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Thomas Russell: All right. Tony, we're ready. Tony Sheehan: Thanks, Tom. Good morning, and welcome to the H1 FY '26 update for Change Financial. My name is Tony Sheehan, CEO of Change, and I'm joined by Tom Russell, Executive Director. Similar to our usual webinar format, Tom and I will run through a presentation and then take Q&A at the end. If you do have any questions, please submit them through the chat function on this webinar. Okay. Just a little bit briefly about Change Financial. So, Change Financial provides innovative and scalable payment solutions for over 150 clients across more than 40 countries. We are a B2B business with 2 core products. The first being Vertexon, which is our Payments as a Service offering, which provides card issuing, card management and transaction processing. Vertexon supports prepaid, debit and credit card issuing, and there are 2 main models under Vertexon, the first one being processing only. Under this model, we provide the technology, which is a card management system to clients to run their card programs. The clients hold the necessary scheme and regulatory licenses to issue cards. So processing only is available globally and supports all major schemes. And we have clients using Vertexon in Southeast Asia and Latin America, including 2 of the largest banks in the Philippines running over 45 million cards on the platform. The second model is processing and issuing. This is only available in Australia and New Zealand. And under this model, clients utilize Vertexon for processing capabilities and leverage our regulatory and scheme licenses and issuing capabilities. So under this model changes the card issuer record and provides treasury, fraud and compliance services. Vertexon generated 85% of the group's revenue in H1. Our other core product is PaySim, so that's software, which enables end-to-end testing of payments platforms, processes and scheme rule compliance. The PaySim software is based on global messaging standards and can be sold globally. PaySim is the default testing standard for EFTPOS in Australia and has a blue-chip client base, including 5 of the top 10 digital payments companies. PaySim contributed 15% of the group's revenue in H1. So importantly, for both the Vertexon and PaySim, they are proprietary payments technology platforms, which are owned and developed in-house by Change. So this is an important -- this is important from a value and control perspective for the company. So, if we look at some highlights, so really strong financial performance in H1 with a record half year revenue result of USD 9.3 million. So that's up 29% on prior year. 70% of revenue is derived from recurring sources. So this provides a very solid base of revenue to grow from. The proportion of revenue from nonrecurring sources increased during the half due to the strong performance from licenses and professional services revenue. So one-off revenue is an important driver of overall financial performance and was a key contributor to the strong financial performance during the half. Our rolling 3-year revenue CAGR to 31 December is now 25%. Underlying EBITDA for the half was USD 1.8 million. So, this is a material improvement on the underlying EBITDA loss of USD 0.5 million in H1 FY '25. The key drivers of this significant improvement in the underlying EBITDA were revenue growth, stable fixed cost base and the U.S. cost outs from the exit of the U.S. operations. Now if we isolate the impact of the U.S. cost-outs, H1 FY '26 underlying EBITDA was USD 1.9 million versus an underlying EBITDA of USD 400,000 in H1 FY '25. So, we also delivered a maiden profit of USD 600,000 for the half. So that's a real key milestone for the company and something we're very, very proud of as well. We are seeing the operating leverage pull-through we've been talking about. We've been talking about this for the last few quarters. We want to continue to drive operating leverage moving forward to generate margin expansion as we continue to scale. So, PaaS is a key driver of our growth, and we have seen strong growth in PaaS metrics across the board. We now have more than 110,000 cards active in Australia and New Zealand. That increase in cards was driven by the Sharesies debit card program in New Zealand, which launched in October and also significant growth in one of our existing fintech clients in the prepaid card space. So, we will continue to drive revenue growth on the PaaS platform through organic growth from our existing clients. Our new clients already signed. So, we're currently onboarding 2 clients and also further client wins. One of our key priorities across the business is growing our PaaS client base in Australia. So, increasing our footprint in Australia will drive scale benefits. So, we have the product and the team in place to add significantly more clients and volume without having to increase our cost base. There's a significant opportunity in market size in Australia as well. So, we want to really replicate that success that we've had in New Zealand and bring it here into Australia as well. Over to you, Tom. Thomas Russell: Okay. Thanks, Tony. So, we cover a lot of this information in our quarterly webinars. So, the slides are here for new investors, but I won't spend too much time going over the same ground. If you do have specific questions, please ask them using the Q&A function, and we are more than happy to answer them at the end. As Tony said, we've had a great growth in our active card numbers with a significant number of new cards added late in the half. Active cards were up 66% versus H1 last year. We obviously finished onboarding and launched a significant fintech client in New Zealand in October last year, and we're also currently launching another significant fintech client who will soon be migrating existing cards across the Change. We report active cards, which is a leading indicator for expected activity, that is transactions and transaction volume. We want clients growing because the PaaS model is designed to support our clients through launch and then their growth is also our growth. The types of fees we earn from our clients are listed there in the bottom left table. Generally, the largest driver of PaaS revenue is a number of transactions, but we also charge for active cards volume fees depending on the type of transaction and other valued fees you see there. Okay. The 2 clients I just mentioned that have recently launched and are in the middle of launching already have a significant cardholder base and the volumes are starting to show in the coming periods. Change is a B2B business and sales cycles can take a while. But importantly, once clients are onboarded, they can be very meaningful from a revenue perspective and as clients go through their own rollout plans and their multiyear deals. One question we get a lot is, are you actually going to be able to compete in market? Why would someone use Change over a competitor? Well, if you look at this chart, 6 of these clients were one of competitors. So the answer is yes, we can and are competing in market. We are winning on features, service and reliability as one of the only options in market now that owns our own technology. So in short, we've already proved we can win clients. The graph here shows that both competitors -- from competitors, banks and other issuer processes, and we can win net new programs. The key focus for us is building up the number of clients on the right that are contracted and going through the onboarding process. We won a new client in Q2, which is just about to start onboarding. And with the momentum building and more of the deals maturing through the pipeline, you should expect to see the box on the right starting to grow again very soon. All that will drive recurring PaaS revenues in the short-term, but also over the medium to long-term. I've presented this slide before as well, including in our full year results. So I'll just quickly touch on the key points for anyone new. Firstly, the scalability of Vertexon. Our clients process and manage over 45 million debit and prepaid cards on the platform, including one client in the Philippines who issued more than 40 million cards. For our Vertexon on-prem clients, we historically sold a one-off license to them. From that point, clients pay an ongoing support and maintenance fee of around 20% for as long as they continue to use the platform. That includes us pushing quarterly updates to them to ensure their system remains compliant with the card scheme mandated changes. Importantly, many of these clients have been with us for more than 10 years. Vertexon is a core system for them when they roll out new features, for example, the Southeast Asian client recently launched a credit card offering. They pay new license fees plus ongoing support and maintenance. Some clients also expand card tiers, which drives additional license revenue. Revenue here is generally not linked to transaction volumes. PaySim operates in a very similar way. Clients pay an upfront license fee for the modules they require and then ongoing support and maintenance to receive quarterly scheme updates. It's highly modular. Clients typically start with 4 or 5 core modules and then they add additional testing functions over time, which drives further license and recurring revenue. Across both products, particularly Vertexon on-prem, we also undertake customization work where required, generating professional services revenue. Talking explicitly to the financials now. It was a great half financially for Change, a record revenue half with USD 9.3 million of revenue or AUD 13.3 million of revenue, which is up 29% on H1 FY '25. PaaS is now the biggest contributor to revenue and Oceania has overtaken Southeast Asia as well as our biggest region in the last 12 to 24 months. I like sneaking this into every presentation, too, but we've had consistent quarter-on-quarter growth now for the better part of 3 years, and we are on track to have doubled the revenue in the business in the last 3 years by the end of FY '26. Pleasingly, revenue was up across the board and recurring revenue continues to build. The revenue waterfall chart here clearly shows where the revenue comes from across the business. The growth in revenue is being driven by our PaaS clients, but also our Vertexon clients who use Vertexon's core system and have had it deployed into their banks for a long time. The team is doing a great job at managing project pipelines, and we are seeing that work and resulting revenue dropping through at higher rates than in previous years. As a reminder, approximately 70% of our global client base pays us in USD, 20% in New Zealand dollars and 10% in AUD. Turning to the profit and loss. So again, USD 9.3 million of revenue in the half. You can also see the benefits of the cost reduction and exiting the U.S. operations, which is now materially completed, and we're in the final stages of the process to wind down the U.S. subsidiary. As we always say, we have the team in place to support significant increase in revenue, and that's the power of the platform. We are now starting to also see the benefits of AI multiplying the scalability of the platform, and Tony will talk through this shortly. Significantly, we recorded a significant step change in underlying EBITDA with a positive result of USD 1.8 million for the half. For context, we made a USD 0.5 million EBITDA loss last year in H1, and we only recorded USD 200,000 for the full year of FY '25, a 9th of the half year result. This clearly shows the inflection point the company is going through. Looking at PaaS margins, these have started to expand as we have advised they would. Margins in FY '25 set around 26%, but in H1 FY '26 have moved to around 30%. We still have heavy onboarding activities, which we continue to expect to have as more clients are onboarded, but the impact of these lower-margin revenues and even costs during onboarding are diluted by higher recurring base of transactional revenue. As we scale, fixed costs like connectivity and digital pay certifications are spread across a larger revenue base and will support ongoing margin expansion. Turning to the balance sheet. At the end of December, we had USD 2.6 million of cash at bank, an additional USD 1.4 million of cash-backed security deposits. As flagged at the full year, we have started splitting out client settlement funds that sit on our balance sheet as well. These relate to our PaaS business. They were USD 2.5 million at 31 December and fluctuate depending on the day of the week. There also is an offsetting liability for USD 2.3 million, which is labeled scheme settlements payable, which we've now split out from other trade and other payables. We also maintain a healthy balance of contracted liabilities. These are already contracted paid for support and maintenance as well as professional services work that will be unlocked over the next 12 months. In the first couple of months of H2, we've also contracted some large projects with Vertexon on-premise clients that are not reflected in that 31 balance. Overall, the balance sheet is in very good shape, and we continue to drive profitable growth. We'll continue to strengthen the balance sheet. In terms of cash flow, the significant improvement has been driven by a significant increase in cash receipts, but also the stable fixed cost base. The increase in operating payments is primarily driven from PaaS COGS as volumes and revenues increased. CapEx has stayed relatively stable with capitalized software development only up slightly on the back of additional revenue-generating features rolled out to clients in the half. As we always point out, given the billing cycle and cash usage cycle in the business, H2 is expected to be much more improved again on a net cash flow perspective and remain on track to hit our target of cash flow positive guidance for the full year. Back over to you, Tony. Tony Sheehan: Thank you, Tom. So just briefly touching on the large market opportunity that we have in front of us. Many of you on the webinar today would have already heard us talk around this, but there are some new people on the call. So, I will go through this, but I'll go through it pretty quickly. There is more details in the appendix. So, we have a very large market opportunity for Vertexon and PaySim. So, what is our focus really to capitalize on these opportunities? We have identified target markets. So, for Vertexon, that is Australia, New Zealand and Southeast Asia. They are the regions that we are gaining traction and winning. For PaySim, it's global as the product can be sold globally without modification. Secondly, we have pivoted towards outbound sales hunting. So, we have reshaped the sales team and pivoted towards outbound sales. So, the BDMs that we have hired over the last 12 months continue to aggressively target outbound sales opportunities. Thirdly, it's growing and leveraging the partner ecosystem, so expand our partner ecosystem and work more closely with existing partners to drive mutual value. That partner ecosystem provides a one-to-many sales approach, which can be very effective for both Vertexon and PaySim. Fourth is cross-sell and upsell. So, work with our existing Vertexon and PaySim clients to drive project work, and for Vertexon clients, continue that journey towards migrating to PaaS or the latest on-premises version. We upsell the modern functionality and features to clients, which also drives incremental revenue across both products. So, if we look at some key operational achievements. So, to deliver on our financial results that Tom has just gone through, we have a clear and focused operational plan. So, some of the notable operational highlights for H1 include from a commercial perspective, we integrated a marketing campaign automation tool and commenced marketing nurtures for Vertexon and PaySim. So, this is to increase brand awareness and lead generation. We expanded our partner ecosystem. So, we signed 3 new PaySim partners and a new BIN sponsored partnership with a global processor. We also launched our first BIN sponsorship client in New Zealand. We've talked about them before, the Sharesies debit card program launched in early October. From a product perspective, we significantly enhanced the Vertexon PaaS digital capabilities. So, we upgraded our digitization offering, and we broadened our SDKs or our software development kit to enable faster and deeper client integration. So that's really key from a sales perspective as well is having a rich SDK, which does make it easier to integrate and offer more functionality. We continue progressing the PaySim modernization project. So, we completed a 64-bit upgrade to increase testing capacity for our clients. We also enhanced the PaySim ISO 222, which is account-to-account payments product offering. So that complements our ISO 8583 offering. And we completed dual domestic EFTPOS network connectivity in New Zealand. So that's important for our debit card programs and in particular, our financial institution clients as well. From an operations perspective, we strengthened the Vertexon PaaS platform monitoring to maintain high availability as volumes continue to scale. We also undertook ongoing high availability infrastructure improvements, again, for continued scaling. Some of the clients that we're in discussions with and one that we've won recently really is around the resilience and stability of our platform. So that is key for us from a business perspective. We also deepened AI integration across the business, and I'm going to talk more in more details around that now in terms of AI. So, if we look at -- looking a little more deeply at AI and what it means for our business. So AI is rapidly evolving on a daily basis. The enhancements in capability, particularly in the last few months is quite extraordinary. So, the evolution of AI has now reached the point where it can create significant opportunity and value for Change. AI is not new to us. So we already utilize AI in products, for example, fraud monitoring and over the last 24 months, have deployed AI to assist development and other business units. Now with the recent transformational improvements in AI, we are changing the way we adopt AI moving forward. We are embedding Agentic AI across development, operations and client delivery. This will enhance structural advantages and drive operating leverage across the business. So, what is the impact we see from embedding Agentic AI across our business? Firstly, it's around defending and deepening the moat. So, we have proprietary platform control. As we mentioned earlier, we own the technology for Vertexon and PaySim. So this enables faster execution versus competitors reliant on third parties. We have over 20 years of institutional trust in our products. So AI improves our resilience and scalability. Embedded proprietary business logic, so compounding advantage as AI trains on our internal data. There are also some things which AI can't shortcut. So for example, scheme certifications and regulatory licenses and compliance. From our perspective, AI strengthens our competitive moat rather than eroding. Secondly is to accelerate revenue, so faster product releases. So development cycles compressed from months to weeks. So, this will accelerate our product road map delivery, which is super exciting. Will enable faster client onboarding through reduced implementation time frames. It will enable more customization capacity. So that's improved -- that will improve our ability to win large and complex deals. And it will also improve client responsiveness, so stronger retention and cross-sell expansion. The third pillar that we see there is really to drive margin expansion and operating leverage. So increased developer productivity, so far greater output per employee. There will be automation assistance with support and reporting, reduced rework and testing cycles. The operational task, automation, so workflow enhancements to reduce manual engagement and also expanded operational capacity. So, AI will augment teams and drive financial efficiency. So, we are in a super exciting period of evolution for our business. In terms of the outlook, so on the back of a strong H1, we upgraded our guidance for FY '26 in late January. Many of you will be aware of that. Revenue is now expected to come in between USD 17.5 million and USD 18.5 million. So, the increased quantum of recurring revenue provides a very solid base for the business. Underlying EBITDA is now expected to come in between USD 3.1 million to USD 3.8 million. So that's a 15% increase at the midpoint compared to previous guidance, which we released in July. We've also maintained our guidance of being cash flow positive for the year. So as Tom mentioned, historically, our cash flow has significantly improved in the second half of the year. We expect that to be the case in FY '26 as well. So overall, it's been a great start to FY '26. Our focus is on growing the business and executing on our operating plan to deliver on our targets for the year. Tom, we might turn over to Q&A. I think we've had some come in. Thomas Russell: Yes. Thanks, Tony. Okay. So. the first one here is from Miles at Veritas Securities, who has recently picked up coverage of the stock. Thanks, Miles. To what extent are AI and automation enhancing your sales and marketing capacity? Tony Sheehan: Yes. So good question there. I think let's start with the marketing. What the -- what AI is enabling us to do is establish content faster, whether that's white