a lot of that cost, as you know, is going to be trial dependent. We sort of have a base year of R&D spend year-over-year. As we put out this announcement this morning regarding the TRIESENCE IND being accepted and that study picking up, those costs will kind of show up in the middle part of the year, so Q2, Q3. We will have a little bit of a ramp in the middle part of the year, and then it should come down a little bit on the R&D side in Q4, as you sort of wrap up those studies along with some of the Melt studies. Operator: Got it. Thank you. Thank you. Our next question comes from Lachlan Hanbury-Brown with William Blair. Your line is open. Lachlan Hanbury-Brown: Hey, guys. Thanks for taking the questions. I guess first, would appreciate maybe a little more color on how you are thinking about the IHEEZO dynamics in 2026. You said you think the in-office procedure expansion beyond retina can offset the ASC loss. Is that sort of specifically talking about Q2, or is that more of a longer term, you think, you know, looking a year or so out, it will have more than offset that? I guess should we expect maybe a drop in Q2 in unit demand? Mark L. Baum: I do not wanna be specific about demand in any particular quarter other than to say that in Q4, Q1, Q2, Q3, I think I have said this, we expect demand to continue to increase. Demand continues to increase. That is separate from revenue recognition, but demand for the product does continue to increase. In terms of when we are likely to see the offset from the loss of the ASC units. When I looked at the ASC units specifically, the number of units that we are losing relative to the overall opportunity that we are adding when we add these in-office opportunities with this 2.5 million unit increase to our TAM, it is such a small level of success. We have a discrete team going into the same customers that are using it in the ASC that do not know that they can use it also in their clinics. You know, remember, every one of the doctors that is using it in the ASC is a surgeon. They also only spend a day or two a week in the surgical operating room. The rest of the week, they spend in their office doing procedures. It is a simple idea. We are going to the same customers that are using the product satisfactorily in the ASC. We are saying, "Hey, you are doing more procedures in your office than you are doing in the, in the surgical suite." It is not for every procedure, but for those procedures where this can be impactful, we are going to the same customers and trying to convert their in-office business. It is such a small number of units, as I said, that we do not have to really be that successful to fully offset the entirety of what we are losing when we lose the temporary pass-through code. Is that gonna happen in the first quarter or the second quarter? No. I doubt it. It should happen throughout the year. As I said, it is such a small number of units relative to what the overall opportunity is that we can fail and fail and fail again and still end up eating up all of those lost units from the ASC. Lachlan Hanbury-Brown: Okay. Thanks for that. It is good to call it. I guess second question is just on VEVYE and the new coverage. Just wondering what you are seeing in terms of the patients that are sort of getting scripts filled under that coverage. Are they new to brand patients, or is there a sizable chunk of them who were, you know, previously paying cash pay or maybe you previously managed to get coverage for them who are now just converting to be, you know, sort of covered more easily? Mark L. Baum: Yeah. I cannot say specifically with numbers, you know, what % or what number of patients are converting. You know, I can sort of echo what we have said in the past and that, you know, in 2025, there were a lot of patients who we received prescriptions for, but, you know, legal prescriptions, but who were denied access to the product for one reason or another, who chose not to get their prescription filled. We are going out to those patients. Now, those patients still have legal prescriptions, and we can contact them and make them aware of the existence of coverage and try to capture as many of those as possible. At the same time, there are patients who are paying cash, as you said, so these consignment patients who do have coverage now but formerly did not, and we can go to them. We know exactly who those folks are as well and convert them. This is a sizable number of people and, you know, you are talking about, you know, well north of $30 million new covered lives where you have, you know, the best access for VEVYE now. We have to see how things play out. I think based on what we are seeing in the first quarter, we thought we would not be where we are. We are in a better place than where we thought we would be in terms of new prescriptions. The new to brand side of things I think is going to come once we get these new bodies out, these new sales reps. You will have more and more of that new to brand. I can, I do not want to steal Pat's thunder, but Pat, do you wanna actually talk about the whole new to brand? I know that is really been a focus of yours. Patrick Sullivan: Thanks, Mark. I think, you know, the core to our next phase of growth for VEVYE is really around, you know, driving new growth for VEVYE. We know better is possible when it comes to managing dry eye disease, as Mark mentioned. Our main focus going forward is ultimately to, you know, win the new-to-brand patients. I think, you know, that is gonna be a heavy focus for us. Obviously, beginning of this year in our conversion from CVS, we are really in our expansion and leading up to our expansion, heavily focused on the right patient and working with our physicians and our communication approach to make sure that we are targeting these patients. Because what we do know is those that are having either coming in, that are having dry eye disease symptoms or are having unresolved or persistent symptoms on other suboptimal treatments, VEVYE is the perfect treatment for that. Our goal moving forward is to make sure that we have the right presence with our customers and ultimately target the right patients going forward. Mark, to your point, new-to-brand for us is a huge focus and will really start to come to life for us as we go to our next phase of expansion. Mark L. Baum: Great. Thanks. Operator: Thank you. Our next question comes from Thomas Eugene Shrader with BTIG. Your line is open. Thomas Eugene Shrader: Good morning. Thanks for all the updates. This fascinating time. On the VEVYE sales force, after your increase, where does that put you relative to competitors like Miebo? Would you be on an equal playing field? Just a remedial question on the melt franchise, are you still wedded to two products? It seems like the first product is the bigger product, it is the combination. Does your compounding business inform you that there really is a need for two products? Thank you. Mark L. Baum: Yeah. You know, I will take the first question. In terms of the VEVYE sales force, You know, we do not know exactly how many reps, you know, these competitors have out in the field. You know, we have heard that, you know, one of our competitors that has, you know, a pretty sizable market share has upwards of 300 people. We are gonna have around 100 ourselves. What I can tell you is that our reps are so powerful that one Harrow Health, Inc. rep with VEVYE is equal to 4 of theirs. I am kidding. We really do have a terrific sales organization that is well trained, and they have an outstanding product to sell. This is the second phase of our expansion. This, you know, we had the initial hiring for this product. This is the second phase, taking us up to around 100 territories or so. There very likely could be a slight increase in the number of territories as we see this investment pay off. You know, we are excited to have these, this sales force more than doubling here in the near term. I am also pleased with the quality of people we have been able to attract, and those that we have, you know, continued to retain who are on Maria's team. In terms of melt and the need for both products, the MKO Melt, which is a compounded formulation that we have sold for a number of years, has really informed the entirety of the development program. One of the nice things about the G-MELT when it is approved is that we are gonna discontinue the compounded version of the product, and we will hopefully convert all of that business into, you know, an FDA-approved and hopefully reimbursable product. It is very hard, as I have said over the years, to sell compounded medications. They are not FDA-approved. They do not have a label, particularly in anesthesia and sedation, where an anesthesia professional is, you know, gonna think twice or three times about whether or not they are gonna use a compounded formulation. When we have an on-label FDA-approved product that is also hopefully reimbursed, this should significantly expand the market opportunity for the G-MELT in cataract surgery, but also for other procedures where, you know, and a sublingual non-opioid sedation choice can prevail. In terms of why we need also the 210 program, the 210 program addresses a different market segment. Believe it or not, in terms of the total number of units of opportunity for it, based on the expected label, and we still need to discuss that, you know, with the FDA and come to a resolution around what ultimately a label might look like for what is now called YOCHIL. That product, in terms of unit demand, is bigger in unit volume demand, we believe, than even the G-MELT. The G-MELT will be used certainly in cataract surgery, which is what we are studying it for. We also believe it will be used, as the compounded product is used in ENT, and you know, for endoscopy. It is used in dermatology, plastics, dental, widely used in dental. It is used to deal with claustrophobia in MRI tubes. So that is the experience that we have with the MKO Melt, the compounded version. Our expectation is that the G-MELT, when it is approved, eventually will be used in markets outside of ophthalmology, which happen to be even bigger markets than the ophthalmic market. The answer is yes, we need two products. They serve different markets. One is specifically related to anxiety. It will also, as I said, be available. I said this, I think, in the letter to stockholders ultimately be available in a number of different strengths. Thomas Eugene Shrader: If I can sneak in one follow-up. The new TRIESENCE, I mean, it seems like it is much easier product to make and use. Do you think you might expand that outside the eye where that steroid is used, or is this entirely a formulation for the eye? Mark L. Baum: It is purely for the eye. You know, we started our company in 2014. Our first sale was with triamcinolone acetonide for injection. This is a product category and an active ingredient we know really, really well. You know, our compounded formulation, once again, the enthusiasm for TRIESENCE for us comes from our experience having sold Tri-Moxi in, you know, well over 1 million cataract surgery. It is a market we know well. It is just this product is just going to be for the eye. But we have real high hopes that we can once again create this protocol, which is IV-free, opioid-free, and even eye-drop-free eventually for cataract surgery patients, which is really where the market needs to go. Thomas Eugene Shrader: Great. Thanks for all the color. Mark L. Baum: Thanks, Tom. Operator: Thank you. Our next question comes from Thomas Slayton with Lake Street Capital Markets. Your line is open. Thomas Slayton: Hey, good morning, guys. Appreciate you taking the question. Following up on VEVYE, with respect to the sales force expansion, can you talk a little bit about, and I think you alluded to this, Mark, that it is a lot of new territory, but new territory versus territory splitting because of overload, and then how you see the dynamics between the ophthalmology and optometry community playing into that growth, expectation? Mark L. Baum: I will take the second one first, then I will flip the first to Pat. You know, in terms of the sales force. Actually, pardon me. I do not. Your second sales force expansion and what else, Thomas? Thomas Slayton: The ophthalmology versus optometry component. Mark L. Baum: Yeah. Ophthalmology. Yeah. Ophthalmology and optometry, believe it or not, you know, the optometric market is a critical market. I would say that, you know, I would be slightly biased towards the optometric market. I think now, optometrists are writing as many or probably more prescriptions for dry eye medications than ophthalmologists. That is what the data that I am seeing shows. Pat, do you want to talk about the sales force expansion specifically? Patrick Sullivan: Yeah. Thanks, Mark. I think when we think about the expansion, I mean, this is a real great opportunity for us to look at the great progress that VEVYE has done for dry eye disease patients to date. I think, you know, one of the first things we do is, you know, is look at this to your point, you were talking about like basically business interruption versus business continuity. It sounded like your question was around. I think we are taking a very methodical approach to make sure that we are, one, relooking at making sure that this approach going forward, it is sales force expansion, but it is about VEVYE's brand presence and promotional efficiency in front of our customers going forward. This is a very active category that is large, growing and active. For us, like to the prior question by one of your colleagues around, you know, playing in that dynamic part of the market where that new to brand is, it is gonna take not only having our current territories be very efficient, but also our expansions. We are being very, very thoughtful in how we are, one, putting our footprint together. I think the key takeaway here is VEVYE is poised for significant growth going forward, but it will be about how we, one, put a new VEVYE presence in front of our customers. That one is, you know, is really about differentiation, new to brand, and having the right presence that is commensurate with being a number one goal of being a number one cyclosporine and number one dry eye disease treatment. To your question, very thoughtful on how we will drive that business to maintain our aims and our growth going forward. Thomas Slayton: Got it. Mark L. Baum: Thomas, just as a practical matter, look, we need to get salespeople in these offices. They need to see their VEVYE reps more frequently, and that is what this is about. We know where the high value targets are. We know who is prescribing dry eye disease. We know who is looking for dry eye disease. This expansion is gonna allow more Harrow Health, Inc. VEVYE reps to get in those offices far more frequently. You know, our data demonstrates very clearly that when we do that, we end up with more prescriptions for VEVYE. I think you are gonna see that throughout the year. Thomas Slayton: Mark, to follow up on the last commentary on MELT being used or MKO being used a lot outside of ophthalmology indications, what can we expect with respect to deal making to get MELT, you know, appropriately exploited in those opportunities that are outside ophthalmology? Mark L. Baum: Well, right now we are completely focused on 2 things. One is Amir and his team building this data set. I have put a bounty on him getting that NDA in sooner than he even thinks he is able to get it in. I am hopeful that, you know, we can hopefully, you know, we can beat some of these timelines that we have laid out. It is all about getting the NDA in and getting the data in front of the FDA so that we can hopefully get this approved and then ultimately get it coded for reimbursement. The second thing is that the market, even in ophthalmology, you know, you are talking about 5 million use cases minimally per year, and that is just really cataract surgery. If you tack on glaucoma surgeries and other relevant procedures, you know, you can add another couple of million procedures. For a reimbursed non-opioid, non-IV sedation medicament, the opportunity in ophthalmology is very large. You know, it is billions of dollars per year where our competition is IVs and opioids. The data, there is a Duke study, there is a Mayo study, the data is clear. Patients today are getting dosed with fentanyl for sedation during cataract surgery in particular. We aim to change that. We have got to build our commercial strategy for the G-MELT, and that is underway, so that is the second component. Other than that, outside of the U.S. market in ophthalmology and getting the studies completed and filing the NDA, you know, something happens where there is a partnership that is revealed or an opportunity like that that is revealed, we will certainly pursue it. We have such a big revenue opportunity with the G-MELT in ophthalmology that we need to really stay focused on that, and that is what we are going to do. Thomas Slayton: Got it. Appreciate it. Thank you. Operator: Thank you. Our next question comes from Jeffrey Scott Cohen with Ladenburg Thalmann & Company. Your line is open. Jeffrey Scott Cohen: Hey, good morning. Thanks for taking our questions. I guess 2 from our end. Firstly, Mark or Andrew, could you comment any on margins and/or tariffs and ramifications throughout 2026 or any net changes that you are seeing now from 25? Mark L. Baum: Andrew, you want to tackle tariffs and margins? Andrew R. Boll: Yeah. Hey, Jeff. Jeffrey Scott Cohen: Hey. Andrew R. Boll: Yeah, on the tariff side, we are not expecting much impact. I think the analysis we did last year was kinda almost in a worst-case scenario when we kind of relooked at things, and we are doing that on a continual basis. The analysis we did last year is still holding strong, and actually we are in better shape than we would have been last year in that worst-case scenario around Liberation Day. To answer your question more directly, we are not expecting to see any impact on margins as it relates to tariffs this year. Jeffrey Scott Cohen: Got it. Secondly, any commentary on your midyear expected launch on BYOOVIZ as far as preparations and commercial organization and how that might look like midyear? Mark L. Baum: Andrew, you wanna touch on that at all? Anything you want to add there? I think we are ready to go. I think we start realizing revenue and the team's got a very unique strategy. Andrew, do you want to touch on that or Pat? Andrew R. Boll: I can touch on a little bit and then hand it over to Pat. Jeff, we are really leveraging the existing retina team with that launch. There is some incremental costs that will go into that. We will have some variable costs as we get the hub up to help support the product. We are really excited to get that thing going. We have got a great partner in Samsung as well that is helping us, helping us as we prep. This is a very dynamic market. We are going to be getting in with BYOOVIZ right away in the middle of this year, which is a Lucentis-referenced biosimilar. Then, you may have recently seen that Samsung announced it is entered into a settlement with the innovator drug for EYLEA. We will be able to get into the market a little earlier than we expected with that product as well at the beginning of next year, which will be in January. From a spend perspective, like I said, we will leverage most of the existing sales force. There will be some small incremental costs there, and maybe some variable costs related to the hub activity for the products, but should be highly accretive to earnings on new revenues. Pat, do you want to add anything? Patrick Sullivan: Thanks, Andrew. I think the one thing to add is, you know, as Mark mentioned, you know, we are really excited to get this going. You know, thinking about back to Mark's comments about the team that we have here, a very deep set of heritage in the retina space. I think to me, we will capitalize on that very quickly. I think in addition, when you think about our current portfolio, we made significant strides in growing our retina business, and this is going to, you know, help us significantly with our presence in growing the value of that franchise. We are actively right now preparing the market and targeting our business to take off here in the middle of this year. You know, we are super excited about BYOOVIZ going forward. Jeffrey Scott Cohen: Terrific. Thanks for taking my questions. Mark L. Baum: Thanks, Jeff. Operator: Thank you. Our next question comes from Yi Chen with H.C. Wainwright. Yi Chen: Thank you for taking my questions. Could you comment on your marketing strategy for the biosimilar, whether they will have a dedicated sales force and how you are going to present your biosimilar as a differentiated product from other biosimilar competitors? Thank you. Mark L. Baum: Yes. Thanks for the question, Yi. You know, as I think Andrew referenced and as Pat discussed, I think as you know, it is a highly dynamic market. It is competitive, we have a unique place in the market with our Lucentis referenced biosimilar. At this point, I really do not wanna reveal specifically how we are going to, you know, attain the market share that we expect to drive towards. What I have said in the past is that based on our cost in getting into the deal, the level of success that we need to achieve to make this highly profitable is quite low. We are not playing to get 30% market share with BYOOVIZ. We are playing to get a handful of percentage points of market share in this market, which is the largest market in ophthalmology by revenue. Our expectations are quite modest, and we believe that the strategy that we are going to employ, with the team that we have, which as Pat said, has a tremendous background in relationships, and this market is gonna be successful in helping us get to our goals. We do not have, you know, you know, we are trying to get about a handful of percentage points of market share, which is what we have said historically. Operator: Thank you. Andrew R. Boll: I can add a little bit too. You know, the one big advantage we have compared to everyone else in this market is we have other products that we are selling these doctors. It allows us to provide a really comprehensive offering. We can talk about the patient experience with our anesthetic. No one else has that anesthetic in the biosimilars. It is more than just the biosimilar products that we are gonna be selling. It is this comprehensive package of products where we totally support the practice and focusing on the patient experience. Operator: Got it. Thank you. Thank you. I am showing no further questions. I would like to turn the call back over to Mark L. Baum, CEO, for closing remarks. Mark L. Baum: First, this is not in my script, I have to say that this call is the longest call I think we have ever had. It reminds me of our recent State of the Union. It set a record. We are gonna definitely work next time to try and make this call a little bit more efficient. We apologize for the time that this call took, but I think it was worthwhile. Hopefully, anyone who is listening feels a lot more knowledgeable about where this company is and where we are going over the coming quarters and years. Across the portfolio, we are seeing tangible momentum, improved access, expanding adoption, and growing commercial execution. We have got a great new commercial leadership team. Multiple products are scaling meaningfully. Key franchises are gaining depth, and we are seeing early signs of inflection where we have been patient and disciplined. The result is that you own a business with increasing revenue concentration that is in durable high-value assets, and that we have multiple pathways with other products for continued growth. I want to thank you for your continued confidence in Harrow Health, Inc. We are building something durable and lasting and valuable, and we believe the most exciting part of our story is still ahead. This will conclude our call. Thank you. Operator: Thank you for your participation. You may now disconnect. Everyone, have a great day.
Operator: Ladies and gentlemen, thank you for standing by. Hello, and welcome to James River Group Holdings, Ltd. Fourth Quarter 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. I would now like to turn the conference over to Bob Zimardo, Senior Vice President of Investor Relations. Please go ahead, sir. Bob Zimardo: Thank you. Good morning, everybody, and welcome to James River Group Holdings, Ltd.'s Fourth Quarter 2025 Earnings Conference Call. A reminder that during the call, we will be making forward-looking statements that are based on current beliefs, intentions, expectations, and assumptions that are subject to various risks and uncertainties, which may cause actual results to differ materially. Such risks and uncertainties are detailed in the cautionary language regarding forward-looking statements in yesterday's earnings release, and the risk factors of our most recent Form 10-Ks and other reports and filings we have made with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statements. In addition, during this presentation, we may reference non-GAAP financial measures. Please refer to our earnings press release for a reconciliation of these numbers to GAAP, a copy of which can be found on our website. Lastly, unless otherwise specified, for the reasons described in our earnings press release, all underwriting performance ratios referred to are for our continuing operations, business that is not subject to retroactive reinsurance accounting loss portfolio transfers. Thank you, and I will now turn the call over to Frank D’Orazio, Chief Executive Officer of James River Group Holdings, Ltd. Frank D’Orazio: Okay. Thanks, Bob. Good morning, everyone, and thank you for joining our call today. We are speaking to you this morning, already two months into 2026, and keenly focused on executing our business plan and strategic objectives for the year. Today, I am eager to discuss our fourth quarter and full year results with you, but just as importantly, I want to communicate our vision and share our optimism for 2026. Over the past few quarters, we have commented at length on the strides that the company has taken to focus on its wholesale-only E&S platform, maintaining a strong position in the E&S marketplace, while delivering shareholder value to our investors. I think it is fair to say that our future success will not be driven by a single factor, but rather the combination of several purposeful, prioritized initiatives working in concert to drive our future results. At a high level, I believe three primary themes both underlie and empower our ability to perform in 2026 and beyond. First, I would point to our refined risk appetite and enhanced performance monitoring that we have invested in over the last few years, which has resulted in a focus on smaller and more profitable accounts across our casualty universe, while exiting or reengineering our stance on several classes that have proven to be unprofitable to James River Group Holdings, Ltd. over time. Secondly, we will benefit from the lasting operational efficiencies and expense management focus achieved through substantial cost-saving initiatives across the business during 2025 including our redomicile to the United States. And finally, our continued engagement and deployment of our technology platform will support both of these efforts, which we expect will drive efficiencies and future profitable scale in our E&S business. Now as for execution, we began the year with a refreshed and reorganized E&S leadership team fully in place, with a compelling game plan for the implementation of our strategic vision. With respect to our redefined appetite in E&S, that work has largely been done already. We will continue to target smaller accounts that tend to have higher renewal retention ratios that we believe have proven to be more profitable for James River Group Holdings, Ltd. over the company’s 20-plus-year history. In Q4, that same focus saw our average policy size decrease by 9.6% compared to the prior-year quarter, and for the full year, the impact has been an average policy size decrease of 8.4%. While our approach tempered top line growth in the quarter and much of 2025, the prioritized focus of the organization is on profitability, and admittedly we are comfortable with that trade-off. Submission flow across our casualty-focused business remains healthy, 4% overall growth for 2025. With increased competition in a transitioning market, we are seeing a combination of both strong renewal submission activity, which we view as a sign of continued relevance with our distribution partners, and an increase in new submissions overall. Rate change remained positive at 9% for the year, consistent with 2024 and above loss trend, but clearly the level of rate increases has moderated and there is dispersion by product line and division. Expense discipline remains an essential part of our story. In the fourth quarter, we executed on our redomicile to the United States, which simplifies our corporate structure, improves tax efficiency, and gives us greater flexibility as a U.S. specialty insurer. Through the redomicile and other initiatives, we removed meaningful expenses, permanently lowering our full-year expense ratio over 1 point from 2024 and the quarterly expense ratio over 2.5 points from the first quarter, all on fairly flat net earned premium. Combined with the underwriting improvements and appetite changes we have made over the last several years, our expense discipline has meaningfully improved the company’s profitability and earnings profile. Perhaps even more importantly, deliberately taking these measures has enhanced the organization’s future ability to further leverage profitability and increase scale utilizing the investments we have made in technology, most notably the complete multiyear upgrade of our core operating systems to Guidewire that will be completed in 2026, and our recently announced partnership with Kalepa to roll out AI-enabled underwriting workbench capabilities throughout our E&S segment. The Guidewire implementation has afforded our platform a notable modernization uplift while allowing us to fully engage in the deployment of customized AI underwriting workbench technology, which we believe will enhance our underwriting efficiency in 2026 and beyond. We are using advanced data and decision support tools to enhance underwriting judgment, not replace it. These tools will help us assess risk more consistently, identify outliers earlier, and improve operating efficiency in an increasingly competitive environment. While speed in our market is a priority, the goal is not speed for its own sake. It is about better decisions made more efficiently and having a positive impact on our day-to-day underwriting workflows and quote and bind rates. We are confident that continued technology adoption will undoubtedly be a tangible differentiator for us as we optimize our SME platform and our very special wholesale-only distribution model. Moving back to our performance, our 2025 results validate the balance sheet actions of the last few years but more so position us for continued success ahead. For the full year, we delivered a 96.6% combined ratio and generated a 15.3% annualized adjusted net operating return on tangible common equity, while growing tangible common book value per share by 34%. Those outcomes were not driven by a favorable market surprise; rather, they are a result of strong execution, deliberate choices around underwriting, expenses, and risk selection. Our fourth quarter E&S combined ratio of 86% reflects that progress and represents our strongest quarterly profitability in several years. When we look at production over the course of 2025, our gross written premium was down approximately 5% overall. That said, two of our five primary divisions are driving most of that reduction, with Property down 27% year over year and Manufacturers and Contractors, one of our larger divisions, down 11% year over year. Property remains a small component of our overall focus, and our construction production has been impacted by our decision to refine our underwriting guidelines relative to tract housing exposure. Despite these dynamics, we did see growth this year across several specialty departments including Allied Health, Professional Liability, and Management Liability, and maintained flat performance in our largest division, Excess Casualty. Overall, we remain encouraged by the profitability headroom we see across even more divisions in 2026. On recent accident years, we continue to be encouraged by a lower frequency of claims and improved loss emergence but remain cautious in recognizing those trends as the book continues to mature. Importantly, we continue to operate with reserve protection in place, which has allowed us to focus on the company’s current performance profile rather than its legacy. In sum, while growth in certain lines has slowed, we believe that the trade-off has been the right one for James River Group Holdings, Ltd. Profitability, balance sheet strength, and earnings durability were priorities in 2025, and our results reflect that focus. We enter 2026 with a leadership reorganization complete, a cleaner corporate structure, improving margins, a more disciplined portfolio, and a team that is empowered by technology and positioned well to execute. The North American E&S market is vast, and although the market has been transitioning for several quarters now, we see attractive opportunities for James River Group Holdings, Ltd. in 2026, particularly with our focus on smaller insureds, with the benefit of refreshed underwriting guidelines, new technology, and the emphasis we have placed on performance monitoring. In particular, we see an opportunity to scale our small business unit as well as several underwriting departments in our specialty division like Allied Health and Professional Liability, departments that have historically been very profitable for the company. We also expect to push rate in areas like Excess Casualty and parts of our General Casualty portfolio in an effort to stay ahead of our view of loss trends, but have also identified areas across the E&S segment where we can relax rate and attempt to gain a bit of scale in those businesses. In short, we feel 2026 holds significant promise and opportunity for James River Group Holdings, Ltd. With that, I will turn it over to Sarah to walk through more details for the quarter and the year. Sarah Doran: Thank you, Frank, and good morning, everyone. James River Group Holdings, Ltd. generated very strong financial results for 2025. We reported $47,400,000 of net income, $39,600,000 of it available to common shareholders, which is a marked improvement from the $81,100,000 net loss of 2024. Operating earnings were $54,100,000, or $0.79 per diluted share, for the 2025 year. As Frank pointed out, we delivered a full-year combined ratio of 96.6% as compared to 117.6% for 2024. Our operating return on average tangible common equity was 15.3% for the year, and tangible common book value per share increased 34% to $8.94 per share. For the fourth quarter, we reported operating earnings of $16,000,000 as compared to a loss of $40,800,000 in the prior-year quarter. Annualized return on tangible common equity was 16.2%. As we review them, our results included strong underwriting income, meaningfully improved expenses, solid investment returns, as well as a tax benefit, which I will address first. As previously discussed, the one-time $14,100,000 tax benefit was driven by interest expense deduction from Bermuda to Delaware in connection with the company’s November redomicile. Importantly, we excluded that tax benefit from our operating earnings due to its one-time nature. I am drawing this important distinction as most analysts did include it in operating earnings, which distorted a comparison this quarter. If we had included it, fourth quarter operating earnings would have been $0.53 per share rather than the $0.30 per share that we reported. On top of that, annualized operating return on tangible equity would have been 19.7% for the quarter, and 19.3% for the full year. Looking ahead, alongside the expense work accomplished in 2025, we see meaningful efficiency benefits to our tax rate coming out of the redomicile, as on a go-forward basis we expect our effective tax rate to be in line with the U.S. statutory rate. Moving to underwriting results, our E&S segment generated $59,500,000 of underwriting income for the year and $19,700,000 for the quarter. Our full group results were $20,300,000 and $8,600,000 respectively. Our full-year expense ratio of 30.2% was below the 31% indication discussed earlier in the year. We have made meaningful permanent changes to our structure throughout the year. It is notable that we reduced the expense ratio in a year when we also reduced gross written premium, and more so that net earned premium was flat given our portfolio management as Frank reviewed. Throughout the year, we have created nearly $13,000,000 in expense savings and reduced G&A expenses by about 9% overall. We ended the year with 578 total employees, over 60 fewer than when we began the year. These changes were driven by continued optimization and operating efficiency gains at both operating segments. As a result, lasting changes in items including compensation expenses drove a material amount of the savings throughout the year, while rent and professional fees contributed as well. Regarding the quarter’s loss activity, we recorded $1,800,000 of net favorable impact from prior-year development. This consisted of $5,000,000 of favorable development in the E&S segment, partially offset by adverse development attributed to Specialty Admitted. Within E&S, we continue to observe declining trends in frequency for recent accident years, and we have removed meaningful exposure to accounts and risks that drove prior-year development in 2023 and prior. We start 2026 with $23,000,000 of aggregate limit on the adverse development cover for E&S, covering accident years 2010 through 2023 with no retention. During the quarter, we ceded $28,600,000 of development to the cover, largely related to Product Liability in the 2019 through 2023 years. As you know, our external opining actuary completes their work and opinion in the fourth quarter with the filing of our statutory opinions. Turning to investments, we had $21,000,000 of net investment income for the quarter, down about $1,000,000 from the previous quarter and a year when interest rates also declined generally. The quarterly result reflects outperformance within the company’s fixed income portfolio, which had about 72% of cash and invested assets, and generated meaningful income as new money yields remain in the 5% range, well above our current book yield of 4.5%. We mentioned earlier this year that we had been able to put a meaningful amount of cash to work at attractive yields and high-credit-quality securities, as we worked through our cash aggregation from year-end 2024. Still, compared to the prior-year quarter, a lower rate environment overall impacted both the bank loan portfolio and short-term cash returns. Our portfolio remains conservatively positioned with an average credit rating of A+ and duration of 3.5 years. Finally, as we close out last year and move further into 2026, we expect our performance for the year to generate a low- to mid-teens return on average tangible common equity. While we continue to prioritize the protection of our balance sheet, we feel our active portfolio management actions are largely behind us. That means that, especially given our employment of technology, we see meaningful opportunities for profitable top line growth this year. Finally, we expect to continue to be vigilant with our expenses as we look for profitable growth to bring improved scale across our E&S business especially. But with that, I would like to turn the call back over to the operator to open the line for any questions. Operator: Thank you. Quick reminder before we start the Q&A. Press number 1 on your telephone keypad to raise your hand and enter the queue. If you would like to withdraw your question or your question has been answered or has been asked, please press 1 again. Thank you. We will pause for just a moment to compile our roster. We have not received any questions from any of our analysts. I will be turning the call back over to Frank D’Orazio, our CEO, for closing remarks. Frank D’Orazio: Thank you, operator, and many thanks to those of you who were able to join our call this morning. To conclude, we are pleased with how the organization performed in 2025, particularly given the competitive market we are operating in. The progress we have made reflects a continued focus on bottom line profitability, and with new leadership in place across the organization, we are motivated and encouraged to perform well in 2026. Thank you again for your time, and we look forward to speaking to you again in just a few short weeks. Operator: The meeting has now concluded. Thank you all for joining. You may now disconnect.