papers, whether that's lead generation materials as well. So that's sort of the first pillar is around that content. It will also likely enable us to do AI-powered lead scoring as well. So, we will use signals, web visits, content downloads, engagement frequency to enable targeting to potential clients there. So, it will continuously learn from our CRM data that we have and refine that and refine the nurtures and the campaigns that are going out. And then what we would be hoping that will come out of that as well is the identification of more sales-ready leads earlier. So that directly leads into the sales side of the business as well. I did talk around the enhancements that Agentic AI, we see coming across the business in terms of product delivery, the road map, customizations as well and onboarding -- the speed of onboarding of clients. So, we think that when you combine that with marketing and the product from a sales perspective, we will reduce implementation friction, increase confidence, particularly during those large and complex enterprise procurement processes there and accelerate our sort of revenue recognition for new contracts. Thomas Russell: Thanks, Tony. Next one from Joe at MST. Congrats on the great result and maiden profit. Just wondering if you can give any color on the current sales pipeline. Tony Sheehan: Yes, I'll take that. So, the sales pipeline at the moment is in very good shape. We've got some very good opportunities that are down the bottom of the funnel, so well advanced in Australia, which is great on the PaaS side. Tom mentioned around when we talked around that onboarding slide where you can see the number of clients and building out that box down the bottom right in terms of clients that are signed. We will be looking to really build that out over the coming quarter or 2 as well. So, from a sales perspective, looking very strong there, which is great. We just need to get those conversions and close those deals hopefully in the coming months as well. And then Southeast Asia, we are still seeing good traction up there. We've got some really marquee clients up there, which is driving a lot of our professional services and license sales on the Vertexon on-premises side as well. So, some great opportunities coming through. Joe, needless to say, we just need those to drop through in the coming months as well. Thomas Russell: Thank you. All right. Laf from MST, who also covers the stock. I appreciate the extra color on AI. Can we talk to specifics on the costs and how they may change and investment versus possible savings? I'll let you take that one, Tony. Tony Sheehan: Yes. And Tom, jump in on this as well. So Laf, in terms of where we're at with that AI, that is rolling out in a very accelerated manner across our business. I think in terms of the costs and what that will change, we will be working on that in more detail in the coming sort of couple of months as well as we -- as that rolls out across the business. So, probably a little bit early for us to sort of talk around that investment and possible savings. Tom, I don't know if you've got anything you want to add to that? Thomas Russell: Yes. The only thing I'll say is that the actual AI tools don't cost a huge amount of money. So, it might surprise you, but we're not talking about huge amounts of money to make that investment in AI. We've already started doing that, as Tony said, over the last 12 months in particular, but the additional cost of AI is not great. And I think we can provide a bit more color on that in the coming sort of months to 6 months. Okay. Another question from Laf. Are the 3 wins in PaySim net wins, new wins? Tony Sheehan: Yes. So, they're partner wins, so they are net new partner wins, Laf, on the PaySim side. And so, they're in most of those -- one partner was in Latin America, 2 were in the Middle East as well. So, regions where we can sort of leverage that partner network to sell PaySim licenses in region. Thomas Russell: So, we sell a lot of licenses through partners currently in different parts of the world as well. So, we use them as a distribution channel. And what worked in the pitch for PaySim, how do you seriously move above a less than 0.5% market share? Tony Sheehan: Yes. So, with PaySim, it is extremely functionally rich. So, the software itself, functionally rich. We have resellers that have their own testing tools as well, but they sell PaySim because it is more functionally rich. In terms of how do we move past that 0.5%, we are undertaking a modernization of that product, so to improve the look and feel of that. That's where we would expect our Agentic AI to really accelerate that modernization of PaySim. It's also about direct sales. So, we've moved towards outbound sales hunting with the appointment of new BDMs last year, and that partner network, we talk around that one-to-many partner network for distribution as well. So, it really, Laf, comes from product. So that modernization is very functionally rich. Let's modernize it to improve the look and feel and then direct sales and partner sales, I think the partner sales network, which has been very good for us historically. We need to accelerate that, and that's one of our key focus areas. Thomas Russell: Back to AI. Do you think you can use it for any horizontal opportunities as a new revenue potential? Tony Sheehan: Look, in terms of horizontal opportunities, I mentioned it earlier around accelerating our road map. We have road maps for Vertexon and PaySim. Where I see the AI coming in is the acceleration of that, which is new products and features. So that is revenue potential. So absolutely see AI as accelerating our revenue potential and growth there. Thomas Russell: I've got another question here. What is the cost of remaining listed? Would the company not be better off being privately held? Look, that's something that people ask us from time to time. The cost is probably about USD 400,000 a year in terms of being listed. It's not cheap to be a listed company, which is why you see in the market now companies need to be bigger before they list. Look, it's something the company could consider, but we've got about 2,000 shareholders who I'm not sure would all appreciate being a private company. So, for now, we'll be staying listed. Michael from MST. Can you touch on some of the future products or enhancements you guys may be exploring over the next 12 to 24 months? Tony Sheehan: Yes. So, Michael, from a product perspective, if we have a look at PaySim, the modernization, which I mentioned in the presentation and also some of the last questions there, the modernization look and feel, also building out our ISO 222, which is our account-to-account solution as well. So, what we -- a core function that we have runs on 8583, ISO 8583. What we want to do is build out that functionality around account-to-account payments because that's a growing segment as well. So, that will be the real focus for PaySim. If we have a look at Vertexon, again, we have a long list on our product road map, which we go through with prioritization. Things that we are looking at, I've mentioned that we've significantly enhanced our digital capabilities on the PaaS platform. We will also be looking at loyalty and also account-to-account, so real-time payments to complement our card issuing. We're not going to be someone that competes for account-to-account payments, but it is a complementary offering for our clients around that card issuing. So that's probably some of the key things that we'll be looking at over the next sort of 12 to 24 months. And again, that's where we do expect that acceleration to happen through our sort of rollout of Agent AI. Thomas Russell: Thanks. Last question for now. Sean from Snowble. Does the use of AI affect your hiring decisions? Example, would you look at hiring less due to efficiency gains? So, I might take that one, Tony. So yes, I think that is our expectation. The platform, as everyone knows, is very scalable, and we've always needed to hire a few people to double the revenue, like we said for the future and like we've shown in the last sort of 12 to 24 months. We've had those people there the whole time. The revenue has doubled. We don't need to -- when we sign a new client, go and add more staff necessarily. There will become a point where we do. As we said before, we're sort of going through our AI rollout plan at the moment. It's happening very quickly, something we've been sort of been keeping a very close eye on and how it's going to affect us as a business. So we're well ahead of it. But over the next few months, I think we'll be in a position to talk more about that as we come into towards the end of the financial year. Okay. That's it for questions for now, I think, Tony. Tony Sheehan: Okay. Thank you for the questions, Tom and I always enjoy the engagement from investors and our analysts that cover our stock as well. Thank you for joining. Thanks for taking the time to join us on our H1 update. I look forward to keeping you updated throughout the remainder of FY '26. Lots of exciting things happening in the business. So, we'll keep that coming with our news flow as well and our quarterly updates that we provide.
Operator: Ladies and gentlemen, thank you for standing by. I am Mina, your Chorus Call operator. Welcome, and thank you for joining the Piraeus Bank conference call and live webcast to present and discuss Piraeus' Full Year 2025 Financial Results. [Operator Instructions] And the conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Piraeus Bank's CEO, Mr. Christos Megalou. Mr. Megalou, you may now proceed. Christos Megalou: Good afternoon, ladies and gentlemen, and good morning to those joining us from the U.S. This is Christos Megalou, Chief Executive Officer, and I am joined today by Theo Gnardellis, Chryssanthi Berbati and Xenofon Damalas to present and discuss Piraeus' fourth quarter and full year 2025 results. Today, I will take you through the first 2 sections of the presentation, covering the main financial and business achievements for the full year period and demonstrating our standing in the European banking landscape. This will be followed by a Q&A session. Let's begin with our presentation on Slide 4. Piraeus is a leading bank in Greece, ranking first across all major business lines. We serve 4.5 million clients with a workforce of 8,100 employees in Greece. Our total assets stand at EUR 91 billion with EUR 37 billion in client loans and EUR 66 billion in client deposits, representing 28% market share in deposits. We operate an omnichannel distribution platform with 370 branches, 1,500 ATMs and serving 3.2 million digital clients. Our mobile app is top ranked, reflecting our commitment to digital excellence and customer satisfaction. We are a leader in sustainable banking with EUR 5 billion in sustainable financing, EUR 2.2 billion in green bonds outstanding and a strong focus on supporting small businesses and farmers. All these outstanding results have been delivered thanks to our people and our clients. Let's move on to Slide 5 for the key highlights of our full year 2025 performance. We generated normalized return on average tangible book value of 16% or 14% on a reported basis. Our earnings per share reached EUR 0.82 post the AT1 1 coupon, fully absorbing the fast decumulation of base rates. On the back of our strong performance, we increased our payout ratio to 55%. We intend to distribute EUR 0.40 per share cash dividend in Q2 2026 on top of the EUR 100 million share buyback that was completed in the fourth quarter of 2025. In total, we are on track to a total distribution of EUR 592 million out of the 2025 profit, which corresponds to a 7% yield. We have expanded our loan book by a Europe leading growth rate of 11% year-on-year and achieved EUR 4 billion net credit expansion, maintaining pricing discipline at the same time. Importantly, net credit expansion reached EUR 300 million in the retail segment after 15 years of contraction. Our cost-to-core income ratio stands at 33%, among the best in the European banking market, confirming our strong cost discipline. Revenues from services reached EUR 700 million in 2025, up 7% year-on-year. Our revenue diversifying efforts are reflected in our services revenues over total revenues of 26% and fees over assets that exceed 80 basis points. Both metrics are best-in-class in Greece and close to or above average in Europe. We delivered EUR 2.7 billion net revenues in 2025 with net interest income arising in Q4 quarter-on-quarter, and we consider that we are now well past the trough in net interest income. Asset quality dynamics remain solid with the NPE ratio at 2%, while organic cost of risk shaped at 52 basis points. NPE coverage increased to 73% from 65% a year ago, solidifying our balance sheet. Our assets under management increased to EUR 14.5 billion in 2025, up 27% year-on-year with EUR 1.5 billion net inflows. Furthermore, client deposits rose by EUR 3.2 billion annually and are now at EUR 66 billion, practically our deposits almost fully funded our credit expansion in 2025. Our total capital ratio reached 18.7%, absorbing the Ethniki Insurance acquisition, 55% distribution accrual, the strong low growth and DTC amortization. We maintain a buffer of 275 basis points above Pillar 2 guidance with a CET1 ratio standing at 12.7%. Slide 6 presents the details of our fourth quarter and full year operating results. The reported pre-provision income was up 7% quarter-on-quarter. Below pre-provision income, the quarter has some one-offs aimed at further strengthening our balance sheet in the areas of nonperforming assets and non-core participations to lay out a clean backdrop for the new strategy. We sustainably grow our tangible book value per share now at EUR 5.9 per share, which is net of the EUR 0.30 per share cash dividend paid in June '25, the EUR 0.08 per share of share buyback in November '25 and the impact of the Ethniki Insurance acquisition. On Slide 7, we present our strong loan origination dynamics. Performing loans increased by 11% in 2025, driven not only by all business lending segments, but also by an increase in household lending. Importantly, Q4 marked a new cycle record of EUR 250 million for mortgage disbursements. On Slide 8, we present a detailed sector breakdown of our CIB net credit expansion of EUR 3.6 billion in 2025. As you can see, our corporate platform outreach is very granular, reaching all sectors of the Greek economy. Among other initiatives, we are increasing our presence in syndicated deals, and we are offering greenhouse technology financing solution. At the same time, we keep focusing on SME clients in Greece, as shown by the top performance in disbursements. Slide 9 demonstrates that we have achieved Europe's strongest corporate loan growth while maintaining pricing discipline, which is a testament to the commercially rigorous approach of all of our teams. We have been able to compete and win business while pricing at par with the market average and keeping risk-adjusted returns at the core of our business credit underwriting. Turning to Slide 10. The key milestone to note is that 2025 is the first year that mortgage loan growth, net of repayments has turned positive with net credit expansion of EUR 110 million. This follows net consumer loan growth, which already turned positive in 2024. Consumer disbursements have been growing since 2021 by 10%, but this growth was previously outweighted by heavy repayments. We now have reached an inflection point that bodes well for future expansion of our loan book and revenue streams. Slide 11 outlines the impressive evolution of our services revenues, which is being supported by loan originations, asset management and bancassurance. Ethniki Insurance contributed for circa 1 month with the growth of the new operating model still to come and expected to elevate services revenues with expansion across all segments of the market, namely life and health protection and P&C protection. More on this during our Capital Markets Day next week. Slide 12 demonstrates the growing trend of assets under management that reached EUR 14.5 billion in December, backed by strong net inflows of EUR 1.5 billion. We have upscaled our investment solutions offering to private banking and retail clients, incorporating robo advisors while our open architecture strategy, combining Piraeus asset management expertise with a wide suite of best-of-breed third-party products is paying off. Slide 13 presents detailed information regarding net interest income intrinsics. In a nutshell, our growing CIB loan book drove NII improvement, along with the stabilization of base rates. Spread erosion was milder in Q4 versus the previous quarter, while deposit costs stabilized. As a result, NII rose by 1% in a quarterly basis indicating that the trough of the cycle is behind us, given current yield curves. Turning to Slide 14. Our cost control efforts kept G&A costs under control while still making extensive IT investments. Overall, we remain cost conscious, maintaining cost-to-core income ratio below 35%. Slide 15 provides a summary of our asset quality indicators. Our NPE ratio stands at 2%, while the organic cost of risk shaped at 51 basis points in the fourth quarter. Our NPE coverage strengthened, reaching 73%, while our Stage 1, Stage 2 and Stage 3 coverage ratios are increasing, standing higher than EU average. Piraeus enjoys a superior liquidity profile presented on Slide 16. Our liquidity ratios remain strong as evidenced by the high balance of deposits at EUR 66 billion and 216% liquidity coverage ratio. Turning to our capital base on Slide 17. Our CET1 ratio stood at 12.7% at the end of December, post the Ethniki Insurance acquisition, absorbing loan growth, 55% distribution accrual and accelerated DTC amortization. Slide 18 depicts Ethniki Insurance performance in 2025. Profitability was significantly improved to EUR 45 million before tax at a recurring level from EUR 26 million in the previous year. With a leading 14% market share and 1.9 million customers, gross written premium posted growth in health and P&C. On Slide 19, we present an update on Snappi, our neobank with its own portable pan-European banking license. Snappi launched commercially in September, it is already gaining significant traction with its fully digital, app-based, branchless, low CapEx model, as it currently has 60,000 app users. Turning to the second section of our presentation for our positioning within the competitive landscape. I want to point out that Piraeus is in a leading position in Greece in terms of performing loans, deposits, equity brokerage and network as highlighted on Slide 21. In addition, Piraeus ranks at par or above average on all major KPIs in the European banking space. In Slides 22 to 27, we present the key metrics for Piraeus versus European bank averages. On Slide 22, Piraeus delivers best-in-class loan growth in Europe, outpacing EU peers by wide margin. On Slide 23, our net interest margin is far above the European average, reflecting our pricing power and effective balance sheet management. Slide 24, net fee and commission income over assets is well above the European average and the best in Greece. Slide 25, our cost-to-core income ratio is best-in-class in Europe, demonstrating our ongoing focus on operational efficiency and cost discipline. On Slide 26, Piraeus' return on tangible book value is well above the EU average, highlighting our ability to generate superior returns for our shareholders. Concluding with Slide 27, despite our strong fundamentals in absolute and relative terms in relation to our European peers, Piraeus trade below EU banks with similar earnings implying significant upside for our shareholders. And with that, let's now open the floor to your questions. Operator: [Operator Instructions] The first question is from the line of Sevim, Mehmet with JPMorgan. Mehmet Sevim: I have just a couple of questions, please. One on the fee income this quarter, which you renamed to revenues for service -- from services. It seems like a very good strong print. I was just wondering if there are any one-offs or anything else to highlight in that print? Or is this a good run rate for us to consider for 2026? And maybe related to that also, it seems like a strong initial contribution from the business in just 1 month. I was wondering how we should think about 2026 when it comes to revenue contribution and integration costs here and maybe anything else that we should be aware of when it comes to modeling the business? And finally, just wanted to ask on the payout ratio, which came in higher than expected with the EUR 0.40 per share dividend payment. But at the same time, your CET1 fell slightly below the target of 13%. So how do you balance this? And going forward, should we think about this level of payout ratio as the base? Or is there anything that you'd like to highlight here as well? Christos Megalou: Sevim, and thank you for the question. I'll start with the fee income. We had indeed a very strong fourth quarter, and this is highlighting the franchise value of Piraeus. We have always maintained that we are a strong earner in fees over assets and particular areas like asset management, the banking business, the bancassurance are areas of growth for us, and they will continue to be. For the fourth quarter, there were a few, let's call it, highlights, especially on the investment banking side. So I wouldn't extrapolate this number for the whole of the year. But I would just say, and of course, we will come with guidance on next week on our Capital Markets Day in London. I would just say that this is an indication of the strong franchise value that results in fees from services for Piraeus Bank. Now, on the payout ratio and the level of capital, first of all, we thought that we felt very comfortable with the level of capital that we were in, given the balance sheet and given the way the bank has derisked over the years. And therefore, to give an extra return to our shareholders from 50% to 55%, we thought it was more than appropriate given the fact that with the level of CET1 that we are currently at, we are at a total capital level of above 270 basis points above P2G. And of course, this whole exercise was facilitated by the fact that the P2G went down to 1%. So as you can imagine, given the strong fundamentals of the bank, we thought that this reduction on the P2G should be passed to our shareholders. And this is what we did right now rewarding our shareholders with an extra 5% on the payout ratio. Theodore Gnardellis: On your question, Mehmet about Ethniki, I mean this is really 1 month plus a few days that you're seeing here. Let's just wait for the 5th of March, where we're going to be giving you guys a detailed guidance. We're giving a preview of the solo result. I mean, it's still an audit, and it's going to be published by the end of March, but we're giving you kind of a preview on Page 18. But we'll discuss much more about Ethniki and the accounting effect and the value effect on the group consolidation on March 5. Let's just wait for that. Operator: The next question is from the line of Caven-Roberts, Benjamin with Goldman Sachs International. Benjamin Caven-Roberts: Just 2, please. Firstly, could you please provide some further color on the one-offs that were recorded this quarter? And if we should expect any further one-offs going into 2026, for instance, relating to the recent Katseli ruling? And then secondly, on the net credit expansion, just looking through the different categories, as you mentioned, a very positive pickup in mortgages, but large corporate net credit expansion was a little lower in Q4. Could you elaborate on how we should think about that mix and run rate going forward? Theodore Gnardellis: Ben, indeed, quarter 4, we found the opportunity, and we recorded some one-off expenses, I would say, below the normalized line. What primarily we did was on the cost side, there were some adjustments that we did on VES and some transaction-related costs with the Ethniki trade, valuation adjustments that was done on the equity and the NPA line. And of course, on loans, we're all aware of the Swiss franc legislative actions that happened throughout the quarter. And as a result, there was an additional adjustment there. Given the nature of these adjustments, I would not say that these are to be repeated in the future. We will not have, again, one-offs of that kind going forward. Overall, the guidance and the profitability communication that we will be giving and we have given in the past regarding '25 is on the reported side. So our objective is always to be meeting that, both on a returns ratio perspective and on a nominal perspective. This is what we did. So kind of nothing to write home about there that produces the future. Christos Megalou: Robert, also on the loan growth, as we were going into the fourth quarter, we were well above our target of EUR 3.5 billion by some margin. And therefore, there was no real urgency on pushing forward. So naturally, we have been slowing down a little bit in the fourth quarter so that we will be in a position to have a very strong Q1. So nothing to think about the Q4 credit expansion, especially on the CIB other than that the trend is very strong. We have a very strong pipeline. And as we will come up with a new guidance on the 5th of March on our Capital Markets Day, you will see this coming through. Operator: The next question is from the line of Kemeny, Gabor with Autonomous Research. Gabor Kemeny: I have a question on your capital distribution. If you could comment on how you think about the mix of cash dividends and buybacks going forward in light of the strong performance of the shares recently? That's the first one. And the second question on the net interest margin. Do you see the NIM stabilizing going forward? Is this -- is Q4 a good run rate for the coming quarters? Or do you see any additional headwinds coming through? Christos Megalou: Gabor, I mean, on capital distribution, the way we are right now, we think cash. So that's what we were planning for, for '26, and this is how we strategically look to conduct ourselves in the future. Theodore Gnardellis: And on the NIM, Gabor, indeed, I think we're reaching a point given the interest rate status and what we're seeing on spreads where NIM is finding its lows. There are some tailwinds actually on the ratio that we'll be discussing next week. But I'll refer you to the 5th of March for those. Gabor Kemeny: Right. Just a quick -- another quick one on your capital ratio. I think you had a valid case for increasing your payout, the CET1 ratio, slightly dropped below 13%. How would you think about steering your capital going forward? Are you looking to built it up to 13% or above? Or is there now a possibility that you stay maybe a little bit below that? Christos Megalou: Gabor, look, I think this is a franchise that generates earnings. It's a high-yielding one, high distribution one and generates capital as well. We have been talking about our strategic direction and philosophy on distributions and rewarding our shareholders. In the future, as we generate more capital, we will be following the same strategic direction. We will come with specific guidance on the Capital Markets Day. But our philosophy is this is capital accretive franchise, and we have to be delivering back capital to our shareholders. Operator: The next question is from the line of Nellis, Simon with Citibank. Simon Nellis: First question would be on the losses from participations or impairments. Can you just elaborate on what the nature of those one-offs are? Second question would be on the increase in bancassurance fees. I guess that's with existing insurance partners. How do you see that transition from existing insurance partners to Ethniki occurring and the impact it might have on that line? Those will be my 2 questions. Theodore Gnardellis: Simon, yes, the one-off part of the adjustments on associates had to do with one of a particular case that exists in our book. We saw some market intrinsic, some market information that led us to do a one-off valuation adjustment on the particular exposure. As I said, this is a very one-off situation. This does not prelude to any further such one-offs. It was something that we found an opportunity to do now so that we can have a kind of clean horizon ahead with no kind of gray areas or question marks. Simon Nellis: And how much was that, if I could ask? Theodore Gnardellis: EUR 35 million was the one-off adjustment that we have done on the equity side. You can find it on Page, I believe, 52. So on the banca fees, yes, it was a strong quarter. I mean, generally, banca as a franchise, we know that Piraeus is running the strongest banca sales. Quarter 4 was particularly strong. It is with the existing partners that we've got. The arrangements that we've got with the 2 bancassurance partners are, of course, active, and it's a testament of how the network continues to produce insurance regardless of other things that might be happening on the side. The particular line, I think, we will see it next week in conjunction with a lot of other things that are affecting the future overall of the group when it comes to insurance sales and insurance revenue. So let's just hold on for another week. Operator: The next question is from the line of Novosselsky, Ilija with Bank of America. Ilija Novosselsky: So one question on your interest expense paid on deposits. So I can see that it's constant in the quarter. So as far as I know, that relates to both the actual expenses on deposits and also the hedge impact, and both of them seem to be constant. I would kind of expect both of them to have a positive impact. So maybe if you can tell us how we should see interest expenses on customer deposits developing from here, maybe split between the 2 impacts? And then again, if I stay on the hedges, if I look into the Excel data set on the NII section, I see big changes in the non-maturing deposit hedging cost, which is kind of offset by a similar change in the IRS liability side. So maybe if you can tell us what has caused that because the change is around EUR 90 million in each of the lines. And maybe finally, one more on the hedges. So you started with EUR 10 billion. You have about EUR 9 billion now. So how can we expect the portfolio to develop throughout this year? Theodore Gnardellis: Ilija, overall, the deposit cost, as you saw, we have netted out and well pointed out with the NMDs. It's on 29 basis points right now. It is a flat situation. There's multiple, I would say, minor movements there. But for the future -- I know we're trying to keep the line, but you guys keep coming back on guidance for the future. But for the future right now, what we can tell you is that it's a stable outlook. So if you want to make an assumption, I think that's a fair one. My answer to your hedging question from a strategy perspective, it depends a little bit on our outlook on interest rates. So we will be discussing that next week. I've said many times when one believes that when one believes that you have reached a terminal level of interest rates and those positions stop having value or you can -- you're free to kind of materialize and monetize the value that these carry. But again, let's discuss this more next week. Operator: The next question is from the line of Souvleros, Andreas with Eurobank Equities. Andreas Souvleros: And congratulations for the results. I have 1 quick question, which is regarding the calendar provisioning that is around EUR 300 million, if I'm not wrong. And you mentioned a meaningful drag on the common equity Tier 1 ratio. So could you please clarify under what timeline or condition this is expected to be reversed? Theodore Gnardellis: Andreas, thank you for the question. Indeed, it is, of course, part of the capital reduction that you use for -- following the calendar provisioning guidance. It will reduce over time. The expectation is that -- I would say with growth rapidly, probably around the 50% mark over the next 5 years. Part of the recovery strategy, that's the way calendar works, you front load, and then, eventually, as recovery, hopefully, you release. Operator: The next question is from Gil Santivanes, Fernando with Intesa Sanpaolo. Fernando Gil Santivanes: This is a very general one regarding the latest Supreme Court ruling the last period of February on interest payments. Can you give us some color or some views on the balances the bank has? What potential impact might we see? And if this ruling is to be adhered by banks or not? Any color would be very helpful. Christos Megalou: Let me start on the Katseli Law by saying that the Katseli Law served its purpose, I would say, when it was legislated in 2010. If you look at the exposures that we have in our book right now and feel we will follow up with the numbers. All the Katseli Law exposures that we have in our balance sheet are Stage 1 paying loans and performing, which means that there was some good work done out of this law. And we are monitoring this decision. And also, we have to wait, I'm afraid, for the final script because details matter, but we can give you an outlook of what we have in our books and what that could potentially mean. So, Theo? Theodore Gnardellis: So Fernando, the overall book that we've got right now on the balance sheet of such loans is about EUR 50 million. Obviously, depending on how the decision will be scripted, there might have to be adjustments there, which is a percentage of that. We have hypothesis, obviously, which is being budgeted within 2026. That will be included in any guidance -- in the guidance we give out next week, but you understand it's a percentage of EUR 50 million, so actually excluding the margin of error of any cost of risk estimation for the future. Operator: [Operator Instructions] The next question is from Potgieter, Stephan with UBS. Stephan Potgieter: You've answered most of my questions. So just on follow-up on the Katseli loans, the ruling there. Obviously, you're outlining your own exposure, but do you have any views of what this could mean for the industry? I suppose most of these loans are sitting in the securitization structures, the regular scheme, if you have any views on that? Theodore Gnardellis: Stephan, again, we need to wait for the actual detailing because the impact might range a lot, obviously. It's a cash recovery question of the securitizations. It doesn't concern Piraeus Bank or the banks overall given the fact that these loans are derecognized. But in terms of the overall recovery, the outlook of HAPS and what that means, this is to be seen as we see the details. Overall, the outfits are producing cash reserves. We've -- the overall recoveries that come out of these loans are a percentage. I would say a small percentage of the expected recoveries. We'll see that -- what that means for this phase for the future. But overall, I think, for the bank's balance sheet, no effect. Operator: Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Megalou for any closing comments. Christos Megalou: Thank you all for participating in our full year 2025 results conference call. We now want to welcome you to our Piraeus Capital Markets Day, which will be held in London on Thursday, the 5th of March, where we will be presenting our strategic plan from 2026 to 2030. As already communicated, before the strategic presentation, we will hold an analyst-only session to discuss any questions and any technical aspects of the new business plan. We look forward to seeing you all next week in London. Thank you. Operator: Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.
Operator: Ladies and gentlemen, welcome to AIXTRON's Fourth Quarter and Full Year 2025 Results Conference Call. Please note that today's call is being recorded. Let me now hand you over to Mr. Christian Ludwig, Vice President, Investor Relations & Corporate Communications at AIXTRON for opening remarks and introductions. Christian Ludwig: Thank you very much, Anna. A warm welcome to AIXTRON's 2025 results call. My name is Christian Ludwig. I'm the Head of Investor Relations & Corporate Communications at AIXTRON. With me in the room today are our CEO, Dr. Felix Grawert; and our CFO, Dr. Christian Danninger, who will guide you through today's presentation and then take your questions. This call is being recorded by AIXTRON and is considered copyright material. As such, it cannot be recorded or rebroadcast without permission. Your participation in this call implies your consent to this recording. All documents referred to in this call can be accessed via our website in the Investor Relations section. Please take note of the disclaimer that you find on Slide 1 of the presentation document as it applies throughout the conference call. This call is not being immediately presented via webcast or any other medium. However, we intend to place a transcript on our website at some point after the call. I would now like to hand you over to our CEO for his opening remarks. Felix, the floor is yours. Felix Grawert: Thank you, Christian. Let me also welcome you all to our full year '25 results presentation. I will start with an overview of the highlights of the year and then hand over to Christian for more details on our financial figures. Finally, I will give you an update on the development of our business and our new guidance. Let me start by giving you an overview of the highlights of the year on Slide 2. The most important messages of the day from my viewpoint are: in 2025, we have performed well in a soft market environment by achieving revenues of EUR 557 million, a decline of 12% year-over-year. That translates into a CAGR of more than 13% since 2020. We delivered on our adjusted 2025 revenue guidance, meeting the upper end of our guidance given in October '25. Mainly due to the lower utilization in operations, due to one-off restructuring costs, and due to G10 ramp-up adjustments, our gross profit was down 15% to EUR 222 million, and EBIT was slightly down with minus 24% at EUR 100 million as a result of this. Similar to last year, we finished the year with a strong Q4 '25 performance. We achieved 31% EBIT margin, a level comparable to last year's extraordinary Q4. This marks a great achievement of our operations team as we managed to realize all shipments that customers had asked us to deliver in Q4. The highlight of the operating performance is our cash flow generation. Operating cash flow increased by more than EUR 180 million to EUR 208 million. And our free cash flow increased by more than EUR 250 million to EUR 182 million. With that, we concluded the year '25 with a cash level of EUR 225 million, a good step towards rebuilding our strong cash position that we always have desired. Thus, despite the weaker net profit, we have decided to propose a stable dividend of EUR 0.15 per share to our shareholders. Our outlook for the year 2026 is based on an expected continued weaker market environment. We expect revenues to come in at EUR 520 million in a range of plus/minus EUR 30 million with a gross margin between 41% and 42% and an EBIT margin between 16% and 19%. Breaking this down by segment, AI will be the key revenue driver in '26, fueling strong growth in optoelectronics and lasers through rising demand for optical interconnect. In contrast, SiC, silicon carbide power will face a weak year due to overcapacity and slowing EV momentum with LED and microLED and GaN power demand remaining broadly stable. This concludes the short highlights section. I will now hand over to our CFO, Christian Danninger. He will take you through the full year '25 financials. Christian? Christian Danninger: Thanks, Felix, and hello to everyone. Let me start with the highlights of our revenue development on Slide 4. As Felix mentioned, the revenues in 2025 were down 12% to EUR 557 million. Our strategy of serving various uncorrelated end markets with our equipment proved again successful in 2025. We saw strong growth in the optoelectronics area. This compensated to some extent, the weaker demand for equipment for LED and microLED as well as gallium nitride power electronics. The breakdown per application shows that 57% of equipment revenues comes from GaN and SiC power, 23% from optoelectronics, 15% from LED and a 5% contribution from R&D tools. The aftersales business contributed to total revenues with a growth of 1% to EUR 112 million. The aftersales share of revenues grew to 20%, up from 17% a year ago. Now let's take a closer look at the financial KPIs on the income statement on Slide 5. Gross margin decreased by 1 percentage point versus 2024 to 40%, which was primarily due to lower utilization operations, G10 ramp-up adjustment expenses and the one-off restructuring cost. Accordingly, gross profit was down by 15% year-over-year to EUR 222 million. As we had planned, our spending on R&D in the year 2025 decreased to a total of EUR 81 million due to a reduction in external contract work and lower consumables costs. This helped to drive our OpEx down 7% to EUR 122 million. Combined with the lower gross profit, this resulted in an EBIT of EUR 100 million, which is 24% lower year-over-year. Net profit was down 20% year-on-year at EUR 85 million. This results in an effective tax rate of 15% in fiscal year 2025, a clear positive were our Q4 2025 gross and EBIT margins at 46% and 31%, respectively. Despite the 18% lower revenues number at EUR 187 million, we were able to beat the very strong level of Q4 2024 on gross margin level and meet it on EBIT margin level. Orders in the quarter came in at EUR 170 million, an uptick of 8% versus last year's quarter. For the full year, order intake came in at EUR 544 million, slightly weaker than last year. And thus, our backlog at EUR 258 million is down by 11% year-over-year due to the above-mentioned softness in demand. Now to our balance sheet on Slide 6. We ended the year 2025 with a total cash balance, including other financial assets of EUR 225 million, which was well above the EUR 65 million last year. There are a number of factors driving this increase. Firstly, inventory levels at the end of 2025 came down by about EUR 85 million to EUR 284 million compared to EUR 360 million at the end of '24. This is the result of our adjusted supply chain strategy and corresponding measures after initially front-loading the supply chain in 2024 in expectation of stronger revenue growth. We target a further reduction of inventory levels through 2026. Second, we have seen a solid decrease in outstanding receivables compared to the last year and which generated some EUR 60 million in cash. As a result of putting on the brakes in our supply chain early on, the amount of payables have been stable during the course of the year. Advanced payments received from customers, on the other hand, were slightly down year-over-year at EUR 44 million due to the decline in order intake, combined with a shift in the regional customer base and partially impacted by some key date effects. At year-end, down payments represented about 17% of order backlog. As a consequence of all these factors, operating cash flow improved by more than EUR 180 