Operator: Greetings, and welcome to the Paysafe Limited fourth quarter 2025 earnings conference call and webcast. At this time, participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Kirsten Nielsen, Head of Investor Relations. Please go ahead. Kirsten Nielsen: Thank you, and welcome to Paysafe Limited's earnings conference call for the fourth quarter and full year 2025. Joining me today are Bruce Lowthers, Chief Executive Officer, and John Crawford, Chief Financial Officer. Before we begin, a reminder that this call will contain forward-looking statements and should be considered in conjunction with cautionary statements contained in our earnings release. These statements reflect management's current assumptions and expectations, and the company's most recent SEC reports, and are subject to factors that may cause actual results to differ materially from those forward-looking statements. You should not place undue reliance on these statements. Forward-looking statements during this call speak only as of the date of this call, and we undertake no obligation to update them. Today's presentation also contains non-GAAP financial measures. You can find additional information about these non-GAAP measures and reconciliations to the most directly comparable GAAP financial measures in today's press release and in the appendix of this presentation, which are available in the Investor Relations section of the website. With that, I will turn the call over to Bruce. Bruce Lowthers: Good morning, everyone, and thank you for joining us today. I will start off with a few key messages. In 2025, we delivered our third consecutive year of organic revenue growth while continuing to sharpen our focus on experience-driven commerce. While business mix led to a different margin outcome than the original outlook called for, I want to reiterate that we have made incredible progress in 2025. For the last three years, we have made deep structural changes modernizing our platform, upgrading our talent, and positioning Paysafe Limited for its next phase of growth. During this time frame, we renewed our focus on product innovation, which is reflected in the progress of our vitality index. I am confident that the positive impact of this work will become increasingly evident through our financial results as we move forward. I am grateful for the dedication of our 2,008 colleagues worldwide. Their resilience has driven us through the challenges and laid a foundation of accelerated growth and exceptional experiences for both customers and employees. Let's move to slide four. For the full year, we reported $1.7 billion in revenue, growth of 6% excluding the disposition. While we saw softer results in the SMB business, this was offset by double-digit growth from e-commerce, including record iGaming volumes across the U.S. football season. We also saw strong demand for our local payment solutions in Latin America and, increasingly, consumer engagement from product initiatives across Europe. Importantly, our digital wallet consumers reached 7.8 million at quarter end, our highest level in three years. We generated an impressive $298 million in unlevered free cash flow in 2025, despite divesting a business line that generated $40 million in EBITDA the prior year. This provided us with the flexibility to return more than $90 million to shareholders in 2025 as valuation levels were a compelling opportunity. As John will discuss later, we expect to continue to return capital through open market purchases, but reducing our leverage ratio will be a higher priority in 2026. Turning to the full year revenue walk on slide five. Revenue growth was balanced across the existing client base and our new sales and product initiatives, which contributed 810% of revenue growth respectively. Revenue attrition ended up at 12%, slightly higher than our original expectation for the full year. We continue to see improvement throughout the year. In Q4, attrition was 11%. When we put all this together, our performance reflects strong cross-selling and growth with existing clients as well as new clients and new products. On slide six, we have shared our regional performance for the full year. Our largest market, North America, grew 5% in 2025 excluding the disposition, and Europe grew 7% normalized for FX. Latin America was flat for the year, but after lapping the impact of a large customer renewal, we saw more than 20% growth from the region in Q4 and continued strength in January. In the non-core rest of world region, we saw a decline from our consumer wallets as a function of both the market dynamics and our own actions to trim this exposure over the years. This gives you a sense of our balanced regional profile, which we will plan to provide on an annual basis going forward. Slide seven is a look back on our 2025 priorities. Having shifted our focus to the key growth engines of the company, our aim was to drive more revenue from new products, deliver on our longer-term innovation road map, and mature the sales organization, bolstering both areas through new partnerships. Despite strong progress, we had a bit more groundwork to complete, including advancement of our wallet platform, such as our business wallet and white-label wallets, and monetizing our pipeline in targeted e-commerce verticals. Reaching 24% in the fourth quarter and 27% for the full year. North America iGaming had a standout year with 50% growth in processing revenue. As we discussed on the last call, total e-commerce growth did moderate compared to the more than 30% growth in the first half, and compared to what we planned for the year driven by softer performance across other verticals. Just to take a step back, we delivered $196 million in e-commerce revenue for 2025, an impressive three-year CAGR of 29%. Turning to the enterprise bookings, we increased our total deal count by 38% compared to 2024, along with 10% growth in larger-sized deals. Cross-selling was a strong component overall with 40% of our total bookings from existing clients. We also want to highlight the evolution of our enterprise sales function which was built over 2023 and 2024 and is now generating a meaningful revenue contribution from those cohorts since inception, driving nearly $260 million in revenue in 2025. On the SMB side of the business, we saw total new MID growth of 6% driven by 18% year-over-year growth in the second half, led by our direct sales channels, along with positive growth in revenue per merchant. SMB revenue growth for the year was a modest 1%, coupled with a margin headwind due to the ongoing mix shift to our lower-margin ISO channel. Throughout 2025, we have focused on retooling and optimizing our SMB portfolio and believe we have a stronger foundation to improve growth in 2026, supported by the expansion of our agent programs and value-added services. Turning to the consumer snapshot on slide nine, continued growth from product initiatives and expansion of Paysafe Limited's digital banking. Other KPIs remained healthy with 6% growth in transactions per user while ARPU was relatively stable. Additionally, we believe our classic wallet, Skrill, remains a high-value asset despite not accelerating to the level we planned for in 2025. It has a stable user base exceeding 900,000 actives for the last five quarters. We focused on reducing friction and improving user experience. At the same time, our product initiatives have effectively elevated both new and existing eCash users to our wallet platform. We continue to believe higher growth and value can be created here as we deliver on our initiatives to deepen consumer engagement, coupled with successful rollout of our business wallet and white-label solutions. Turning to slide 10. One of the clearest measures of our progress is our new product vitality index. This is how we measure the health of our organization and the momentum we have around innovation that directly addresses our customers’ evolving needs. 2025 reached $270 million of vitality revenue, representing 16% of total company revenue. It has fueled mainstream, sustainable revenue, enabling us to reduce high-risk, non-core revenue streams while improving our overall growth profile. We continue to innovate and launch new solutions. We expect this momentum to carry Paysafe Limited towards industry-leading benchmarks. So let's look at how one recently launched product is contributing to this progress on slide 11. Within our eCash business, you may recall us highlighting growth from new products, our account-and-card product which we have recently rebranded as Paysafe wallet. This began as an initiative to cross-sell and shift eCash users towards online account-based distribution. Paysafe wallet serves as a full-service consumer solution including a personal bank account and a debit card, allowing customers to send, receive, spend, and withdraw money. We first launched in a few European markets to offer cash and stored-value consumers the benefits of the wallet, and later expanded into banking services. What we saw was strong adoption, with sign-ups surpassing 500,000 by October 2025, reaching a scale that took some of the leading digital banks nearly two years, despite their broader offerings and large marketing budgets. What is different and advantageous here is that we already have a sizable base of users we can target, which allows us to scale at a much lower cost of acquisition, which is around $21 for Paysafe Limited. Today, we are live in 18 countries and continue to drive functionality and regional expansion. On slide 12, we share the key priorities and outcomes that we are driving in 2026. Starting with consumer business, we will continue to enhance our classic wallet user experience, including loyalty programs and value-added features and services. Our Paysafe wallet and PagoEfectivo in Latin America will continue to expand on core capabilities, with the goal in both regions focused on building a simple, everyday digital banking wallet customers can rely on to manage their daily spend. To support user growth, we will scale our marketing strategy, leveraging our expanding wallet portfolio and localized go-to-market plays to drive acquisition, retention, and lifetime value. Turning to our merchant priorities, we are focused on capturing opportunities in existing and target e-commerce verticals, supported by enhancements to our gateway and bank network to incrementally offer more flexibility for both large merchants and SMBs. Success with these top initiatives will support continued growth. We will focus on elevating customer experience with faster onboarding and activation, with seamless access to value-added services. Our vitality index company-wide, which we see as one of the most important markers of our success. Turning to slide 13. Before I hand the call over to John, I want to take a moment to reflect on the transformation we have driven over the last few years and how it is positioning Paysafe Limited for the future. When I joined nearly four years ago, I shared with the team my vision for building a truly modern payments company. It was not just about adopting new technologies like AI or eventually quantum computing. It is about fundamentally reimagining our business processes for scale, adaptability, and resilience in a high-volume, always-on payments infrastructure. We have made meaningful progress. Our go-to-market motion has strengthened. We have launched innovative products, and we have opened new revenue streams in adjacent markets such as our Paysafe wallet, which offers a modern, consumer-friendly solution comparable to what other players like Revolut and Chime have delivered in digital banking and embedded finance. Our measure of this innovation momentum is our vitality index, the percentage of revenue from new product initiatives. We have grown this from less than 2% in 2022 to 16% in 2025. Looking ahead, our long-term aspiration is to reach over 30%, in line with world-class innovative companies that consistently drive sustained growth through fresh offerings. Every core function has felt this impact. We have stayed disciplined, focusing on process improvement first and deploying tools only where there is a clear ROI. Over the last three years, we have reduced aggregate FTEs by approximately 20% through automation and efficiency gains. More importantly, we have reallocated those savings to fuel growth, investing in higher-impact areas. We have upgraded our talent significantly, eliminating about 30% of our senior executive roles from three years ago, and of the remaining executive team, roughly 77% are new additions, bringing fresh perspectives and expertise. Our capital allocation has shifted dramatically, roughly 90% maintenance-focused to now 80% directed towards growth initiatives. This reflects a deliberate move from sustaining the status quo to building for the future. To me, modernization goes beyond just any single tool like AI. It is about reengineering processes that enable us to operate at scale in a complex, 24/7 payments environment while staying agile and cost effective. That is the foundation that we are building. Embedded AI across the enterprise, not as experiments but as the operating system powering how we work. It accelerates decision making, enhances experiences for merchants and consumers, and strengthens our position in sectors like gaming, digital entertainment, travel, and e-commerce where seamless, personalized, trust-building interactions are increasingly the standard. In operations, we have automated high-volume workflows in customer support, disputes, reconciliations, and back-office functions, driving higher productivity and improved service levels. In product development, AI is now end-to-end, shortening cycles and enabling smarter, adaptive solutions that boost engagement and monetization. We have reduced integration times for new payment methods by approximately 80%, putting us in line with industry leaders. In risk and compliance, AI drives real-time onboarding, monitoring, fraud detection, and reporting, lifting auto-decisioning on direct applications to around 50% while cutting false positives by over 20%. And in our tech stack, modernization has delivered strong results. Over 30% of the code was generated via AI in 2025, speeding time to market while maintaining quality. Across the board, we are moving faster, deciding with better data, scaling with tighter controls, and doing it at a lower cost. This has made intelligent systems foundational to how we compete. Looking ahead on slide 14, our AI strategy is structured around three clear pillars. Product innovation: scaling AI-native offerings like our embedded wallet and intelligent tools. Our modern wallet platform enables merchants to deploy commercially ready, fully brandable embedded wallets, delivering white-label solutions they own end to end for seamless deposits, withdrawals, identity verification, and enriched user experiences. Agenic Commerce: aligning with emerging standards while leveraging protocols like Model Context Protocol (MCP), Agent Payment Protocol (AP2), and Universal Commerce Protocol (UCP) to remain secure, compliant, and governed, ensuring agent-driven protocols clear financial policies. AI-driven automation: continuing to deliver structural efficiency gains while enhancing quality controls and fraud prevention. We see AI and Agenic Commerce as a meaningful expansion of our addressable market and a structural opportunity for platforms that bring together scale, regulatory expertise, and orchestration capabilities. That is where Paysafe Limited is differentiated. I will stop here and turn it over to John. John Crawford: Thank you, Bruce. Let's move to slide 16 for a summary of our fourth quarter results. Revenue for Q4 was $438.4 million, an increase of 4% on both a reported and organic basis, as the impact from the business disposal and a modest headwind from interest revenue was offset by favorable FX. Organic performance in the fourth quarter reflects 6% growth from digital wallets, led by Latin America, which increased more than 202%, and organic growth for Merchant Solutions driven by continued strong volumes from e-commerce merchants which offset a decline from SMB. Relative to the revised expectations we outlined in November, our Q4 performance was in line overall. Adjusted EBITDA declined 1% to $102.1 million in the fourth quarter, and adjusted EBITDA margin declined 130 basis points, mainly due to higher marketing investment and OpEx timing items. These impacted the margin comparisons throughout the second half compared to 2024. We generated $103 million in unlevered free cash flow in the quarter, bringing our cash flow conversion to 101%, which benefited from the license deal completed in Q3 as well as timing-related working capital flows. This brings our full-year cash conversion to 69%, which is at the high end of our targeted range. Adjusted EPS decreased 4% to $0.46 compared to $0.48 in Q4 of last year, including higher depreciation and amortization expense, fully offset by a reduction in our adjusted tax rate as well as a reduction in share count from our share repurchase activity. Moving to slide 17. A quick recap: our full-year reported revenue growth was flat year over year at $1.7 billion. Including impacts from FX, interest revenue, and the disposed business, organic revenue growth was 5%. Adjusted EBITDA declined 5% to $429 million, and adjusted EBITDA margin was 25.2%. Excluding the noise from the business disposal, which was a $41 million headwind, our adjusted EBITDA margin would have declined only 40 basis points. This included a headwind of 120 basis points from gross margin—two thirds from mix and one third from interest revenue—which was offset by tight cost management in SG&A. Despite the puts and takes behind the margins here, we believe this full-year margin profile to be a sustainable margin for 2026, which we will discuss in a moment. We generated $298 million in unlevered free cash flow for the full year, and it is worth pointing out that we continue to generate this attractive cash flow conversion despite divesting a business line that generated more than $40 million in EBITDA in the prior year. Finally, adjusted EPS declined 9% to $1.95 per share, predominantly reflecting the adjusted EBITDA loss due to the business disposal, partially offset by the denominator benefit from our share buybacks. Let's move to slide 18 to discuss the Merchant Solutions segment. Revenue in the fourth quarter from Merchant Solutions was $222.7 million, resulting in full-year revenue of $904.7 million. This represents organic growth of 2% for the fourth quarter and 5% for the full year. A reminder, the underlying performance was led by e-commerce, which grew 24% in Q4 and 27% for the full year, and moderated somewhat from a growth rate north of 30% in the first half of the year. This was partly offset by soft performance from the SMB business, which declined 3% in the fourth quarter and grew modestly at 1% for the full year. Adjusted EBITDA for the Merchant Solutions segment was $28.8 million for the fourth quarter, reflecting a margin of 12.9%, leading to full-year adjusted EBITDA of $145.7 million, with a full-year adjusted EBITDA margin of 16.1%. Looking past the impact from the business disposal, adjusted EBITDA margin declined 130 basis points for the full year, the main driver being the channel mix dynamic due to stronger growth within our third-party ISO channel, which outpaced the higher-margin direct sales in Merchant Solutions as we discussed all year. Additionally, the Q4 margin of 12.9% included the bulk of the higher marketing expense I mentioned earlier, and timing-related items in OpEx. Going forward, we expect adjusted EBITDA margin for the segment back into the mid-teens in 2026. Turning to the Digital Wallet segment on slide 19. Revenue from Digital Wallets in the fourth quarter increased 13% to $220.2 million, or 6% on an organic basis, leading to full-year revenue of $815 million with 6% reported growth and 4% organic growth for the year. In Q4, adjusted EBITDA grew 4% to $93.1 million, helped by favorable FX and reflecting a margin of 42.3%. Our full-year adjusted EBITDA was $352 million with a margin of 43.2%. Margin declines in the segment were driven by lower interest revenue—$3 million in Q4 and $13 million for the full year—as well as the business mix dynamics we have discussed throughout the year, including higher growth in eCash products. The fourth quarter also reflected an increase in segment SG&A, mainly due to timing, with full-year SG&A being favorable as a percent of segment revenue. Turning to slide 20 for a summary of debt and leverage. At the end of the year, total debt was $2.6 billion, an increase of $252 million, largely due to fluctuations in the euro-USD exchange rate which increased total debt by $144 million, along with net withdrawals of $105 million. Net leverage ratio was 5.5x at year end compared to 4.7x at the end of 2024. At the bottom right of the slide, you can see that this increase was attributable to FX and the business disposal. In 2025, we allocated more than $90 million to share repurchases. We are laser focused on reducing our net leverage ratio in 2026 and expect to be below 5x by the end of this year. We repaid $64 million of our revolver in the month of January, and while we continue to think our shares are materially undervalued, we will prioritize debt repayment this year. Moving to the full-year guidance on slide 21. Which is consistent with the preliminary outlook we discussed on our November earnings call, we expect revenue in the range of $1.79 billion to $1.83 billion, representing 5% to 8% growth. This includes a small full-year uplift from FX mainly in the first half of the year, assuming current FX rates, rounding out to roughly 5% to 7% organic growth. As for the cadence, we expect the first quarter and the first half growth to be in the mid-single digits on an organic basis, and the second half to improve towards the higher single digits. We expect adjusted EBITDA in the range of $449 million to $464 million, reflecting 5% to 8% growth. For the cadence here, we expect first-half adjusted EBITDA margins to be around 24%, and the second half averaging above 25%, leading to flat adjusted EBITDA margin for the full year compared to 2025. In terms of the year-on-year comparisons and shaping quarterly models, recall that we had the $10 million license deal that benefited the third quarter results in 2025. And finally, we expect adjusted EPS to be in the range of $2.12 to $2.32 per share, aiming for double-digit growth versus 2025. Turning to slide 22, let me wrap up with a few comments on our current financial position before we open the call for questions. 2025 marks our third consecutive year of positive organic revenue growth, a meaningful step forward considering our flat growth profile four years ago. We have achieved this while enhancing the quality of our revenue base, notably derisking our portfolio, including the direct marketing divestiture at the start of 2025. Though these actions created short-term noise in our results, they position us for a stronger future, and we expect our financials to be much cleaner in 2026. The operational improvements we have made have allowed us to allocate more investment to our growth functions. We are beginning to see the benefits reflected in our financial results and new product delivery. Our outlook is further supported by the strong free cash flow we continue to generate, providing a path to reducing leverage to below 5x by the end of this year. To close, we are starting 2026 in our healthiest position since going public, which gives us confidence in the business and our ability to deliver on our long-term objectives. We will now open for questions. Operator: Thank you. We will now be conducting a question-and-answer session. Our first question is coming from Dan Perlin from RBC Capital Markets. Your line is now live. Dan Perlin: Good morning, everyone. Bruce, I was wondering if we could revisit the strategic initiatives as you see them to reaccelerate SMB as we think about going into 2026. You alluded to it a little bit in the prepared remarks, but anything incremental would be helpful. Thank you. That is great. And then just on the guide for 2026, I am wondering, given the state of the world, what expectations you have baked in in terms of macro environments. I think you touched a little bit on FX. And then if there is any delineation you can draw between SMB and e-commerce growth, that would be great. Thank you. Bruce Lowthers: On the SMB side of things, we have been putting a lot of energy around that in 2025 and building momentum into 2026, which we can see already emerging early in Q1. We feel very good about the product sets that we have, seeing significant lift with our Clover sales in Q4—really pretty strong. I think we were north of 30% in new MIDs year over year in Q4 with Clover, so we feel very good about that. We have engaged new management, so we have a new team that is leading us in the SMB space. I think that is going to really pay tremendous dividends, and we are excited about having the team on board. From a product standpoint, we feel very good about the product set that we have. It really now is just about execution. We have really honed our marketing on the SMB side. We see real strength in the direct channel, so we feel like we are in a pretty good position overall with the new team, strong product, value-added services, and increased marketing around merchant acquisition. Overall, we feel like we are coming into 2026 in a very good place. John, do you want to take the macro? John Crawford: On the macro, I think we are baking in relative stability on the FX side. As folks probably remember, Q1 last year, the euro was much lower and moved a lot at the end of the quarter. We do not have dramatic changes other than what is projected in the current curves out there in terms of interest rate changes as well, and no significant real change in the macroeconomic environment. Bruce Lowthers: As John said in the prepared remarks, the nice thing about 2026 is it is a very clean year for us. We do not have a lot of activity. Obviously, the divestitures have worked their way through, all the grow-overs have worked their way through, and it looks like a very clean year for us as we go into 2026. Operator: Thank you. Our next question is coming from Darrin Peller from Wolfe Research. Your line is now live. Paul Obrecht: Hi, thanks. This is Paul Obrecht on for Darrin. Can you help frame the opportunity of the Paysafe wallet? Where are you seeing momentum with this product initially? What do consumer engagement trends look like? And then, in the deck, you also called out plans to expand it to more geos. Where do you see the most opportunity? And then, you briefly touched on it in your prepared remarks, but could you provide any more detail on how you see Paysafe Limited’s role evolving in Agenic Commerce and what steps you are taking today to prepare for eventual consumer adoption down the line? Bruce Lowthers: Good morning, and thank you for the question. We are very excited about Paysafe wallet. We have had a lot of momentum with that product over the last 12 to 18 months as we have been flying under the radar with it. It is something that we have invested in quite a bit over the last year. We are in 18 countries right now. As we look at the growth of that product, it is really about continued execution on the rollout. The product is very solid. We feel very good. We talked about the 500,000 registered users for it. When we look at that, it is really on pace with what the others that are in that vertical—embedded finance—have done. When you go back and look at their initial couple of years, we are tracking right in line with them, which is great to see. I think the big differential is the cost, because we have roughly 8 million active users out there. We are marketing a lot to our own users and driving those into the Paysafe wallet. We feel very good from a feature-functionality standpoint and from cost of acquisition right now. We are going to invest some marketing behind this and really drive it in 2026. From a geographic footprint for 2026, we are going to continue to focus within Europe and really drive within Europe. It is not an aggressive geographic expansion outside of Europe. We will do some test-and-learn in probably a couple of markets, but predominant growth is expected within the Europe region. So for us, we have been really incorporating a foundational change to the organization. When we look at Agenic Commerce, it is really about TAM expansion for us. We are going to stay within the entertainment area—or the experience economy is really where we like to play—so you will see us continue to stay within those verticals. For us, it gives us the ability to accelerate product into travel and leisure, for example. When we look at our verticals, we have tremendous strength in the gaming space, whether that be video gaming or sports betting. We think Agenic Commerce allows us to step into some of these adjacent verticals that will help really drive an overall experience for us in our market within the experiential economy. We think it is a great opportunity. It is something that we have been working with over the last few years. Going back to when the first Copilot rolled out a few years ago, we were one of the 200 companies to adopt that. We have had our head of technology out on the West Coast working with all the major players in this space on protocols and making sure that we are aligned with how the market is moving, so we feel very good about our level of engagement around this. Operator: Thank you. Our next question is coming from Andrew Harte from BTIG. Your line is now live. Andrew Harte: Hey, thanks for the question. Good morning. Bruce, last quarter we talked about the Digital Wallets segment still being under construction, but it feels like in 4Q the business seems to have really accelerated. What changed there, and how should we think about it going forward? Are there any one-off benefits we should think about that happened in the fourth quarter? And then, on the merchant side, you called out the expectation for 2026 e-commerce revenue growth in the mid-teens and SMB to return to growth. Could you break out how we should think about direct sales versus ISO—any growth rates we should think about for those two, and maybe e-commerce as well—and help us with how to think about the relative margin contributions of each? Bruce Lowthers: There was really nothing in a one-off context in Q4 around the digital wallet space. We have a lot of momentum building. Earlier in 2025, we had some issues that we needed to work through as we continued to expand the use cases around our wallet, but those are normal new-product launches. You can see our vitality index is getting very strong, moving from 2% in 2022 to 16%. We will see that accelerate in 2026, so we feel very good about new products that we are bringing to market. In the payments space, it is a very complex network or ecosystem that we participate in. There are a lot of moving parts—from the networks themselves, the back-end processors, the banks that are the bank sponsors. There are a lot of components that all have to be aligned, including regulators by country, and sometimes there are starts and stops as you roll out a product, as each of them make their own determination as to how it is going to work within their institution or regulatory framework. We have worked our way through that. We feel good momentum building, and we feel like we are in a good spot for our vitality index to continue to accelerate in 2026 and ultimately 2027. Overall, really good progress in the back half of the year on our product set. I do not think we have provided historically the direct sales versus ISO segmentation. We can have Kirsten follow up with you. Overall, we feel very good about SMB returning to positive growth in 2026. It will be in line with the overall segment guidance that we have given, and we are already seeing a positive move coming into Q1. We have moved in the right direction early here in Q1. Operator: Thank you. Our next question is coming from Timothy Chiodo from UBS. Your line is now live. Timothy Chiodo: Great, thanks a lot. Slide eight had some good data around the revenue contribution in-year from the sales hires. The number was $257 million for 2025. I am assuming that the gross margin on that is high given generally the direct margins are higher on a gross margin basis. Could you give us a rough sense—how many productive, in-field salespeople were contributing to that number earlier in the year, say January 2025, and how many ended the year—so we can get a sense of the average number of salespeople that produced that in-year contribution of $257 million in revenue? And then I have a follow-up on Agenic Commerce. Are you able to share roughly what that number was, just as a reminder? And then, on Agenic Commerce, when you say that you are preparing to accept payments in that environment—supporting ACP, MCP, UCP, the various Visa and Mastercard initiatives—what do you have to do on the ground to make sure that you can receive that information through that channel and process the payment? What are some of the additional complexities to consider relative to a traditional e-commerce transaction? Is this something you think all merchant acquirers will be doing, or a more select group because of the effort required? Bruce Lowthers: I do not have the number of active enterprise salespeople in front of me. Maybe John has it there, but there has not been a tremendous amount of movement in the number of salespeople throughout the year on the enterprise sales team, so it has been relatively consistent through 2025. John Crawford: I was just going to say the same thing, Bruce. The number at the end of 2025 is very similar to the number at the end of 2024—about 132. That is just our enterprise sales team. Timothy Chiodo: Right, exactly—the ones associated with the $257 million. John Crawford: Yes. Bruce Lowthers: On Agenic Commerce, I think this creates an opportunity. I would imagine that most payment organizations get involved with these new standards as we move forward. It is extremely complex. When you think about this new, emerging commerce, it is really about elevating the experience for consumers, and through that it creates a tremendous amount of complexity. It creates personalization, which brings options and different data sets that have to be exchanged, interrogated, and acted upon. You have coordination between all kinds of embedded software—not just the schemes but also the information you are sharing with sponsor banks, additional software providers, and consumers themselves. The biggest thing you hear a lot of people talk about right now is liability management—how do we deal with the liability management of Agenic Commerce? Those things still have a long way to go before they are worked out—the governance rules. Every organization dealing with this has to set up the right governance framework from a board level and an operating level. This is not an easy product that will roll out quickly. It is going to take time. We think this is a great opportunity for us to accelerate into new verticals and create great experiences around the experience economy, but I think this is something that everyone will find a way to participate in, in some form or fashion, within our industry. I would not say this is a one- or two-player, winner-take-all situation. The industry as a whole will participate. Operator: Thank you. Next question is coming from Jamie Friedman from Susquehanna International Group. Your line is now live. Jamie Friedman: Hi. Good morning. Good finish to the year. To step back about the sales strategy, Bruce, without getting into the details of the commission per head or margin characteristics, could you share what you see as the strengths and challenges between a direct and ISO strategy? And then, you referenced the success in cross-sell between products and services on the platform. Could you elaborate on that and what a good account looks like? Is there any metric you have shared in the past about how many products each is taking, or what you target for the cross-sell opportunity? Bruce Lowthers: Good morning, Jamie, and thank you for the question. Between the ISO and direct, the direct is a much higher-margin profile, which is why we put so much energy behind that side of the sales channel. We are focusing on building the infrastructure that drives scaled sales. We feel like we have the management team in place for that and the product in place. We have a variety of products that we sell in the SMB space, but our partnership with Fiserv has really been working in the back half of the year. We have had a lot of success selling Clover, and we feel like that is a great model for us in the SMB space—not only because it provides the merchant acquiring, but also the value-added services that SMBs need to be successful. We provide that in a great form factor through Clover. Not everybody is going to want that, so we have optionality. We have other products that we use for people that are not looking for such a robust solution, but I would argue that Clover is probably the best solution in market in the U.S. for SMB today. In the ISO channel, it is a little bit different. It is us helping our partners be successful, making sure that they are trained on the products that we have, creating good second-line support for them, and helping them find ways to grow their customer base. That is what we have been focused on over the last year—how we reframe that ISO marketplace. On the SMB space, you have probably seen a lot of energy around the agent space. We have rolled out a new agent program, which we are very excited about. We like the agent program quite a bit. We can see a tremendous amount of growth coming from the agent side of the business as well, and that is a hybrid between the margin profile of the ISO and the margin profile of the direct business. Think of it as creating a mini-franchise program for independent sales agents and providing the support and training that they need to be successful. On cross-sell, this is a point of pride for us. We have seen tremendous growth. Going back to 2022 and 2023, we had virtually no cross-sell. It was a theory that we would be able to cross-sell to our existing customer base, especially in the gaming, video gaming, and gambling space. We felt those larger clients had the opportunity to take more than one product, and we focused on that. To see 40% of Q4 sales have cross-sell as part of that is remarkable from nearly zero just a few years before. Overall, it is really about focusing on those enterprise customers, getting the Digital Wallet customers to do acquiring with us—and the other way around. The big focus now is through our product organization, bringing more products to market and giving us more to go back and cross-sell into existing customers. That is what we are focused on as we move into 2026, 2027, and 2028—continuing to accelerate that vitality index with new products and services. Operator: Thank you. We have reached the end of our question-and-answer session. I would like to turn the floor back over to management for any further or closing comments. Bruce Lowthers: Yes, thank you. Just a couple of comments before we head out. As we enter 2026, we are in a very good position. We feel good about the foundation we have built. We are operating with more discipline, clear priorities, and stronger execution across the business. Our outlook is rooted in what we control—continuing to innovate, deepening relationships with our customers, and allocating capital in a way that drives sustainable value—and that is what we are focused on. I also want to take a moment to welcome our new board members. I think everybody has probably seen we added four new board members in the last month, so we are very excited about Rupert and Ruth Aquile, Pete Thompson, Karen Tamponi, and Edward joining the team. We are very excited about that. I also want to quickly thank our departing board members from CVC and congratulate them on their career journeys—Peter Rutland and Matthew Bryant, just congratulations. We are so proud of them, what they have been able to do, and we wish them all the success in their new roles as they move forward. There has been a lot of change for us in the last month, but we are incredibly excited about it as we move forward. Finally, I want to thank our employees for their continued commitment and hard work. As we start 2026, we are starting from a position of strength. For what feels like the first time, we have a clean year to start the year and feel very good about that. We are confident in our ability to build momentum that we created off of Q4. Thank you for joining us today, and we look forward to speaking with everyone next quarter. Operator: Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
Operator: Greetings, and welcome to the Great Elm Capital Corp. Fourth Quarter and Full Year 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. It is now my pleasure to introduce Adam Yates, Managing Director. Please go ahead. Adam Yates: Hello, and thank you, everyone, for joining us for Great Elm Capital Corp. Fourth Quarter and Full Year 2025 Earnings Conference Call. If you would like to be added to our distribution list, you can email investorrelations@greatelmcap.com or you can sign up for alerts directly on our website www.greatelmcc.com. The slide presentation accompanying today's conference call and webcast can be found on our website under Events and Presentations. On our website, you can also find our earnings release and SEC filings. I would like to call your attention to the customary safe harbor statement regarding forward-looking information. Also, please note that nothing in today's call constitutes an offer to sell or a solicitation of offers to purchase our security. Today's conference call includes forward-looking statements, and we ask that you refer to Great Elm Capital Corp.'s filings with the SEC for important factors that could cause actual results to differ materially from these statements. Great Elm Capital Corp. does not undertake to update its forward-looking statements unless required by law. To obtain copies of our SEC filings, please visit Great Elm Capital Corp.'s website under Financials, SEC Filings, or visit the SEC's website. Hosting the call today is Jason Reese, Great Elm Capital Corp.'s newly appointed Executive Chairman of the Board. He will be joined by Matt Kaplan, Chief Executive Officer; Chris Croteau, Head of Research; Chief Financial Officer, Keri Davis; Chief Compliance Officer and General Counsel, Adam Kleinman; and Mike Keller, President of Great Elm Specialty Finance. I will now turn the call over to GECC's Executive Chairman, Jason Reese. Jason Reese: Thanks, Adam, and thank you for joining us today. I am excited to assume the role of Executive Chairman at this important time for the company. This change reflects the Board's decision to enhance direct engagement with management and increase active oversight on our operations as we navigate a more demanding credit environment. I would like to begin by thanking Matt Graftkin for his service and leadership during his tenure on the Board. His commitment to GECC helped guide the company through a meaningful chapter, and we are grateful for his many contributions. It is important to note, Matt will continue in his role as Vice Chairman of GEG, working closely with me to create value for both GEG and GECC shareholders. As the Chairman and CEO of Great Elm Group, the parent company to GECC's investment manager, and well acquainted with both the management team and our investment process, that familiarity supports a seamless transition into this role. Strength and oversight, my focus is clear: protect shareholder value and reinforce accountability across the platform. We recognize that recent quarters were challenging for GECC; they have been across much of the sector. We experienced losses that reduced NAV, and when performance falls short of expectations, it is our responsibility to respond decisively and transparently. That is precisely what we have done. First, Great Elm Capital Management waived all accrued and unpaid incentive fees through 03/31/2026, approximately $2,300,000 or $0.16 per share. As of year-end, that represented a direct benefit to shareholders. This action is immediately accretive to NAV and reinforces our commitment to economic alignment. Second, we strengthened our investment platform with the addition of Chris Croteau as Head of Credit Research. Chris brings over 25 years of credit experience and deep underwriting discipline to the team. Since joining, he has worked alongside Matt and the team to enhance portfolio surveillance, fortify risk management, and source compelling new investments. We are excited to have Chris speak with you today. Third, we have been deliberate in repositioning the portfolio. We ended the year with minimal investments on nonaccrual, significantly expanded portfolio diversification, meaningfully reduced exposure to higher risk investments, and materially enhanced our liquidity profile. We believe the portfolio today is more resilient and better aligned with current market conditions. Matt and Chris will provide additional details shortly. Finally, through my appointment as Executive Chairman, I will be actively engaged. With decades of credit investing experience, I look forward to working closely with management to reinforce disciplined underwriting, thoughtful capital allocation, and proactive portfolio management and sourcing. During late 2025 and into 2026, we have selectively closed what we believe are compelling cash-generative investments to support sustainable NII growth. We are operating from a position of balance sheet strength. We maintain substantial liquidity, including meaningful cash on hand, availability under our revolving credit facility, and a healthy base of liquid assets. We have no near-term balance sheet constraints and full flexibility to act. That flexibility matters. Periods of uncertainty often create the most attractive risk-adjusted opportunities for disciplined investors. With our strengthened underwriting framework, reduced exposure to higher volatility sectors, and ample liquidity, we are well positioned to selectively deploy capital as markets reprice risk. We intend to be patient but decisive. When compelling cash-generative opportunities emerge through our proprietary sourcing network, we have the capital, the experience, and the governance structure to move quickly. We are committed to rigorous credit standards, transparency, accountability, and long-term shareholder value creation. We believe these principles position GECC to deliver durable performance for our shareholders. I will now turn it over to Matt to discuss operating results and portfolio positioning in greater detail. Matt Kaplan: Thanks, Jason. Thank you all for joining us today. Our fourth quarter reflected a challenging credit and broader market environment but also meaningful progress in improving the earnings profile of the company. Total investment income increased sequentially, and net investment income grew more than 50% quarter over quarter to $0.31 per share. That growth was primarily driven by higher cash income, including stronger distributions from our CLO joint venture. Net asset value per share declined from $10.01 on 09/30/2025 to $8.07 on 12/31/2025. To note, reflecting the incentive fee waiver that Jason highlighted, pro forma NAV was incrementally higher at $8.23 per share at the end of the fourth quarter. Drivers of the quarter over quarter decrease in NAV include approximately $0.40 per share of unrealized losses resulting from volatility in Coralweed stock price, and approximately $0.30 per share from lower quarter over quarter fair values on our CLO investments due to spread tightening of the CLOs' assets coupled with credit market dispersion. In addition, both realized and unrealized losses associated with investments that have undergone restructurings and liability management exercises, or LMEs, accounted for approximately $0.80 per share of the decline. Our First Brands investments further impacted NAV by $0.09 per share, and we took actions in the quarter to materially reduce exposure to First Brands, which was de minimis as of year-end. In the fourth quarter, we sold our entire allocation of the senior secured DIP loan at an average price of 107% of par after funding the loan at approximately 95% of par. In addition, we fully exited our roll-up DIP loans at an average price of 45% of par. The derisking of our First Brands DIP positions, as a result of our decisive actions taken in the quarter, which Chris will expand on, were collectively at much higher levels than where they trade today. The portfolio is now cleaner and more streamlined, comprised primarily of performing, more liquid, cash-generative investments, and we ended the quarter with nonaccruals at less than 1% of our portfolio fair value. Turning to our CLO investments. 2025 was a challenging year for CLO equity investors. Cash flows to the equity tranches of CLOs began to come under pressure as we moved through 2025 as spreads on broadly syndicated loans held by CLOs tightened meaningfully. In addition, lower base interest rates contributed to reduced income. Credit market headwinds also intensified in the back half of the year, with dispersion increasing across the leveraged loan market. Certain sectors and several notable idiosyncratic credits experienced significant price declines, with weakness accelerating in the fourth quarter. Despite contributing to the NAV decline in the fourth quarter, our CLO investments generated a positive return throughout 2025 and outperformed the broader CLO equity market. For example, inclusive of our income from the CLO JV in 2025, the broader market performance ranged from negative 6% to negative 13% in the fourth quarter. While our CLO investments may see volatility to their marks given their leverage and the current backdrop of the industry, it is important to remember these vehicles have long-duration liabilities and are constructed to be resilient through periods of market volatility. Further, these investments continue to produce meaningful cash flows, which diversify our income streams and support our ability to consistently deliver sustainable net investment income to our shareholders. As Jason also noted, our portfolio today is positioned more defensively than in prior periods. We have historically maintained an underweight exposure to software-based businesses that may be more susceptible to artificial intelligence disintermediation, a stark contrast to many of our peers. Over the last several months, we have taken proactive steps to further reduce that exposure and rotate capital into investments with stronger downside protection. As of February, investments in our corporate credit portfolio that we believe fall in the category of software businesses comprise less than 4% of our portfolio. From a capital deployment perspective, we are investing at a measured approach in a credit market where spreads in investment grade and high yield ended 2025 in the 14th and 4th percentile, respectively. We saw some compression in private credit spreads over the course of the year as well. We are prudently deploying capital, prioritizing senior secured positions with durable cash flows while continuing to monetize select positions. More broadly, in 2025, we improved credit quality in the portfolio, strengthened our balance sheet, and exited the year with ample liquidity. We have also enhanced our capital structure by opportunistically repurchasing approximately $18,700,000 of our GECCO notes in the fourth quarter and through the end of last week at or below par plus accrued interest. As of the end of last week, we had $39,000,000 of notes outstanding against $16,000,000 of cash, $50,000,000 of revolver capacity, and $14,000,000 of liquid exchange-tradable assets, providing more than sufficient liquidity to address the upcoming maturity of the balance of these notes in the coming months. To that end, we called approximately half of our remaining GECCO bonds on Friday, which brings our pro forma debt-to-equity ratio to approximately 1.5x, consistent with our historical average leverage level. Finally, as previously mentioned, we also strengthened our investment team with the addition of Chris Croteau as Head of Research. Chris is a seasoned investor with experience across syndicated credit and direct lending. He has played a key role in our portfolio underwriting through capital deployment, and we are very pleased to have him on board. With that, I will turn it over to Chris to introduce himself and provide additional insight into the portfolio. Chris Croteau: Thanks, Matt. First, a bit of background on me. I have spent over 25 years in leveraged credit, including serving as Head of Credit for North America for a large public asset manager and acting as agent on private credit transactions. That experience shapes the underwriting rigor and discipline we are executing at GECC. Our investment framework is built on three core pillars: downside protection, portfolio granularity, and durable underwriting edge. First, we anchor every underwriting decision to downside outcome. In credit investing, protecting NAV and avoiding permanent capital impairment are paramount. Second, portfolio granularity serves as a key risk management tool. We utilize broadly syndicated credit intentionally to enhance liquidity and diversification while deliberately maintaining smaller position size. This allows us to be nimble and reduce exposure when our thesis plays out or when compensation for risk no longer justifies the capital at work. Liquidity and granularity work hand in hand. Third, investments are underwritten collaboratively with management and sector analysts prior to investment committee review. We are concentrating capital in areas where our underwriting advantages are durable, supported by deep sector expertise, and aligned strategic partners. We apply this underwriting intensity to our entire corporate credit portfolio. During the quarter, we sold or reduced 18 credit positions. We began the quarter with 61 corporate credit positions, so that means nearly 30% of the portfolio by number was actively repositioned. Those actions included reductions in second lien exposure, which now represents approximately 7% of the corporate portfolio, reflecting stronger structural positioning and improved portfolio granularity. At the same time, we added 12 new broadly syndicated credit positions with an average size of approximately $2,000,000, reinforcing smaller and more diversified exposures in liquid markets. In private credit in the fourth quarter, we closed one transaction with a mid-teens yield profile and warrant participation. Our private credit pipeline remains active with aligned strategic partners where incentives, information flow, and governance oversight are strongest. While we continue to expand that funnel, we remain highly selective in light of current spread dynamics. We continue to engage in active dialogue with our CLO investment partner to identify emerging credit trends early and to enhance idea generation across the platform. Our objective is consistent: attractive risk-adjusted returns driven by disciplined capital allocation, senior positioning in the capital structure, and steadfast protection of NAV. We believe robust underwriting intensity, greater portfolio granularity, aligned partnerships, and active monitoring position the portfolio for more durable performance across market cycles. Now I will turn the call over to Michael Keller to discuss specialty finance. Michael Keller: Thanks, Chris. Raytown Specialty Finance delivered a solid fourth quarter, distributing approximately $287,000 to GECC. We continue to execute on GESF's strategic transformation, successfully repositioning the platform for future growth and enhanced profitability. At Great Elm Commercial Finance, which now offers traditional asset-based lending solutions across a broad range of industries, we continue working with lenders to scale the platform. Asset-based lending, when underwritten conservatively and structured properly, can provide attractive risk-adjusted returns with meaningful downside protections. As we scale the platform, operating leverage has begun to take hold, driving meaningful improvement over the past several quarters. In addition, our pipeline of potential transactions remains robust. As part of the strategic initiatives implemented in 2025, Great Elm Healthcare Finance is now better positioned for sustained profitability and generated solid distributable income in the fourth quarter. The GEHF platform is supported by a strong pipeline of actionable opportunities, which we expect to drive continued profitability into 2026. Meanwhile, Prestige, our invoice financing business, continues to perform exceptionally well. As a reminder, Prestige provides spot invoice financing solutions and has consistently demonstrated the ability to generate attractive returns on equity over the course of the year. In summary, as we move through 2026, we believe we have built a significantly enhanced specialty finance platform aligned with our long-term growth objectives. We are seeing the benefits of our strategic repositioning take hold across all platforms and remain confident in our ability to generate improved returns for shareholders going forward. Now I would like to turn the call over to Keri Davis to go over our performance. Keri Davis: Thanks, Mike. I will go over our financial highlights now, but we invite all of you to review our press release, accompanying presentation, and SEC filings for greater detail. During the fourth quarter, GECC generated NII of $4,400,000, or $0.31 per share, compared to $2,400,000 or $0.20 per share in 2025. The increase in NII was driven primarily by higher CLO JV and increased earnings from deployed capital. Our net assets as of 12/31/2025 were $112,900,000 or $8.07 per share, as compared to $140,100,000 or $10.10 per share as of 09/30/2025. Details for the quarter over quarter change in NAV can be found on Slide 12 of the investor presentation. Net assets pro forma for the incentive fee waiver noted were $8.23 per share as of 12/31/2025. Our balance sheet remains strong and liquid. GECC's asset coverage ratio was 158.1% on 12/31/2025, as compared to 168.2% as of 09/30/2025. Pro forma for the incentive fee waiver and the called baby bonds, our asset coverage ratio was 166% as of 12/31/2025. As of 12/31/2025, total debt outstanding at par value was $194,400,000, and we had no borrowings on our $50,000,000 revolver, providing meaningful liquidity and flexibility. Cash and money market fund investments totaled approximately $5,000,000. Our Board of Directors approved a quarterly dividend of $0.30 per share for 2026, equating to a 19.2% annualized yield on GECC's 02/27/2026 closing price of $6.26. I will now hand the call back to Matt. Matt Kaplan: Thanks, Keri. We continued to strengthen the portfolio during the quarter by rotating capital into senior secured investments and exiting credits with weaker downside protection. Our CLO joint venture is a meaningful contributor to earnings and provides added portfolio diversification. The portfolio today is well positioned to generate sustainable income in the year to come. Our proprietary sourcing platform continues to be a key differentiator, which highlights our ability to generate attractive returns through unique opportunities. Nonaccruals remain below 1% in the portfolio, reflecting the progress we have made improving overall credit quality. While the broader market remains uncertain, we remain disciplined in deploying capital and focused on protecting NAV while growing earnings. We believe our strong liquidity position, diversified portfolio, and improving income profile, and disciplined investment approach position GECC well as we move through 2026. I will now hand it over to the operator for questions. Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star 1. One moment while we poll for questions. As a reminder, if you would like to ask a question, please press star 1. Our first question is from Erik Zwick with Lucid Capital Markets. Erik Zwick: Thanks. Good morning, everyone. I wanted to start with a question just in terms of the portfolio repositioning that Chris was describing. Is the actions that you have contemplated, are they complete at this time, or are there potentially more actions to reposition and maybe derisk the portfolio? Is there potentially more that you could undertake here in this quarter or in future quarters? Matt Kaplan: Good morning, Erik, and thanks for the question here. I would say we took a lot of actions in the quarter, as Chris highlighted, to exit out of names that we have perceived more downside risk and rotate into higher-quality credits on a liquid basis. And further, I highlighted, over the last few months, we have looked to derisk on the portfolio of our software side of the business. I would say at the end of the year, when we looked at the software-ish component, it is about 7% of the portfolio, and we are right now around 4%, so less than 4%, I would say. So I think right now, we have a very clean portfolio on the corporate credit side of things, and we have taken a lot of actions to clean it up. Erik Zwick: Thanks, Matt. And then just the comments around you certainly have ample liquidity today. Wondering if you could just frame volatility in the markets potentially creating opportunity. For me, how you view your pipeline today and where you are seeing the best risk-adjusted opportunities for new investments? Matt Kaplan: Continue to evaluate private credit opportunities, and we are very selective and evaluate the deals where we have strong covenants alongside strategic partners where the incentives are aligned. And then, secondly, as I touched on for a minute in the software space, we are underweight software in the space relative to other BDCs and the U.S. loan market in general. I think BDCs' exposure is well over 20% according to Morgan Stanley research, and the U.S. loan market is 16%. You know, we are evaluating possible opportunities in the average loan market, especially with the current volatility in the geopolitical events here, and we continue to be very focused and rigorously looking at downside protection across all industries in which we invest, not looking to catch any falling knives here, and then weigh the opportunities as they come. But this is obviously a dynamic market environment right now, and we have ample liquidity to manage both our maturities and take advantage of any opportunities in names where we have, as Chris mentioned, durable edge in relationships with sponsors, management teams, etc. Erik Zwick: And then is private credit where you are seeing greater opportunities there relative to additional CLO investments or BSL investments? Matt Kaplan: We have evaluated many private credit opportunities over the course of the year, and I would say that we are very selective in executing on them, focused on the covenants on both maintenance covenants from a financial perspective as well as making sure the incentives are aligned. So it changes over time for us as we look at the marketplace and it shifts. And right now, there is a shift. So I think we are very real-time, day by day, looking at where the public markets are as well as the private markets. You know, we have a very robust liquidity position in both cash or full access to our revolver and kind of exchange-traded assets. Erik Zwick: And then just thinking about the stock repurchase authorization you have outstanding, just how do you weigh the relative opportunities between new investments for the portfolio and buying back stock at this juncture? Matt Kaplan: Something that we constantly evaluate, and there are lots of factors that go into that based on both the portfolio opportunities in the market and discussions with the Board. So lots of factors go into making that decision, but we actively monitor our stock price as well as the opportunity set in the marketplace. Jason Reese: Matt, it is Jason. Maybe I can jump in. Erik, as the Board, we are looking at creating the best ways to create shareholder value. So, right, we are going to constantly look at the stock price versus NAV and decide where we are better off. Obviously, buying back stock is riskless as opposed to putting cash into a credit where there is a level of risk. So we will be looking back daily and have the opportunity to create value. Erik Zwick: Thanks. And just last one for me. I know in 2025, the contribution from the CLO investments was a little bit lumpy as that got ramped up. Are we at the point now where the contribution would be a little bit more even quarter to quarter? Or is there still some variability expected as those cash flow payments come in? Matt Kaplan: I would say there is still some variability as cash flow payments do come in, but I would expect it to be less lumpy than it was over the course of 2024 and 2025. Erik Zwick: Thank you for taking my questions today. Matt Kaplan: Thank you. Operator: Our next question is from Alan Demzer, Private Investor. Alan Demzer: Yes. Hello. I just heard my question answered pretty much regarding the stock buyback program that you announced, and I would just urge you to take a look at the economics of that, being that you might find being more aggressive on this program behooves you. So I urge you to, given the fact that you expect things to stabilize in the marketplace NAV-wise, to really go forward with a clear eye about the value that is inherent in buying back your stock. Thank you. Jason Reese: Alan, if you are interested, I can promise you that the Board is taking this very seriously and looking at this every day. Operator: Right. Thank you. There are no further questions at this time. I would like to hand the floor back over to Jason Reese, Executive Chairman, for closing remarks. Thank you again for joining us today. Jason Reese: We are closing the period with a strong governance framework, enhanced oversight, and a portfolio that is meaningfully more resilient. Our priorities are clear: protect capital, generate sustainable NII, and methodically rebuild NAV over time through disciplined credit execution. The actions we have taken—waiving incentive fees, strengthening our credit leadership, enhancing Board engagement, improving portfolio quality, and maintaining liquidity—reflect a clear commitment to accountability and long-term value creation. We believe GECC is operating from a position of balance sheet strength with the flexibility and underwriting discipline required to navigate uncertainty and capitalize on attractive opportunities as they emerge. We appreciate your continued support and look forward to updating you on our progress next quarter. Operator: Thank you. This concludes today's conference. Thank you again for your participation. You may disconnect your lines at this time.