million to EUR 208 million in the financial year 2025. As mentioned already in previous calls, CapEx decreased significantly in 2025 due to no additional investment requirements for the innovation center. As a result of the significantly lower CapEx, free cash flow improved by more than EUR 250 million year-over-year to EUR 182 million from negative EUR 72 million in 2024. We expect further solid free cash flow generation in 2026. Lastly, we are proposing a stable dividend of EUR 0.15 per share. Despite our lower net earnings, we want our shareholders to participate in the improved cash flow generation. Going forward, following an intensive investment phase in the years 2023 and 2024, CapEx alone for the innovation center was EUR 100 million. AIXTRON plans to use the cash flow in 2026 to further build a strong cash position. Also, I want to remind you that AIXTRON expressly does not pursue a fixed dividend policy, but rather adjust the payout ratio to reflect the respective business performance and capital allocation priorities. With that, let me hand you back over to Felix. Felix Grawert: Thank you, Christian. I will continue by giving you a brief summary of the key market trends we saw last year and before I move on to our expectations for '26. I will start with our currently weakest segment, the silicon carbide power business before moving on towards the strongest segment step-by-step. SiC. Throughout the past year, the global silicon carbide market has undergone a significant transition. In Western markets, we are seeing a temporary slowdown driven by weaker electric vehicle demand and substantial idle capacity at several customers. This has even resulted in reduced or scrapped 6-inch capacity in some cases. We expect the digestion period for silicon carbide epi tools to continue throughout 2026 in Western markets. China, by contrast, remained a strong pillar of demand in '25 for AIXTRON with solid order intake and robust shipments in the first half of the year. In the second half of '25, also in China, SiC demand has softened. And in '26, we expect the digestion to continue also in China. Despite this short-term softness, the midterm outlook for SiC beyond '26 remains highly attractive. Substrate prices have dropped significantly, making silicon carbide devices far more competitive versus silicon IGBTs and enabling broad market adoption, both in EVs and across industrial applications. Even more importantly, the technological transition is well underway. The industry is rapidly moving from 6-inch to 8-inch wafers, starting with Western customers, now also in China, with a full shift expected towards '27 and '28. At the same time, the introduction of superjunction silicon carbide MOSFETs, which require multiple thin epitaxial layers instead of a single thick layer will significantly increase epi tool demand. Our batch-based G10 SiC platform is ideally positioned for this new operating model and has already achieved major milestones with the shipment of our 100 system during 2025. In 2026, we expect very strong demand [Technical Difficulty] at the beginning of '25 and have been steadily recovering. AIXTRON maintains a clear market leadership position with more than 85% market share across GaN device classes, and we remain deeply engaged with customers expanding their GaN road map into [Technical Difficulty] coming years. Importantly, GaN is emerging as a central technology for AI-driven power architectures, particularly as hyperscale data centers plan the transition to high-efficiency 800-volt platforms. We expect additional volume from GaN from AI applications at some time in the 2027 and '28 time frame. The exact timing for when this happens is unknown, and we will keep you posted when signs of this are getting clearer. In parallel, we are working with a small set of customers on 300-millimeter GaN. These customers have existing 300-millimeter silicon fab, which they desire to repurpose for GaN. Our 300-millimeter GaN tool is fully operational with our own innovation center, as we call our 300-millimeter team room and collaborations with imec and leading power semiconductor manufacturers are ongoing. Now, let me come to the LED and microLED market. After a period of muted investment, now the market for red, orange and yellow LEDs, we call them ROY LEDs, is showing clear signs of recovery, driven primarily by development in China. This momentum from display makers who are pushing the boundaries of image quality. In fact, several major TV manufacturers are now transitioning to full RGB backlighting architectures, which further boosts demand for ROY LED as tool. This trend underscores a broader shift. Even traditional LED backlighting is being reinvented, establishing miniLEDs as preliminary storage stage towards microLED. Enhanced local dimming, full color backplanes and ultra-high brightness panels are now becoming standard in premium consumer displays. These innovations are breathing new life into an application space that many considered mature. At the same time, exploratory and qualification work of customers towards microLEDs continues with customers in Europe, U.S. and Asia. The focus of this work has shifted away from watch and television now strongly towards AR/VR glass applications. We expect this market is still some time out into the future until a larger revenue contribution. And given the fact that one wafer can serve hundreds of AR glasses, the expected demand will be much, much smaller than what we would have anticipated for television applications. Overall, we can say that for AIXTRON, ROY LEDs and microLEDs together translate into a solid revenue contribution of around 15% of group revenue for both '25 and '26. Now, let's finally come to our strongest segment in '26, the lasers for datacom. The global indium phosphide laser market has entered a new phase of growth. And from Q4 '25 onwards, we have seen an even stronger momentum in this segment. We have served this market for many years with our proven G3 and G4 platforms historically for telecom and datacom applications, supporting the further adoption of high-speed broadband communications. As far as cloud services with a market share we estimate well north of 90%. The demand we see today is linked to a structural up cycle linked to AI data center build-out and the development of data-hungry new generation of GPUs. And this structural shift creates the demand for indium phosphide-based lasers grown by MOCVD with a massive adoption of optical interconnect now also within the data center architecture. As bandwidth requirements move to 800 gig and data 1.6T, the laser content per data center is increasing multifold to enable the required bandwidth. Our customers are subsequently not only ramping their manufacturing, but also rolling out new product generations with higher bandwidth that are also more integrated like photonic integrated circuit, PIC, now in order to be always faster, more compact and more energy efficient. For the majority of our users, their road map now includes a shift away from 3 and 4-inch to 6-inch wafer size. That is an enormous step for a market that has been historically very conservative. It enables them to access the advanced manufacturing technologies for these new types of products. Our G10 ASP product has rapidly established itself as the tool of record, as we say, for this new generation of photonic devices, replacing customer legacy system, producing higher yield and cheaper 150-millimeter indium phosphide epi wafers. We are serving all of the top 10 suppliers to this market. And demand is coming from all regions of the world, from leading suppliers in the U.S., from the ones in Europe, but also from optoelectronic leaders in Japan, in Taiwan and in China. Looking at demand dynamics, we expect the optoelectronics business to more than double year-over-year from 2025 into 2026. With this, it makes up for a large part of the revenue that declined in silicon carbide that I illustrated earlier. Finally, let me now present our full year guidance for 2026 to you on Slide 19. This guidance takes into account all the factors that I just described previously. We expect revenues to come in at EUR 520 million in a range of plus/minus EUR 30 million. We expect a 2026 gross margin of 41% to 42% and an EBIT margin between 16% and 19%. The effects of a personnel reduction we have initiated in the beginning of '26 are already included in this forecast. Now, let me comment on the first quarter of '26. As usual, sales in the first quarter of the financial year will be lower than the annual average first quarters. In Q1 '26, we expect revenues of EUR 65 million in the range of plus/minus EUR 10 million. This is comparatively low figure, fully in line with expectations and with a seasonal pattern of the business. For completeness, we have adjusted our USD to euro budget exchange rate at which we record U.S. dollar-denominated orders and backlog to USD 1.20 per euro. With this outlook, I'll pass it back to Christian. Christian Ludwig: Thank you very much, Felix. Thank you, Christian. Anna, we will now be happy to take the questions. Operator: [Operator Instructions] So the first question is from Ruben Devos of Kepler Cheuvreux. Ruben Devos: I just have one on the guidance basically, pointing to EUR 520 million a year. Obviously, you started the year effects of the seasonality at EUR 65 million, which is about 12% of the total. So just curious about how you see the quarterly cadence at this stage. And what might give you maybe the confidence that orders of, I think you talked about EUR 280 million, whether that will materialize at the pace needed for a strong H2? Felix Grawert: Yes. Thank you very much. So we expect again in '26, the pattern that we have seen in previous years, where we have the year a pretty much back-end loaded towards Q3 and Q4. I think that's a seasonal pattern, which we have already seen in 2024 and 2025. If you recall in '24, in the fourth quarter, we even shipped over EUR 200 million. Now in the fourth quarter, it was around EUR 180 million. So it's not uncommon that we are backend or backwards loaded. I think it will not be as heavy in '26. But the Q1 is very weak. I think in Q2, Q3 onwards, we should be maybe around EUR 110 million, EUR 120 million, EUR 130 million, I don't know, something like this. So north of EUR 100 million, I would say. And then clearly, in the Q4, I think we will be peaking. So nothing to be -- don't expect the Q2 is again another EUR 65 million and I think we would be a little dry. But that's not going to happen. Does that answer your question? Ruben Devos: Yes, certainly. The second one is just around the G10, which is the tool of record at the leading laser customers. When a customer qualifies your tool and locks in, how long does that qualification typically last before it needs to be, let's say, recompeted? I'm just trying to understand a bit the stickiness of your opto business and whether your position today, which is very strong, obviously, whether that's a meaningful barrier already or whether there for each new product generation, that sort of, yes, reopens the door for competition? Felix Grawert: I think in the laser business, you have probably the most sticky and the most difficult to requalify from all the segments. So with many customers, qualification efforts have been going on since 1 or 2 years already. And the complexity comes in the qualification for a laser tool from the fact that it's not just one simple laser, or one simple layer like you have in silicon carbide. In SiC, this is our most simple tool, I would say. You have one single layer, a thick single layer and every customer is doing kind of almost the same. Now in contrast, in the laser domain, typically, each wafer gets not only put into the tool once for one layer, but the laser customers have very advanced structures. And in these modern architectures and high-speed devices that is currently now making up the market, many wafers of our customers see the tool 3, 4, 5 or even 6x from the inside, meaning the customer makes a layer, doing some other steps, the wafer is put into the tool again, makes another layer and so on and so forth. And you can imagine if something changes in the deposition and that is repeated 5 or 6 times, an error or a change is then repeated or taken to the power of 5 or taken to the power of 6 that depends on a very, very precise repeatability. And so with many of these customers, we've been working since multiple tools, multiple years. That's also the reason why the G10 ASP, which we launched already in '21, '22 is only now getting the strong momentum from the laser market because the qualification has taken such a long time. Ruben Devos: Okay. And just a final question is that you're launching the 300-millimeter Hyperion tool commercially in '26. Just curious how many customer qualifications are currently underway? And when would you expect sort of the first repeat orders to come in? Felix Grawert: We work with multiple customers. I think it's important to differentiate. Some customers are, I would say, in an exploratory and research stage. And there's many of these, I don't know, I think probably double-digit or so. However, I think from commercial relevance, 300-millimeter will, as I mentioned in my prepared remarks, only initially only for a relatively small number of customers. And that is those guys who have a very big 300-millimeter silicon fab, which they want to repurpose and convert an existing 300-millimeter silicon line to a 300-millimeter gallium nitride line. I think all the other stuff like microLED and so on is more like playing around, researching, exploring ways. But I think those market segments probably take another, I don't know, 2, 3, maybe 4 years until they really mature. We are engaged. We work on a lot. But I think in terms of revenue and really making numbers, that's still quite some time away. Operator: The next question is from Martin Marandon-Carlhian from ODDO BHF. Martin, unfortunately we cannot hear you anymore. [Operator Instructions] Christian Ludwig: Let us continue with the next question, please. We can take him later. Operator: The next question is from Rohan Bahl of Barclays. Rohan Bahl: I just wanted to touch on that 300-millimeter GaN tool. I mean your peers said overnight that have gotten several orders on 300-millimeter GaN already. So I just wanted to check your progress on getting Hyperion ready for production volume lines rather than sort of your R&D quality tool that you have at the [ minute ]. Felix Grawert: I think we are very well on track with respect to that. We have also multiple orders again from these few customers that I was mentioning. Rohan Bahl: Okay. And maybe just on the 800-volt AI data center opportunity for GaN, everyone is getting excited about this. So just curious on how things are progressing here? What have customers been saying to you and whether you're still sort of expecting orders to ramp up materially in the second half? I've noticed your backlog has been building for 2027. So I wonder if there's any 800-volt business in there? Felix Grawert: So the 800-volt is splitting essentially into multiple types along the architecture. You probably have seen the slides on the 800-volt architecture by NVIDIA and by major suppliers such as Infineon, right? So we are participating in multiple stages on that chain. The one part is coming from the overland line on the silicon carbide, which translates or transfers from over 10 kV down to 1,200 volts, 2 kV, 1 kV. This is the biggest part silicon carbide. Then gallium nitride comes into play at 650 volt at 100 volt and even at lower stages like 20 volts. So this is where we are participating. We are with multiple customers working on 650 and 100-volt devices for exactly this architecture. And to our understanding, the qualification efforts of our customers means either IDMs or foundries, again, with their customers, being the board makers and the power supply makers for these architectures is ongoing. To our understanding, there is no clear time line on when exactly the switch is taking place yet. And that is also the reason why I commented in my prepared remarks that we know that this is coming, and we are pretty sure that this is coming sometime in the time frame, I always say '27 and '28, but we don't know exactly when it is coming. So in the order backlog that you're referring to, I don't think there is still 800-volt orders in. I think this is other topics more like EV silicon carbide related. Of course, general tool for silicon carbide can be used for any segment. That's clear. But I think the button when exactly the 800-volt is getting pushed and the orders are coming in, the timing is still a bit uncertain. I would not be able to give you the point in time at this period of time. Operator: So Martin Marandon from ODDO BHF is back. Martin Marandon-Carlhian: My first one is on photonics and opto, et cetera. Considering that several of your customers are talking about very significant indium phosphide CapEx increase this year. And I understand that the big acceleration in terms of orders was really in Q4 last year. Do you think we are quite early in that CapEx cycle? Or do you think that '26 could be the peak? So how -- basically, how do you think about '27 at the moment? Felix Grawert: Thanks a lot. I think that's a very good question. Yes. Let me try to shine a little more light on it, how we see it. And again, we only have, again, a piece of the puzzle, but let me try to explain what we are aware of and what we believe. And so we see that the cycle really has kicked off towards the end of '25. So you have seen that in the fourth Q4 '25, our photonics orders have significantly increased. Q1 to Q3, they were still on a relatively low level. In Q4 '25, our photonics orders have increased. We still, already now in Q1, we see continued order momentum from our customers. Some orders have already received. Others are in discussion with customers. And we expect -- and this is also, by the way, the reason you may have seen that our coverage of revenues with orders, our backlog is lower than we have seen in many past years because we are at the very beginning of the cycle. I think that explains this topic, so on. However, we have indications from a number of customers like kind of their road map, their forecast, what they need throughout the year. This is baked in our guidance. So our guidance reflects that already. And we expect that the orders are coming in essentially throughout Q1 and continue to come in Q2 and covering then the revenues that we have forecasted for the year. And as you see, it's a quite significant increase. It's more than double year-over-year for the photonics side. And I mean, this is very helpful for us because I think we all are aware, silicon carbide is really dropping almost dead this year, meaning pulling a bit hole in our revenues. This hole is now just nicely getting filled up by the photonics. It's quite helpful. Now I think you've indicated how long this extends into '27. Of course, very difficult to predict the future. My guess is it's not only 1 year, but it's extending beyond that. However, to comment how much or to which extent it's the majority in '26 and is it even the same level in '27 or less in '27 and more in '27, that is too early. I have no indications to qualify that. Martin Marandon-Carlhian: Okay. And just another one for me on GaN adoption in data centers. I think in the past, you said you could expect orders in H2 this year or in '27 for '27 and '28 revenue. But how do you think about how the ramp will happen? What I mean by this is that, it looks like a big ramp. So how it usually happens with your customers? Do you have already some discussion with when and how much you need to be ready? Or do you really see that ramp once the orders start to come in basically? Felix Grawert: That is a very good question. I think both things come together at the same time. Typically, when a ramp for a new segment is happening, we see the first orders for that particular second or that particular application coming in from one customer or typically from 2 or 3 customers at the same period of time because normally then a segment is coming and also the guys who are using the chips are not only relying on one source, but typically on 2 or 3 sources. So typically, we then get the first orders, particularly for a given segment to come in. And along with the orders that are coming in, we sit together with our customers, they share forecast with us, and we jointly sit on the table making a ramping plan, because normally, it's not that the customer needs only 2 tools or only 10 tools, but rather the customer has a plan and say, look here, in the first year, I need 10 and the next year, I need 15 and the year thereafter, I need 15. How do we best do it? How do we best distribute it over time and so on and so forth. This is normally what's happening. And I expect when this 800-volt GaN ramp is really starting, we are not there yet, but then I expect to have these discussions with customers. Operator: The next question is from Oliver Wong of Bank of America. Oliver Wong: My first question is, again, back to 300-millimeter GaN. I understand that the -- we're not expecting huge revenues upfront. But I was wondering -- so my understanding is that whether it's with the 200-millimeter or the 300, usually customers kind of go with one major supplier, one tool of record, so to speak. I was wondering what kind of timing can we expect for the leading 300-mill GaN suppliers to kind of make a decision on that? Felix Grawert: I think Q4, Q3 or Q4 of '26. Oliver Wong: Got it. And my other question is regarding the lead times. I was wondering if we can get an update on currently where the lead times are for the major end markets and kind of where you expect that to trend? Felix Grawert: Excuse me, I didn't understand your question. Oliver Wong: The lead times between orders and revenues for kind of your major end market categories. Felix Grawert: I think we are probably around -- I think it depends by the market, somewhere between 7 and 10 months, I would say, or 6 and 10 months, something like this. But honestly, I don't have it broken down by end market. We are back to normal, right? If you recall, yes, in the post-COVID, our lead times were very long. We are now back to a normal lead time. Operator: Next question is from Madeleine Jenkins. Madeleine Jenkins: I just had one -- another one on GaN. You mentioned utilization rates are improving. Do you have a kind of a broad sense of where they are now? And then also on this data center opportunity, obviously, I know timing is uncertain. But sort of volume or demand-wise versus kind of the consumer business that made up GaN in the past. Do you think it's a similar size? Or do you see it being bigger? Any color on that would be great. Felix Grawert: Utilization rates, that's always very difficult to predict, because we get more like signs from our customers, qualitative signs like: we need new tools, we don't need new tools. I would guess across the market, probably utilization rates are maybe 60% to 80%, I would say. So on a decent level now, I mean, earlier, we were probably around 30% to 50% after the big GaN investment wave where the demand wasn't there yet. So I think it's still taking a little bit of time until the next investment wave is getting triggered. But as we said, somewhere around the '27 time frame, early in '27, end of '27 or maybe even end of this year, we will see some investment trigger. Now as for the size, and I think with GaN, it's important to note that GaN has been penetrating across all market segments. It started off, as you rightfully note, 4, 5 years ago, purely in the consumer market, chargers for smartphones, chargers for notebooks and those kind of applications where the form factor was the driving topic. By now, we have seen GaN penetrate kind of across all the market segments, which is addressed by silicon means motor drives for battery-driven applications. We've seen it in motor drives for things like air conditioners, more like high-power, high-voltage topics. We've seen it in 100-volt and 20-volt point of loads and servers to reduce the energy consumption of servers so kind of all market segments. So I think you cannot split GaN any longer into a consumer or non-consumer segment. I think GaN is really on a trajectory of getting a very widespread application. Madeleine Jenkins: Makes sense. And I know you -- in your release, you flagged that there's a decent chunk of orders for 2027 delivery. Could you just kind of provide some more color on that? Why is it? Kind of is it just lead times or -- is there kind of specific customer capacity additions going on? Felix Grawert: No, no. What we have said is, we expect as we see the utilization rates of the installed base now gradually increasing. And as we see further adoption of GaN, particularly in the 800-volt architecture for AI, we expect that at some point, whether it's the end of '26 or sometime in '27 or at the end of '27, we don't know the exact timing. We expect at some point, utilization rates to be at a level where it triggers new investments, new tool purchases by our customers, and where especially the 800-volt architecture is then switched to GaN. Today, a big part is still on silicon. And once that switch has happened away from silicon to the much more energy-efficient GaN, then this will trigger in our expectations, new tool orders by customers because they need to expand their capacities in order to serve this additional market segment. But when exactly it happening, whether this is end of '26 or early '27 or end of '27, we explicitly say we don't know the timing. Madeleine Jenkins: Sorry, I get it. So I was talking more kind of broad comment on your current backlog. I think over EUR 100 million is for delivery in '27. I just wondered why that was the case? Felix Grawert: Well, this is a mix of applications. It's a mix of applications. A big part is silicon carbide, where customers have ordered and as the market fell down and became slower, customers said, can we have it a little later? Yes, I think the biggest part -- I would guess the #1 application amongst those is silicon carbide. Operator: The next question is from Martin Jungfleisch of BNP. Martin Jungfleisch: First one is a bit of a follow-up on the guidance and the lead times. It looks like that you need around EUR 300 million in new orders in the first half to make the '26 guidance. Is that kind of the right way to think about it with lead times of 7 to 10 months? And then maybe if you can comment if you're on track to meet this kind of EUR 150 million order run rate in Q1 already? That's the first question. Felix Grawert: Yes. We see ourselves fully on track. We sleep very well. We feel very well in covering and securing that. Martin Jungfleisch: Okay. Then maybe another follow-on on the moving parts. I think if I understood you correctly, you mentioned that you expect photonics revenues to double this year. So then what are the moving parts? I think you said also GaN should be up moderately. So is it like the 3D sensing part or the LED part that should be down massively this year then? Felix Grawert: Sorry, I didn't get the last one. I didn't get the last part of your question. Martin Jungfleisch: Yes, I was just asking with photonics doubling, I think that's what you said this year. And what are the moving parts within that revenue guidance? I think you said GaN should also be up moderately, so is 3D sensing, LED, silicon carbide then down quite massively? Is that the right way to think about it? Felix Grawert: Yes, exactly. That's the right way to think about it. I would say LED/microLED roughly is flat. Silicon carbide massively down. This is a big hole that's in there. And this hole, to the largest part, is getting filled up by the doubling of the optoelectronics. And that's why overall, and if you sum it up, we come at those slightly down numbers from the whatever EUR 557 million we had in the past year in '25 and now to the EUR 520 million plus multiple. Martin Jungfleisch: Okay. And maybe if I can, just a small follow-up on the gross margins. Can you just break down the moving parts a bit on the gross margin guidance for this year? So what is kind of the headwind from lower revenues that you're seeing, what is the better product mix and so on? And maybe if you think about -- if we go back to EUR 600 million revenue next year, what would be the gross margins on a like-for-like basis when you assume all the benefits from the restructuring program, et cetera, should this be like 45% then? Felix Grawert: So great question, but I don't have all the numbers prepared. It sounds like almost I would need an Excel sheet next to me to answer your question. So on a joking note. No, let me try and best to help you explain as much as I can without having a computer next to me, yes? So you see we managed to keep the gross margins around stable compared to last year or improve even a little bit. And what you see here is already we did first a slight amount of headcount reductions early in '25, so last year already. So a part of that benefit already becomes effective in '26. We then, as you have seen, have been able to gain further efficiencies, and we do another slight headcount reduction now or have done in January already. It's completed. We did it very early in the year. And the cost for that is, of course, included in the guidance. And we've been working a bit on our efficiency in operations, streamlining processes and operation shop floor work and all that kind of stuff, right? And all that allows us to keep the gross margin stable. Now the question is, how should you think about it? Well, if you go into next year, into '27 -- again, I just do it on a like-for-like basis. I didn't do it the Excel spreadsheet for your hypothetical EUR 600 million. But you can then take out from the cost this what we said, mid-single-digit million restructuring cost. That's, of course, a onetime cost, and that's onetime in '26 and not again in '27, kind of. So that will help on the gross margins. And honestly, I haven't looked at the details of the product mix, which, of course, also plays a role. I haven't done that. But it will certainly help on the margin. And just to make sure -- maybe one more comment, just to make sure that you get that, as you now probably looking to get some numbers into your model. And if you look at the R&D cost, we had in '24 an R&D cost on the order of EUR 90 million, and we had in '25 an R&D cost on the order of EUR 80 million. In the current year '26, if you do your model, we'd rather put in EUR 90 million of R&D cost. You will come to that if you do the math anyways with gross margin and the EBIT margin, just to make sure that you get the right number so everybody gets the right numbers here because we have quite some new ideas for new products, and that always translates then for us into R&D because at some point, '27, '28, we expect the markets to pick up, and of course, our investors and you guys expect that we have then a fresh portfolio winning and securing our market position again. Now it's down. But when new markets are there, then it's a lot of fun. We want to be prepared and we want to be ready for that. Operator: Next question is from Jarad Abed of mwb research. Christian Ludwig: It doesn't seem to be there. Let's take the next question please, Anna. Operator: Maybe it should work now, Mr. Abed, can you hear us? Abed Jarad: Yes. Can you hear me? Operator: Yes, we can hear you now. Abed Jarad: Okay. Sorry. Yes, I just have a quick question regarding Q4 backlog movement. I mean there is notably an order cancellation of approximately EUR 11 million. Can you provide some color on this? Felix Grawert: Yes. I think that was 2 process modules. I think it was a customer from laser and gallium nitride, if I recall. Abed Jarad: Okay. And my second question, I'm trying to understand the overcapacity in silicon carbide. Is it like structural or cyclical? Felix Grawert: Cyclical. So we get from our customers literally the feedback that they say, look, gradually capacity is now starting to fill. I mean we looked 1 year ago probably at 30% utilization, but the adoption of silicon carbide continues in the market. A big element that helps is that the prices for substrates have dropped significantly. And due to that, the overall -- and substrates make in silicon carbide a major part of the overall cost, probably the #1 cost position is substrate. Those are getting cheaper. With that, and the silicon carbide power devices are getting more affordable. The cost is going down. And as cost is going down, silicon carbide MOSFETs gain relative in attractiveness compared to silicon power devices, silicon IGBTs. And with the gaining attractiveness that design-in is increasing, they're getting more widespread and the demand in terms of units is increasing. And as the units are increasing, the existing capacity gradually gets filled. And at some point -- again, we don't know the timing, but at some point, the overcapacity will be digested and then new orders will be triggered. And again, we expect this sometime in the '27 and '28 time frame. When exactly, we don't know. Abed Jarad: Okay. But you know that like -- I mean, it's -- you mentioned previously that you expect some orders once annual EV production with silicon carbide inverters surpassed 3 million units. Is it still the case? Felix Grawert: I didn't get your question with the numbers that you were just saying. Sorry, I couldn't understand. Abed Jarad: Yes, sure. You mentioned previously that you are expecting like silicon carbide acceleration once annual EV production with silicon carbide inverters surpassed 3 million units. Is it still the case? Felix Grawert: I think we've never given out a number of 3 million units for inverters. I think that's a very specific number, which is probably not from us. Christian Danninger: I think it is referring to a broad assessment of how many cars we would need on the street to see a pickup. That was -- that's where it came from. Christian Ludwig: As a proxy. Christian Danninger: As a proxy, exactly. Felix Grawert: Honestly, we cannot comment on that. Operator: Next question is from Craig McDowell of JPMorgan. Craig Mcdowell: My first one is on pricing. And certainly, on the device side of opto, we're sort of seeing, obviously, a tight market, and it seems like device makers -- laser device makers are able to take price and pretty significant price. I'm wondering whether that changes the value that you offer to your customers on the indium phosphide tool and whether you're able to see price increases and specifically whether that's included in your more than doubling comments for 2026? Felix Grawert: The main driver for the doubling is literally on the number of tools. So it's not a doubling by price, yes, that would be nice. It's literally doubling by the number of tools, by the number of shipments. But historically, optoelectronic tools are on the higher side of the pricing in our portfolio simply due to the fact that those laser tools are of a very high level of complexity. If you compare an LED tool going into China and you take a laser tool and you open them and look at them next to each other, you feel that one tool is filled with twice the number of technology inside than the other tool. And somehow that's, of course, reflected in the price. Craig Mcdowell: But given the tightness in the end market, you're not yet raising the prices of your own tools, to be clear? Felix Grawert: No. We don't. That's never a good idea towards customers. They don't like that. Craig Mcdowell: Understood. Okay. And then just on -- you mentioned that you're still in discussion with opto customers through Q1. Some of those orders might have been written, certainly discussions ongoing. Just wondering whether there's a change in tone with your opto customers, are you talking on a multiyear period now in terms of delivery? Or is it still very much sort of within the next sort of 6, 12 months that conversations are happening? Felix Grawert: It depends customer by customer. We have both types. We have some customers discussing kind of literally the next tool. I need something very, very fast. When can I have 5 tools? Please as fast as possible. I have others more engaged in a structural discussing throughout the year '26 and then others more looking around the multiyear road map. It really depends by customer purchase team or strategic planning team. We have all of it. Operator: The next question comes from Om Bakhda from Jefferies. Om Bakhda: I just had a question on your silicon carbide business. I guess when we look through the course of the year, is there -- I mean is there anything that you see today that could happen, that could mean that the guidance that you've given on SiC could prove to be conservative in the second half of this year? Felix Grawert: Well, that's a very good question with lots of buts and if. Let me think. Honestly, I think for the second half of '26, my gut feeling tells me it would be a bit too early, seriously for silicon carbide and talking about revenue, because I think there still is some capacity in the market, which still needs to be digested as we had discussed earlier. I think if we look into '27, purely the EV demand can be a nice driver, as discussed. We see now that silicon carbide devices more and more get designed into higher voltages. So not only 1 kV, 1,000 volt, 1 kilovolt, but also 2,000 volt, 3,000 volt, 10,000 volt, so 2, 3 10 kV, and notably in the space of grid applications for solid-state transformers and applications like that. But I think this is -- would be too early to expect a tool demand, equipment demand for that in '26. I think we are clearly looking towards '27 and '28 for these new applications and new trends. That's my gut feeling. Maybe I'm wrong. If we can ship more, we are happy to serve the market. We have capacity. We can serve the market, no problem. But I think realistically, and giving you the most realistic estimate, I would not expect an uptick in terms of revenues, maybe orders towards the end of the year, but I don't think there's a big uptick in shipments in '26. Om Bakhda: Got it. And then just a follow-up in terms of your sort of the order momentum you're expecting in the first half of this year. When you sort of look at the discussions you've had year-to-date, how should we think about the mix in your order book? Is it sort of largely opto based in H1? Or could we see some GaN tool orders coming and inflecting in H1 potentially for shipment in the second half of this year? How should we think about that mix in the order book? Felix Grawert: I would expect, if I look at ongoing customer discussions at this point in time, again, there can always be surprises, but I'm just extrapolating what kind of discussions are ongoing. And we know then the discussions take between, I don't know, 1 and 3 or 4 months to materialize, which kind of covers the H1 quite well. I would expect in H1 a significant optoelectronics/LED loaded order intake, whereas then in the second half, I would expect the power electronics gradually to come back. Operator: Moving on to the next question from Michael Kuhn of Deutsche Bank. Michael Kuhn: I'll stick with, let's say, order composition. Of the roughly EUR 260 million order book you currently have, I think you gave some indications already. But could you maybe give some deeper insight into how the composition is by category, power versus non-power and maybe even going into a little more detail? Felix Grawert: Yes. I think if we look at the order backlog of '25, I think opto is around 40%, SiC 30%, GaN 20%, LED 10%. Do you think so, Christian? Christian Danninger: Yes. That makes sense. Approximately. Felix Grawert: Approximately, right? Christian Danninger: Yes. Michael Kuhn: Understood. And then on GaN and let's say, the next upward cycle, you mentioned at some point in the presentation that you expect AI data center power to drive the tool demand by factor 3. What would be the comparison base for that factor 3, just to get a better idea on how big the market could grow? Felix Grawert: I think we look here at the comparison, the total market size is more like around '24, '25. And the factor of 3, which we've illustrated more like an upside scenario comparing '25 versus 2030 kind of a 5-year comparison, one point in time, '25 versus 2030. I think this is what we have looked at right now. Michael Kuhn: Okay. So this is -- '30, this is nothing like 4 in 2 years' time, at least from today's point of view? Felix Grawert: No, no, no, no. I think this is a gradual increase. As we have discussed in this call already, we believe at some point in '27, there could be the first momentum starting and then it's a design in. And as always, in our applications, our markets, it's a ramp. It's a new trend, which is then happening. It's getting designed in. So our customers, our IDMs have now made devices, which is in the qualification with their customers, board makers, GPU makers, rack makers and so on and so forth. The architecture has been set. Now the complete industry is working on it. Hopefully, it's going to be fast. We know the AI industry is a very fast-moving industry. So maybe it's faster than some of the other industries. But then at some point, it's being designed in and then the volume is starting and then gradually over time, it gets penetrating and the adoption rate goes from today 0% then whatever, 10%, 20% in the initial stage and at some point, 2030, 100% adoption rate after the adoption is completed, and then we look at that point in those numbers. So a gradual adoption. Again, still our assumption. You never know how the adoption goes. Sometimes things go very, very fast, would be nice, but that's the assumption which is under. Michael Kuhn: All right. Understood. And then one more question. Obviously, we are not yet there. But let's say, the -- say, cycled as well and you're ramping capacity big time. When would you reach, let's say, your current capacity towards 100%? And when would you consider, let's say, reactivating your Italian capacity that is currently mothballed and what would be the potential cost associated with that? Or is that not even a planning scenario as of now? Felix Grawert: Honestly, it's not relevant for the overall business or profitability. I would say capacity can always be scaled up in one way or another, which way we choose to take, we will decide when we are there. But I think it's nothing that affects the P&L in one way or another. It's not a constraint. It's not a limit to us. It's not a profitability limit or inhibitor or whatever it is, it's just operations. Operator: The next question is from Nigel van Putten from Morgan Stanley. Nigel van Putten: I just wanted to follow up on some of the customer behavior in the optoelectronics end market. I mean, some of them have said that they're currently ramping supply. They see demand ahead of supply, maybe even towards next year. But do you feel that comment is directed at you? When you speak to customers, do you have to disappoint them? Are