Operator: Hello everyone. Thank you for joining us and welcome to the 2025 fourth quarter and full year earnings conference call. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, please press 1 again. I will now hand the call over to Adam Strachan, Head of Investor Relations. Please go ahead. Adam Strachan: Good morning, everyone, and thanks for joining us today for Marex Group plc’s fourth quarter 2025 earnings conference call. Speaking today are Ian Lowitt, Group CEO, and Crispin Robert Irvin, Group CFO. After Ian and Rob have made their formal remarks, we will open the call to questions and Paolo Tonucci, our Chief Strategist and CEO of Capital Markets, will join for Q&A as usual. Before we begin, I would like to remind everyone that certain matters discussed in today's conference call are forward-looking statements relating to future events, management's plans and objectives for the business, and the future financial performance of the company that are subject to risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements, and the risk factors that may affect results are referred to in the press release issued today. The forward-looking statements made today are as of the date of this call, and Marex Group plc does not undertake any obligation to update these forward-looking statements. Finally, the speakers may refer to certain non-IFRS financial measures on this call. A reconciliation schedule of the non-IFRS financial measures to the most direct comparable IFRS measures is also available in the earnings release issued today. A copy of today's release and investor presentation may be obtained by visiting the Investor Relations page of the website at marex.com. I will now turn the call over to Ian. Ian Lowitt: Good morning, and welcome to our fourth quarter and full year 2025 earnings call. 2025 was a year of continued growth for Marex Group plc. We delivered another year of record financial performance, with revenue of over $2,000,000,000. Over the past five years, we have increased profitability sevenfold, from $61,000,000 in 2020 to $418,000,000 in 2025. We have done this by broadening our product offering across our four interconnected services, expanding geographically and combining organic growth with targeted M&A. Acquiring, integrating, and scaling businesses is embedded in the DNA of Marex Group plc, enabling us to add clients, deepen relationships across products, asset classes, and geographies. Our platform and organization are difficult to replicate, increasing further the high barriers to entry we benefit from in our industry. The results we are reporting today demonstrate that our strategy is effective and continues to deliver value for our shareholders. On slide four, you see that we closed the year with record profitability in the fourth quarter. Revenues grew 38% from $416,000,000 to $572,000,000 and adjusted profit before tax increased 41% to $115,000,000. We grew EPS by 50% to $1.14 per share. Pleasingly, this performance was not driven by an idiosyncratic market event, but by broad-based strength across the firm. Full year revenue grew 27%, from $1,600,000,000 to just over $2,000,000,000, and adjusted PBT increased 30% to $418,000,000. Profit after tax increased at a faster rate, benefiting from an improved effective tax rate, which declined from 26% to 25%, reflecting our evolving geographic mix. Full year EPS grew 39% to $4.12. We experienced growth across all our segments, with continued strength and client balance growth in Clearing, strong performance in Agency and Execution driven in particular by Prime, which I will come back to, as well as good momentum in Market Making and Hedging and Investment Solutions. In Clearing, average customer balances increased over the year by 18% to $14,000,000,000 in the fourth quarter, with balances growing steadily quarter by quarter. We continue to execute our M&A strategy, strengthening earnings through disciplined integration and development of recent acquisitions. We have developed a repeatable model for identifying complementary assets, acquiring them at attractive prices, integrating them efficiently, and enhancing their earnings power as part of the Marex Group plc platform. That capability continues to be a sustainable competitive advantage for the firm. We are very selective in the opportunities we pursue, and maintain high conviction in our ability to meet our return objectives and grow acquisitions once integrated. This is evidenced by the acquisitions we completed during the year, which are delivering in line with or ahead of expectations. ARNA provided an opportunity to establish a Clearing presence in the Middle East. The day-one synergies we identified, which increased profitability by around 50%, were realized as expected. Hamilton Court provides us with access to a number of UK/EU corporates that we did not serve previously. It expands our client base and creates meaningful cross-sell opportunities. Winterflood, which we completed in December, has started strongly and enhances our UK equity market making franchise while creating cross-sell opportunities with leading UK participants. Following the subsequent sale of Winterflood's custody business, which we expect to complete in Q2, we will have acquired Winterflood at a meaningful discount to tangible book value, a transaction that we believe will generate substantial long-term value for our shareholders. Alongside M&A, we continue to execute a number of organic growth initiatives including digital assets within Clearing, expanding our footprint in Asia, the Middle East, and Brazil, and growing our Prime brokerage and FX capabilities. A meaningful contributor to the diversification of the firm, and an example of how we scale businesses once integrated into our platform, is Prime Services. We acquired Prime in December 2023 for approximately $25,000,000 of premium. In 2025, it generated over $250,000,000 of revenue, and now accounts for around a quarter of the group's profitability. Prime also adds diversification to our earnings profile, broadening our revenue drivers beyond traditional exchange volume-linked activity. Finally, as the breadth of our platform expands, we are increasingly scaling relationships with larger, more sophisticated clients, something I will touch on in more detail shortly. On slide five, you can see the consistent improvement in our key financial metrics: revenue, profitability, earnings per share, and return on equity. Beyond the headline growth, what is particularly encouraging is the quality of that growth. Full year revenues increased 27% to over $2,000,000,000, adjusted profit before tax grew faster than revenues, up 30% for the year, and EPS increased 39% reflecting the improved tax rate. Reported return on equity improved to 27.6%, underscoring the capital efficiency of the model, and pretax margins were 21%. Looking now at the operating environment in more detail, on slide six. As we step back and look at the operating environment during the year, it is clear that on the whole, we have enjoyed a supportive backdrop for our services. The spike in volatility in April was notable at the start of the second quarter. While April was a strong month, it was not outsized in the context of the full year. We continue to deliver strong growth even as volumes reduced from April's peak, including through the seasonally quiet third quarter, amid the impact of the short report. We also absorbed the impact of lower interest rates in Clearing, as we grew our client balances, which Rob will cover in more detail. In Q4, exchange volumes increased, up 5% year on year and 8% higher than the third quarter, while volatility also picked up modestly. Equity markets being at or around all-time highs in Q4 helped our Prime business, which is a function of customer balances and spreads. It also, to some extent, supports Solutions, where we tend to see higher client activity in structured products when markets are rising. In this context, our fourth quarter profits were up 41% year on year, and up 14% compared to the third quarter, and also above our prior record in Q2. This demonstrates that we are growing faster than underlying market volumes, and that we have set up the firm to deliver growth through a variety of environments. I will now turn the call over to Rob, who will take you through the financials in more detail. Crispin Robert Irvin: Thanks, Ian, and good morning, everyone. I will take you through our financial performance for the full year and the fourth quarter, following the same structure as usual. For the full year, we grew revenue by 27% to $2,020,000,000 with growth across all our business segments. Total expenses increased by 24% reflecting the higher revenues as well as ongoing investment to support growth and acquisitions during the year. Adjusted PBT margin expanded by 60 basis points to 20.7%, delivering a 30% growth in adjusted PBT to $418,000,000. The effective tax rate for the full year decreased from 26% to 25%, reflecting mainly the geographical mix of our earnings. This is an excellent result for the year, capped off by the fourth quarter, which was the strongest quarter in our history. Q4 revenue of $572,000,000 was up 38% versus last year, while total expenses grew 36%, broadly in line with revenues, driven by higher compensation costs and ongoing investments to support growth. Adjusted profit before tax increased 41% to $115,000,000 as margins increased 50 basis points to 20.1%. Our adjusted return on equity remained very strong at 30.8%, and we grew basic EPS to $1.14 per share, up 50% year on year. Focusing now on our segmental performance, starting with Clearing. In the fourth quarter, Clearing revenue increased 10% to $137,000,000. This was driven by growth across all revenue lines, higher volumes, and continued momentum in client onboarding, particularly large institutional client wins during 2025. Average Clearing balances increased to $14,000,000,000 from $11,900,000,000 in the fourth quarter of last year, reflecting the contribution from ARNA and new client wins. Net commission income increased 6% reflecting higher client activity as well as our broadened product offerings across regions. Net interest income was stable at $59,000,000. The durability of Clearing NII even as rates have declined shows how well this business is positioned, as growth in client balances offset these rate pressures. Adjusted profit before tax for the quarter increased to $67,000,000 with margins at 49%. For the full year, Clearing revenue increased 13% to $528,000,000 with sustained growth in client balances, new client wins, and an expanded product offering. Adjusted profit before tax increased to $262,000,000 with margins at 50%, reflecting disciplined investment to support growth. Overall, the fourth quarter capped a year of sustained momentum in Clearing, with strong client acquisition, higher balances, and disciplined investment, positioning us well going into 2026. Turning now to Agency and Execution. This quarter, we are providing a more granular breakdown of performance across the asset classes to reflect the continued expansion and diversity of the platform. The fourth quarter was another strong period, with revenue increasing 51% to $290,000,000. This was driven primarily by strong growth in securities, reflecting the continued strategic expansion of Prime alongside more modest growth in energy. Securities revenues increased to $209,000,000, reflecting broad-based growth across the platform with all major asset classes contributing. Prime was again a standout performer with revenue increasing to $70,000,000, supported by a significant increase in clients on our platform and continued expansion of our securities-based swaps offering. FX also performed strongly, benefiting from the integration of Hamilton Court, completed in July, and growth across the broader FX platform. In Energy, revenue increased to $76,000,000 driven by higher activity in UK and European gas and power markets, and continued capability expansion. Adjusted profit before tax increased to $89,000,000 in the quarter, with margins expanding to 31%, reflecting growth in higher-margin activities, particularly Prime. For the full year, Agency and Execution revenue increased to $1,050,000,000 with strong contributions from both securities and energy. Adjusted profit before tax increased to $281,000,000, reflecting the continued build-out of a more diversified high-quality platform with 27% margins. Turning now to Market Making. Fourth quarter revenue grew 83% to $81,000,000, driven by particularly strong performance in metals and securities, partly offset by softer conditions in agriculture and energy. Metals delivered the second-best quarter on record with revenue increasing to $50,000,000. While supportive market conditions and high volatility provided a favorable backdrop, performance was driven by increased client activity across both precious and base metals. Securities revenue increased to $20,000,000 reflecting the inclusion of Winterflood following the completion in December, alongside improved performance from our FX and credit desks. In Energy, revenue was lower year on year, as the prior period benefited from elevated volatility and large client flows, whereas the fourth quarter in 2025 saw more muted hedging activity. Agriculture also moderated year on year, reflecting a more challenging macro backdrop and elevated commodity prices, although performance improved sequentially from the third quarter as conditions stabilized. Adjusted profit before tax increased to $27,000,000 with margins expanding to 33%, as strong revenue growth more than offset higher front-office compensation and the additional headcount following the Winterflood acquisition. For the full year, revenue increased to $236,000,000 driven primarily by strong performance in both metals and securities, which more than offset softer conditions in agriculture. Adjusted profit before tax increased to $69,000,000 with margins at 29%, reflecting investment through the year and the mix of revenues across the platform. Finally, Solutions, which had its strongest quarter on record in Q4. Revenue increased by 57% to $63,000,000, reflecting growth across both Financial Products and Hedging Solutions. Hedging Solutions revenue increased to $23,000,000 supported by institutional client wins and higher activity in energy and FX, more than offsetting softer agricultural markets. Financial Products revenue increased to $40,000,000 reflecting continued strength in structured products. Performance was supported by improved market conditions, expanded exchange access, regional expansion, particularly in Asia, and rollout of our new technology platform, which also supported higher issuance volumes and broader product accessibility. Adjusted profit before tax increased to $14,000,000 with margins improving to 23% despite continued investment in technology and headcount. For the full year, revenue increased to $197,000,000 reflecting sustained growth across both businesses. Adjusted profit before tax increased to $44,000,000, margins at 22%, reflecting our investment to support long-term scalability. Turning now to net interest income at the group level. For the full year, NII was $153,000,000 compared to $227,000,000 in the prior year. Interest income increased 4% year on year as a $4,800,000,000 increase in average balances more than offset a 100 basis points decline in rates. However, interest expense increased 21% reflecting $1,500,000,000 of additional average structured note balance and senior debt issuance, which more than offset the increase in interest income. NII for Q4 was $26,000,000, down $13,000,000 compared to Q3 2025, primarily reflecting the further 40 basis points decline in the average Fed funds rate during the quarter. Interest income was $181,000,000 as lower rates offset growth in average balances. Interest expense was broadly flat, with the decrease in rates being broadly offset by higher structured note balance. Throughout the quarter, we continued to hold significant liquidity headroom. While this creates a modest near-term headwind to group NII, it is a deliberate choice that strengthens the balance sheet, positions us to support clients, and pursue future growth opportunities. Importantly, as we highlighted in the Clearing segment, Clearing NII remains resilient. Average Clearing balances increased to $14,000,000,000 in the fourth quarter, and that growth has continued to broadly offset the impact of lower rates. I will briefly touch on expenses as it is important to how our cost base evolves as we grow. As I have said before, our cost base is highly flexible with around 55% of total expenses in Q4 variable in nature, which are linked to the performance of the group. In the front office, variable expenses primarily flex with revenues, while back-office variable expenses flex with the overall profitability of the group. Given the strong revenue performance year over year, $54,000,000 of the increase in total expenses was driven by higher variable compensation, including variable compensation for recently completed acquisitions. A further $18,000,000 relates to the fixed costs associated with the recently completed acquisitions. These acquisition-related costs are not the one-off transaction expenses but the continuing operating costs of growing these business which generate revenue and drive overall profitability. And an additional $50,000,000 to support the organic growth of the organization and investment in control and support, notably technology. These investment decisions are deliberate choices we have made to support the future growth of the organization. Looking now at our balance sheet, as a reminder, approximately 80% of our balance sheet supports client activity, and consists of higher-quality liquid assets. Total assets increased to $35,000,000,000 at December, driven by growth in Clearing client balances and securities activity, including Prime. After netting client assets and liabilities, the remaining residual balance sheet primarily comprises corporate cash and other assets against group liabilities, including our structured notes portfolio and senior notes issuance. Turning now to capital and liquidity. We continue to manage capital and liquidity prudently, maintaining substantial headroom above regulatory requirements to ensure resilience across market environments. At year end 2025, regulatory capital was $927,000,000 against the requirement of $403,000,000, representing a capital ratio of 230%. This provides a substantial buffer and supports our investment grade credit ratings. Total corporate funding increased to $6,200,000,000, up from $3,800,000,000 at year end 2024, primarily reflecting structured notes issuance and a senior debt issuance of $500,000,000 during the year. We maintained approximately $1,000,000,000 of liquidity headroom at year end. In line with the growth of the business, we have increased our liquidity stress testing limits and associated buffers to ensure we remain well positioned to support higher client volumes while maintaining a conservative risk profile. While carrying excess liquidity creates a modest drag on net interest income, maintaining substantial headroom remains a deliberate and conservative choice that strengthens the balance sheet and ensures we are well positioned to support all clients and navigate periods of market volatility. Overall, our capital and liquidity framework remains robust, scalable, and aligned with our growth ambitions. Finally, we announced again a quarterly dividend of $0.15 per share for 2025 to be paid to shareholders on March 31 this year. Finally, we have a proactive and involved risk management approach at Marex Group plc. In Market Making, we are a client flow-driven business and do not take a directional view on prices. However, we do carry a small level of inventory to source client demand and capture the trading spreads. Average daily VaR was $3,800,000 for the full year, and remains at a very low level relative to the growth in the overall business. In terms of credit risk, we had a realized credit loss of $800,000, representing less than 0.1% of revenues. Now I will hand you back to Ian. Thanks, Rob. Ian Lowitt: Let me spend a moment on clients because this is the critical component of the Marex Group plc growth story. As our platform has expanded, particularly since we went public, we are increasingly having success with larger and more sophisticated clients. You can see on slide 19 that while active clients, which we now define as those generating over $25,000 in annual revenue, grew 19% year on year, revenues grew 32%, and average revenue per client increased 11%. Consistent with my commentary throughout the year, that growth is particularly evident amongst our largest clients. Our $5,000,000-plus client cohort increased by 36% and revenue from that segment grew by over 80%, with average revenue per client up 35%. Today, those top circa 50 clients generate on average $14,000,000 annually versus $10,000,000 last year, and drove over $300,000,000 of our revenue growth in 2025. Importantly, this does not mean we are becoming overly concentrated. The top cohort represents around a third of firm revenue. But we remain diversified across more than 3,400 active clients and no single counterparty represents undue exposure. We included slide 20 at last year's Investor Day, and again at the half year results. We think it is a helpful way to demonstrate the quality and reliability of our earnings. On the left-hand side of the chart, we show the consistent year on year growth in our average monthly PBT, and the relatively low variability in the distribution, driving an extremely high Sharpe ratio of 6.2 for the full year 2025. This shows that our profitability is not driven by a few exceptional months. It is stable and in a narrow band, demonstrating high quality earnings. On the right of the chart, we show the distribution of our daily profitability for the full year versus last year. You can see the distribution has shifted to the right by around $400,000 year over year, from around $1,300,000 to $1,700,000. The left tail remains very small with only six negative days during the year. In the right tail, you can also see how we have successfully captured market opportunities with more above-average profitability days. This is not just successful market making. We are doing more larger transactions with clients as we become more relevant to sophisticated market participants. So in conclusion, at our Investor Day last April, we described our goal of delivering sustainable profit growth with roughly 10% organic and 5% to 10% from selective inorganic opportunities. 2025 performance reinforces our belief in our competitive position and ability to continue to deliver growth. Structural shifts in bank focus, high barriers to entry, the breadth of our capabilities, and the quality of our service creates opportunities for Marex Group plc. Our M&A pipeline remains attractive, opportunity sets continues to expand, as our scale and reputation improve. And we are increasingly seeing inbound opportunities. As a result, we are able to be more selective, executing only those transactions where we have high conviction in our ability to enhance returns through integration and scale. Our digital assets initiatives continue to progress well, as we are seeing growing engagement from clients coming to us to solve real world use cases for them. We already have 24/7 trading capability in place for our digital assets offering in Solutions and plan to extend this imminently to Clearing, where we clear crypto futures for clients primarily on CME. This will also give us the ability to support prediction markets at limited additional cost. In 2025, we went live as a day-one clearer for SGX Derivatives’ launch of digital asset perpetual futures, meeting institutional demand for transparent access to regulated crypto derivatives. And we are actively involved in the CFTC's pilot program for the acceptance of stablecoin and crypto as collateral for futures, and we expect to go live with this in March. While still early days, we believe these initiatives position us strongly as market structure continues to evolve. They represent a meaningful long-term opportunity for the firm. Artificial intelligence is clearly a major theme in the markets today, and given how topical it is, I would like to address it. We see AI as an accelerant to our competitive advantages and are already deploying it internally to enhance productivity, improve risk management, and deepen client engagement. As a vertically integrated firm with deep expertise and institutional knowledge of market infrastructure, and strong client relationships, we believe our competitive moats are reinforced, not threatened, by the technological advancement. Looking ahead, we remain confident in our ability to continue to deliver sustainable growth across a range of market environments. For eleven straight years, we have reported to our Board and shareholders that Marex Group plc has delivered record profitability. We are extremely proud of that track record, and we feel confident in our ability to continue that trajectory in 2026 and beyond. We remain committed to disciplined capital allocation, excellent client service, and long-term value creation for shareholders. Finally, you may have seen we announced a second Investor Day on March 26 in New York. We look forward to seeing as many of you as possible there later this month. With that, I will hand it back to the operator to open the line for questions. Operator: We will now begin the question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, please press 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Daniel Thomas Fannon with Jefferies. Your line is open. Please go ahead. Daniel Thomas Fannon: Ian, I was hoping you could just talk a little bit more about the current environment given we are in early March and a lot has changed not only recently here in the last week or so, but just even year to date. I was hoping to get an update in terms of how clients are behaving, maybe balances or any real changes in the environment that you have seen so far? Ian Lowitt: Hi, Dan. As you say in your question, it has been a very interesting couple of months and certainly it feels like there is a great deal going on at the moment. I think that there are a series of things that I would regard as tailwinds for our business and then a series of things that probably feel more like headwinds. The tailwinds are obviously increased exchange volumes, which are actually quite a bit higher this year than they were last year. Volatility has been a lot higher, particularly around commodities. As we have spoken on this call a few times, when we think about volatility, there is a Goldilocks level of volatility, which is active volatility, but it is not excessive or too high. I think the volatility that we have seen in January and we are seeing again in March does not fall into the Goldilocks category. It is pretty high, and it makes a big difference and puts a lot of pressure on clients. So I think that it is very active. I think there is a lot of uncertainty in the marketplace. I think that the demand for our services is high, and I think that, consistent with the message that we had in the prepared remarks, we are very confident with regard to our ability over the course of the full year to deliver growth in the sort of corridor that we previously indicated to the market. Exactly how that plays out through the course of the year is obviously impossible to tell. But we feel very good about our business, our business model, our competitive position, and the opportunities ahead of us given how diversified our business is. Daniel Thomas Fannon: Understood. And then just as a follow-up, I was hoping you could expand on the growth and outlook for the Hedging and Investment Solutions business. Obviously, I think you said a record quarter, really strong 4Q results. Just to get a little bit more underneath that in terms of what is driving that and the sustainability of that as we think about 2026. Ian Lowitt: I think about all of our businesses in 2026, I have quite a lot of confidence that all can continue to grow. The management in each of those businesses is ambitious. They all see opportunity, and we see ourselves as broad-based and looking to ensure that all the elements of the firm are growing. Your question is about Solutions specifically, and I think that what we are seeing there is the impact of global expansion as well as the addition of additional products, and then additional penetration of clients. I do not see anything that will undermine that over the long term, and I think that we should and expect to see Solutions continuing to grow consistent with broadly how the overall firm is expecting to grow. Operator: Your next question comes from the line of William Raymond Katz with TD Cowen. Your line is open. Please go ahead. William Raymond Katz: Thank you. I apologize for any background noise in transit this afternoon. Thank you very much for your commentary. I was really keyed in on your commentary around the growth in some of the larger accounts and not a lot of concentration. Could you unpack that a little bit, maybe where you are seeing the greatest rates of growth either by distribution channel, geography, the segment of the business? I am curious what some of the underlying drivers are in the process there. Ian Lowitt: What I have been sharing with people is client wins that we have been enjoying with prominent hedge funds and with some of the largest and most sophisticated players in our space. We have had traditional strengths with commodity producers and consumers. As you are aware, as part of our efforts to diversify the firm, we were looking to expand out the products that we could offer leading financial players. And I think that what we are seeing now is the fruit of that. It does not feel like it is the end. It feels like it is building momentum. So who are the people in that $5,000,000-plus category? It is the largest financial players in the world. It is the largest commodity producers and consumers. I think if there was a geographic focus, it is probably in North America, which again I think is not surprising just given the preponderance of large players in the US, and I think the success we have had growing our US franchise. But the growth has been with financial players—banks, hedge funds, large asset managers—more than in any other client type. And those are all clients who are engaging with us across a number of different segments and a number of different desks. So part of what is driving that growth is just the cross-sell, so that those players who are able to engage with us across a lot of products and do so in size are increasingly doing that. William Raymond Katz: Just as a follow-up, I am very intrigued by the digital opportunity, the stablecoin, crypto, what have you. A lot of debate just in terms of the impact of tokenization on the ecosystem at large. If you can maybe break down where you see the opportunities for tokenization at the front—maybe that is already on expanded trading activity—but maybe post trade, how we should think about the durability of the business to the extent that tokenization continues to mature and season into the market structure system. Thank you. Ian Lowitt: What we are focused on is what I think we described last quarter as our digital prime brokerage offering. What we are very keen to be able to support for clients is our ability to take digital assets as collateral with all the things that go with that, to ensure that that is viable and supported. There is a lot of work that goes into that, and that has really been our focus more than around what our view is with regard to the long-term prospects of tokenization. My expectation is that there will be week-in, week-out trading. I think it will be done in tokenized form. I think it will just live alongside the exchanges for some period of time, and maybe forever. And it will not replace it. It will just exist as a separate world meeting very specific requirements of a specific set of investors. How tokenization moves into post trade, I do not really have a specific perspective, and we are not currently investing in that. But I think that if that does turn out to be more relevant, we will be in a position to take advantage of it. But really, the emphasis at the moment is being able to create some products for clients which are more around being able to take digital assets as collateral. What I would add to the answer, though, is we have certainly seen with some of the digital asset products that we have been involved with, the ability to collect margin real time and in particular over the weekends is a very attractive feature in terms of risk mitigation. And so, as I think about the impact on Clearing, as a general matter, the ability to get collateral or get payment 24/7, I think, is actually a really attractive risk mitigant. I do not know if you have anything to add to that, Paolo. Paolo Tonucci: Yes, just a couple of points, but it is a good question, Bill. I think, just to extend Ian's point on where we are focusing, the key components of both the Clearing and the Prime offering—one is more futures-oriented and the other is more securities-oriented—is that we can receive the collateral and recognize the collateral, which I think there has been progress both with the exchanges and on the regulatory side, that we can provide a combined sort of margining on a risk basis, which includes the activities, the risks, and the collateral. That we can provide all of the reporting and the reconciliations, and I think that in each of those dimensions, we have made significant progress. We have applied for a license which will allow for the conversion—for us to provide the conversion between crypto and fiat currencies, and we hope that that will come through in the next few weeks. We have got the infrastructure in place and we have partnered with very established players to establish the infrastructure both for execution as well as for Clearing. And that extends to tokenization where we are working with some of our most progressive clients to ensure that all of the rails for tokenization, whether that is for post trade or whether that is for supporting 24/7 activities. So I think we have moved a long way and my sense is relative to where the rest of our competitor group are, we are probably towards the front, if not at the very front of that queue. William Raymond Katz: Thank you very much. Ian Lowitt: Thanks, Bill. Operator: Your next question comes from the line of Benjamin Elliot Budish with Barclays. Your line is open. Please go ahead. Benjamin Elliot Budish: Hi. Good morning, thank you for taking the question. Maybe first, Ian, I was wondering if you could unpack a little bit more the comment you made earlier in the Q&A around this not being a Goldilocks volatility kind of environment. Maybe talk about what you typically see when there are volatility spikes in terms of either exchanges’ collateral requirements or how customers respond. And I gather—I think your comments maybe were referring to mid-February—but things have changed a bit more in the last couple of days. So just curious how to think about—you know, we can see your collateral balances daily through your website, but things have changed more the last couple of days. So if you could unpack that a little bit, that would be helpful. Thank you. Ian Lowitt: Sure, Ben. It is a really good question. At times of very high volatility, a couple of things are happening. One is either we are increasing margin multipliers or the exchanges are often increasing their margins, and you certainly saw that in January. So people are having to put more margin up against the existing positions. The other thing that plays out is, in terms of their own existing risk models, they have limits for what kind of positions they can maintain relative to the risk that they have been authorized to hold. They tend to reduce their positions in order to remain within their risk limits. The other thing that is just an obvious consequence of extremely high levels of volatility is it impacts how people choose to hedge and how they think about hedging, in the sense that they have to decide what their entry points are. They have to decide how long they are willing to hedge for. And just as we saw in April with Liberation Day, when people are unsure what is driving pricing and where it is going to settle, their reaction is often to shorten the duration of their hedges or actually just be unsure about when to begin to hedge. They also have to manage their liquidity carefully in addition to managing their risk carefully. So all of those things play through when you have those volatility spikes. And just to put that in perspective, I am sure you appreciate that some of the moves in some of these commodity contracts were one-in-35-year events that were playing through at the end of January. I do not know, in terms of over the last few days and where this thing is going to go, whether we are going to see volatility of that magnitude. But certainly, in natural gas prices, we are seeing price moves that are not dissimilar to what we saw with the Ukrainian invasion. So that is a bit more color on what is actually involved when you are operating in a world of extremely high volatility. Benjamin Elliot Budish: Understood. That is very helpful. Maybe just to follow up, a separate topic. You mentioned briefly prediction markets in your opening remarks. And just curious, from your seat, how do you see this evolving from an institutional perspective? It seems like from all the data that is trackable, most of this is happening in sports and in the retail channel, but there is a big question mark around how and when this might evolve into something broader. So just curious, what does institutional interest look like? Where in prediction markets are you looking to participate? How do you think this plays out over the next few quarters? Ian Lowitt: The method that is interesting to us is if this results in contracts that are really listed on the principal exchanges. So where the CME or ICE or Cboe end up listing a series of contracts which are not sports-related specifically, but are financial instrument-related, which I think is certainly a direction that people are looking at. We also believe that there is interest from retail aggregators for this particular product. So I do believe that we will see these products listed on exchanges so that you deal with the credit risk associated with some of these other venues. And you will, I think, see experimentation with financial instruments and strategies expressed as event contracts in the coming quarters—maybe it will take a little longer than that—but I think that is my expectation. And I think there is a variety of people who are interested in experimenting with it and, at some level, you could imagine these contracts actually being quite intuitive ways for retail investors to express certain investment theses they have. And so I can see that actually taking off. But you do not want to deal with the credit risk associated with some of these venues, and I think that the exchanges will naturally evolve into this space. Benjamin Elliot Budish: Great. Thank you. Ian Lowitt: Thanks, Ben. Operator: Your next question comes from the line of Patrick Malcolm Moley with Piper Sandler. Your line is open. Please go ahead. Patrick Malcolm Moley: Yes. Good morning. Thanks for taking the question. I know the Middle East has been an area of focus for you and it is a place where you have found success, especially with the ARNA acquisition. Just curious, with all the geopolitical turmoil going on, if we do see an extended conflict in the Middle East, how that impacts Marex Group plc’s business and the overall strategy there? Ian Lowitt: The answer clearly depends on what actually happens with regard to this conflict, whether it resolves relatively quickly or not. Certainly, we see that opportunity as attractive and sustained, and certainly we are hopeful that there is nothing that undermines it, and there is not knowledge at the moment that it might undermine it. But there is obviously a lot that we do not know. I do not know what you would add, Paolo. Paolo Tonucci: It is difficult to have certainty about the longer-term impacts, but so far, we have got a very broad-based business in both Dubai and Abu Dhabi. Volumes have been consistently increasing. The breadth of product offering has been consistently increasing. It does not feel as though that trend is going to change, but we may have obviously some disruption in the short term just as we all watch what is transpiring. Patrick Malcolm Moley: Thanks for that. And then you mentioned in your prepared remarks the pipeline of opportunities that you are looking at from an M&A perspective. Could you just update us on maybe what is in focus right now in terms of both asset classes and geographies? Any color there would be great. Thank you. Paolo Tonucci: Absolutely, Patrick. We have continued, I think, the pace of acquisitions that we have seen for the last couple of years, and we have had a couple of announced transactions this year. We most recently announced that we will be purchasing WebTraders, which is an options market making group. So somewhat away from the Clearing and Agency and Execution areas where we have traditionally more focused on acquisitions. Winterflood also is a Market Making business. So it shows that there are opportunities across all of the different service lines. We remain of a view that we are buying the capabilities and not just the revenues, and the other capabilities include both the geographic coverage as well as product capabilities. There are opportunities across each of the service lines, but I think that you will see both Clearing and Agency and Execution businesses being added in the next couple of quarters. And from a geographic perspective, whilst it is really hard to predict when these opportunities will arise, we are still focused on both extension in Asia, where we have probably a slightly subscale business, certainly on the Capital Markets side, and in Latin America where we bought AgriInvest last year. We are really pleased with how that is going. That is obviously an agricultural-focused business, but we are seeing opportunities on the financial side as well. So the geographic focus remains the same. It is just hard to say exactly when those will come to fruition, but we are seeing good opportunities. And the thing I would just add to that is we are always looking to fill in holes where, within a geography, we do not have the product. If we think we could build that organically, then that is typically what we would choose to do. But in many cases, and particularly as you try to expand geographically, that is just very hard to do organically. Those are the places where we would typically focus around acquisitions. Patrick Malcolm Moley: Very good. Thank you, and look forward to seeing you at the Investor Day. Thanks. Operator: Your next question comes from the line of Alexander Blostein with Goldman Sachs. Your line is open. Please go ahead. Alexander Blostein: Hey. This is Anthony on for Alex. Wanted to hit on Prime Services, which continues to see solid growth. How much of this growth has been a function of maybe existing clients doing more with you versus onboarding new accounts? And what does the pipeline of new clients look like today? Paolo Tonucci: Hi, Anthony. Thank you for the question. I am going to split the answer into this longer-term trend and what we saw in the fourth quarter. In terms of our annual accumulation of new clients, we are adding about 30%. We have a growth rate of about 30% a year on a gross basis, and then we lose about 5% of our clients because they cease to be or they move into different structures. So the long-term trend is around that type of growth rate. In the short term, where you see a bit more volatility is with existing clients which have relationships and are able to ramp up. In the fourth quarter, there was more increase in activity from existing clients increasing activity than there was from new clients. But the trend over the longer term, and I think you will see this over the course of both 2025 and 2026, is that we are adding clients and we are adding them at about a 30% annualized growth rate. Alexander Blostein: Thanks. That is helpful. And maybe just to follow up on the M&A you either completed or announced in 2025. Could you talk about the aggregate annual impact on run-rate earnings from these transactions? And where do you think they might scale to over the next few years as you realize revenue and expense synergies? Paolo Tonucci: The majority of the earnings increase in this year was organic. That does include the impact, as we have talked about very extensively, of the Prime business, and it comes through on the organic side because we have owned that for some time. It has really been about our investment in the products and capabilities. While the platform is obviously very important, it is the basis on which we have been able to develop that business. I expect the split between organic and inorganic will be somewhere in the range we have had before. Crispin Robert Irvin: Yes. So this year, the growth was roughly 75% organic and 25% inorganic. Alexander Blostein: Thank you. That is helpful. Operator: There are no further questions at this time. I will now turn the call back to Ian Lowitt for closing remarks. Ian Lowitt: Thanks, everybody, for joining us. We are very pleased with the full year numbers that we were able to deliver. We are really pleased that it was another record and that we had a record quarter in the fourth quarter, and, as I have indicated, we really are quite excited about our prospects over the course of the year and our ability to continue to grow in 2026 and beyond. Thank you for joining us, and hopefully we will see as many of you as possible at our Investor Day. Operator: This concludes today's call. Thank you for attending. You may now disconnect.