you shipping to, let's say, 80%, 70% of demand? You've mentioned, as an example, a customer that comes in with a shipment for 5 tools as quickly as possible. Are you still able to serve those type of requests? Or do you have to sort of disappoint them and saying, well, that's going to be quite a bit longer than maybe the 6 to 10 lead time month lead time you've indicated before? Felix Grawert: Well, in this case, good for our optoelectronics customers. The silicon carbide customers are so nice to step to the side for them in this year, leaving a lot of unused capacity, both in our shop floor and within our suppliers. And as you know, we work on a -- how do you say, modular system with our Planetary systems. So all our products are closely related to each other as a family, you can say. That is now a capacity that is not being emptied or not used by silicon carbide customers because that market is currently sleeping. We can use the same supply chain for parts and of course, also the same kind of assembly tools on our own shop floor and the skill set of our people now to do the labor part. In other words, we have free capacity to literally serve all the demand, which is currently coming in. It might be a different game if the silicon carbide would be at the same time in the party now. But silicon carbide, as we have illustrated, is really leaving the gap, and this gap is currently just now being taken by the laser guys. It's good for them. Nigel van Putten: Got it. So when they say we can't ship, it kind of reflects your lead times, you think? Or especially when your customers... Felix Grawert: It should not be us who's the bottleneck. Yes, it should not be us who's the bottleneck. And my team, my operational team, my sales team is handling it. I expect if there would have been a bottleneck, I would know it. I'm not aware of any bottleneck across the entire industry. Nigel van Putten: Perfect. That was my question. But then maybe a broader question. You said larger wafer size and better yield. I think one customer said it's 6 inches is 4x the product of the 3-inch, which -- or yes, the current capacity. So maybe ballpark to give us an idea in terms of the capacity you're shipping this year relative to the installed base, what do you think the increase is you can serve with sort of your view on the revenue you're shipping into '26? Felix Grawert: Well, that's a very, very difficult question. I can only illustrate to you the various factors to that because the installed base is -- first of all, many, many tools, but many of them still on 3-inch and 4-inch wafer size, as you said, which is a much, much smaller capacity in terms of square centimeters or number of chips that you can get out of it in other ways. The other point is, that while the installed base counts many, many tools in the installed base, many times those old tools, they would be dedicated to one product and they would only be qualified for certain products, so with huge inefficiencies. So I think we are currently like the shift in new architecture towards photonic integrated circuits to the PIC on indium phosphide, also much bigger chips, much more functionality is really -- it's a world which is not comparable to the old world I would say. Because it's different chips, different products, a much larger wafer size, much higher productivity. So I think the industry is really seeing a massive momentum. But on the other hand, as illustrated, inside of the data centers, even inside of the racks, we go completely away from electric cables and go completely to optical data connects, which inside of the racks is really new to the industry. So the demand is massively increasing. Operator: The next question is from Adithya Metuku from HSBC. Adithya Metuku: Just firstly, just thinking about the capacity that's coming on board for indium phosphide lasers. From what I understand, the yields are something like 50% and that the continuous wave lasers used in CPOs are about 1/10 of the die size of EML lasers. So I just wanted to hear your thoughts on how you think about the yield improvement, especially if the die sizes go down. That combined with the die sizes going down with the existing capacity that's in place or you will have put in place by the end of 2026. I suppose the question is, it's been asked, but how much does the capacity go up? And will there be enough demand to drive further growth in your optoelectronics business in 2027 if yields go up, die sizes go down 10x because of continuous wave laser adoption. So any thoughts around that would be great. And I've got a follow-up. Felix Grawert: I think you asked the billion-dollar question, but I don't have the answer for you, unfortunately. I think the effect you're alluding to is a typical pattern across the whole semiconductor industry that in a new market segment, you start with a relatively low yield simply because the application is there, the application needs the capacity, the application needs a ramp. But then over time, new generations of products step-by-step come in, which come with a die size shrink and higher yields, means you get more capacity out of your installed base. Typically, such a process, so I cannot -- upfront, I cannot quantify this for you. This is -- I don't know. I think also our customers at this point in time don't know. Typically, this process that you are describing is happening over a 2.5, 3, 3.5, 3, 4-year time horizon because it takes one generation of chips and after the next generation and the next generation, typically, at least you need 1.5 to 2 years for one generation after the next, because your customers are simply not able to digest a faster succession of generations and also to increase the yield takes some time. So what it means is my personal guess, and again, it's only a speculation, but I can share the opinion I have with you is that this is not only a 2026 trend, but at least this trend in this market will extend into 2027, that I think is very, very clear. This does not happen within 1 year. Now to which extent and how large this will extend in '27 and '28? I think that's the billion-dollar question I cannot quantify for you. But I'm very convinced that we are not talking about 1 year, but at least about 2, and I would guess rather a 3- to 4-year time horizon. Adithya Metuku: Got it. So essentially, you are expecting growth in '27, but you don't know the magnitude of the growth at this stage. Would that be a fair way to characterize it? Felix Grawert: That's a fair way. Yes, exactly. That's a fair way. Adithya Metuku: Got it. And then just following up on an earlier question, you talked about the epitaxy machines not being the bottleneck. To my understanding, it's the indium phosphide substrates. Is that right? Or is there some other bottleneck in the system that's preventing your laser customers from ramping capacity and meeting the demand that they're seeing? Felix Grawert: I hear also that indium phosphide substrates is a bottleneck that's currently being addressed by the entire value chain. I know this both on the side of our customers who need the substrates in their factories, and I know it also from substrate manufacturers. And I'm aware that there is a large, very well coordinated and well-orchestrated initiatives by our customers and by the substrate makers together in place to address these bottlenecks. But yes, that's, I think, a topic which is currently being worked on in this value chain and in this industry. Adithya Metuku: Understood. And then maybe just one last clarification. Are you able to give any color on the divisional growth revenue expectations for the first quarter? Felix Grawert: Honestly, I don't have the numbers. Operator: And the last question for today from Malte Schaumann from Warburg Research. Malte Schaumann: My first one is on silicon carbide superjunction technology. So can you maybe share your view on how the time line until adoption might look like? And then associated to that, would your tools in the existing base require an upgrade to incorporate that? Felix Grawert: A very good question. So we are aware that all the leading device makers are currently working on superjunction technologies. To my understanding, the first devices will be launched at the end of '26 by suppliers, means in the second half of '26 or the first half of '27, volume ramps of devices happening in the market. And we think that superjunction technologies in silicon carbide will be strongly embraced by Western players because it's a major way for them to get more dies per wafer and hence, to reduce the cost per chip. So it's a massive trend, which is currently being strongly pushed across the entire industry. As for our tools, there's no further upgrade needed for our tools. They are able to run as is. And one point I would like to illustrate, nevertheless, is that the superjunction technology where essentially you don't take one thick layer, let's say, 10, 12, 14 microns of thickness, but you rather split this into 3 or 4 thinner layers and the wafer gets put into the tools multiple times. Most customers embrace a technology, which is called multi-EP, multi-implant, so you do an epi step to do an implant, you do another epi step, another implant. So the wafer gets several times into our tools, a little bit like what we saw in the indium phosphide just earlier in the discussion. And that means that for one wafer of superjunction devices, you need more epi time. You need more tool time in the epi, and we expect that this will be also one driver at some point, as illustrated in the '27, '28, '29 cycle, which will trigger additional demand from our customers for more tools because they need to expand their epi capacity in order to accommodate all the superjunction MOSFETs. So it's a market trend that we like a lot because it helps our business. Malte Schaumann: Okay. Understood. Secondly, on working capital. With the shift in the product mix away from power to opto this year, can you keep your inventory target? I think it was around EUR 200 million by the end of '26. And then secondly, with respect to the down payments, we have seen quite a significant decline over the past few years relative -- down payments relative to order intake. So what are your thoughts where these levels should normalize going forward? Felix Grawert: Yes, good question. So inventories, yes, we expect inventories to go further down. The shift in product mix, in fact, is an effect which is not helping. So we are still -- but we are still targeting EUR 200 million to EUR 220 million in terms of inventories. So maybe there's 20 more than we initially expected due to the shift of product mix, let's see. But still, we target a significant further reduction of inventories. It's gradually burning down, maybe a little bit slower as you're indicating, but still significant. Christian, maybe you can take the second part. Christian Danninger: On the down payment, it's a little bit more difficult because we don't have complete control on it. It really depends on end market mix, regional mix, customer mix and also cutoff date effect. I mean, the number at the end of the year was really low. We expect it to recover to some degree, but to predict this in detail is quite difficult. And it's also not the major negotiation point with customers, right? It's part of the deal, but not the major part. So it's a little bit difficult to predict. It should increase trend once again. Malte Schaumann: Okay. Okay. Lastly, a quick one on R&D. You indicated an increase in R&D spending this year. Would you expect another increase with the rising business volume generally over the next years and '27? Or would that volume be more or less sufficient to support your programs you have in mind? Felix Grawert: I think we discussed already earlier. So in '24, we had around EUR 90 million. In '25, we had around EUR 80 million. For '26, we expect again around EUR 90 million. Malte Schaumann: And then beyond '26, so the EUR 90 million is sufficient for the next few years... Felix Grawert: It look -- that always depends a little bit on individual cycles of products. At some point in the cycle, the products take a little more money. At some point in the cycle, they take a little less, it depends throughout where the portfolio stands. Honestly, I wouldn't want to predict beyond that. Operator: Thank you very much from my side. With that, there are no more questions in the queue. So I'm closing the Q&A session and handing the floor back over to Ludwig. Christian Ludwig: Well, thank very much. Thank you very much all for your questions. The IR team and part of the management team will be on the road in the next couple of weeks, so we'll see a lot of you, hopefully, in-person. And for those we do not see, we will have our next quarterly call scheduled for April 30, when we will report our Q1 figures. So if we don't see you until then, then have a happy Easter and talk to you end of April. Goodbye, and thank you. Felix Grawert: Bye-bye.
Operator: Thank you for standing by. Welcome to Indivior Pharmaceuticals Inc's fourth quarter and full year 2025 results conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, please press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please note that today's conference is being recorded. I would now like to hand the conference over to Jason Thompson, your host for today's call. Please go ahead. Jason Thompson: Thank you, and good morning, everyone. I am joined today by Joseph J. Ciaffoni, Chief Executive Officer, Patrick A. Barry, Chief Commercial Officer, and Ryan Preblick, Chief Financial Officer. We are also joined by Christian Heidbreder, our Chief Scientific Officer. Before we begin, I need to remind everyone that on today's call, we may make forward-looking statements that are subject to risks and uncertainties, and that actual results may differ materially. We list the factors that may cause our results to be materially different here on slide 2 of this presentation. We also may refer to non-GAAP measures, the reconciliations for which may also be found in the appendix to this presentation that is now posted on our website at indivior.com. I will now turn the call over to Joseph J. Ciaffoni, our CEO. Joseph J. Ciaffoni: Thanks, Jason, good morning and thank you for joining us on today's call to review our fourth quarter and full year 2025 results. I will begin with an overview of our business performance in 2025 and summarize our progress against the Indivior Action Agenda. Pat will then provide a commercial update and discuss our priorities for SUBLOCADE. Finally, Ryan will review our financial performance, 2026 guidance, and then detail our capital deployment strategy. 2025 was a transition year for the company. Last July, we rolled out the Indivior Action Agenda to maximize the potential of our business, make a positive difference in the lives of people living with opioid use disorder, and to create value for our shareholders. We have made significant progress, including successfully completing phase 1, Generate Momentum, and delivering against our financial commitments for 2025. Specifically, we improved our commercial execution and generated momentum for SUBLOCADE, delivering record net revenue in 2025 of $856 million, a 13% increase versus 2024, and total net revenue of $1.24 billion, representing a 4% increase compared to the prior year. We took several actions to simplify our organization and establish Indivior Pharmaceuticals Inc's go-forward operating model. Operating expenses will not exceed $450 million in 2026. We grew adjusted EBITDA 20% year-over-year to $428 million in 2025, along with notable margin improvement. We launched a new direct-to-consumer campaign, Move Forward in Recovery, on October 1, 2025, to drive awareness of SUBLOCADE among people living with opioid use disorder. Although early, we are encouraged by the engagement we are seeing and all key leading indicators are trending ahead of expectations. Finally, we strengthened our financial profile, including paying the outstanding $295 million obligation related to the legacy DOJ matter, thereby eliminating a significant future liability for our company. I want to thank the Indivior Pharmaceuticals Inc team for their contributions to our progress against the Indivior Action Agenda and their unwavering dedication to people living with opioid use disorder in the communities we serve. Our strong financial performance and the momentum we generated in 2025 position us to accelerate in 2026. Our confidence in the business is reinforced by our new $400 million share repurchase program authorized by our board that we announced this morning. With phase one of the Indivior Action Agenda completed and our go-forward operating model firmly established, we are now executing on phase two of the Indivior Action Agenda, Accelerate. During this phase, we expect to accelerate SUBLOCADE dispense unit growth and net revenue throughout 2026 and immediately grow adjusted EBITDA and cash flow at a faster rate. SUBLOCADE is the first and number one prescribed long-acting injectable for the treatment of moderate to severe opioid use disorder. It is the only monthly long-acting injectable with an indication for rapid initiation and has been prescribed to over 475,000 people. We believe that SUBLOCADE is a durable growth driver with 12 Orange Book-listed patents that range from 2031 to 2038. We are committed to investing at sustained levels to maximize the potential of SUBLOCADE and grow the long-acting injectable market. Although we are making progress, we believe long-acting injectables remain underutilized. We expect our laser focus on improving commercial execution, our sustained investments in patient education and activation, and efforts to advance state and federal policies that support greater treatment access will drive the acceleration of SUBLOCADE. I am encouraged by the trends we are seeing across all key metrics thus far in the first quarter. In 2026, we expect to deliver SUBLOCADE dispense unit growth in the mid-teens, an acceleration compared to the 7% dispense unit growth we achieved in 2025. This will result in SUBLOCADE net revenue growth of 8% at the midpoint of our guidance range. The leverage generated by our go-forward operating model will immediately accelerate adjusted EBITDA and cash flow at a faster rate. We expect to generate 30% adjusted EBITDA growth in 2026, representing a 13 percentage point improvement in our adjusted EBITDA margin compared to 2025, and we expect to generate approximately $300 million in cash flow from operations. Our increased cash flow and strong financial position will enable us to strategically deploy capital to create value for our shareholders. Our capital deployment priorities are threefold: manage our debt, opportunistically deploy our newly authorized $400 million share repurchase program, and evaluate potential business development opportunities to acquire the next commercial stage growth drivers as we earn our way to phase 3 of the Indivior Action Agenda Breakout. We are encouraged by, but not satisfied with, the progress we made in 2025. The actions we took and the foundation we established strongly position us to achieve our financial and operational objectives in phase two, Accelerate, in 2026. I will now turn the call over to Patrick A. Barry. Patrick A. Barry: Thanks, Joe, and good morning, everyone. As part of phase one of the Indivior Action Agenda, Generate Momentum, we have been focused on improving commercial execution for SUBLOCADE. Our commercial team is dedicated to helping people living with OUD, and they have a strong belief in SUBLOCADE as the first and number one prescribed long-acting injectable in the category. We have made progress on our commercial execution initiatives, which are reflected in our fourth quarter and full year results. In the fourth quarter, we delivered strong dispense unit growth of 12% versus the prior year and 6% versus the third quarter. New patient starts in the fourth quarter were up 25% year-over-year, and over the course of the last 10 weeks of the year, weekly new patient starts achieved all-time highs on three separate occasions. Total category share of LAIs and new patient share in the U.S. for SUBLOCADE continued to stabilize in the mid-70s. We exited 2025 with a record number of active SUBLOCADE prescribers, including those treating 5 or more patients. In the 4th quarter, both total active SUBLOCADE prescribers and prescribers treating 5 or more patients grew 14% year-over-year and approximately 6% sequentially. We believe this progress represents a combination of the fundamental strengths of SUBLOCADE, along with our improving commercial execution. We are encouraged by the momentum we generated exiting 2025 and are well positioned to accelerate in 2026. We remain focused on continuous improvement in commercial execution to accelerate SUBLOCADE prescribing volume for the benefit of people living with OUD. Our efforts are centered on driving excellence in field force messaging, improving commercial channel productivity, growing patient activation and new starts, and unlocking treatment access through proactive engagement with policy leaders. We have seen improvements across each of these areas. Our field force messaging acumen that is focused on SUBLOCADE's differentiated label is driving growth in the number of physicians utilizing the accelerated second dose. Approximately 7% of new patients received the accelerated second dose, and 17% of active HCPs prescribed a second dose in line with the expanded SUBLOCADE label. On commercial dispense yield productivity, we