Operator: Greetings, and welcome to the Advantage Solutions Inc. fourth quarter and full year 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press. As a reminder, this conference is being recorded. Thank you. Operator: Welcome to Advantage Solutions Inc. fourth quarter and full year 2025 earnings conference call. David A. Peacock, Chief Executive Officer, and Christopher Robert Growe, Chief Financial Officer, are on the call today. David and Christopher will provide their prepared remarks, after which we will open the call for a question-and-answer session. During this call, management may make forward-looking statements within the meaning of the federal securities laws. Actual outcomes and results could differ materially due to several factors, including those described more fully in the company's Annual Report on Form 10-K filed with the SEC. All forward-looking statements are qualified in their entirety by such factors. Our remarks today include certain non-GAAP financial measures, which are reconciled to the most comparable GAAP measure in our earnings release. As a reminder, unless otherwise stated, the financial results discussed today will be from continuing operations, and revenues will exclude pass-through costs. I will now turn the call over to David A. Peacock. David A. Peacock: Thanks, operator. Good morning, everyone. Thank you for joining us. I want to thank our teammates across the organization for their ongoing commitment successfully serving our clients as they navigate the market uncertainty and volatility, helping them adapt and succeed. Before turning to our results, I would like to highlight several strategic actions we have taken over the past few months to strengthen our foundation for shareholders, employees, and customers and to position the company to drive sustained performance in 2026 and beyond. First, we moved towards refinancing our debt later this month, extending maturities to 2030. We had over 99% acceptance of a new debt package from our lender group. This refinancing is intended to provide operating flexibility and enhance our liquidity profile while helping us achieve our long-term leverage target of 3.5 times or less. This provides us with greater financial flexibility and ensures we have the capital necessary to continue investing in our core capabilities while delivering exceptional service to our clients. This planned refinancing includes a pay down of approximately $90,000,000 of our debt. Second, we further sharpened our portfolio through the divestiture of three noncore businesses. These transactions streamline our focus and allow us to redeploy capital into higher opportunities aligned with our long-term strategy. As a result of these actions and our strong cash flow performance, we ended the year with $241,000,000 in cash and a strengthened balance sheet, positioning us in a place of greater stability and optionality as we enter 2026. Finally, our upcoming reverse stock split supports broader institutional accessibility as we enter our next phase of growth. Taken together, these initiatives increase our strategic flexibility, enhance operational focus, and allow us to move from defense to offense. Turning to fourth quarter results, net revenues of $785,000,000 were up approximately 3% year over year, reflecting an improving trajectory in Experiential Services while Branded Services continue to face cyclical headwinds and Retailer Services face slowing spend and some revenue timing shifts. Combined, our overall company delivered adjusted EBITDA of $88,000,000, which reflects the ongoing mix shifts toward more labor-intensive, lower-margin businesses. Our cash flow generation was strong, and in 2025, we generated $174,000,000 in unlevered free cash flow, a significant increase from $50,000,000 in the first half, representing over 100% unlevered free cash flow conversion, excluding the payroll timing factor. One reason for this was our successful SAP implementation earlier this year. Net free cash flow of $74,000,000 in the second half exceeded our target of 30% of adjusted EBITDA, excluding payroll timing, and as I discussed earlier, our cash position strengthened materially. We believe our liquidity position provides ample flexibility to serve our clients effectively, invest selectively, and further improve the balance sheet. As I mentioned earlier, we further streamlined our portfolio in recent months, including in early 2026, with several small divestitures of noncore businesses, resulting in approximately $55,000,000 in proceeds, further bolstering our cash position. Before discussing our strategy going forward, I want to briefly reflect on how we arrived at this point, both from an external and internal perspective. Externally, consumers continue to be cautious, value-seeking, and selective. This is affecting overall shopping behavior and spending at retail, with lower-end consumers buying more on promotion at lower price points, while higher-end consumers are shifting purchasing habits away from expandable consumption categories to healthier options. These two dynamics affect our business in three ways. One, we can see overall lower commission revenue when we manage sales for CPGs or private label manufacturers. Two, we see CPG and retailer P&Ls challenged, leading to some lower spending on merchandising projects, resets, and remodels. And three, we are seeing overall pullback in traditional marketing as retailers demand more investment in their retail media networks, and many are cyclical in nature. Despite them, we made meaningful progress adapting our business to these conditions to compete more effectively for the long term. Internally, we have been proactively investing in a multiyear IT transformation that concludes this year. These investments required upfront spending that are already driving efficiencies across the business. We expect our capital spending to decline in 2027, reflective of ongoing support rather than transformation investments. We continue to rationalize applications to reduce complexity and support efficiency in our IT platform. We also experienced some client losses in certain areas, particularly where clients became more price sensitive or chose to bring work in house. At the same time, overall retention remains high, and we continue to execute against our pipeline of new clients, reinforcing the fact that there is continued demand for our services when we compete on the full value of our offering. With that context, let me turn to what we are doing to structurally improve performance and strengthen the balance sheet. First, we are improving productivity across the organization, with our centralized labor model serving as a core driver. Better profitability per labor hour. Expanding this rollout remains a key priority for 2026. Technology will continue to be another critical driver of our productivity while also differentiating our ability to better serve our clients and customers. Given our investments in new systems, we are able to rationalize many of our legacy applications and systems to provide a more efficient IT backbone. Our enterprise transformation, including our new SAP and Oracle systems, in addition to our Workday implementation later this year, creates a strong and modern platform to provide insight-driven services to our clients and customers. Our new technology platforms are enabling efficiency gains, better workforce optimization, faster data integration, and sharper visibility into performance, positioning us to operate as a truly insights-driven organization, which we believe will propel us to a leading position in the industry. In parallel and in conjunction with our materially upgraded systems, we are integrating AI where it drives the most impact. One example is AI-enabled staffing and scheduling, which is already making us more effective and efficient, reducing manual work while improving speed, predictability, and labor utilization. Second, we are focused on driving growth that deepens client relationships, expands our addressable market, and leverages the capabilities we have built. Our partnership with Instacart is a good example as it continues to progress, combining their in-store audit capabilities and consumer insights with our retail execution network to help CPG brands improve on-shelf and overall in-store performance. We remain focused on pursuing new partnerships with retailers outside the grocery sector, which would significantly expand our addressable market. Our efforts are focused on retail segments where our capabilities translate well. We will share more as these opportunities progress. Finally, we are leveraging our industry-leading data investments through our alert-based sales system called Pulse. This is an AI-enabled decision engine that integrates proprietary retail data with real-time capabilities to help clients anticipate demand and drive growth while more quickly identifying opportunities. Pulse will help our key account managers either remediate underperformance in an account or accelerate growth by more quickly providing the causal analysis and recommended actions. This was enabled by our migration to the cloud and creation of our data lake, which is helping us ingest and analyze more data than ever before. Turning to our segments, Experiential Services delivered strong Q4 results and stands as the clearest proof point of our progress in 2025. Accelerating demand, improved hiring velocity, higher labor readiness, and more consistent execution drove increased event volumes, stronger execution rates, and better predictability, positioning us well entering 2026. Branded Services remained under pressure, consistent with prior guidance. Softer CPG spending, tighter procurement, and client insourcing continue to weigh on performance. While we are not expecting a near-term inflection, we believe many of these pressures are cyclical. In 2026, our priorities are stabilizing the revenue base and converting new business even faster. Our pipeline of new opportunities has expanded, and we expect to provide more visibility into conversion and win rates as the year progresses. We are also managing costs and continuing targeted investments in data and analytics and partnerships to drive measurable client ROI. Retailer Services results were affected by channel mix shifts, project timing, and cautious retail spending, particularly in grocery. Some activities shifted into early 2026, creating a timing mismatch as costs were incurred in 2025. Overall, while performance varied by segment, the underlying theme is clear. Execution discipline and operating consistency are improving, particularly in Experiential Services, which gives us confidence looking ahead. Turning to our outlook, we are approaching 2026 with cautious optimism as we shift from heavy investment to enhanced execution. 2026 is the final year of our elevated IT spending, and we expect to begin seeing the operating benefits of these investments flow through our results. While the industry faces continued macro headwinds, we expect revenue to be flat to up low single digits excluding divestitures, driven by continued momentum in Experiential Services, a more stable trajectory in Retailer Services, and a move towards stabilization in Branded Services over the course of the year. We expect adjusted EBITDA to be flat to down mid single digits excluding divestitures. I want to be direct about why. This reflects ongoing macro uncertainty and mix shifts toward more labor-intensive, lower-margin services while some higher-margin businesses remain challenged. That said, execution discipline, labor productivity initiatives, and technology investments should drive an improving margin profile as the year progresses. Cash flow remains a core strength and priority. We expect unlevered free cash flow of approximately $250,000,000 to $275,000,000 for the year and net free cash flow conversion of at least 25% of adjusted EBITDA, excluding the incremental costs related to a potential debt refinancing. This reflects continued working capital discipline, including further improvement in our DSO performance and a steady CapEx profile as we enter the final stage of our IT transformation. Overall, this outlook reflects both the realities of the current environment and our confidence in the progress we are making. We are building a more durable, predictable, and cash-generative company, and the actions we are taking across labor, technology, and execution position us well over time. I will now turn the call over to Christopher Robert Growe for the financial results. Christopher Robert Growe: Thank you, David, and welcome, everyone, to our call today. I will review our fourth quarter and full year 2025 performance by segment, expand on David's guidance commentary, discuss our strong cash flow results, and improved capital position. Starting with Branded Services, in the fourth quarter, we generated approximately $259,000,000 in revenues and $39,000,000 adjusted EBITDA, down 929% year over year, respectively. For the full year 2025, Branded Services generated $1,000,000,000 in revenues and $143,000,000 in adjusted EBITDA, down 921% year over year, respectively. Performance reflected sustained softness in CPG spending throughout the year, which continued to pressure results in the fourth quarter, along with challenges in the sales brokerage and omni-commerce marketing businesses. Insourcing remains a headwind; we believe this is cyclical in nature. We are focused on converting our large and expanded pipeline of new business to counteract this trend, continuing to manage costs tightly while prioritizing execution, and positioning the business for recovery as client spending improves. In Experiential Services, fourth quarter performance once again exceeded our expectations. We generated approximately $280,000,000 in revenues and $28,000,000 adjusted EBITDA, up 19115% year over year, respectively. Results reflected higher event volume, up 15% in the quarter, and faster and more responsive hiring, with execution rates exceeding 93%. The EBITDA margin was once again in the double digits, as the incremental margin in the quarter reached over 30% despite elevated labor-related costs, including workers' compensation and medical benefits. For the full year 2025, Experiential Services delivered $1,000,000,000 in revenues and $101,000,000 adjusted EBITDA, up 834% year over year, respectively. This segment experienced a strong second half finish to the year, supported by our hiring initiatives, strong execution, and robust demand, supporting momentum as we move into 2026. In Retailer Services, fourth quarter revenues were $246,000,000, with adjusted EBITDA of $20,000,000, up 1% and down 22% year over year, respectively. As David mentioned, performance was impacted by delayed projects leading to costs being incurred ahead of revenue being recognized, and ongoing pressure in advisory and agency work due to channel mix. A portion of planned project activity shifted out of the quarter and into early 2026, while associated labor onboarding and training costs were already incurred. We also saw higher workers' compensation and medical benefit costs in the segment as well. For the full year 2025, Retailer Services generated $944,000,000 in revenue and $87,000,000 adjusted EBITDA, down 212% from the prior year, respectively. Looking forward, we believe this business is positioned to grow in 2026 in a more normalized environment for retail project work, expanding our retail partners beyond the grocery segment, and an exciting suite of new value-added services we are developing. For the year, shared services and IT costs increased as systems move fully from build to live operations, which is in line with our expectations. We see shared service costs rising modestly in 2026 inclusive of higher IT spending as we near the end of our transformational IT investments. We do expect the growth in these costs to moderate after 2026, allowing us to capitalize on the efficiencies created by our shared service infrastructure. Moving to the balance sheet and cash flow, we ended the quarter with $241,000,000 in cash, up roughly $40,000,000 sequentially. The strong cash performance was driven by improved working capital performance, proceeds from recent divestitures, as well as the partial settlement on the Take 5 litigation. Specifically, we sold our minority interest in Action Food Service in September for approximately $20,000,000, and we sold Small Talk, our small marketing-oriented business, in December for approximately $20,000,000. In January, we divested part of our stake in Advantage Small in for $27,000,000, and we also received the final $27,500,000 cash payment in early 2026 from the sale of June Group. We did not repurchase debt or shares during the quarter. Our net leverage ratio was approximately 4.4 times adjusted EBITDA at quarter end, in line with the third quarter but above our long-term target of 3.5 times, and we are executing against a clear plan to reduce. Given our strong cash position, we expect to apply approximately $90,000,000 to debt pay down as part of our refinancing. Over the course of 2026, we expect our strong cash flow to contribute to continued debt paydown. With cash on hand, expectations for improved cash generation in the year, and approximately $440,000,000 available under our revolver, we believe our liquidity position supports our needs amidst a still volatile macro environment. Turning to cash generation, DSOs improved during the fourth quarter to approximately 57 days, the lowest level in our history, reflecting improved working capital management, intense focus on collections, and normalization following earlier systemic disruptions in the year. Optimizing DSO has been a priority for the organization, and we will continue to make progress in reducing DSOs as we move through 2026, which will contribute to additional cash flow generation. CapEx was approximately $24,000,000 in the fourth quarter due to heavier IT-related spending against our transformation plan. For the full year 2025, CapEx totaled $53,000,000. Turning to cash flow, we generated approximately $75,000,000 of adjusted unlevered free cash flow in the fourth quarter, and the conversion rate was nearly 130%, excluding the payroll timing shift. Cash flow performance exceeded our expectations, driven primarily by strong working capital execution, including improved DSOs. For the full year 2025, adjusted unlevered free cash flow achieved an approximately 80% conversion rate, excluding payroll timing, reflecting a materially stronger second half performance. As David mentioned, planned extension of our debt maturities from 2027 and 2028 to 2030 provides meaningful financial flexibility for the business while improving the balance sheet over time. We believe this outcome will be favorable for all stakeholders and allow us to execute our strategy and remain focused on delivering improving operating and financial results. The strategies we have in place are the right ones to achieve that goal. Turning to our outlook for 2026, our guidance reflects a measured and prudent view of the macroeconomic environment coupled with confidence in our cash flow generation. Excluding divestitures, which contributed approximately $20,000,000 to revenues in 2025, we expect revenue growth to be flat to up low single digits, with continued strength in Experiential Services, a more stable performance in Retailer Services as project timing normalizes, and a gradual recovery profile in Branded Services over the course of the year. Also excluding divestitures, which contributed over $10,000,000 to adjusted EBITDA in 2025, we expect adjusted EBITDA growth to be flat to down mid single digits year over year, reflecting continued macroeconomic headwinds, the last year of our major IT investments, and mix shifts toward lower-margin, labor-intensive businesses, particularly within Experiential Services, but also within Branded Services. While we expect execution and profitability to improve through the year, our guidance assumes a conservative margin profile early in the year and does not rely on a near-term inflection in Branded Services. Cash flow remains a core focus in our outlook. We expect unlevered free cash flow of $250,000,000 to $275,000,000 for the year, with net free cash flow conversion of approximately 25% of adjusted EBITDA, excluding any incremental debt refinancing costs. This outlook is supported by improved DSO performance and disciplined working capital management and a steady CapEx profile. We expect CapEx to be approximately $50,000,000 to $60,000,000 in 2026, consistent with 2025 levels, and this represents our final year of elevated CapEx levels before we start to see a meaningful reduction in future years. While we do not provide quarterly guidance, we do expect a widening of the first half/second half adjusted EBITDA breakdown, with the second half representing approximately 60% of EBITDA. Importantly, this guidance reflects our current assumptions around consumer spending, the labor environment, and timing of known project activity. As always, we aim to plan our business prudently and responsibly. Thank you for your time. I will now turn it back over to David. David A. Peacock: Thanks, Christopher. Our expertise and range of services position us well to navigate through 2026 with resilience and agility. We continue to execute with discipline and advance our productivity and growth initiatives. We are making measurable progress in our transformation and see proof points across the business. Finally, our focus on long-term shareholder value creation is unwavering. Operator, we are now ready to take questions. Operator: Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press 1 on your telephone keypad to raise your hand and join the queue. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question. Again, press 1 to join the queue. Our first question comes from the line of Lucas Morison with Canaccord. Your line is open. Lucas Morison: Hey, guys. Thanks for taking the question here. Maybe just first on the debt exchange. It seems like clearly the right move to me, extending the runway to 2030 and removing that near-term maturity risk. I guess my follow-on question is just around the rate step-up from 6.5% to 9%, and whether that changes the sequencing or urgency around getting into sub-3.5 times leverage, and just sort of your path to that level. Thanks. Christopher Robert Growe: Yep. Thanks, Luke. Just to give you some perspective on that, you are right. It does step up, and obviously, the term loan steps up in cost as well. Your overall borrowing rate is going up, call it 150 basis points, roughly that. And I think through this time, to get that incremental time in terms of our ability to extend the debt out to 2030, there was an incremental cost related to that, which we were aware of. I think you will see roughly $10,000,000 or so of incremental interest costs in 2026, and we will see the full sort of annualization of those costs in 2027. I would just note that on the term loan, it is SOFR plus 600 basis points, so SOFR has come down. That has led to a little less incremental cost. But I think what I would say is that certainty around the runway we have right now to 2030, another four-plus years for the debt, that incremental cost, I think, was very much worth it. It gives us the ability now to invest. We have been investing heavily—transformation investment—very heavily back in the business. We are calling this year to be the end of that, and now it gives us the time to put that into action, if I can say it that way, to start to really accelerate the growth of the business. Lucas Morison: Yes. Makes sense. And then maybe just to follow on, just looking at the guide, you explained the spread between revenue and EBITDA growth a little bit. Maybe just double click there and help us think about the structural cost base and what is the eventual path to those two lines converging over the medium term? Christopher Robert Growe: Yes. I mean, I think when you look at the business, we see a couple of drivers, especially with the fourth quarter. One, we had unusually high labor costs, largely in the benefits area, due to higher claims. This is something where we have brought in a new benefits adviser immediately and have started looking at options to bring those costs in line. We have seen pretty significant inflation across the benefits lines over the last couple of years. And then the other has been mix within our business, both cross-segment and intersegment mix. And this is basically lower-margin businesses, some of our labor-intensive businesses, growing faster than some of the businesses that are less labor intensive. I would say that as we look to stabilize the Branded Services segment in the back half of this year, later part of this year, and then obviously aim to grow that long term, that is going to help. And then we are also seeing strong incremental margin in our labor businesses. And so you are going to get to a point where the margins that are being generated from some of these labor businesses get up to the average margin in our overall business. So we do see that arresting over time and those lines ultimately inflecting differently, where you have got EBITDA growth and revenue growth either more in line or even EBITDA performance even ahead of revenue performance. Last thing I would say on it is some of the technology adoption—David talked a lot about our new systems and some of the efficiencies that will come with those. I think like a lot of firms, we are early in the stages. I think anyone who says they are late in the stages is probably not truthful on the AI front, and there are significant efficiencies to be gained there, both what I call in personal productivity but also in enterprise-wide productivity, that we are just, I think, scratching the surface like most companies, but excited about the potential. Lucas Morison: Excellent. Thank you. Operator: Our next question comes from the line of Gregory Scott Parrish with Morgan Stanley. Your line is open. Gregory Scott Parrish: Hey, guys. Good morning. Thanks for taking my question. Maybe I will just start with the revenue guide, flat to up low single digits. 2025 was down 1.5%. So maybe help bridge that step up, if you will—what is baked into your expectations on which segment is improving implied in the guide to get there in 2026? Christopher Robert Growe: Yes. Greg, it is Chris here, and thanks for your question. I would just say that in the fourth quarter, we did grow revenue, so that is a good indication as the year went on. You have seen that really significant step up in the growth of Experiential. We talked last quarter and the last couple quarters about the demand signals there being very strong, and then really want to give credit to the organization to come together to achieve the hiring needs and the execution rates that we needed to satisfy that demand. We talked about 93% execution. I hope that is even higher here in 2026 against this rising demand. So that is going to be a key driver of our 2026 momentum, and there is certainly momentum in that business. I think we do see the Retailer segment growing. We do think Branded Services moves more towards stabilization throughout the year. So I think that is one that will be a bit of a drag early on, but get better as the year goes forward. I think that is the construct we expect for the growth in the year. I think the difference versus Q4 is we do expect the Retailer Services segment to grow, and that will be the key component of what we expect for 2026 growth in revenue. Gregory Scott Parrish: Okay. That is helpful color. And maybe just double click on Branded here. I think you said you are not confident in an inflection near term, but maybe just help us—what is the catalyst here over the next six, nine, twelve months to get that on the right track in the second half? I mean, is it mostly market volumes, or are there other factors that you think could drive upside? David A. Peacock: No. I think some of it, Greg, is we saw some client losses where price became a significant issue relative to the competition, and we are lapping those, number one. Number two, frankly, we have got some new leadership in position and really a renewed focus on what I call the foundations of the business. This is not a difficult business. I tell our team all the time, if you simply do what you say you are going to do and follow up consistently with both our retailer customers and our CPG clients, it is amazing how easy this business can be. And, frankly, I think between transformation and some macro noise in the market that has certainly been difficult—and disruptions around pricing that can relate to tariffs and other things, disruptions in supply chain. We still have some clients that are struggling to meet market demand with supply, and just other macro headwinds. I think we have allowed ourselves to get too distracted and need to be focusing on executing at peak levels despite the conditions we may be competing in. So we feel very good about some of the things we are seeing with clients, the way we are operating with them, the fact that some of our clients that we have had long-term relationships with are starting to shift accounts to us to cover, versus insourcing, and maybe reversing some of those decisions. And so I think all of these things would give us confidence as we head into the latter part of 2026 about the Branded Services space. And then our new business pipeline has really never been this robust, if you will. And a lot of it can be market driven. So it is not always the large CPG that you are thinking about. It can be a lot of the emerging brands, the mid-sized CPG companies, and then just picking up a couple of accounts with various CPG companies at the market level where there is not a lengthy RFP process, but the conversion rate is much quicker. So that gives us some optimism as we head into 2026. Gregory Scott Parrish: Great. That is very helpful. And maybe just lastly for me on the divestitures. Could you size how much revenue that is? I think small ones do, but I do not know. Maybe just sort of rough numbers, like, what the divestitures would impact. Thanks. Christopher Robert Growe: Sure, Greg. It is Chris. And I did give these in my script, so you can just go back to check those. But $20,000,000 of revenue in 2025, then about a little more than $10,000,000 of EBITDA. And I think you hit the nail on the head. The reality of the two of those businesses that we divested—think our Action Food Service stake, which we have already told you about, which occurred back in the third quarter, and then the Advantage Small in have no revenue effect. But they have an EBITDA effect. And then you have got the Small Talk business, which is a marketing-oriented business that we sold in December. That is the totality of the revenue. So when I pick the revenue from that one business, but then the EBITDA from all three, I get that over $10,000,000 effect on EBITDA. So the point is to try to keep that in mind. Our guidance is based off, call it, the pro forma base, excluding that $10,000,000. Gregory Scott Parrish: Yep. Okay. That is helpful. Okay. Thanks, guys. Christopher Robert Growe: You got it. Thank you. Operator: There are no further questions at this time. I want to turn the call back over to David A. Peacock for closing comments. David A. Peacock: Thank you. We want to thank everybody for joining, and we look forward to connecting with this group next quarter. Thank you. Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Operator: Thank you for standing by. My name is Jordan, and I will be your conference operator today. At this time, I would like to welcome everyone to the Tidewater Inc. Q4 and Full Year 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. You are limited to one question and one follow-up question. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to West Gotcher, Senior Vice President of Strategy, Corporate Development, and Investor Relations. Please go ahead. Thank you, Jordan. Good morning, everyone, and welcome to Tidewater Inc.’s fourth quarter and full year 2025 earnings conference call. West Gotcher: I am joined on the call this morning by our President and CEO, Quintin Kneen; our Chief Financial Officer, Samuel R. Rubio; and our Chief Operating Officer, Piers Middleton. During today's call, we will make certain statements that are forward-looking and refer to our plans and expectations. There are risks, uncertainties, and other factors that may cause the company's performance to be materially different from that stated or implied by any comments that we are making during today's conference call. Please refer to our most recent Form 10-Ks for additional details on these factors. These documents are available on our website at tdw.com or through the SEC at sec.gov. Information presented on this call speaks only as of today, 03/03/2026. Therefore, you are advised that any time-sensitive information may no longer be accurate at the time of any replay. Also during the call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures can be found in our earnings release located on our website at tdw.com. And now, with that, I will turn the call over to Quintin. Thank you, West. Good morning, everyone, and welcome to the Tidewater Inc. fourth quarter and full year 2025 earnings conference call. I will start the call this morning discussing Tidewater Inc.’s performance during 2025, providing some highlights of the fourth quarter, update you on our current views on capital allocation, and then discuss our outlook for the market and vessel supply and demand including our initial thoughts on any impact from Operation Epic Fury. We will then provide some additional detail on our financial outlook and give you our 2026 guidance. Piers will give you an overview of the global markets and global operations and then Sam will wrap it up with our consolidated financial results. Entering 2025, there was a good deal of uncertainty as to how the market would unfold and what the pace of offshore activity would look like. Our view was not dissimilar, but we did believe that the broader set of demand drivers for our vessels would help deliver a year consistent to 2024. That proved to be the case. In the face of last year's softer offshore drilling demand and general macro uncertainty, I am pleased to say that Tidewater Inc. nonetheless delivered its best year in recent memory by nearly every metric. We generated year-over-year revenue growth, gross margin expansion, and average day rate growth. We generated EBITDA of nearly $600 million and generated nearly $430 million of free cash flow, well outpacing the free cash flow generated in 2024, which itself was the recent high point for the offshore industry activity. This performance against the broader industry backdrop not only speaks to the resiliency of Tidewater Inc.’s business model, but also to the resiliency of the company we have endeavored to build over the last eight years, with a relentless focus on scalable infrastructure and operational excellence. Fourth quarter revenue and gross margin came in ahead of our expectations. Revenue came in at $336.8 million due primarily to higher than anticipated average day rate and slightly better than anticipated utilization. Gross margin came in at nearly 49% for the quarter, an improvement quarter over quarter and about 250 basis points better than we expected. Fleet utilization continued to benefit from better than anticipated uptime and lower than expected downtime for repair and dry dock days. Additionally, during the fourth quarter, we completed a strategic internal realignment of our vessel ownership to consolidate a significant portion of the fleet under a single wholly owned U.S. entity. During the fourth quarter, we generated $151 million of free cash flow, bringing the full year 2025 total free cash flow to nearly $430 million. Fourth quarter free cash flow came in materially higher than the first three quarters of the year, which was the result of a meaningful working capital benefit, which Sam will provide more detail on later, combined with our lowest quarterly dry dock spend of the year. We are very pleased with the free cash flow generation of the business, ending the year with nearly $580 million of cash on the balance sheet. We made a comment last quarter that we would find it unacceptable to build this kind of cash on the balance sheet and would look for ways to put the cash to more productive, economically accretive use. Subsequent to the end of the fourth quarter and as announced last week, we entered into an agreement to acquire Wilson Sons Offshore Ultratug for $500 million. In addition to our expectation of maintaining the existing debt, we plan to fund the remaining purchase price with cash on hand. We are very excited about the addition of Wilson’s for a wide variety of strategic and financial reasons, many of which we discussed last week. But this is exactly the type of capital allocation opportunity we target. This acquisition has many merits as it relates to the strategic and operational capabilities, but it also provides a compelling use of capital to realize an economic return well in excess of our cost of capital. Importantly, we are able to maintain a healthy balance sheet pro forma for the transaction given the structure of our unsecured debt, revolving credit facility capacity, and the continued cash flow generation of the business. It is worth noting that during the fourth quarter, we did not repurchase any shares under our repurchase program as we were working on the Wilson’s acquisition. We retain our $500 million share repurchase authorization and capacity, which represents 13% of our shares outstanding as of yesterday's close. We have discussed our capital allocation philosophy over the last year or two. We have said consistently that given the strength of our balance sheet, we felt comfortable using a substantial amount of cash for share repurchases and/or M&A transactions, as long as the near-term cash flow visibility provides us the ability to quickly delever back down to below 1x net debt to EBITDA. As discussed last week, we expect to be below 1x net debt to EBITDA pro forma for the acquisition even as of closing, assuming a June 30 closing date. Although still developing, Operation Epic Fury adds an aspect of uncertainty to our operations in the Middle East, but thus far no real changes. Our largest geographic area of operation within this segment is Saudi Arabia, which makes up 80% of this segment's revenue for 2025, and everything there is business as usual. Our vessels in the UAE and Qatar are safely in port but remain on hire and no customers have inquired about evacuations. We do expect an increase in insurance costs while hostilities are ongoing, but that incremental cost is immaterial to our business. Diesel costs are also rising, but fuel is a pass-through to our customers. Similar to the increase in insurance cost, the impact is immaterial to our overall business. It is still early in developing, but thus far, the developments do not change our outlook for 2026, which remains optimistic, particularly as it relates to the pace of offshore drilling activity. Observable offshore drilling leading indicators such as tenders and contracts are materially higher over the past few months compared to earlier in 2025, which suggests that operators are progressing in earnest to commence additional offshore projects in the future. In our conversations with our customers, the commentary is similar to what we hear publicly. Offshore international projects are of high interest and pretender and tender conversations for our vessels continue. One other indicator, which is a bit more structural in nature, from recent oil and gas industry reports, is that the last decade of underinvestment has led to a declining resource base for many E&P companies. There have been indications that oil companies are acknowledging this challenge beyond looking just to fill the gap through their own M&A, through the rollback of capital return programs to focus on exploring activities and otherwise on activities focused on growing a given company's resource base. Combining this resource need with a longer-term hydrocarbon demand curve that looks materially higher than estimated even a year ago provides a significant incentive for our customers to explore and develop existing assets and take advantage of a healthy long-term hydrocarbon demand environment. We believe that the offshore resource base provides a compelling opportunity for oil companies to find new resource bases, and believe that these fundamental factors will support an increase in drilling activity not only as we progress through the year, but for at least the next few years. I have only spoken about drilling, but the other areas of activity where we benefit—production support, offshore construction, and EPCI work—are all likely to benefit in the scenario outlined. To the extent that drilling activity does increase in a structural way, this will likely occur in frontier regions that require new subsea infrastructure and ultimately FPSO installations to efficiently move product to market. This element of our business continues to serve us well today, and would also provide for incremental vessel demand. It is useful to contrast this intermediate demand picture with the current state of vessel supply, which, as we often say, is the most important determinant of the long-term financial health of our business. The demand curve for vessels is highly inelastic. When vessel supply slightly exceeds demand, our pricing power is fairly restrained. However, when demand slightly exceeds vessel supply, pricing leverage accelerates quite quickly. The global fleet of vessels has been essentially unchanged, if not declining slightly, over the past few years. In 2024, there was a handful of newbuild vessels that were ordered, representing roughly 3% of the global fleet. We have not seen any newbuilds ordered since then. Given the lead time on newbuild orders—somewhere between two to three years—and some of the structural reasons that were limiting newbuild ordering that we have discussed in the past, the vessel supply and demand picture I have illustrated depicts what we believe to be an exciting outlook for the offshore vessel industry. In summary, we are pleased with how the business performed through 2025 with a particularly strong finish to close out the year. We are excited to welcome the Wilson’s organization into the Tidewater Inc. family and will work diligently to close the transaction and to integrate the business. We will look to continue to efficiently allocate capital to the highest returning opportunities we have against a compelling vessel supply and demand that we believe is in the early stages of developing. And with that, let me turn the call back over to Wes for additional commentary. West Gotcher: Thank you, Quintin. Subsequent to the end of the fourth quarter, we announced the acquisition of Wilson Sons Offshore Ultratug for $500 million in an all-cash transaction. We expect to finance this transaction using cash on hand and the assumption of approximately $261 million of debt provided by BNDES and Banco do Brasil. The assumed debt carries a weighted average cost of 3.6%. Further, the assumed debt has a long-term amortization profile that stretches out to 2035, with no particular year of amortization adding any significant maturities to our current debt maturity profile. Assuming a 06/30/2026 closing date, we expect to have a net leverage ratio below 1x. As Quintin mentioned, we did not repurchase any shares during the third quarter due to the Wilson’s acquisition—excuse me, during the fourth quarter due to the Wilson’s acquisition. At the end of the fourth quarter, we retained our $500 million share repurchase authorization. As a reminder, under our outstanding unsecured bonds, we are unlimited in our ability to return capital to shareholders, provided our net debt to EBITDA is less than 1.25x, pro forma for any share repurchase. Under our revolving credit facility, we are also unlimited in our ability to repurchase shares, provided that net debt to EBITDA does not exceed 1x. However, to the extent we exceed 1x net leverage, we still retain the flexibility to continue to return to shareholders, provided that free cash flow generation is in excess of cumulative returns to shareholders. From a financial policy perspective, our approach to leverage remains consistent. Our general test is that so long as we can return to net debt zero in about six quarters, we are comfortable to proceed with a given outlay of capital. Further, our target leverage at any given point in time is 1x, although we will consider exceeding this target for M&A based on the relative merits of the transaction and the visibility and durability of the acquired cash flows, all with an eye to returning to our target leverage level with an ability to return to net debt zero in about six quarters. We will maintain a disciplined approach to deploying debt in such a way that we are able to achieve return-enhancing uses of capital while maintaining the strength of our balance sheet. We remain opportunistic on share repurchases, and we will look to execute share repurchase transactions when suitable M&A targets are not available. We retain the option of evaluating M&A and share repurchase concurrently, but our financial policies and philosophies outlined dictate our relative appetite to pursue both concurrently. Turning to our leading-edge day rates, we will reference the data that was posted in our investor materials yesterday. Across the fleet, weighted average leading-edge day rate was down slightly in the fourth quarter compared to the third quarter. During the quarter, we entered into 21 term contracts with an average duration of six months, and so we are working to ensure that we maintain vessel availability for new contract opportunities as the market is expected to tighten later this year. Turning to our financial outlook, we are updating our full-year 2026 guidance to contemplate the Wilson’s acquisition, assuming a June 30, 2026 closing date. We are raising our full-year 2026 revenue guidance to $1.43 billion to $1.48 billion and a full-year gross margin range of 49% to 51%. The updated guidance is reflective of the addition of the Wilson’s fleet and does not contemplate any changes to our guidance for the legacy Tidewater Inc. business. Our expectation remains that there is the potential for uplift depending on the strength of drilling activity picking up towards the end of the year. Looking across 2026, firm backlog and options and January revenue for the legacy Tidewater Inc. fleet represent approximately $1.1 billion of revenue for the full year, representing approximately 80% of the midpoint of our legacy Tidewater Inc. 2026 revenue guidance. Approximately 65% of available days for 2026 are captured in firm backlog and options. Our full-year revenue guidance assumes utilization of approximately 80%, leaving us with about 11% of capacity to be chartered if the market tightens quicker than we are anticipating. Our largest class of PSVs and anchor handlers retain the most opportunity for incremental work, followed by our midsized anchor handlers and small and midsized PSVs. Contract cover is higher earlier in the year, with opportunity available later in the year. The bigger risk to our backlog revenue is on unanticipated downtime due to unplanned maintenance and incremental time spent on dry docks. With that, I will turn the call over to Piers for an overview of the commercial landscape. Piers Middleton: Thank you, Wes, and good morning, everyone. Before I talk about the market and put some of Quintin and Wes’s comments into a wider global context, I wanted to mention that we will be releasing our sixth sustainability report in early April. This report, as always, is a global team effort. I would like to take this opportunity to thank everyone within the Tidewater Inc. team for their hard work and commitment helping to put this report together as we continue to showcase to all our stakeholders our historical as well as our future commitment to sustainability. Please look out for the report. Turning back to the offshore space, as Quintin has already mentioned, 2025 was a very good year for Tidewater Inc., which is testament to the hard work of the whole team not just in maintaining market-leading day rates, but also continuing to improve our vessels' uptime with a laser focus on making the right investments in the maintenance and operations of our vessels to be the gold standard in the industry and thereby continuing to decrease our downtime for repair days year over year across the global fleet. We all came into 2025 with a level of uncertainty as to how the market would turn out. So for our global teams to deliver such impressive results in a flattish market, I believe bodes very well for us as we start to see the expected tide of increasing demand turn in 2026. Demand had eased back slightly during 2025; however, long-term fundamentals of the business are still very much in Tidewater Inc.’s favor, and with the limited supply story, the only truly global footprint, and the largest and one of the youngest and best maintained fleets in the industry, we are well placed to springboard on from our 2025 results and make further progress in future years as expected demand growth comes back online in 2026. Turning to our regions. Starting with Europe and the Mediterranean. The Mediterranean seems set fair to be very active during the year with several oil majors announcing and tendering for drilling programs in the region for commencement in 2026, as well as several EPCI projects kicking off throughout the year. So we expect a very active 2026 in the Mediterranean. In the North Sea, Norway looks set for a good few years ahead. With additional rigs expected in the region and some PSVs expected to leave the OSV space, the supply-demand balance should further tilt in our favor over the next few years. Even in the UK, rumors continue to circulate that the UK government is discussing an early end to the windfall tax levy as soon as this year, although the more likely scenario is this would not fully come into play until 2027. But as we mentioned in our last call, this would be a significant shot in the arm for the industry in the UK. Lastly, in the North Sea, where we operate two large AHTSs, we have seen some early signs of large AHTS spot rates both in the UK and Norway cresting over $100,000 per day. While these are very short-term contracts, it is quite unusual to see day rates this high so early in the year. With a couple of large AHTSs leaving the region over the winter for warmer climates, we do expect to continue to see strong rates for large AHTSs through the rest of 2026. In Africa, sentiment remains cautiously optimistic for 2026, strengthening drilling activity in West Africa and neighboring regions such as the Mediterranean and Mozambique coming back into play is expected to support high utilization and day rate increases across all AHTS and PSV segments throughout the year. A number of oil companies have released tenders for further exploration campaigns in 2026 in Namibia. The 900 square meter plus PSV region in a country where over the last few years we have been very successful supporting our customers from our in-country base, and the expectation is that in early 2027 we should start to see a number of our customers kicking off field development in earnest in Namibia, which is more vessel intensive, especially in countries like Namibia with limited infrastructure. Similarly, in Mozambique, we are starting the year supporting TechnipFMC with four of our larger OSVs, with the expectation that we will start to see several other projects kick off in Q3–Q4 of this year and go well beyond 2027, as things continue to settle down safety-wise in-country. Lastly, in Angola, we are seeing a lot of increased activity in-country, as the government continues to pressure the IOCs to increase production, and thereby a big focus on both improving existing fields for improved subsea but also through exploration for new fields, as Angola sees annual production rates stagnating. Overall, we are positive with the outlook for Africa as we get towards the latter part of 2026, and for the next few years beyond. The Middle East market remains tight with very limited availability of tonnage in the region, and we expect the region to remain supply constrained for the short to medium term. The opportunity will be there to continue to push rates throughout 2026. Of course, as a word of caution, as Quintin just mentioned, we are watching carefully the ongoing situation in the region, and as of today, operations are continuing. However, the safety of our people and crew in the region are of the utmost importance, and as such, we will constantly be monitoring the situation and work with all of our stakeholders to make sure everyone stays safe. In Asia Pacific, Australia looks to be a flattish year compared to 2025, with most of our customers focusing on production, so we do not expect any significant incremental demand during 2026. In Malaysia and Petronas specifically, we saw an uptick in activity in the latter half of 2025 which has meant that locally owned OSVs have now gone back to work, meaning there is less supply available to depress day rates in the wider region, which, with increased tendering activity in countries like Indonesia, Myanmar, and Vietnam, should mean that we are able to push rates upwards for the larger class of PSVs as we move into 2026. In the Americas, the Gulf of Mexico market outlook for 2026 looks flat at best and we expect there to be some pressure through the year. There will be very limited work on the East Coast, which over the last few years has soaked up a number of boats in the Gulf during the summer months and kept the supply-demand balance in check. We have limited Jones Act exposure with only four or five of our U.S. boats currently working there, and we believe any softening in the Gulf will be more than offset by the growing demand we are seeing in the Caribbean. In Mexico, with Pemex seeming to slowly be righting their listing ship, we are cautiously optimistic that by the end of this year we will really start to see some significant increase in the tendering activity driven both by Pemex, and also by a number of new operators that are targeted to be coming into the country to help Mexico focus on increasing its falling production rates. Lastly, in Brazil, we are very excited about the long-term prospects in the country, evidenced by our recent announcement to acquire Wilson’s Ultratug, and as we talked about last week, we really believe that the combination of our two companies will create an even stronger platform to allow us to continue to support and meet the growing demands of our customers in Brazil. Overall, as Quintin mentioned, we are very pleased with how our global team both on and offshore performed through 2025, and while we saw some softening in the offshore space during 2025, the market still continued to move in the right direction through the year, and we remain positive that the platform we have created will continue to be able to reap significant rewards for all of our stakeholders for many years to come. And with that, I will hand over to Sam. Thank you. Samuel R. Rubio: Thank you, Piers, and good morning, everyone. At this time, I would like to take you through our financial results. My discussion will initially focus on the full year 2025 compared to 2024, followed by a deeper discussion of the sequential quarterly results from 2025 compared to 2025. As noted in our press release filed yesterday, we generated revenue of $1,350,000,000 for the year, an increase of approximately $7,000,000 versus our 2024 amount. Gross margin for the year was $665,800,000 compared to $649,200,000 in 2024. Our net income was $334,700,000 compared to $180,700,000 in 2024. Our net income for the quarter and full year 2025 includes the previously mentioned tax benefit related to a strategic realignment of our vessel ownership. Included in that amount is a one-time non-cash tax benefit of $201,500,000, primarily related to the utilization of foreign tax credits that were previously subject to valuation allowances. The incremental tax basis is reflected in deferred tax assets for property and equipment. Average day rates improved by $1,300 per day for the full year to $22,573, while active utilization decreased slightly to 78.7% due to more idle days, partially offset by fewer dry dock and repair days. The strength in the day rates combined with the reduction in operating costs versus 2024 increased our gross margin by about one percentage point year over year to 49.2%. Adjusted EBITDA was $598,100,000 for 2025 compared to $559,600,000 in 2024. We also generated $426,000,000 of free cash flow, an increase of $95,000,000 from 2024 due in part to a reduction in dry dock costs of $35,000,000. We also sold 12 vessels for total cash proceeds of $17,600,000. Working capital was a source of cash due to notable success in our cash collections during Q4. Our success in our Q4 cash collections was a large contributor to our free cash flow generation in 2025. Overall, 2025 was a good year with strong free cash flow delivery and solid operational execution, as well as completing important strategic initiatives including our debt refinance in Q3 and the previously mentioned vessel realignment. Our improved balance sheet and future cash flow generating capability will continue to provide opportunities to deploy capital in M&A, as illustrated by the Wilson’s announcement last week, as well as repurchase our own shares. As a reminder, although we did not repurchase shares during Q3 or Q4, for the full year we used $98,000,000 in cash to reduce approximately 2,800,000 of our shares in the market during the year, including shares which were held back to pay roughly $8,000,000 in taxes related to vesting of employee share-based awards. I would now like to turn our attention to the fourth quarter, where we reported net income of $219,900,000, or $4.41 per share, which includes the tax benefit mentioned previously. We generated $336,800,000 in revenue compared to $341,100,000 in the third quarter. Average day rates were down about 3% versus the third quarter; however, we did see a nice increase in active utilization from 78.5% in the third quarter to 81.7% in the fourth quarter, which was our highest active utilization since Q1 2024. This utilization increase resulted mainly from the decrease in idle and write-off days. Gross margin in the fourth quarter was $164,000,000 compared to $163,700,000 in the third quarter. Gross margin percentage in the fourth quarter was almost 49%, nicely above our Q4 expectation and slightly ahead of our Q3 margin of 48%. The increase in margin versus Q3 was primarily due to a decrease in operating costs. Operating costs for the quarter were $172,700,000 compared to $177,400,000 in Q3. In the quarter, there were three fewer vessels operating in Australia, which is a high operating cost area. Overall, we saw a decrease in salaries, travel, and consumable expenses, partially offset by increases in R&M and other vessel expenses. Adjusted EBITDA was $143,100,000 in the fourth quarter compared to $137,900,000 in the third quarter. For the year, our total G&A costs were $134,500,000, which is $23,700,000 higher than 2024, primarily due to increases in professional fees and personnel costs. This amount includes approximately $8,300,000 in transaction-associated costs related to our M&A diligence efforts. G&A cost for the quarter was $39,000,000, $3,700,000 higher than the third quarter due primarily to an increase in professional fees and personnel costs. For 2026, exclusive of additional M&A costs, we expect Tidewater Inc. standalone G&A costs to be about $123,000,000. This includes an estimated $15,000,000 of non-cash stock compensation. Moreover, we expect to incur approximately $7,000,000 in additional G&A costs in the second half of this year related to the Wilson’s acquisition. Dry dock costs for the full year were $98,600,000, which includes approximately $35,000,000 of engine overhauls. Full year 2025 dry dock days affected utilization by about five percentage points. In the fourth quarter, we incurred $13,900,000 in deferred dry dock costs compared to $17,600,000 in the third quarter. We had 672 dry dock days that affected utilization by about four percentage points in Q4. Dry dock cost for 2026 is expected to be approximately $122,000,000, which includes $46,000,000 of engine overhauls. 2026 dry dock days are expected to affect utilization by approximately five percentage points. Additionally, we expect to incur about $16,000,000 in dry dock costs in the second half of the year related to the Wilson’s acquisition. Full year 2025 capital expenditures totaled $25,800,000. In Q4, we incurred $5,100,000 in capital expenditures related to vessel modifications and upgrades, ballast water treatment installations, DP system, and IT upgrades. For the full year 2026, we expect to incur approximately $51,000,000 in capital expenditures. The increase year over year is primarily due to a planned major upgrade to one of our Norwegian vessels, which is supported by customer contract. Optional upgrade or maintenance CapEx is expected to be approximately $36,000,000 during 2026. We will also spend an additional $24,400,000 in 2026 related to two purchase options we have exercised for vessels we have been leasing. The purchase option prices were below market value for these vessels. Finally, we expect to incur about $1,000,000 in CapEx in the second half of the year related to the Wilson’s acquisition. We generated $101,200,000 of free cash flow in Q4 compared to $82,700,000 in Q3. In the quarter, we sold two vessels for proceeds of $5,300,000 and incurred $3,800,000 less in deferred dry docks. However, the free cash flow increase quarter over quarter was mainly attributable to significant working capital benefit achieved in Q4 due to an increase in cash collections. This was largely due to our cash collections related to our largest customer in Mexico, whose overall receivable balance decreased by more than $40,000,000. As a result, our overall DSO decreased by 14 days quarter over quarter. As a reminder, following our debt refinancing, which was completed in Q3 2025, we only have small debt repayments that are related to refinancing of recently constructed smaller crew vessels. We have no payments until 2030 on our new unsecured notes. Following the anticipated close of the Wilson’s acquisition, our debt maturity and repayment profile will change to accommodate the newly assumed Wilson’s debt. We conduct our business through five operating segments. I refer to the tables in the press release and the segment footnote and results of operations in our 10-Ks for more details of our segment results. In the fourth quarter, consolidated average day rates were down versus the third quarter; however, results varied by segment with our Middle East day rates improving by 9%, which was offset by day rates declining in each of our other regions. Total revenues were slightly lower compared to the third quarter, with increases in our Middle East and African regions offset by decreases in our APAC, Americas, Europe, and Mediterranean regions. Regionally, margin increased in Africa by six percentage points, and we also saw a three percentage point increase in our APAC region as well as a one percentage point increase in the Middle East. Our Europe and Mediterranean region saw a decrease of one percentage point and the Americas declined by eight percentage points. The gross margin increase in our African region was primarily due to a large increase in utilization of 13 percentage points, combined with a slight decrease in operating costs and partially offset by a 2% decline in average day rates. The increase in utilization was due to fewer idle, dry dock, and repair days. Gross margin increase in the APAC region was due to an increase in utilization and a large decline in operating costs, partially offset by a day rate decrease of about 11%. The decline in operating costs and day rates are primarily due to three fewer vessels operating in Australia versus Q3. Utilization increase is primarily due to a decrease in idle and dry dock days, partially offset by an increase in repair days. The increase in the Middle East gross margin was primarily due to a 9% increase in average day rates, partially offset by higher operating costs. The cost increase was primarily due to higher R&M and personnel expenses. Utilization was roughly flat quarter over quarter. Our Europe and Mediterranean region gross margin was marginally lower versus the previous quarter, and the gross margin decrease in our Americas region was driven by a nine percentage point decline in utilization as well as a 6% increase in operating costs. The cost increase was primarily due to higher R&M and higher fuel expense due to lower utilization compared to Q3. The decrease in utilization was due to higher dry dock and idle days. In summary, Q4 was a strong quarter. We delivered both strong financial results and free cash flow. Our balance sheet is in excellent position and the industry long-term fundamentals remain very strong. We are especially excited about the Wilson’s acquisition in the highly important Brazilian market, and we remain optimistic about the opportunities that lie ahead for Tidewater Inc. With that, I will turn it back over to Quintin. Quintin Kneen: Thank you, Sam. Jordan, I think we can go ahead and open it up for questions. Operator: Great. In order to ask a question during this time, simply press star 1 on your telephone keypad. First question comes from the line of James Michael Rollyson from Raymond James. Your line is live. James Michael Rollyson: Yeah, you can call me Jimmy. That is fine. Good morning, everyone. Quintin or Piers, so if you kind of lay out the day rate picture, right, leading edge has slipped the last couple quarters, which I guess just speaks to the whitespace timing and seasonality and that kind of stuff. But with what Piers went through, you know, with maybe a couple exceptions, it sounds like things are shaping up to get, you know, materially better as we move through this year and into next. Maybe just some context around the guidance and kind of your thoughts on how your fleet average day rates move throughout the year and heading into next. Right? You were going up $4,000 a day for a couple years. That kind of trimmed back to, I think, was $1,300 that Sam mentioned. But how do you think that trajectory looks and kind of what is embedded at the midpoint of guidance for 2026? Piers Middleton: Well, I will start. You know, obviously, we are expecting things to be somewhat flattish for 2026, but looking for a tightening in the market in the second half. We are not banking that into the guidance. But if we do see that tightening, my hope is that we are going to see those day rates climb in 2027 and 2028 at another $3,000 and $4,000 a day. So it is quite responsive to even small increases in demand for vessel usage. We are starting to see some signs of that. So, you know, if you go back two or three years, there was some slackness in the Middle East, but, you know, you see that that region was one of our best movers in the past quarter. I expect that to continue. I am getting very excited about what I am seeing develop in West Africa, and we saw some rate there. So as long as the world can still hold itself together and maybe, as Piers indicated, we get some relief from the taxing authorities in the UK, we will see that market tighten up globally. And then you will see those $3,000–$4,000 a day movements per year. So I may have covered what Piers was going to say, but he and I are in separate locations. Let me just ask Piers if he wanted to add anything before we hand it back to you. Piers Middleton: No. I mean, Quintin, you should join the commercial team. That was brilliant. Yeah. No. Nothing more to add. I mean, we are actually just—I think, Jim, we are seeing, you know, a lot of, I think as Quintin said in his opening remarks, a lot of additional tender and pretender type of conversation at the moment with our customers, which does really bode well for the sort of second half of this year. You know, big projects both on the E&P stuff and also on the drilling side as well. So, yeah, very optimistic as we get towards the latter half of the year. And I think as Quintin said, then we get the chance to really push rates in 2027 to hopefully where we were in the last big time we got to really push rates. James Michael Rollyson: Yeah. That is certainly exciting and nice to actually have visibility beyond just kind of hope of things going. And my follow-up is probably for Sam. Sam, if you kind of line up your midpoint of guidance, let us just say, for 2026 and the little bit higher dry dock CapEx and a little bit higher overall CapEx, and then, you know, however you are thinking about working capital as Pemex kind of catching up, how are you thinking about free cash flow generation right now for 2026? Samuel R. Rubio: Yeah, Jim. Thanks. No. I think the free cash should stay fairly strong for 2026. You know, we did see in Q4 2025, obviously, we had a big bump in our cash collections. So, you know, if we look back over the last few years, you know, it should average out in the, you know, $300–$311 million somewhere. Quintin Kneen: Yeah. I guess the other thing I would add to that, Jim, is that we did have a disproportionate bump in Q4 from the lump-sum collections from Pemex, and we are certainly very happy to see that. I need to see them continue to pay at that level. But if you look at the DSO for us, it is actually abnormally low for such an internationally and broad company, and that may normalize. So that may eat up some otherwise, you know, operational cash flow in 2026. James Michael Rollyson: That is kind of where I was going. Thank you. Appreciate it, guys. Samuel R. Rubio: Thanks, Jim. Operator: Your next question comes from the line of Keith Beckman from Pickering Energy Partners. Your line is live. Keith Beckman: Hey. Thanks for taking my question. Always appreciate the slide that you guys kind of put out on newbuild economics. Just kind of wanted to get a sense on maybe you see the maximum vessel life for a majority of the PSVs in the industry, and then when you think a rough timeline maybe on when you think we could face either serious upgrades and renovations or a full newbuild cycle? Obviously, looking much further down the road. Quintin Kneen: Well, I will start. And as I indicated, Piers, Wes, and I are in separate locations. I am here with Sam. So he and Wes may want to add something because he maintains those slides. But I will tell you that the industry is a lot more capital disciplined than it has ever been in my two decades in the industry. I was at a conference about a month ago, and this was a big discussion, and nobody is interested in building. If you look at most people's financial statements, they use a 25-year depreciation life. But the fact is these boats can work well into 30, 35 years. But they will need serious upgrades as they go forward, and that needs to be supported by day rates and so forth. So, you know, I think that we are going to see real modest to almost no building in the next year. And then if the industry does pull back—like I was just mentioning to Jim—in 2026 and 2027, and you start to see average day rates closer to $30,000 a day, you are definitely going to see some building. But at least from my discussions recently, I believe it is going to be very moderate and be more replacement-oriented. So we will have to see how it plays out. But I still think that we need to see day rates closer to $30,000 a day before you see anybody spending a lot of money and certainly before you see banks supporting Keith Beckman: Awesome. That is very helpful. And then my second question was just around—like, right now, obviously, you guys are focused on integrating the Brazil acquisition. I was just wondering if there are any other regions that could make sense to increase your fleet looking forward down the road, or on the other end of that, is there any sort of fleet rationalization that could make sense at some point on maybe some lower-spec boats? Quintin Kneen: Well, you know, we sell boats on a regular basis, and Sam, I think, covered some of the boats we sold during the year. So every year, you know, there are some vessels that hit the wall. So, economically, we will sell them off. But certainly, the regions that we are in today are regions that we are dedicated to. I am actually—I mentioned it in one of the remarks, I think, earlier on the call. I cannot remember if it was in the questions or earlier on the call. But I am excited about West Africa. I am starting to see things really solidify there, and, you know, historically I had been focused on the Americas, and obviously we got the deal done in Brazil. I guess now more I am tilting towards West Africa, but we will just have to see. You know, a lot of it has to do with price, and that is always hard to say. Keith Beckman: I really appreciate you taking the time, and I will turn it back. Samuel R. Rubio: Thank you. Operator: Your final question comes from the line of Greg Lewis from BTIG. Your line is live. Greg Lewis: Hey. Thank you, and good morning, and thanks for taking my questions. Samuel R. Rubio: Certainly. Samuel R. Rubio: Good morning. Greg Lewis: Hey. I did want to talk a little bit about what is happening in the Middle East. You mentioned things are kind of just business as usual, I guess, in Saudi Arabia. I realize it has been years, right, since Saudi evacuated a rig. I think you probably have to go back to, what, Desert Storm, which I do not—I do not—I doubt—maybe, Quintin, maybe you were in the industry, but I do not know anyone else was. As we think about that, is there any kind of way to think about if we do evacuate rigs, as we think about the contracts with Aramco, are there, like, force majeure clauses? Is there any kind of contract language that allows them to pause contracting or anything like that? How should we think about the—you know, realizing it is changing by the hour probably? Quintin Kneen: So you are right to think about the Middle East as the primary active area, of course. I will tell you that when it comes to Saudi Aramco, they rule the roost, and, no, there is nothing in the contracts that gives them the privilege to cancel at will. But, you know, they are a strong force and they will come to us if they feel they need to reduce the vessel count. But the reality is, during these times, people need oil and the production becomes very important. And so, in that particular area where it is very production focused offshore, I expect that, you know, we may see things like insurance costs go up. We may see things like personnel costs going up, because it sometimes gets harder for people to go there during those times. At least that is what we have seen in the past. But I am honestly, at this point, not concerned. But, you know, obviously, we will update you in the next month and a half or in May when we do the first quarter call. But, no, it is just what we do. So it is—for right now, it is just not a concern. Greg Lewis: Okay. Great. And my other one, appreciating, you know, you guys have your ongoing merger with—happening. I guess I am just kind of curious. It looked like OceanPact is acquiring CBO in Brazil also. Has anything changed in Brazil that is kind of driving this kind of flurry of M&A activity? I feel like everybody has been waiting for potential consolidation in Brazil for, I do not know, a few years now. And it just seems like all at once, it is happening. Is there anything that has changed that is driving this? Just kind of curious if you have any kind of color you could provide around that. It is the optimism that, you know, that is in Brazil today. Quintin Kneen: You know, there was some back and forth in 2025 about what Petrobras was going to be doing and what the activity levels were going to be and, generally, you know, the strength of the South American market. And then I would tell you that people are just very focused on finding long-term contracts with good payers at good margins, and Brazil fits that bill. I think that it is just coincidental that these two transactions have happened real quickly. You know, whisper talk has been that they have been going on for a couple of years, and so, as a result, you know, yeah, I think it is just more coincidental of the timing, but the general optimism in Brazil is quite nice. Greg Lewis: Okay. Super helpful, and congrats on the quarter too. Samuel R. Rubio: Thanks, Greg. Operator: That concludes today's question and answer session. I will now turn the call back over to Quintin Kneen for closing remarks. Quintin Kneen: Jordan, thank you, and thank you, everyone. We will update you again in May. Goodbye. Operator: That concludes today's meeting. You may now disconnect.