remain in the early stages of improving yields towards our non-commercial channel average of approximately 80%. We are seeing steady progress with our targeted commercial specialty pharmacies and expect steady yield improvement as we move through 2026. In addition to these commercial improvement initiatives, we are investing to expand patient awareness and engagement. Last October, we launched our direct-to-consumer campaign, Move Forward in Recovery, which is designed to emotionally and authentically connect with people living with OUD and drive awareness of SUBLOCADE as a treatment option for those struggling with moderate to severe opioid addiction. Recall this campaign has an omni-channel approach, including national television, digital and social media, and in-office point-of-care materials, along with a newly designed SUBLOCADE patient website. We are seeing early indicators of success following the launch of the campaign. For example, prompted awareness among patients has increased versus the first quarter of 2025. Branded online search volume increased 60% in the fourth quarter compared to the months immediately prior to the launch of the campaign, driving high-quality engagement on the SUBLOCADE website, including a 70% increase in usage of the Find a SUBLOCADE Treatment Provider tool. We also saw an average of around 1,400 new CRM enrollments per month in the fourth quarter, versus around 60 per month immediately prior to the new campaign, reflecting meaningful and tenure-driven patient action. We are also actively pursuing opportunities to expand patient access through our proactive public policy initiatives. For example, in several states, long-acting injectables are only available under a medical benefit. This creates logistical complexity, upfront cost, and administrative burden for providers. Expanding coverage under a pharmacy benefit would reduce these barriers, lower financial risk, and improve provider adoption. In parallel, we are engaging on bundled payment structures to help ensure that long-acting injectables are appropriately recognized, whether through potential carve-outs or a more accurate reflection in overall payment levels. This would strengthen the financial viability of treating people with OUD. Taken together, our improving commercial execution, patient activation efforts, and policy initiatives are laying the foundation for SUBLOCADE acceleration and give us confidence in our ability to deliver mid-teens dispense unit growth in 2026. I will now turn the call over to Ryan. Ryan Preblick: Thanks, Pat. Good morning. First, I will highlight our fourth quarter and full year financial performance, followed by a review of our 2026 guidance, and close on our capital deployment strategy. We delivered on our financial commitments in 2025. We grew total SUBLOCADE net revenue by 13% and adjusted EBITDA by 20% year-over-year. We simplified the organization while strengthening our financial profile. We are well positioned to execute on phase two of the Indivior Action Agenda, Accelerate. Looking at our results in more detail, starting with the top line. Total net revenue of $358 million for the fourth quarter and approximately $1.24 billion for the full year increased 20% and 4%, respectively, versus the prior year periods. The increase for both periods was driven by strong SUBLOCADE net revenue growth. Total SUBLOCADE net revenue of $252 million for the quarter and $856 million for the year increased 30% and 13%, respectively, versus the prior year periods. For the fourth quarter, SUBLOCADE dispense volume grew 12% year-over-year and 6% versus the prior quarter. For the full year, SUBLOCADE dispense volume grew 7%. Gross-to-net benefits also contributed to the increase in SUBLOCADE net revenue for both periods. The fourth quarter included a gross and net benefit of approximately $19 million and $10 million due to an increase in trade inventory of approximately 2 days. The full year included a gross and net benefit of approximately $49 million. Turning to SUBOXONE Film net revenue, in the fourth quarter and full year, we benefited from continued generic price stability in the U.S. Fourth quarter SUBOXONE Film net revenue included a gross and net benefit of $23 million, and the full year included a gross and net benefit of $55 million. Total non-GAAP operating expenses were $164 million for the fourth quarter and $622 million for the full year, down 8% and 5%, respectively, versus the same year-ago periods. Non-GAAP SG&A expenses were $148 million for the fourth quarter and $545 million for the full year, down 2% and 1%, respectively, versus the prior-year periods. The decreases in both periods were driven by reductions in headcount and footprint consolidations across the organization, partially offset by increased selling and marketing investments behind U.S. SUBLOCADE. Non-GAAP R&D expenses were $17 million for the fourth quarter and $80 million for the full year, down 36% and 22% year-over-year, respectively. The decreases in both periods were driven by the reprioritization of pipeline activities and the restructuring of the R&D and medical affairs organizations. Charges related to the simplification actions we took as part of phase one of the Indivior Action Agenda were $55 million in the fourth quarter and $120 million in 2025. These charges include severance costs, write-offs for leases, inventory, equipment, and intangibles, as well as other termination payments and consulting costs. The related cash costs were approximately $28 million in 2025. Looking at the bottom line, we generated record adjusted EBITDA for the fourth quarter and full year. Adjusted EBITDA for the fourth quarter increased 91% year-over-year to $142 million. For the full year, adjusted EBITDA grew 20% to $428 million, with margin improvement of 500 basis points. We are reaffirming our 2026 financial guidance, which reflects the go-forward operating model we established by completing phase one of the Indivior Action Agenda. We expect total net revenue in the range of $1.125 billion-$1.195 billion. The modest decline in net revenue at the midpoint versus 2025 is mainly due to the expected U.S. SUBOXONE Film pressure, lower net revenue from the rest of the world due to the optimization we conducted last year, and the continued runoff of PERSERIS. We expect total SUBLOCADE net revenue in the range of $905 million-$945 million, representing growth of 8% at the midpoint versus 2025. We expect to accelerate U.S. SUBLOCADE dispense unit growth to the mid-teens in 2026 from 7% in 2025. By leveraging our new operating model that we have established as part of phase one of the Indivior Action Agenda, Generate Momentum, we expect non-GAAP operating expenses in the range of $430 million-$450 million. We expect adjusted EBITDA in the range of $535 million-$575 million, which at the midpoint, is an increase of 30% versus 2025 and would represent 13 percentage points of margin expansion to 48%. With the successful completion of phase one of the Indivior Action Agenda, Generate Momentum, we have strengthened our financial profile and will continue to improve upon this foundation as we execute on phase two, Accelerate. We ended the year with gross cash and investments of $222 million, even after concluding the legacy DOJ matter by paying the outstanding obligation of $295 million. Excluding the impacts from settlement and restructuring payments, underlying cash flow from operations was over $200 million in 2025. We ended the year with net leverage below 1 time. In 2026, we expect to generate over $300 million in cash flow from operations, enabling us to strategically deploy capital to create long-term value for our shareholders. Our capital deployment priorities include managing our debt, returning value to shareholders through opportunistic share repurchases, and evaluating business development opportunities as we earn our way to phase 3 of the Indivior Action Agenda Breakout. Today, we announced that our board authorized a new share repurchase program of up to $400 million, with a term up to 18 months. We plan to utilize this program opportunistically to return value to our shareholders. As we earn our way to phase 3 Breakout, we will evaluate business development opportunities specifically focused on commercial stage assets that have the potential to enhance and diversify our growth profile. Our financial strength provides us with capital deployment optionality. We are committed to taking a disciplined approach. I will now turn the call back over to Joe for concluding remarks. Joseph J. Ciaffoni: Thanks, Ryan. 2025 was a year of significant progress against the Indivior Action Agenda. We sharpened our focus on our highest growth opportunity, U.S. SUBLOCADE, established our go-forward operating model, and strengthened our financial profile. We are now executing phase 2 of the Indivior Action Agenda, Accelerate, in which we expect to accelerate SUBLOCADE throughout 2026 and immediately accelerate adjusted EBITDA and cash flow at a faster rate. With the establishment of our capital deployment strategy, we are focused on creating long-term value for our shareholders as we work towards becoming a leading, diversified specialty pharmaceutical company, committed to making a positive difference in the lives of people through the commercialization of differentiated medicines. We will now open the call for questions. Operator? Operator: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Once again, please press star 11 and wait for your name to be announced. To withdraw your question, please press star 11 again. We are now going to proceed with our first question. The questions come from the line of David Amsellem from Piper Sandler. Please ask your question. David Amsellem: Hey, thanks. Just a couple here. Joe, I wanted to get your thoughts, just taking a step back on where you think penetration of LAI buprenorphine modalities ultimately could go to, or what you think would be a reasonable way to think about peak penetration of the category in the OUD space. Then secondly, how should we think about share versus your competitor? Obviously, the goal is growing volumes here, and that has been the focus, but there is a lot of, I think, investor focus on your share, even though the pie, so to speak, continues to grow. I am wondering if you can give us some thoughts on share. That would be helpful. Then lastly, you mentioned capital deployment in your prepared remarks. Wanted to get some more detailed thoughts on business development. What kind of therapeutic adjacencies or other therapeutic areas are you looking at? My assumption is that you are looking at commercial stage assets, but wanted to get more details on your thought process regarding biz devs. Thank you. Joseph J. Ciaffoni: Great. Thanks, David. Look, I appreciate your questions. First off, with regards to LAI penetration, we are now embarking upon 9%, so we have to confront the reality of where we are, and we believe there is significant opportunity to continue to grow LAI penetration. We believe that long-acting injectables are underutilized. I am not going to get into peak penetration projections. However, I will share with you some analogs and data we look at that will give a sense of what is possible. If you look at categories like schizophrenia, as an example, from a long-acting injectable perspective, you would see penetration at 30%. I can assure you, we have a lot of market research here at Indivior Pharmaceuticals Inc that would support LAI penetration in the range of 20%-30%. My final comment on LAI penetration is we are committed, as the longstanding leader in the space, to doing everything that we can to educate and activate consumers with regards to the important role that long-acting injectables can play. As it pertains to your question on share, what I would emphasize on share, and you are correct, our focus is really first and foremost about driving the market. From a share perspective, we have seen over many quarters our market share stabilizing in the mid-70%. I would emphasize that we are the only entity in the world that has perfect data on the vast majority of the market, and we have been applying a consistent methodology. Importantly, what we are most focused on is new patient share, which has been very strong, as has the absolute number of new patients. We are pretty routinely now achieving all-time highs in new patient starts. To your final question on capital deployment, look, our start point is there are no commercial assets in the space of opioid use disorder that we believe are there that would enhance our portfolio. Once we made that determination, we will be establishing a new strategic beachhead in a new therapeutic area. I will not say we are agnostic. There are certainly some areas we would not go into, like cancer gene therapy, but what we are focused on are business fundamentals. We are looking at commercial stage only. We are looking for assets that have peak sales potential of greater than $200 million. It is important to us that the products have a long runway. One of the strengths of the Indivior Pharmaceuticals Inc story is we have a great growth driver with a durable runway in SUBLOCADE, we want to acquire assets that have runway that goes towards the mid to end of 2030 at a minimum. Of course, we want differentiated assets. We are not interested in being an aggregator of commoditized brands. We feel that is important from a patient value perspective, but also, when you look at it from a reimbursement perspective, we believe to get the coverage necessary to be successful commercially, that you have to have meaningfully differentiated products. David Amsellem: Okay. Helpful. Thanks. Joseph J. Ciaffoni: Thanks, David. Operator: We are now going to proceed with our next question. The question comes from the line of Chase Knickerbocker from Craig-Hallum. Please ask your question. Chase Knickerbocker: Good morning, guys. Congrats on the results here, thanks for taking the questions. Maybe just first digging in a little bit more to guide. Can you just kind of delineate what your guidance assumes from an LAI market growth perspective in 2026? Then, you know, to ask, I think, this question just a little bit differently on the share, what does it assume for share in 2026? Just kind of zooming in on the guide specifically, Joe. Thanks. Joseph J. Ciaffoni: Yeah. Chase, thanks for the question. On the SUBLOCADE guide, I am not going to get into an LAI penetration assumption. We are assuming mid-teen SUBLOCADE growth, which is a significant step up from where it is that SUBLOCADE was in 2025. I will comment on a market share perspective. We do expect to see continued stabilization of SUBLOCADE market share. Chase Knickerbocker: Just as we wrap up 2025, you know, like you had mentioned, you guys kind of have perfect data. Can you just kind of update us on what LAI market growth was in 2025? My last question, Joe, is just a little bit more, you know, I would appreciate some more thoughts on kind of buyback versus M&A. It is just kind of where they are on the priority list. Is this something where you will kind of be opportunistic on M&A, and then in the meantime, you know, you guys will be, you know, fairly aggressive on the buyback as far as that being kind of the primary capital allocation after you service your debt, of course? Joseph J. Ciaffoni: Okay, thanks, Chase. I will let Pat take the first question and let Ryan comment on the second. Patrick A. Barry: Yeah, in LAI category growth, for Q4, we were approaching 18%. Again, really strong category growth. Ryan Preblick: Hey, Chase, good morning. When it comes to capital allocation, you know, due to our financial strength and the strong cash flow from the business, we have options here. It is not about or, it is about and. If you start with the debt, you know, right now we do have expensive debt, but as part of our normal cadence, it is something that we are looking at, and it is something that, you know, we will take care of in the near future. If you look at the share repurchase, this is another option we have to deliver value to our shareholders. We authorized the $400 million program to be ready to be prepared to buy back shares and be opportunistic. That decision will be made in the context of what else is going on in the business at that point in regards to the debt conversation, BD, making sure we have the right capacity for investments behind SUBLOCADE. And then also, you know, we need to evaluate if there is still a gap between the share price and what we believe the value of the company is. And then finally, when it gets to the business development, you know, we are still earning our way to phase 3, the Breakout, where, as Joseph J. Ciaffoni just said, you know, we are going to look at BD, including buying commercial assets. Overall, we are definitely focused on driving shareholder value. Chase Knickerbocker: Great. Thank you. Joseph J. Ciaffoni: Thanks, Chase. Operator: We are now going to proceed with our next question. The question comes from the line of Dennis Ding from Jefferies. Please ask your question. Dennis Ding: Hi, good morning. Thanks for taking our questions. I have two. Number one, what are your thoughts on the overall Medicaid funding landscape and the potential impact on SUBLOCADE from less funding in 2027? How confident are you around maintaining that mid-teen unit growth in the U.S. in 2027 and after? Number two, on SG&A, I am just curious about the shape of SG&A in 2026, given it was $148 million in Q4. If you can comment on how much you are spending on DTC in 2026, and, you know, at what point would you reevaluate that DTC spend in terms of growing or shrinking that? Thank you. Joseph J. Ciaffoni: Yeah. Dennis, thanks for the question. With regards to DTC, we are not going to get into how much we are spending for competitive reasons. What I will assure you is we are making every investment in support of it, and we are actually over-investing beyond what our models would suggest that we should. We are also committed to investing behind DTC at those levels for a multi-year period, because at the end of the day, the most important thing that we can do is educate and drive long-acting injectable penetration. As it pertains to Medicaid, I am not going to get into, we are just starting 2026, what we think growth would look like in 2027. What I can tell you is, one, we advocate for and are hopeful from a humanistic perspective, that everybody who should be supported by Medicaid is supported. We believe that overall, if you look at the various legislation, it is generally supportive, we view that as a bipartisan support to helping people with substance use and opioid use disorder. The final point I would make, at 8%-9% long-acting injectable penetration, there is so much opportunity for growth with SUBLOCADE across the board, inclusive of Medicaid. It will not be impacted whether Medicaid population is ± a certain %. I will give Ryan the opportunity to comment on SG&A. Ryan Preblick: Yeah, good morning. In regards to the step-up in Q4, that was simply us taking advantage of our DTC campaign, tested really well, and we had the opportunity to start it early. That is the expense you are seeing in Q4. Around phasing for 2026, our quarters are relatively flat. You may see some skew to the first three quarters just due to the campaign we have in place. Dennis Ding: Helpful. Thank you. Joseph J. Ciaffoni: Thanks, Dennis. Operator: We are now going to proceed with our next question. The question comes from the line of Christian Glennie from Stifel. Please ask your question. Christian Glennie: Hi, thanks, guys. Thanks for taking the questions. First one would be on SUBLOCADE and the guide. Just so I guess to understand it properly, obviously, you had meaningful gross-to-net benefits. Is the idea that we, you know, adjust for that, take that off in terms of the base, the underlying, I guess, base for SUBLOCADE, that gets you, if you are doing mid-teens, that gets you to the sort of the range that you have guided to? As in, trying to, you know, compare the 8% net revenue guide versus your mid-teens guidance in dispense growth. Joseph J. Ciaffoni: Thanks for the question, Christian. Look, in 2025, gross-to-net served as a tailwind. In 2026, gross-to-net will serve as a headwind to the business. The key component of the guide is the following: we are going to grow and accelerate dispense unit growth to the mid-teens, and we are assuming that we are going to continue to see a stabilization of market share. Christian Glennie: Okay, thank you. Then on the, I guess, just obviously, you know, funny enough, if we are going back to the capital markets day 2022, you talked about an exit rate to, you know, billion-dollar exit rate by the end of 2025. You have actually gone and actually done that. I guess, any observations about, you know, the potential to breach that billion-dollar number? Joseph J. Ciaffoni: I appreciate the question. We are not going to get into any peak sales projections, any forward-looking, when we are going to hit certain thresholds. What we are focused on is delivering on the financial commitments that we made to everyone for 2026, or for 2026. The final comment I would make there is we are very confident with SUBLOCADE that we have a durable growth driver, and I think we are just scratching the surface on the potential of this asset, both from a business perspective, but candidly, more importantly, in the potential it has to make a difference in a positive way in the lives of people living with opioid use disorder and the