Operator: Hello, everyone. Thank you for joining us, and welcome to the 908 Devices Inc. Fourth Quarter 2025 Financial Results Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. Please go ahead. I will now hand the call over to Barbara Russo, Vice President of Marketing and Corporate Communications. Barbara Russo: Thank you, and good morning. On this call, we will be discussing our financial results for the fourth quarter and full year ending 12/31/2025, which were released earlier this morning. Joining me from 908 Devices Inc. is Kevin J. Knopp, Chief Executive Officer and Co-Founder, and Joseph H. Griffith, Chief Financial Officer. During today's call, we will make forward-looking statements within the meaning of federal securities law. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. For a discussion of these risks and uncertainties, please review the forward-looking statement disclosure on Form 10-Ks and other SEC filings in the earnings news release, as well as in our most recent annual report. These forward-looking statements reflect management's beliefs and assumptions as of the date of this live broadcast, 03/03/2026. Except as required by law, we disclaim any obligation to update forward-looking statements to reflect future events or circumstances. Our commentary today will also include non-GAAP financial measures, which should be considered as a supplement to, not a substitute for, GAAP financial measures. The non-GAAP reconciliations can be found in today's earnings press release, which is available in the Investor Relations section of our website. With that, I now turn the call over to Kevin. Thanks, Barbara. Kevin J. Knopp: Good morning, and thank you for joining our fourth quarter and full year 2025 earnings call. I want to start by expressing my sincere appreciation to our entire team for their exceptional execution and unwavering commitment to our strategic transformation throughout 2025. The momentum we have built and the progress we have achieved reflect our disciplined focus on delivering innovative chemical analysis devices that protect frontline responders worldwide. I am pleased to report that we achieved $17.4 million in revenue from continuing operations in Q4, representing robust 21% year-over-year growth. This performance was driven primarily by three factors: one, continued demand for our Explorer gas identification device by firefighters and hazmat response teams; two, strong initial demand for Viper, our new product that provides simple and fast chemical analysis of solids and liquids; and three, continued strong adoption of all of our products by U.S. state and local customers. Most importantly, we achieved positive adjusted EBITDA in the fourth quarter of $700,000, which is a remarkable improvement from the prior year's loss of $4 million. This achievement validates the structural initiatives we implemented as part of our transformation. For the full year 2025, I am proud to report that we delivered $56.2 million in revenue from continuing operations and in line with our five-year CAGR performance, representing strong 18% year-over-year growth. This strong performance validates our focus on vital health, safety, and defense tech applications. A key highlight was our team's execution of replacing outdated FTIR equipment with modern devices—one of our growth catalysts. In 2025, more than 50% of device placements came from FTIR, led by the full-year impact of our Explorer device. Another highlight is our achievement of 22% year-over-year growth in recurring revenue, which represents 35% of our 2025 revenues. This growth reflects our ongoing efforts to offer more value to our customers through service, support, software, and accessory offerings, strengthening revenue visibility and long-term predictability. I would now like to highlight our progress during 2025 across our three strategic focus areas. Our number one focus has been to increase adoption of our devices to address global threats to public health and safety. Our Explorer device continues to be a standout performer with its unique capability to detect, identify, and quantify over 5,000 unknown gas and vapor chemical threats in seconds. The market response has been exceptional across fire and hazmat teams worldwide, who recognize the device's value in filling a critical gap in on-site gas identification to better inform decision-making and accelerate action. In its first full year of commercial sales, the quantification-enabled Explorer delivered over 150 units to high-quality accounts, including the council of governments serving the broader Washington, D.C. area and the U.S. Marine Corps CBRNE installation and protection program. These wins underscore the growing adoption of Explorer among premier federal and regional response organizations. As a result, Explorer achieved standout growth of more than 40% year over year, reflecting both the strength of demand and the impact of introducing quantification capability into the field. To help drive procurement efficiency and predictability in our U.S. federal government business, we consolidated contracting partners in the fourth quarter from four to one. For 2026, we are now working with Mountain Horse Solutions, who specializes in supplying mission-critical equipment, such as our portfolio of devices, to all levels of the U.S. government and military. By leveraging their strong procurement relationships, contracting expertise, and integrated logistics and kitting capabilities, we improve forecasting accuracy and level-load production as a supplier while enabling government customers to receive fully configured, mission-ready solutions more quickly and reliably. We look forward to the benefits of coupling our demand generation with their procurement expertise. Outside the U.S., we saw traction for devices accelerate, especially in Europe, as NATO countries have begun increasing their defense budgets due to the ongoing war in Ukraine and other global concerns. For the full year of 2025, 27% of revenues came from outside the United States. This is an increase from 25% in 2024, with an even stronger increase in sales along NATO's eastern flank. We shipped chemical detection devices to Poland, Czech Republic, Finland, Ukraine, and others in the region. This international expansion, we believe, is just beginning, across all customer segments. Moving to our second objective, advancing our next-gen analytical tools portfolio. Our newest device, Viper, which we launched in July 2025, represents a breakthrough in simple, field-based chemical identification of unknown bulk substances by combining FTIR and Raman spectroscopy technologies with our proprietary smart spectral processing capability. The device's simple and smart workflow is game-changing for customs and border personnel as well as hazardous response teams. When connected with our Team Leader app, Viper allows field teams to instantly share results with command centers and subject matter experts, dramatically improving response coordination and decision-making speed. Overall, we are excited about the positive market reception for Viper with early deployments across state and local hazmat teams and international customers. In the fourth quarter, we shipped more than 40 Viper units, over $3 million in revenue, and are encouraged by the ultimate potential of this new product and the full-year impact that Viper will have in 2026. We also enhanced our flagship MX908 platform in 2025 and recently released several usability improvements, including the new TIC Hunter mission mode that provides first responders with a more guided and purpose-built tool for hazardous vapor detection. Additionally, we expanded the device's drug detection capabilities by adding five new priority targets, including medetomidine, a veterinary sedative estimated to be 200 times more potent than xylazine and which is increasingly being mixed with fentanyl. As the illicit drug landscape continues to evolve, our software-updatable platform enables us to rapidly deploy new target libraries and capability enhancements, ensuring law enforcement remains current and equipped to address emerging threats in real time. And finally, our third focus has been to strengthen our financial position and accelerate profitability. The operational improvements we implemented throughout 2025 have solidified our financial position. Our manufacturing consolidation into Danbury, Connecticut, and our move to a cost-efficient headquarters in Burlington, Massachusetts, have created meaningful efficiencies across our operations. These initiatives, combined with our disciplined cost management approach, enabled us to achieve our goal of positive adjusted EBITDA, which was $700,000 in the fourth quarter. This achievement demonstrates that our cost structure is now rightsized, disciplined, and fully within our control. Compared to our year-end 2024 position, we also strengthened our balance sheet materially, exiting 2025 with $113 million in cash. With this solid financial foundation, we now have the flexibility to invest in the expanding growth opportunities ahead, driven by developing secular tailwinds such as increased funding to combat the fentanyl and illicit drug crisis and increased global defense budgets. To that end, we have established three strategic focus areas for 2026. First, scale proven platforms. We will sustain growth by continuing to modernize legacy detection equipment, especially FTIR, across global fire, law enforcement, and defense enterprise accounts. We believe we have only made a dent in the overall potential and expect 2026 to benefit from a full year of growth of our newest product, Viper. Second, extend platform leadership. We will also drive growth with greenfield placements, differentiated capabilities, and disciplined product introductions. New capabilities drive new opportunities. Our Explorer product is a great example of this. With the differentiated gas quantification and identification capabilities, it is quickly penetrating the broader gas detection market. Similarly, our MX908 is now the proven device for trace chemical identification, and our law enforcement customers continue to rely on its unique capabilities. We expect to build on this and raise the bar further with our next-gen mass spec platform. And our third focus is to strengthen revenue durability. We are building a predictable revenue mix by pursuing recurring revenue opportunities with connected services, expanding OEM-based revenue, and through long-term programs. To that end, our DoD AVCAD program in partnership with Smiths Detection is nearing its next phase. Field testing was completed in late fall, and as of today, we believe all material issues have been deemed addressed. Smiths Detection has responded to an RFP for a next phase and is awaiting feedback from the government. This next phase quoted is for an initial production run of approximately a few hundred systems, with component and subsystem contributions from 908 Devices Inc. being potentially delivered throughout the second half of this year. We remain committed to support Smiths Detection and DoD on this important national defense effort. We look forward to updating you on our progress in each of these focus areas on future calls. I will now turn it over to Joseph H. Griffith to review our financial performance. Thanks, Kevin. As a result of the sale of our desktop portfolio in 2025, the financials we are reporting today are for continuing operations only. All current and historical activity related to our desktops, including the gain on sale, are captured in a single discontinued operations line in our financial statements. Total revenue was $17.4 million for the fourth quarter 2025, increasing 21% from $14.3 million in the prior-year period. Handheld product and service revenue was $16 million for the fourth quarter 2025, up 18% from $13.6 million for the fourth quarter 2024. The increase was primarily driven by our FTIR products, including more than 40 Viper shipments, and Explorer, which more than doubled its placements in the fourth quarter versus the prior-year period. MX908 product and service revenue was relatively flat, with an increase in U.S. orders that offset fewer international device shipments. In total, we shipped 224 devices in the fourth quarter, bringing our installed base to 3,736. Program product and service revenue was $300,000 in 2025, as we received funding for AVCAD program services performed in 2025; it was $17,000 in 2024. OEM and funded partnership revenue was $1 million for the fourth quarter 2025, compared to $700,000 in the prior-year period. Revenue growth was led by component sales to pharma and industrial QA/QC customers, leveraging our new precision machining capabilities, as well as component deliveries to Repligen under our supply agreement. Recurring revenue, which consists of consumables, accessories, software, and service revenue, represented 32% of total revenues this quarter and was $5.5 million, an 11% increase over the prior-year period. Gross profit was $9.2 million for 2025, compared to $6.7 million for the prior-year period. Gross margin was 53% for the fourth quarter 2025 compared to 47% for the prior-year period. The increase was driven primarily by higher volume along with the shift in channel mix to state and local and defense sales during the fourth quarter 2025 compared to international sales in 2024 that have a lower average selling price. Adjusted gross profit was $10 million for 2025, compared to $7.5 million for the prior-year period. Adjusted gross margin was 57%, an increase of approximately 530 basis points compared to the prior-year period. The increase in adjusted gross margin was driven by the channel mix and leverage as mentioned above. Total operating expenses for 2025 were $6.1 million compared to $23.4 million in the prior-year period. The decrease was largely a result of a $5.1 million reduction in the fair value of contingent consideration and a $10.1 million goodwill impairment charge in 2024. Excluding the impact of these two non-cash items, operating expenses for the fourth quarter decreased year over year by $2 million due to a reduction in headcount and facility expenses. Net income from continuing operations for 2025 was $4.4 million compared to a net loss of $16 million in the prior-year period. This increase was primarily driven by the $15.2 million decrease in non-cash goodwill and contingent consideration and was additionally due to improved gross margins and reduced operating expenses. Adjusted EBITDA for 2025 was a positive $700,000 compared to a loss of $4 million in the prior-year period, representing a $4.7 million improvement and achievement of the goal we set in 2025. This significant improvement was related to our aggressive cost initiatives, resulting in reduced operating expenses across the board, including headcount, facilities, R&D costs, and professional fees. We structurally changed our cost basis and expect to see the benefits of these efficiencies continue. Now moving on to our full-year results. Revenue for the full year 2025 was $56.2 million, increasing 18% from $47.7 million for the full year 2024. This was primarily driven by an increase in revenues from our FTIR products led by our recently launched Viper and our Explorer device, but also partly due to the impact of ownership for the full-year period in 2025 compared to eight months in 2024. An element of our growth in 2025 was driven by our state and local sales channel, which grew 38% to approximately $24 million, representing 43% of revenues for the full year 2025 compared to 37% for the full year 2024. State and local deals are generally smaller in size and more frequent, which is a more predictable balance to large, potentially lumpy, federal and military enterprise sales. Gross profit was $28.4 million for the full year 2025, compared to $24.5 million for the full year 2024. Gross margin was 51% for both the full year 2025 and 2024. Adjusted gross profit was $31.9 million for the full year 2025, compared to $26.7 million for the full year 2024. Adjusted gross margin was 57% compared to 56% for the full year 2024. The increase in gross margin was primarily due to improved service and contract gross margins. Total operating expenses for the full year 2025 were $67.8 million compared to $81.9 million in full year 2024. The decrease in operating expenses was driven primarily by a $47 million non-cash goodwill impairment charge, offset in part by a $27 million change in the fair value of the contingent consideration liability, where it was a charge in 2025 and a credit in 2024. Net loss from continuing operations for the full year 2025 was $33.3 million compared to $53.1 million in the full year 2024. This increase was largely due to the non-cash charge for the impairment of goodwill and change in valuation of the contingent consideration just mentioned. Adjusted EBITDA for the full year 2025 was a loss of $9.6 million, marking a meaningful 39% reduction compared to full year 2020. We ended the year with $113 million in cash, cash equivalents, and marketable securities, with no debt outstanding. We generated approximately $900,000 in cash in 2025. The increase was primarily related to collection efforts and timing of working capital. Looking ahead in 2026, we expect revenue to be in the range of $64.5 million to $67.5 million, representing growth of 15% to 20% over full year 2025. Our guidance range includes the following assumptions. First, we expect handheld product and service revenue to grow 13% to 17% year over year, which equates to a range of $59.5 million to $61.5 million. The increase reflects expectations around the full-year impact of Viper and growth of our MX908. Second, we expect OEM and funded partnerships, including contract revenue, to be approximately $3 million. And third, we expect revenue contribution from the AVCAD program to be in the range of $2 million to $3 million, likely in 2026. Moving down the P&L, we expect adjusted gross margins to be in the mid- to high-50% range for full year 2026 and are targeting margin expansion of at least 100 basis points with our increased volume. Channel and product mix play a key part in our adjusted gross margin, and we will look to balance this with our first full year of manufacturing in Danbury and insourcing initiatives with our precision machining capabilities. During 2025, we were able to streamline our research and development and selling, general, and administrative costs. We will continue to be thoughtful on investments in 2026 and likely will see an increase in selling and marketing expenses as we look to drive revenue growth with targeted headcount investments. And on the bottom line, we expect to cut our 2025 adjusted EBITDA loss in half for 2026, reducing it to the mid-single-digit millions, making another significant step down year over year while we go after the growth opportunity. At this point, I would like to turn the call back to Kevin. Thanks, Joe. As we wrap up today's call, I want to emphasize that 2025 was a defining year for 908 Devices Inc. The results we have delivered demonstrate that our strategic transformation is working. With our lower cost structure and healthy balance sheet, our trajectory is firmly within our control as we balance disciplined growth investments with profitability. I am confident in our ability to capitalize on the significant and growing opportunity in front of us. We have entered 2026 with a late-stage pipeline that is double the size it was at the start of 2025, which is a tangible reflection of stronger customer demand. With funding momentum building and favorable U.S. policy decisions reinforcing the priorities of our end markets, we believe we are well positioned to translate this demand into sustained growth in the year ahead. Lastly, and perhaps most importantly, we are executing a mission that matters. Every device we deploy helps protect frontline responders who put their lives on the line to keep our communities safe. This purpose-driven focus, combined with our technology leadership and operating strategy. That, let us open it up for questions. Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. To withdraw your question, press 1 again. If you would like to ask a question, please press 1 on your telephone keypad. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Matt Larew with William Blair. Your line is open. Please go ahead. Matt Larew: Hi, good morning. Thanks for taking my question. The first one on the relationship with Mountain Horse, Kevin, that you referenced. Just curious why you decided this was the right time to work with an external partner, how much volume of this particular product set you are trying to work with them on, and, Joe, I think you referenced the changing economics that might be involved there relative to margin expansion from feeding your first full year of Danbury. So just kind of curious how the economics will work with that relationship as well. Kevin J. Knopp: Yeah. Absolutely. Happy to take that question. Thank you. You know, as a reminder, as I think you know, we drive demand for all our products. We have direct employees that are across the United States working with the federal and military accounts, and they work very closely with those end customers. But in many cases, these larger U.S. military and federal customers, we really need to work with the procurement specialist. We need to work with a contracting partner. The primary factor behind that consolidation from four partners to one for the federal military side was really to drive procurement efficiencies, predictability, and help us improve forecasting. As you know, historically, it could be lumpy—some of these large U.S. federal opportunities. Mountain Horse is very unique. They have been a great partner for us. They are led by U.S. veterans. They have great procurement relationships across all levels of the U.S. government, which gives us wonderful visibility and helps us move those along in various contracting vehicles. They have experts on their team that help us get through the contracting, help us get through any integrations that are required. They can do kitting. They also do logistics. If you think about some of our orders, they may have to go and then be shipped to bases across the globe. There are a lot of complexities around that. So they do a great job for us. And we thought now is really the right time to consolidate to one because we can gain commitments, we can gain forecasting visibility, we can gain a mix and some volume incentives, and it also is very helpful to the U.S. government because they can get these more fully configured, ready-to-go solutions out of the box and, in some cases, at a lower cost. So it certainly helps us, certainly has helped us here in 2025, and we do expect them to continue to be a great partner in 2026, and we are really excited about it. And, Matt, you were asking about the benefits of Danbury, and a lot of efforts went into that, and I think it translates across the P&L in a few areas, but primarily within the adjusted gross margin. And, you know, we were pleased with the way the 2025 results fell out. Joseph H. Griffith: I hope it becomes a baseline to drive it up over time. For 2026, we are targeting margin expansion of about 100 basis points from the 50.7% adjusted gross margin that we did achieve. We certainly have operational momentum now resulting from last year's structural improvements, that full year of manufacturing in Danbury being a key one, and expanded insourcing that we can do with our precision machining capabilities. And these efficiencies really create a strong foundation to absorb the quarterly variability of channels and products. Kevin J. Knopp: And, Matt, maybe I will also add in, we are really at a point in our business with the transformation. We have done a ton to make the business much more predictable. We talked today about recurring revenue increases. We talked today about how we have so many more state and local sales, and that was a big driver of our Q4. So we are having maybe a smaller percentage now of exposure to these large, lumpy potential federal opportunities. We like them; it just can be difficult to get through contracting, and that is another reason that Mountain Horse helps us. Matt Larew: K. That is great. And then I just wanted to ask on the new, next-gen MX908 platform. I think that is still on schedule for 2026, but curious from a timing perspective when you think that might appear, how to think about adoption. I know you have more than 3,000 placements out there. Kevin J. Knopp: Yeah. That all remains accurate. We are really continuing to advance that next-gen platform with the commercial launch later this year. We are excited about the progress the team has made, but, obviously, for commercial and competitive reasons, we are not providing specifics today. What I would say is that we are really disrupting ourselves. We are not reacting to competitive pressure. MX908 really remains a very highly differentiated product with really limited direct competition. So we are working on that product. We think it can be compelling, but we also want to make sure we are focused on really dialing it in before broad commercialization. So we do see demand coming as we go from both existing and also opening up some new customers due to its step change in simplicity and size, and goals that we have set for ourselves. And you are right. We have more than 3,100 MX908 devices out there. The advantage of the MX908 is it has been tested from A to Z. We have something that is very thick, probably a two-inch binder of various third-party test reports. So, obviously, we are going to be very thoughtful with the pacing and the transition, and some enterprise accounts are likely going to continue with our MX908 for some time. And then we will be getting this out to disrupt ourselves and take us further. We absolutely believe there is a lot of opportunity there with the increased funding in the opioid crisis, fentanyl and illicit drug area, and the rising global defense spending, particularly across these NATO countries. So, absolutely, the MX908 today remains a great growth driver as we see it for 2026, but the next gen will help us set up, and if we do our jobs right, it could be pretty impactful to next year on a full-year basis. Matt Larew: Okay. Thank you. Operator: Your next question comes from the line of Puneet Souda with Leerink. Your line is open. Please go ahead. Puneet Souda: Yeah. Hi, guys. Thanks for the questions here. So first one, Kevin, when we look at the overall growth for this year, you know, 17.5 or 18 to get close to almost 18 at the midpoint. You have a number of drivers this year, obviously, including AVCAD. You have a state and local pandemic crisis ongoing still. There is international growth from Eastern Europe with disruption there and conflict. And now we have got a new conflict. So I was just wondering if you can talk to us about what takes you to the higher end versus the lower end of the guidance range on the top line growth? And then how should we think about the current conflict, if that were to expand? Could that drive additional handheld sales? Obviously, it is very hard to tell with where we currently stand, but I just wanted to get your sense on if there are any prior precedents that you can point to that will help us understand where 908 Devices Inc. can be more helpful if this conflict were to get worse. Kevin J. Knopp: Yeah. Absolutely. Maybe I will start with some of that and pass to Joe as well for his comments. Yes, we have some great growth drivers in front of us from a macro tailwind perspective, and that is increased funding, increased defense budgets, NATO, and global concerns, as you mentioned, which seem to unfortunately be expanding each day. Those are all drivers for increased defense spending and increased spending on the public safety side. AVCAD is absolutely, as you mentioned in the prepared remarks, a program of record we have been working on for some time with Smiths Detection that we do view as nearing its next phase. And from our survey of those involved, I remain very encouraged and positive that we will see an award this spring, and hence we are factoring it into some of the guidance discussion today. Joe? Joseph H. Griffith: Absolutely. And maybe to revisit and reinforce some of the drivers that can get you within the range and for us to get to the top end of the range. We do see those multiple paths to drive the organic growth, which more than double our pro forma growth from 2025, getting us to that 15% to 20% range. We expect Viper to be a key contributor, driven by our first full-year impact. It was great that we were able to get 40-plus in Q4, which we feel is meaningful. However, 2025 had less than 50; we believe it could be two to three times that in 2026. To help get us to the top end of the range, we expect Explorer again to be a big contributor. It was last year. It is our first full year with the quant-enabled Explorer here in 2025. We shipped over 150 devices and had 40% year-over-year growth. Now we just started to tap into our federal defense channel and see this as an opportunity for 2026 and beyond. With Explorer, we are opening up a broader fire gas detection market, which is exciting. We are continuing to keep extending our platform leadership in trace chemical identification and enterprise accounts and create field placements across our state and local, international channels and the opportunity there. And our law enforcement customers continue to rely on the MX908 and are excited at the next-gen mass spec platform as it comes out. In AVCAD, we just touched on it. We are planning on $2 million to $3 million this year in our guide. I would add, too, just as we think about the full year and maybe provide a little bit of insight on seasonality. For 2025, our revenues stepped up each quarter, and we had 44% of the revenues in the first half. Fourth quarter was about 31% of our revenues overall. So for 2026, I think there are a few factors to consider. I expect H1/H2 to be comparable to 2025. Within H1, I would expect Q1 growth to be in the low teens—say, maybe 10%, maybe get into the 15% level—and then Q2 would be close to the higher end of our guide of 20% year-on-year growth. So there are some Q1/Q2 timing dynamics, partly due to our production limits of our new product Viper, which I mentioned had a lot of demand in Q4, requiring us to replenish material inventory. So a lot to think about, a lot of different elements there as we go into 2026, but excited in laying out the 15% to 20% growth and looking to try to achieve that top end where possible. Puneet Souda: Got it. That is super helpful. And then just on the adjusted EBITDA side, I just wanted to get, you know, you are pointing to 50% improvement, but just wanted to understand any other levers that you have and how should we think about that cadence as well. And, you know, with the DHS shutdown, should we, I am just wondering, are you accounting for that in the first quarter here? Thank you. Kevin J. Knopp: Yeah. Great question. I will start with the funding dynamic and pass it to you, Joe, on the EBITDA remarks. On the funding dynamics, overall, I think we are in a better spot than this time last year, because we do have 11 of the 12 federal appropriations bills complete, which means the federal government and agencies are funded through September 30. You are absolutely right. Homeland Security is the one oddball there that is in short-term extensions and remains unresolved and unfunded at the moment, so different funding demand dynamics there. In the state and local markets that rely upon grant funding that often flows through DHS, we have not seen a slowdown. Customer applications remain active. I think we are also just entering 2026 with a materially stronger late-stage funnel. So DHS specifically, it is a little hard to quantify the impact here in the first quarter or the first half. But, again, many of the grant preparedness programs are these multi-year funding cycles, which really helps smooth it out. So, all in all, I think it is a net positive in where we sit from a funding dynamics standpoint today versus a year ago or certainly earlier in Q4. Joseph H. Griffith: Mhmm. On the adjusted EBITDA, for 2026, we are committed to cutting our adjusted EBITDA loss in half from that approximately $10 million in 2025. We think there is another significant step down. We believe we can do it without handicapping our ability to address the expanding opportunity. We really feel that is key. It is such a great opportunity, and we need to go after it hard. I think getting to the low- to mid-single-digit millions of adjusted EBITDA loss for the full year of 2026 is huge and monumental. With our balance sheet and efficient cost structure, we can firmly control our trajectory. We are focused on that growth and cash runway, and it is not as much of a concern at this point. And with some targeted investments in the selling and marketing side, whether it is internationally within specific opportunities on the state and local, and making sure that we get the next-gen MX off and running—a little bit of investment on the R&D side. So I think the adjusted EBITDA with volume is under our control and excited to be on that journey. Puneet Souda: That is helpful. Okay. Thank you. Welcome. Operator: Your next call comes from the line of Dan Arias with Stifel. Your line is open. Please go ahead. Dan Arias: Hey, good morning, guys. Thank you. Kevin, maybe just going back to the Middle East conflict here. Can you talk through the way in which these situations at the federal level or the global level tend to impact timing and the focus of the federal government? I mean, another way to say it is, when we go to war with Iran, does that sort of suck up all the air in the room for the defense folks, DHS, military, in a way that creates some uncertainty when it comes to the stuff that you are working on with them? Kevin J. Knopp: Yeah. No. That is a great question. We are not seeing that or feeling that today. I think the government is very large and has many prongs of engagement with 908 Devices Inc., and increasing amounts on the state and local side. It was about maybe 30% of our sales last year with a larger federal and military, and 70% was outside. I would say that if you look internationally, certainly in the Middle East, a lot of people are working from home right now. So can that slow down some of our opportunities in the Middle East? That is possible. Can this conflict increase the demand there? I think that is also highly likely, but those deals take a long time to progress. So we are not particularly seeing a meaningful immediate impact one way or the other on that. From the U.S. government, absolutely, our troops are in harm's way. Some of our employees' children are involved in those conflicts. So we very much wish them the best. If you think from a demand side, we know some of our customers are there. We do know that some of our customers are involved, and where that plays out, we will see. But I think it is pretty balanced at the moment. We are not really expecting any disruption from it at this time. Dan Arias: Okay. And then, Joe, you mentioned op expenses kicking a little bit higher this year. What specifically are you looking to do when it comes to the commercial efforts? And then how are you thinking about the return on that spend? Is it more immediate, or is it longer-term investment? Thanks. Joseph H. Griffith: Yeah, great question. I think some of the opportunity that we have seen—performance on the state and local at a high level—and we see more opportunity there, as far as getting more penetration in the field, but also leveraging inside sales capabilities, outreach, remote demos, and opportunities. So adding some folks to support those efforts and drive the need and the funding sources that we are seeing on the state and local side. I think on the international side, we work with the distribution network—over, I think, it is 65, almost 70 countries that we sell through today—and those are supported by 908 Devices Inc. employees. I think there is opportunity to build out and provide more of a commercial presence internationally, whether it is in Europe, Middle East, and APAC across the board. Kevin J. Knopp: Yeah. International sales were about 27% of our revenues last year. That is up from 25% in 2024, and, obviously, a larger number. And so we really do believe there is a lot of potential in that area. We have channel managers and apps people across Europe, Middle East, and APAC, but we do think it is an area well worth investing. Joseph H. Griffith: Yeah. From a timing perspective, I think the state and local can have some more immediate opportunity and contribution with those investments. They turn around a bit quicker. International is a little bit more of the long game. There might be some benefit in the back half, but definitely as we grow and continue to show growth trajectory in the years to come. Dan Arias: Okay. Thank you. Operator: Your next question comes from the line of Chad Wiatrowski with TD Cowen. Your line is open. Please go ahead. Chad Wiatrowski: Hey, Kevin. Hey, Joe. Obviously, the FTIR replacement cycle is a major driver this year. In your words, you have only made a dent so far. So can you help frame the path forward in light of initial 2026 guidance, but even looking at 2027, 2028—how do you expect this to play out? And is this a durable multiyear driver? Kevin J. Knopp: Yeah. Absolutely. Great question. To us, innovation is absolutely a focus and a multiyear driver. We just launched our Viper, our newest product, in the July time frame, and now we have shipped more than 40 devices in Q4—$3 million of revenue. So we are very excited for that early reception and those placements in the U.S. and internationally. We do think about that as a great driver for us for 2026 and beyond. There is a pretty large market opportunity we see for that and all of our FTIR products in total. And, as we called out, Explorer is another great example of that. It delivered 40% year over year in 2025, and we again expect it to be a very significant contributor. So, yes, we really do believe that cycle—the modernization, the increased capabilities that we are bringing—does drive very durable growth. And just to recap a bit, so 2025, 58% of our revenues was mass spec–related, 42% was FTIR, and— Joseph H. Griffith: Super excited to see that contribution within the first two years of acquisition and some of the product traction. Kevin highlighted Viper, and with our product portfolio, typically you see some of the initial opportunities being able to be secured within state, local, international, and then fed and military defense might be a little bit further down the pipeline. So as we think about growth in 2027 and beyond, that would be through some of those enterprise accounts and adoption that have to go through more of a testing cycle to get adoption. So it is not just the initial, but then the longer-term trajectory of things like Viper and Explorer, where we are just getting going. Chad Wiatrowski: And on that same theme, I guess, for 2027 and beyond, on the deck, I see that you referenced integrations with UGVs, UAVs, and robots. Could you spend a minute explaining what applications you are referring to there and what that could actually look like? Kevin J. Knopp: Yeah. Absolutely, Chad. That is an area that we have been planting seeds, and we continue to do that today. Those seeds are working with partners across different countries. We have talked about a collaboration with Dallas Defense Group in France; they have put it on their quad-robot. We have talked about and showcased an effort at the Indy 500, where our gas sensing technology was added to a patrolling quadrabot that went through the tunnels underneath the raceway looking for toxic industrial chemicals and any leakages or hazardous conditions. So those are the types of areas that we talk about. As our platforms—all of our platforms—as you look at our roadmap, we are always thinking about smaller size, weight, and power. All that enables more and more opportunity in those areas. So we are trying to align our engagements out there and seed the market because we do think it opens up even further the number of sockets as we look towards 2027 and beyond. Operator: There are no further questions at this time. I will now turn the call back to Kevin J. Knopp, CEO and Co-Founder of 908 Devices Inc., for closing remarks. Kevin J. Knopp: Okay. Well, thank you very much for the thoughtful questions and your time today. We appreciate you listening to our call. Have a great day. Operator: This concludes today's call. Thank you for attending.
Operator: Good morning. My name is Paul, and I will be your conference operator today. At this time, I would like to welcome everyone to Viking Holdings Ltd's fourth quarter 2025 earnings conference call. As a reminder, this call is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question at that time, please press 1 on your telephone keypad. If you wish to remove yourself from the queue, please press 2. Thank you. I would now like to turn the program to your host for today's conference, Vice President of Investor Relations, Carola Mengolini. Carola Mengolini: Good morning, everyone, and welcome to Viking Holdings Ltd's fourth quarter and full year 2025 earnings conference call. I am joined by Torstein Hagen, Chairman and Chief Executive Officer, and Leah Talactac, President and Chief Financial Officer. Also available during the Q&A session is Linh Banh, Executive Vice President of Finance. Before we get started, please note our cautionary statements regarding forward-looking information. During the call, management may discuss information that is forward-looking and involves known and unknown risks, uncertainties, and other factors, which may cause the actual results to be different than those expressed or implied. Please evaluate the forward-looking information in the context of these factors, which are detailed in today's press release, as well as in our filings with the SEC. The forward-looking statements are as of today, and we assume no obligation to update or supplement these statements. We may also refer to certain non-IFRS financial metrics, which are reconciled and described in our press release posted on our investor relations website at ir.viking.com. Torstein and Leah will provide a strategic overview, a recap of our fourth quarter and full year results, and an update of the current booking environment. We will then open the call for your questions. To supplement today's call, we have prepared an earnings presentation that is also available on our investor relations website. With that, I am pleased to turn the call over to Torstein. Torstein Hagen: Thank you, Carola. Good morning, everyone, and thank you for joining us today. In our first full year as a public company, we have delivered very strong financial results. And I think we accomplished a great deal as our business continues to grow. If you turn to slide 3, I will begin by highlighting our fleet, which remains at the center of our strategy. 2025 was marked by the significant milestone of surpassing 100 ships. I believe that this accomplishment reflects our innovative approach and decades of thoughtful growth. From our humble beginnings in 1997, with just four river ships and two cell phones, we have certainly built a global business that now operates on all seven continents, spanning river, ocean, and expedition cruising. Today, our fleet consists of 89 river vessels, 12 ocean ships, and two expedition ships. All share the unique Scandinavian design and deliver the consistency and quality that our guests expect from Viking Holdings Ltd. As part of our ongoing fleet expansion, we will soon operate the world's first hydrogen-powered cruise ship, capable of operating part of the time with zero emissions, something I am particularly proud of. We believe that innovation should be practical and thoughtfully implemented. Also during the year, we continued to expand into new and exciting destinations. A highlight was the announcement of our new river itineraries in India, a region rich in history and cultural depth. At the same time, we increased our roof lid on the Nile and on the Mekong Rivers. In parallel to all this, we strengthened and expanded partnerships across the architecture and scientific institutions. These partnerships support brand awareness and local engagement among our target demographic. Moreover, in many cases, they also introduce opportunities to enhance our guest experience via unique privileged access unavailable through other travel providers. As you can see, we pursue growth with intention, expanding access, increasing choice, and enriching the cultural experiences that set Viking Holdings Ltd’s product apart. I am very pleased that the milestones we achieved in 2025 supported an exceptional fleet and with it an exceptional financial performance. Regarding our fleet, you can see on the next two slides some of the features that make our ships such a strong driver of our results. I will start with ocean on slide 4. As it pertains to our ocean fleet, we are one of the youngest fleets in the cruise industry. Our state-of-the-art efficient design eliminates wasted space and extra weight on board while maximizing guest comfort and optimizing fuel consumption. Moreover, our ocean ships with a sleek hull design and closed-loop scrubbers allow us to use more cost-efficient fuel. These attributes help us manage fuel costs in times of adversity. The layout and onboard offering of our ocean ships also allow us to operate with fewer crew, without diminishing our high level of service. All these elements improve ship profitability. If we now focus on river on slide 5, most of our river vessels are Longships, a unique type of ship designed for European rivers. These ships include design features such as patented asymmetrical corridors and a square bow that allows for three full decks. With this design, we can accommodate up to 190 guests, which is more than the average European river vessel, improving the Longship profitability. As it pertains to fuel cost, the river operation has fixed-price contracts for a significant portion of the 2026 season. Within each product, our ships are indistinguishable to our guests. Potential guests shop by itinerary rather than a specific ship or age of ship, and it allows all the ships to achieve similar yields even when introducing new ships. On average and based on contribution to operations, the payback period for an ocean ship is about five to six years, and the payback period for a Longship is about four to five years. Taken together, these characteristics show how the design efficiency and consistency of our ships translate directly into very good financial performance, which was particularly strong in 2025. Now turning to slide 6, you can see that we increased capacity by 12% year over year. This reflects both the expansion of our fleet and the continued demand for our product. At the same time, our net yields grew 7.4%, demonstrating our ability to attract high quality demand and to maintain pricing power. Together, these factors drove a 21.9% increase in total revenue, which reached a record of $6.5 billion in 2025. This strong top-line momentum translated into meaningful profitability. Our adjusted EBITDA reached almost $1.9 billion, an increase of 38.8% year over year, reflecting not only higher revenues, but also the benefits of scale, operational efficiency, and disciplined cost management. And lastly, our adjusted net income was $1.2 billion, 43.9% higher than last year. We are very proud of this performance, given the continued investments we are making to support our long-term growth. Now our 2025 performance is best understood and appreciated in the context of our long-standing track record of strong, consistent results. As you can see on slide 7, for 2025, every major financial metric outperformed the compound annual growth rates shown on the slide, which are all very good. I believe that these trends reinforce that our 2025 results were not driven by a single good year but by sustained demand, long-term planning, disciplined execution, and a strong business model. Additionally, on the next slide, number 8, you can see in a measurable way the strength of our demand. Viking Holdings Ltd has consistently increased capacity by increasing yields and maintaining high occupancy levels. Together, these trends reflect the long-term resilience of our business and our ability to execute consistently. In this context, strong financial performance is part of the story. It is also important to review additional metrics that validate our growth trajectory. These are on slide 9 and highlight the depth of our guest loyalty, our market position, and the strength of our balance sheet. In 2025, 54% of our guests sailed with Viking Holdings Ltd as repeat travelers, a number that continues to grow and that is a clear sign of the trust they place in our brand. Moreover, more than half our bookings were made directly through Viking Holdings Ltd. This provides a meaningful long-term advantage in how we manage demand and engage with our guests. On top of this, we continue to hold a leading market share position with a 52% share of the North American outbound river market and a 27% share of the luxury ocean market. In addition to all this, we managed our balance sheet well. We ended the year with 45.8% return on invested capital and a net leverage ratio of 1.1x. Overall, these results reflect our ability to achieve profitable growth by staying true to our principles of financial discipline and long-term value creation. Beyond the financial results, this consistency is also reflected in the recognition we continue to receive from our guests and the industry. On the next slide, number 10, we have highlighted some of the many accolades we have received during the year. These awards are particularly meaningful because they are based on guest feedback, reinforcing that our differentiated approach continues to resonate with our core demographic. In closing, I would like to highlight that even as business continues to evolve, the principles that define Viking Holdings Ltd and guide every decision we make are unchanged. And these principles are shown on slide 11. First, we remain unwavering in our commitment to obsess over our guests, making sure that we deliver an excellent travel experience at good value. Second, we continue to treat our employees as part of our extended family, recognizing that their dedication and care are central to everything we do. Third, we will continue to take a contrarian approach when we believe it serves the long-term interest of the business. And finally, we continue to do what we believe is right for the environment. With that, I will return to Leah to discuss our financials. Leah Talactac: Thank you, Torstein, and good morning, everyone. We are very pleased to report a strong fourth quarter, capping a year of exceptional financial performance. On slide 13, you can see our key financial metrics. On a consolidated basis and for the fourth quarter, total revenue was $1.7 billion, increasing 27.8% year over year, driven by higher capacity, higher occupancy, and higher revenue per PCD. Adjusted gross margin was $1.1 billion, up 27.3% year over year, resulting in a net yield of $546, 7.7% higher than 2024. Vessel operating expenses, excluding fuel per capacity PCD, increased 2.6% this quarter compared to the same time last year. Adjusted EBITDA totaled $463 million, an improvement of $157 million, or 51.3% over 2024. I will highlight that our adjusted EBITDA margin reached 41.8% this quarter, representing an increase of 663 basis points compared to the same period last year. Net income for 2025 was $300 million compared to $104 million for the same period in 2024. The net income for 2024 includes a loss of $96 million from the revaluation of warrants issued by the company due to stock price appreciation. 2024 was the final quarter impacted by the warrant revaluation. And lastly, adjusted net income attributable to Viking Holdings Ltd was $298 million and adjusted EPS was $0.67, 48.3% higher than 2024. Overall, we are very pleased and proud to close the year with a great fourth quarter, delivering strong revenue growth and meaningful margin expansion. Now I will briefly discuss our two reportable segments on slide 14. Unless noted, I will be referring to metrics for the full year ending December 31. For the river segment, our capacity PCDs increased 6.5% year over year. The increase was driven by the addition of two vessels delivered in 2024 and six vessels delivered in 2025. During the 2025 season, these vessels operated across multiple regions of the world, including Europe, Egypt, Vietnam, and Cambodia. Adjusted gross margin grew 16.2% year over year to $1.9 billion and net yield was $578, up 8.4% year over year. Occupancy was 96% for the year. For ocean, capacity PCDs increased 17.9% year over year, driven by the delivery of the Viking Vela in December 2024 and the addition of the Viking Vesta in July 2025. Adjusted gross margin increased 30.9% year over year to almost $2.0 billion and net yield was $572, up 9.7% compared to the previous year. Occupancy for the period was 95%. As Torstein mentioned, these great results reflect the strong demand from our core consumer, the loyalty of our guests, the value of our premium products, and the dedication of our employees to deliver exceptional experiences across all seven continents. I will now shift our focus to some metrics related to the balance sheet. On slide 15, you can see that we have a strong liquidity position. As of 12/31/2025, we had total cash and cash equivalents of $3.8 billion and an undrawn revolver of $1.0 billion. Our net debt was $2.1 billion and we finished the year with a net leverage ratio of 1.1x. Also on slide 15, you will see our current bond maturity profile, with all maturities falling in 2028 and beyond. In addition, as of 12/31/2025, deferred revenue totaled $4.6 billion. Taking these factors together, we believe that our liquidity position remains a clear source of strength, supported by ample balance sheet flexibility and a long-dated bond maturity profile. This position gives us the confidence in our ability to support operations, invest in our growth, and pursue strategic opportunities as they arise. With this, I would like to confirm our debt amortization for 2026. As of 12/31/2025, the scheduled principal payments were $397 million. From a committed capital expenditure perspective, and for the full year 2026, the total expected committed ship CapEx is about $1.4 billion, or $500 million net of financing. With that, I will hand it back to Torstein to discuss our business outlook, including our booking curves. Torstein Hagen: Thanks, Leah. If we move to slide 17, you will see that 2026 is shaping up to be another great year as the demand for our core products continues to be very strong. As of February 15, we were already 86% booked for the 2026 season. This is in line with the same time last year while our capacity is increasing by 7%. We have $6.0 billion of advanced bookings, which is 13% higher than the 2025 season at the same point in time. Let's now review the booking curves, which are all as of 02/15/2026. On the next slide, you will see our curves for ocean cruises; this is slide 18. The yellow line shows the bookings for 2026. As you can see, we have sold $2.7 billion of advanced bookings, which is 16% higher than last year at the same point in time. Our operating capacity is up 9% in 2026, and we have already sold 87% of this capacity at very good rates. As of February 15, advanced bookings per PCD were $787, compared to $746 at the same point in 2025. Our fleet expansion for ocean continues to advance in a prudent and strategic manner. This year, we expect two new ocean ships to join the fleet: the Viking Mara during the second quarter, and Viking Libra in the fourth quarter. It is important to note that this year's capacity growth comes on top of an 18% capacity increase in 2025. Taken together, the momentum underscores another strong year of demand for our ocean business. If we move to slide 19, you will see the curves at river cruises. Now before we move on, I would like to provide an update regarding our river build program. One of our shipyards informed us that they experienced temporary technological disruptions and resource availability issues, which affected certain production lines. As a result, delivery timelines for eight of our Longships have been adjusted. The two vessels originally scheduled for December 2025 will now be delivered in 2026. Additionally, as the yard works through the impact of workflow sequence, six ships originally scheduled for delivery in 2026 will now be delivered later in that year. As a result, we have adjusted our 2026 capacity for river, which is now 6% higher than 2025. Last quarter, we reported a 10% increase. Importantly, the yard has assured us that these disruptions are temporary, and they have already implemented corrective measures. Their teams are working to restore full technological functionality and are allocating resources to return to their regular scheduling cadence. We are in continuous communication with them, and we remain confident in their ability to deliver the vessels within the updated timeline. We believe that the impact of these changes to the advanced booking curves and our financial metrics for 2026 are immaterial. Moreover, while these adjustments shift certain delivery dates, they do not affect our long-term growth plans. We will now turn attention again to the booking curves. Advanced bookings for 2026 are shown by the yellow line, which follows a great trajectory. For river, we have already sold $2.8 billion, which is a very good number, 10% higher than last year. Overall, we sold 85% of our operating capacity at very strong rates, averaging $906 per day, compared with $841 last year. It is a very good trend for 2026, and they offer a clear illustration of the strength of demand. Our focus at this time is on selling the remaining capacity for the 2026 season, preparing for the start of the primary river cruising season, which begins in April. We will not be sharing information on future seasons yet. However, please note that both the 2027 and the 2028 seasons are open for sale. Now Leah will add some color to our order book and capacity. Leah Talactac: Thank you, Torstein. Moving to slide 20. Since our last earnings release, we entered into option agreements for two additional ocean ships to be delivered in 2034, bringing our total planned additions, including the options, to 16 new ocean ships over the next nine years. And we also entered into shipbuilding commitments for two additional expedition ships, scheduled to be delivered in 2030 and 2031. We are very pleased to add these ships to our order book as demand for the Viking Holdings Ltd expedition product remains very strong. This is a product that truly resonates with our loyal guests, who are eager to explore new destinations with Viking Holdings Ltd. By adding two more ships, we can thoughtfully scale a category where our brand has been recognized for delivering exceptional travel experiences. As it pertains to our 2026 capacity, similar to past seasons, more than 70% of the capacity from our core products in 2026 will be in Europe. Before we close our prepared remarks and move into the questions, I want to bring you up to date on the current developments in the Middle East. We are monitoring developments closely, particularly as they relate to our operations in Egypt, which represent roughly 2% of our overall capacity. We are prepared to make adjustments in operations if this should become necessary from the point of view of the safety and comfort of our guests and crew. I will also highlight, as Torstein already mentioned, that as it pertains to fuel, our river operation has fixed-price contracts for a significant portion of the 2026 season and our ocean fleet is designed with fuel efficiency in mind. While we continue to monitor these developments and their potential implications for our business, our thoughts are with all those impacted, and we hope for a swift de-escalation and a path towards lasting peace. With this, I conclude our prepared remarks. I will now turn it back to the operator to take questions. Operator: Thank you. We will now open for questions. In the interest of time, we ask that participants on today's call limit themselves to one question and one follow-up. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset. Please hold while we poll for questions. The first question today is coming from Steven Wieczynski from Stifel. Steven, your line is live. Please check your mute button. Steven Wieczynski: Sorry about that. Can you hear me now? All good? Okay. Thanks. Good morning, guys. So, Torstein or Leah, if we think about 2026, we can clearly see the curves, and we can see that the curves have essentially normalized versus where we were at this point last year. You are now coming off, you know, I think it is four straight years of yield growth north of 7%. So I guess my question is, if we think about 2026, and look, I fully understand you do not give firm guidance, but based on the curves and advanced bookings and the fact you are almost 90% sold, seems like yield growth will still be very solid this year, somewhere in that 5% to, let us call it, 7% range. Am I kind of thinking about it the right way? Leah Talactac: Hi, Steven. Good morning. I think we will point you back to the curves, which is what you have referenced. So as of what we see today, we do have 86% of our bookings currently sold with a 13% advanced booking growth with a 7% capacity PCD increase. And what you can also see is that we have been able to maintain that cadence from 2017 to 2025. So I think the curves speak for themselves, and I do not know that we can say much more than that, but I think that your extrapolation makes sense from our point of view today. Steven Wieczynski: Okay. Got it. And then second question, want to go back to the current, you know, the uncertain geopolitical backdrop. You know, obviously a lot going on around the world, especially in the Middle East, which, Leah, you touched on in your prepared remarks. But maybe for Torstein, wondering if you could give us a reminder of how your business, you know, especially on the river side has performed when there has been uncertainty in that region. Trying to understand if we should be expecting any material change in demand in the near term until there is more clarity around what is going on in the Middle East. Thanks. Torstein Hagen: Maybe I could give a long-term perspective on this. As you know, I have been in this business for a long time. And many, many years ago, events like this would have been creating tremors in many boardrooms. But I think American customers, and particularly the type of customers that we have, are well educated in the world, and they know where different places are. So I think what we have seen in the past is that we have not really been significantly impacted. You have a little blip when things happen, and then they go back to normal. And you can say here, you know, things happen very rapidly in the Middle East situation, of course. But, for example, we had a group in Jordan earlier in the week and there were 107 people, and we said, does anyone want to go home? And two of them said we would like to go home. So people are fairly relaxed about all this. Of course, the travel warning that came out last night after this was recorded changes things a bit. Hopefully, that goes away too. But, of course, it is a very limited part of our inventory which is related to Egypt, and Egypt is far away from where the troubles are. So, you know, of course, travel warnings are never nice, and maybe they are basically something real. But I think our guests are really quite well versed in where bad things happen. We do not minimize it, but I think things come and things go, and we will deal with it, of course, always taking care of our guests. Leah Talactac: So, Steven, I would also like to add that, as Torstein mentioned, our guests are fairly well educated. They know where areas of conflict are relative to where they will be traveling to. But also, we are 86% sold for the 2026 season, and that is another benefit of the curves, that we have the ability to wait out or wait for consumer reaction to catch up. And so for 2026, we are still solidly booked, and then we have time to address any reactions that the booking curve may have to current geopolitical events. Steven Wieczynski: Okay. Got it. Thanks for the color. Thanks, Torstein. Thanks, Leah. Operator: Thank you. The next question will be from Robin Farley from UBS. Robin, your line is live. Robin Farley: Great. Thank you. Just looking at your, what low you have ending the year, can you talk a little bit about whether at this point you might think about a dividend or something that, you know, one could argue is not, you know, the most efficient capital structure given how low your leverage is? Thanks. Leah Talactac: Hi, Robin. Good morning. Yes. So I think events that are happening currently remind us why the company likes to have strong cash balances and why we like to be prudent with our balance sheet. But having said that, I think it is still a little bit premature for us to think about share repurchases or dividends, not something that we would necessarily rule out, but we do have a strong order book, and we do have options that are quite far out. And so I think for the time being, that is not something that we would entertain, but not to be ruled out for the future. Robin Farley: Okay. Thank you. And then for my follow-up, just on the addition of two more expedition ship orders, I feel like in the past, I maybe remember Torstein saying that expedition, while it is much higher priced than a lot of the other river and ocean product you have, that maybe there was not as much growth in demand there just because there is a lot of expedition capacity that is out there. So I am just wondering if these two expedition ship orders kind of signal that maybe there has been an increase in demand on the expedition side that you are seeing over the long term, or maybe these ships are going somewhere that is different than where your current expedition ships are? Thanks. Torstein Hagen: I think we plan to deploy these vessels pretty much in the same itineraries as the current vessels. Of course, it has been a while since the first two were built. And when we look at booking curves, which we have also for expedition—we do not share it with you at this time—you will see that relatively the bookings there are very strong, since our supply has been limited. So you can almost read out that something needs to be done and that is why I placed the order. Operator: Thank you. The next question will be from Matthew Boss from JPMorgan. Matthew, your line is live. Matthew Boss: Thanks, and congrats on another nice quarter. So could you elaborate on the acceleration in advanced bookings per PCD to 6% growth relative to 5.5% three months back? Maybe just within that, what are you seeing from repeat guests relative to new-to-brand customers? Leah Talactac: Hi, Matthew. I hope you are doing well. I think, obviously, the price going from 5.5% to 6% is a good indication of how demand is looking for us. We are 86% sold, so we have a little bit more to go. Our goal is always to balance both price and our guest experience, feeling like they got good value for the experience they received. So I think we still aim for that mid-single-digit yield growth. That is something that is still a focus for us for 2026. As it relates to new-to-brand and past passengers, we do have a slide in the deck. Our past guest repeat rate for the 2025 season slightly ticked up between the two. So we are pleased with that. It was about 1%, so we are still seeing a good balance. Matthew Boss: Great. And then maybe, Leah, could you speak to the strength in ocean pricing that you are seeing? Advanced bookings per PCD accelerated by 100 basis points versus three months ago. And just any change in demand momentum at all that you are seeing for your European sailings today? Leah Talactac: Sure. So for the ocean bookings, I think we do have dynamic pricing. We react to what the demand or the consumer interest is. So what you see there is in response to that. But it remains the same answer, that we want to be thoughtful about pricing increases. Our goal is the mid-single-digit increases in yields year over year, and really, it is about having the value proposition for our guests because of that repeat, the importance for us to make sure that the guests do not see this as a one-off travel experience for them; rather, it is something that they want to continue to do as they think about their future journeys. Matthew Boss: It is great color. Best of luck. Leah Talactac: Thank you. Operator: Thank you. The next question will be from Conor Cunningham from Melius Research. Conor, your line is live. Conor Cunningham: Hi, everyone. Thank you. Maybe to keep along that line of questioning, I was hoping to get your perspective on occupancy versus pricing going forward. I mean, your occupancy is basically at all-time highs, I think, now. So just how do you approach the strategy going forward in general? And do you still see upside to occupancy overall? Or, I mean, I think 100% is pretty difficult. Just any thoughts there would be helpful. Thank you. Leah Talactac: Yes, that is exactly right. So unlike the other ocean cruises where they have triples or more than two people, we only have two people per cabin. So our occupancy will never be more than 100%. And with single supplements or people who travel singly, that kind of brings down our occupancy one to two percentage points. So I think with our goal, what you see, 95% occupancy, that is essentially sold out. So our strategy is to sell out the ships and manage the price increases as we have discussed, which is really creating value for guests, making sure that they find the value attractive. Conor Cunningham: Okay. Helpful. And then I just want to ring-fence the two issues that you flagged a little bit here. Just on the delivery delays from the river ships, is there any reaccommodation expenses associated with that that we need to be aware of? And just on the 2% Egypt exposure that you talked about, is that a good proxy for its overall contribution to profitability as well? Thank you. Torstein Hagen: Yes. I am not sure I understand your question on the dealerships, but let me try. Of course, it is a delay, so the revenue will be impacted this year; not so much, it will be impacted. And, of course, the operating costs offset that. There may be some other offsets we can have. It has happened, but things happen. And I think we are very pleased to say that from all we can see, it is now entirely under control, and the ships should be delivered as now indicated. And the 2027 deliveries should not be impacted at all. And whether that deals with the question at all or not. Leah Talactac: On the delay—you know, that is one of the benefits of our identical vessels, particularly in river. So our guests book based on itinerary, not necessarily what is new coming online, and so we were able to accommodate some of them to other ships that are traveling in the same itinerary that they had originally booked. So there are minimal, if any, reaccommodation expenses. And then, Torstein, I will turn it back to you for Egypt commentary. Torstein Hagen: No, you handled it so well. Why do you not continue? Leah Talactac: Okay. So with respect to Egypt, in the prepared remarks, we did say that we were ready to make any adjustments in case there were things like this updated travel advisory. So with respect to Egypt, we are in the process of notifying guests that we are temporarily pausing Egypt itineraries through 03/31/2026. It is really important for us that our guests feel safe and our crew feel safe, and I think that is the base from which the brand loyalty really—that is the foundation of it. This represents about 40 voyages with less than 3,000 guests impacted. So as a reminder, Egypt is only 3% of our total capacity, so we do not see this as a material impact to the business. Conor Cunningham: Very helpful. Thank you. Operator: Thank you. The next question will be from James Hardiman from Citi. James, your line is live. James Hardiman: Hey. Good morning. Just as a clarification, I think you already answered this, effectively, but the river yard issues do not seem like that is impacting the booking curves at all. If so, let me know. But then anything that you would be willing to share in terms of the monthly booking trends past 2025, right, past the end of the quarter? I think it was a year ago where you both first spoke to some softness in February. We have now lapped that. Maybe any update there would be great. Leah Talactac: As far as the booking curves, I think we point back to the curves. We had a strong first couple of months of the wave season, and you see that with the 86% sold and also the pricing increases that we presented today. And sorry, there was a second part to your question that I think I might have missed. Can you repeat it? James Hardiman: Just the river yard delays, if that impacted that curve in any meaningful way. Yes. Leah Talactac: Yes, and so I point back to the answer, which is it does not really affect the curves in the sense that, because the ships are identical, we were able to reaccommodate most of the guests who were impacted to continue sailing in the itineraries they had originally booked. So they are shopping based on itinerary and not necessarily vintage of ship. James Hardiman: Got it. And then, you know, obviously, it is too early to have any quantification on 2027. But I just wanted to hear any color on those Indian river itineraries, just given that they are what is going to be new for next year. Any thoughts on initial demand trends there? How should we be thinking about that market? How does that pricing compare? I know when you got into Egypt, that was a nice—I think it was a nice—pricing sort of benefit that showed up in some of these curves. But any thoughts on India as we look to next year? Leah Talactac: Sure. So India was first open to our past passengers, and it was overwhelmingly supported by them. So we were sold out in a few weeks—as soon as it opened—and it is yielding at higher rates, similar to how Egypt is pricing also is higher. Linh, do you have any additional color you would like to share? Linh Banh: No, I agree. I mean, I think our past guest support and loyalty is great. It is reflected in new itineraries when we open for sale, and that was no different with India. James Hardiman: That is really helpful. Thank you. Linh Banh: Thanks. Operator: Thank you. The next question will be from Andrew Didora from Bank of America. Andrew, your line is live. Andrew Didora: Hi. Good morning, everyone. So the 86% booked for this year—obviously very strong—seems fairly consistent with where you have been the last several years. Maybe if I nitpick, maybe ask about the 14% that is not sold. Just curious of what is not sold—what is the type of product or type of itinerary that is left to sell? Just kind of want to get a sense of what makes up that remaining 14%. Does that typically come at a premium, at a discount, kind of yield neutral? Just curious what is left out there. Linh Banh: Sure. Hi, Andrew. I think, given we are sitting here in early March—our curves are as of mid-February—what is generally remaining to sell is the fourth quarter. So that is our quote-unquote low season. Those guests do book closer in. Then we do have probably some remaining cabins in the third quarter, etc. But majority of that 14% is the fourth quarter, and that is similar year over year. Andrew Didora: Got it. And then appreciate the commentary on fuel. I know it is a small part of your cost structure, but I guess Brent is up 4%–5% or so this year. Just your fuel cost in 2025 versus 2024 were pretty flattish. I think that I would expect that to change this year. Any color you can give just in terms of a $20-plus move in crude, what kind of the like-for-like EBITDA impact could be on the business? Just want to hone in on that a little bit. Thanks. Linh Banh: Sure. So I think at the end of the day, we took a lot of time to design our ships to be fuel efficient. And so for oceans, we do use heavy fuel. Obviously, right now, the market is where it is. But I think the team has done a really good job of managing through times like this. We are monitoring where fuel prices are, and we will act accordingly. For rivers, we have entered into fixed-price contracts for a significant portion of the 2026 season. Andrew Didora: Okay. Linh Banh: Thank you. Operator: Thank you. The next question will be from David Katz from Jefferies. David, your line is live. David Katz: Hi, good morning, everyone. Thanks for taking my question. Congrats on the quarter and appreciate all the details so far. What I wanted to ask is that you obviously continue to put up outsized growth and project outsized growth with further capacity. How do you think about the depth of the market that you are growing into? Are there new-to-cruise customers that you are getting to explore? Are your existing customers sailing more? How do you think about a, say, total addressable market, I suppose, is the essence of the question? Torstein Hagen: Yes. I think maybe we have even been a bit surprised with the fantastic demand we have had for our product, both the rivers and the ocean. But I think when we analyze it and look at where our guests come from, we see that many of our new-to-brand guests both on the rivers and on the oceans come from the established ocean cruise lines, and they are really guests who are not so happy with being on huge ships with lots of screaming kids. You know our policy on kids and casinos and the like. So they graduated from being on the noisy entertainment palaces to being on more calm, peaceful places where they can enjoy their books and themselves. So I think we really found a—well, we knew what we did when we designed it, but I think we underestimated people's reluctance to being on these other ships. Of course, they are great for kids, and they are great for money making and so forth. Do not get me wrong. But I think it is a good source of business for us. And, of course, you have seen that some of the other people have started to come in our slipstream to see what they can do in the same field. So I think we have not tried to quantify total addressable market, but we have all confidence that the order book will be relatively easy to fill. So that is all I can say. Leah Talactac: Yes, and I would like to add to that. We have a huge brand awareness when it comes to river cruising, and that is also another avenue through which we expand into the total addressable market of people who would not ordinarily contemplate a cruise. When they join a Viking Holdings Ltd river cruise, then they see that there is a different way to travel, and that then creates a feeder into that addressable market for the other products that we have in our portfolio. So it is a combination of our well-thoughtfully planned ocean and expedition, but also this enormous brand value that we have by being over half the market share in river. David Katz: Understood. And if I may, I am past it, but I appreciate the screaming kid comment. With respect to other entries into the river cruising market, are you comfortable—and how should we be comfortable—that there is enough room in that marketplace for some new entrants to add some ships and that that is not going to have an impact on you? Torstein Hagen: I suspect all entrants into markets will have some impact. But the question will be a negative impact or a positive impact? The negatives we all know about; the positive, you know, it creates even more buzz around the whole river cruise concept. So I look forward to seeing the advertising when they say, are you tired of being on our big ocean-going trips? Try one of our river ships. I say, wonderful. Now let us see what their advertising will sell. So I think we have a 29-year head start on them, so we should not really be unduly worried about it, I would say. And I think it is similar on the ocean side, where you see that others are starting to copy us there too. You know, they have been in the business for 50 years. So I think we have done something right. But it means we should not rest on our laurels, but we should build on them, for sure. David Katz: Thank you very much. Appreciate it. Operator: The next question will be from Stephen Grambling from Morgan Stanley. Stephen, your line is live. Stephen Grambling: Hey. Thank you. Over the past three years, you have had gross margin expansion. Would love to just get your thoughts on some of the drivers of that and any considerations on how that may evolve not only in 2026, but beyond? Thank you. Linh Banh: Sure. I mean, I think we have approached the business with the guest first, and what Torstein has mentioned even in his early remarks. And with that, we have been able to build our brand, deliver an excellent product, which has led to capacity increases, yield increases, and then we have been prudent with our operating expense. So all those things combined have led to the margin expansion you see today. Of course, our hope is that we continue that into the future. The management team has done a great job, and so the goal is to continue that. Stephen Grambling: And sorry. I just want to make sure I zoom in on specifically gross margin rate. So thinking about the difference between net yield and gross pricing, right, your net yield or your net pricing has been above gross pricing. Normally, we think of that as being things like commissions, transportation, other. Anything in there that is permanent that should be driving it and any impact from fuel prices going up that could influence how that flow-through could look in the year ahead? Linh Banh: Sure. I mean, I think, obviously, we try to be balanced when we approach pricing and cost. And so as the team works through those things, we do our best to ensure there is margin expansion. Obviously, historical performance is no promise for the future, but that is something that we focus on. I think at the end of the day, we are getting the benefit of both price and being prudent with cost. Stephen Grambling: Okay. I will jump back in the queue. Operator: Thank you. The next question will be from Brandt Montour from Barclays. Brandt, your line is live. Brandt Montour: Hi, thanks, everybody. So a question on—another question on costs. The marketing and sales line, you guys did not get a lot of leverage on that line in 2024. You did get a lot of leverage on that line in 2025. You know, another year of substantial capacity growth and you guys are now going to be spending, I assume, well over a billion dollars on marketing and sales. Maybe you could take us a bit under the hood here and just sort of talk through the leverage that you can get this year and what channels you might be expanding to sort of scale with this growing business? Leah Talactac: I am going to think I understood the question, but I will give it a try. We do feel that we can leverage and scale SG&A. We see ourselves not just as a cruise operator, but as a marketing company. And as we think about the tools available in the market now with respect to AI and machine learning, there are certainly multiple areas of the business that we can have a broader digital transformation strategy that would help with the cost. So we feel that there could be some scaling or leverage off of our SG&A as capacity increases. Torstein Hagen: Could I make a comment? Maybe I can make another comment in that regard. You know, the way the accounting works, the marketing expenses are expensed as incurred. But, of course, we are booking so far in advance. So as we grow, it means a large portion of our marketing expense this year is related to 2027 operations. So as we grow, you can say a disproportionate amount of the expenses are charged to the current year rather than to the next year, to which they really are attributed. So that is something one should take into account when one evaluates these expenses, too. Just a comment. Brandt Montour: No, that is great color. Thank you. I think what I was trying to get to is the SG&A per capacity unit. That is the line that I think a lot of us focus on. That was down year over year in 2025, which is great. And so the question is, can you keep that metric muted or sort of well below yield growth for the next year or two years? Leah Talactac: We do not guide, but that is something that is certainly in our consideration set. And we will try to leverage SG&A. Brandt Montour: Thanks, everyone. Operator: And the final question today will be from Patrick Scholes from Truist Securities. Patrick, your line is live. Patrick Scholes: Hi. Thank you for taking my question. You talked about 86% sold for this year. My question around that is how much of that is, we would say, locked-tight nonrefundable at this point? Leah Talactac: So generally speaking, our guests not only book in advance, but they also pay in advance. And what we found is that once they are booked and paid, there are generally very low cancellation rates. And we also encourage that by the fact that we engage them prior to their trip. So we will send them language lessons, things to look forward to, to really make sure that they are looking forward to the trip. So I would say that—and you could see this in prior bookings as well and how it developed into results—that once they are booked and paid, the booking becomes generally very sticky. And that is why we feel that showing these booking curves are the best factual indication of what the current season looks like. Patrick Scholes: My follow-up on that would be, let us just hope it does not happen, that things did really continue to escalate. There would be, you know, hypothetically, fear of travel, but your ships or your vessels were still sailing. Could those who have booked still, or what percent could still, cancel with refund at this point down the road? Thank you. Leah Talactac: Sure. So our cancellation policy generally starts to kick in around 90 days prior to sailing. But having said that, what we have seen in historical patterns is that our guests are quite versed in reading a map, and so they can see where the areas of conflicts are and where they are planning to travel. And they also trust the brand, meaning that we will not operate if we feel that it would be unsafe for our guests and our crew. We have seen that in prior where they will either hold and wait for Viking Holdings Ltd to make announcements, or they will maybe just push it out a little bit later. But generally speaking, the booking curves are pretty sticky. And another part of the equation here also is that, with being 86% sold, any cancellations—we still have time to resell that inventory. Patrick Scholes: Okay. Thank you for the detail on that. Operator: Thank you. This does conclude today's Q&A session. I will now turn the conference back over to Torstein Hagen, Chairman and CEO, for closing remarks. Torstein Hagen: I want to thank everyone for joining us today on this call. I also thank you for your support and interest in Viking Holdings Ltd, and I wish you a great day. Have a nice one. Operator: Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.