communities that we serve. Christian Glennie: Thanks. My final one, if I can, maybe just to clarify a previous comment around new assets. You talked about being well-served, obviously, in OUD, in terms of it seemed to apply other therapeutic areas. Would that include other addiction therapeutic areas, or is it outside addiction? Joseph J. Ciaffoni: I appreciate the question. First thing I want to emphasize, we are head down in phase 2 Accelerate, and we have been clear we need to earn our way to phase 3 Breakout. I would not have an expectation that anything we do from an acquisition perspective would be focused on opioid use disorder or substance use disorder. I would think of different therapeutic areas than that, but I would bring you back to the business fundamentals that will really drive what it is that we are looking to achieve. Commercial stage, peak sales potential greater than $200 million, a long and durable runway in front of it, and a differentiated asset that would deliver both patient value and enable us to get the reimbursement we feel is necessary to be successful commercially. Christian Glennie: Great. Thank you. Joseph J. Ciaffoni: Welcome. Thank you. Operator: We are now going to proceed with our next question. The questions come from the line of Brandon Folkes from H.C. Wainwright. Please ask your question. Brandon Folkes: Hi. Thanks so much for taking my call. Congrats. Maybe just a quick one for me. Can you just talk about how you think contribution from the criminal justice system opportunity in your 2026 SUBLOCADE guidance? Thank you. Joseph J. Ciaffoni: Yeah. Thanks, Brandon. I am going to give that one to Pat. Patrick A. Barry: Yeah, no, I appreciate the question, Brandon. We see the criminal justice segment as a strong opportunity for us. We see it as a rebase business. From there, we believe we can grow. Also, SUBLOCADE is a differentiated asset. It is the only monthly with a long-acting injectable monthly with the rapid induction. You have prescribers that are familiar and comfortable with it. In that context, we do believe it can contribute to the growth that we are guiding to on mid-teens. Obviously, we are looking at the broader opportunity. While CJS is a part of it, we are looking at the opportunity as the category leader to continue to fuel and grow the overall LAI category. Operator: We are now going to proceed with our next question. The question's come from the line of Thibault Boutherin from Morgan Stanley. Please ask your question. Thibault Boutherin: Yes, thank you. Thank you for the clarification on SUBLOCADE guidance between 15% and 8%. There is also another element, it is small, but SUBLOCADE ex U.S., how should we think about that line of revenues given the organization changes they have made, you have made, sorry. Should we expect this to stabilize? Could it decline next year? Just if you could help us on that. Just on R&D, obviously you are going to have 2 phase III go-no-go decisions in the next few weeks. How should we think about the impact of the different scenarios on your OpEx guidance if you take 0, 1, or 2 assets to phase III? Thank you. Joseph J. Ciaffoni: Sure. I will let Ryan take the first question, and then Christian and I will split the second. Ryan Preblick: Certainly. Good morning. On SUBLOCADE and the rest of the world, it is going to be relatively flat year-over-year. We will see growth in Australia and Canada, but we will lose some of the volume coming out of the Nordics. Joseph J. Ciaffoni: Okay. With regards to R&D, I will let Christian comment on the programs and timing of the phase II readouts. What I would tell you is our budget for 2026 contemplates if we have the opportunity to advance those programs, that is built into the operating budget that we are working towards. Christian? Christian Heidbreder: Yes. Based on what Joe just said, the 2 phase II trials were completed at the end of the fourth quarter last year. We are now going through the traditional process of data cleaning, data closeout, and statistical programming. This will be followed by a database lock by the end of the first quarter this year, with the final tables, figures, and listings available in the second quarter of this year for preparation of top-line results on both assets. I must add that in addition of INDV-6001, in addition to the phase II data, the decision to proceed to late-stage clinical development, that is the phase III, hinges on 3 additional factors. First, the manufacturing feasibility and the availability of the drug product for the actual phase III. Second, we are currently running a payer-validated differentiation and evidence that is going to be required for coverage based on the target product profile research. Third, the impact of that research on the clinical phase III trial design, if indeed, this is what the business decides to do. Thibault Boutherin: Thank you. Joseph J. Ciaffoni: You are welcome. Operator: Thank you. This concludes the question and answer session and today's conference call. Thank you all for participating. You may now disconnect.
Operator: Good morning, and welcome to the Ormat Technologies Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded. And I would like to turn the conference over to Josh Carroll with Alpha IR. Please go ahead. Joshua Carroll: Thank you, operator. Hosting the call today are Doron Blachar, Chief Executive Officer; Assi Ginzburg, Chief Financial Officer; and Smadar Lavi, Vice President of Investor Relations and ESG Planning and Reporting. Before beginning, we would like to remind you that the information provided during this call may contain forward-looking statements relating to current expectations, estimates, forecasts and projections about future events that are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the company's plans, objectives and expectations for future operations and are based on management's current estimates and projections, future results or trends. Actual future results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, please see risk factors as described in Ormat Technologies annual report on Form 10-K and quarterly reports on Form 10-Q that are filed with the SEC. In addition, during the call, the company will present non-GAAP financial measures such as adjusted EBITDA. Reconciliation to the most directly comparable GAAP measures and management's reason for presenting such information is set forth in the press release that was issued last night as well as in the slides posted on the website. Because these measures are not calculated in accordance with GAAP, they should not be considered in isolation from the financial statements prepared in accordance with GAAP. Before I turn the call over to management, I would like to remind everyone that a slide presentation accompanying this call may be accessed on the company's website at ormat.com under the Presentation link that's found on the Investor Relations tab. With all that said, I would now like to turn the call over to Ormat's CEO, Doron Blachar. Doron? Doron Blachar: Thank you, Josh. Good morning, everyone, and thank you for joining us today. Let me start with a few key highlights from 2025, and then I will touch on several recent developments beginning on Slide 4. 2025 was a strong year for Ormat. Revenue increased 12.5% to approximately $990 million and adjusted EBITDA improved by 5.7% to $582 million. Our results reflect meaningful progress toward our long-term targets. This was supported by improved performance of our Product and Energy Storage segment alongside solid execution in our core electricity segment. Within our Energy Storage segment, we captured higher energy rates in the PJM market and benefited from strong market pricing. In addition, our energy storage facilities operated at higher availability levels, enabling us to fully capitalize on these favorable market conditions. The segment delivered robust gross margin in both the fourth quarter and full year, demonstrating the effectiveness of our strategy to balance contracted pricing with merchant exposure. Recently, we achieved several important new developments. We successfully commissioned Arrowleaf, our first solar and battery energy storage project in California. We completed the acquisition of our second solar plus storage project, Hoku in Hawaii, and we won a geothermal tender in Indonesia. On the PPA front, I know many of you have been awaiting an update. As promised, we have secured over the last few months, approximately 200 megawatts of new PPAs with hyperscalers, data centers, developers and existing utility and municipal customers, all at elevated PPA prices with potential for additional growth. These agreements include a 15-year portfolio PPA for up to 150 megawatts supporting Google's data center through NV Energy, and a 20-year PPA with Switch for approximately 13 megawatts of energy from our Salt Wells plant, which can serve as a platform for future PPA expansions. We also negotiated 2 blend and extend contracts totaling approximately 40 megawatts pending final approval, which will enable us to realize higher energy rates starting as early as 2027 rather than at the original expiration dates. Together, these contracts, along with future contracts provide profitable new revenue streams, enhance visibility into our development pipeline and validate the expansion of our exploration and drilling initiatives over the past several years. We also made strong progress advancing EGS towards commercialization. This is highlighted by our co-lead role in Sage Geosystems Series B financing, supporting the continued development of its geothermal power generation and energy storage solutions. This investment, combined with our commercial agreement with Sage and our SMB partnership broadens our EGS initiatives and positions us to potentially accelerate EGS time to market and expand geothermal deployment globally. I will elaborate on these initiatives in a moment. Before I provide some additional updates on our business, I would now like to turn the call over to Assi to discuss our financial results. Assi? Assaf Ginzburg: Thank you, Doron. Let me start my review of the financial highlights on Slide 6. Total revenues for 2025 were $989.6 million, up 12.5% year-over-year. Fourth quarter revenue was $276 million, up 19.6% versus the prior year period. This top line growth was largely driven by continued strength in our Product and Energy Storage segments. Gross profit for 2025 was $272.7 million, in line with prior year. Fourth quarter gross profit was $78.8 million, up 7.2% from $73.6 million in the fourth quarter of 2024. Gross margin for the full year and the fourth quarter were 27.6% and 28.6%, respectively, compared to 31% and 31.9% in the prior year period. This modest annual comparison was driven by previously disclosed curtailments in our Electricity segment at several U.S. facilities throughout the year and a change in our mix of revenues with higher revenues in our Product segment. Fourth quarter net income attributable to the company's stockholders was $31.4 million or $0.50 per diluted share compared to $40.8 million or $0.67 per diluted share in the prior year period. For the full year, net income attributable to the company's stockholders was $123.9 million or $2.02 per diluted share compared to $123.7 million or $2.04 per diluted share in 2024. The year-over-year decline in the fourth quarter was primarily driven by impairment charges related to our Brawley geothermal assets and one of our Ormat facilities, which we expect now to discontinue operation during 2026. This was partially offset by strong growth in profitability at our Energy Storage segment. Adjusted net income attributable to the company's stockholders for the fourth quarter was $41.8 million or $0.67 per diluted share compared to $43.6 million or $0.72 per diluted share in the fourth quarter of the prior year. For the full year 2025, adjusted net income attributable to the company's stockholders was $137.3 million or $2.24 per diluted share compared to $133.7 million or $2.20 per diluted share last year. Full year adjusted EBITDA was $582 million, an increase of 5.7%. Adjusted EBITDA for the fourth quarter was $158.7 million, a 9.1% increase compared to last year. The year-over-year growth was primarily driven by higher contribution from the Energy Storage segment, reflecting improved PJM pricing and new capacity addition as well as improved performance in our product segment. Slide 7 breaks down the revenue performance at the segment level. Electricity segment revenue for the fourth quarter increased by 3.6% to $186.6 million, primarily due to the recent acquisition of Blue Mountain and the improved performance at our Dixie Valley facility. This expansion to our operating portfolio helped to more than offset $4.3 million reduction at our Puna complex in Hawaii that was mainly driven by lower energy rates. For the full year, electricity revenue decreased by 1.2% to $693.9 million driven by curtailment in the U.S. earlier in the year that reduced segment revenues by $18.6 million as well as a temporary reduction in the generation at our Puna facility and repowering activities at our Stillwater facility. This was partially offset by new generation contribution from our Blue Mountain facility, the Beowawe repowering project and improved performance at Dixie Valley. Product segment revenue increased by 59.1% to $63.1 million during the fourth quarter, and grew by 55.2% to $216.7 million for the full year. The performance was driven by our strong backlog and the timing of progress made in manufacturing and construction. Energy Storage segment revenue increased by 140.5% in the fourth quarter. For the full year, revenue grew by 109.3% to $79 million. As Doron highlighted earlier, the strong performance was mainly fueled by elevated energy rate at our storage facilities in the PJM market, alongside contribution from new operational projects in late 2024 and in 2025, which include the Bottleneck, Montague and Lower Rio facilities. Moving to Slide 8. The gross margin for the Electricity segment decreased to 30.2% in the fourth quarter and 28.5% for the full year. This decline was driven by the curtailment and lower energy rates at Puna that I just touched on. In the Product segment, gross margin for the year came in at 21.2%, an increase of 280 basis points versus last year, in line with our expectation for the year. This performance was driven by the improved project profitability and more favorable geographic and contract mix in 2025. The Energy Storage segment reported gross margin of 51.5% and 36.4% during the fourth quarter and the full year, respectively, making a significant improvement versus the prior year. The increase was driven by the effectiveness of our strategic approach to balancing contracted pricing with merchant exposure. Moving to Slide 9. In the full year 2025, we collected more than $180 million in cash monetization PTCs and ITCs through tax equity transaction and ITC and PTC transfers. This is more than the anticipated $160 million in the year. In 2026, we expect to collect approximately $90 million from ITC tax equity transactions and ITC and PTC transfers. We recorded $20 million in income related to tax benefits in the fourth quarter compared to $18.5 million last year and $66.7 million in the full year 2025 compared to $73.1 million in 2024. In the fourth quarter and full year, we recorded ITC benefits of $10.5 million and $44.2 million, respectively, in the income tax line that drove down the tax rate to a negative 20%. These benefits are related to the energy storage facilities that commenced commercial operation in 2025 and include Arrowleaf and Lower Rio. With the 2 new storage assets expected to start commercial operation in 2026, we expect to record a tax benefits driven by higher ITC levels that will result in a negative tax rate of 15% to 20%. Slide 10 details our use of cash flow over the last 12 months, illustrating Ormat's ability to generate strong cash flow, which allow us to reinvest in our strategic growth while servicing debt obligation and returning capital to shareholders. Cash and cash equivalents and restricted cash and cash equivalents as of December 31, 2025, was approximately $281 million compared to approximately $206 million at the end of 2024. Our total debt as of December 31, 2025, was approximately $2.8 billion, net of deferred financing costs with a cost of debt of 4.8%. Moving to Slide 11. Our net debt as of December 31, 2025, was approximately $2.5 billion, equivalent to 4.4x net debt to EBITDA. During the fourth quarter, we secured $165 million in funding. This includes approximately $100 million in corporate debt raising during the quarter. In addition, we received approximately $59 million in tax equity proceeds, including $30 million from Arrowleaf. As shown on the slide, our total available liquidity is $680 million. We expect our total capital expenditure for 2026 to be $675 million. Following the sale of our Topp 2 plant in New Zealand during the first quarter for approximately $100 million, we expect the net investment to be around $575 million. Our detailed CapEx plan is presented in Slide 33 in the appendix. We plan to invest approximately $465 million in the Electricity segment for construction, exploration, drilling and maintenance in 2026. Additionally, we plan to invest $180 million in the construction of our storage assets and approximately $10 million in the EGS pilot with SLB. On February 24, 2026, our Board of Directors declared, approved and authorized a payment of a quarterly dividend of $0.12 per share payable on March 24, 2026, to shareholders on record as of March 10, 2026. In addition, the company expects to pay quarterly dividends of $0.12 per share in each of the next 3 quarters. Before I conclude my financial review, I would like to highlight that we anticipate a strong start to 2026. We expect first quarter performance to benefit from the approximately $100 million in additional product segment revenues, carrying an estimated gross margin of around 20% related to the sale of Topp 2. I would like now to turn the call over to Doron to discuss some of our recent developments. Doron Blachar: Thank you, Assi. Turning to Slide 13. Our electricity portfolio now stands at approximately 1,340 megawatts globally. We added 72 megawatts in the fourth quarter of 2025. And currently, we have approximately 149 megawatts under construction and development through 2027. Moving to Slide 14 to discuss M&A activity. Subsequent to year-end, we closed an agreement to acquire Hoku, a recently built solar plus storage facility on the Big Island of Hawaii from Energix Renewable Energies for $80.5 million in cash. The acquired assets include a 30-megawatt solar PV facility paired with a 30-megawatt 120-megawatt hour battery energy storage system with a 25-year PPA. This transaction strengthens our growing storage platform and supports our 2028 energy storage growth targets while enhancing the stability and long-term visibility of our revenue profile. The Blue Mountain Power Plant, which we acquired in June, has continued to contribute positively to our results and its capacity recently reached 22 megawatts. We are also making strong progress on planned upgrades to the facility that we expect to complete in the first half of 2027. In addition, we plan to add 12 megawatts of solar PV that will serve the auxiliary needs of the geothermal facility and enable more geothermal power to be sold to the grid. The upgrade and the solar addition will enhance the facility generation capacity and long-term revenue growth potential. Moving to Slide 15. Our Beowawe plant delivered improved performance over the year following the successful completion of its repowering and our Dixie Valley facility demonstrated stronger results during the year as operation normalized after the unplanned outage experienced in 2024. On the international front, we were recently awarded the Telaga Ranu geothermal working area by the government of Indonesia under the Ministry of Energy and Mineral Resources. This concession was awarded following a competitive tender process involving 4 qualified bidders, securing Ormat's long-term rights to explore and develop the geothermal resource. We have strong confidence in Indonesia geothermal potential and believe this site can add up to 40 megawatts to our exploration pipeline. This new award, together with previously announced Songa and Atedai tender wins and other prospects under exploration and development, sum up to 182 megawatts that we are currently developing in Indonesia. Moving to Slide 16 to discuss the 2 significant PPAs I mentioned earlier. In January, we signed a 20-year PPA with Switch, a premier provider of AI, cloud and enterprise data center. This represented Ormat's first direct PPA with a data center operator, highlighting the strategic alignment between our geothermal capabilities and the growing demand for sustainable energy to power data center infrastructure. Under the agreement, which can serve as a platform for future PPAs, Switch will purchase approximately 13 megawatts of clean renewable energy from our Salt Wells geothermal plant. Ormat also has the option to expand output by adding an approximately 7-megawatt solar PV facility to serve the plant's auxiliary power. The combined output will help support the power needs of Switch Nevada data centers, aligning with their commitment to sustainability and carbon reduction. More recently, we entered into a long-term geothermal PPA with Google. The PPA covers a multi-project portfolio enabled by NV Energy Clean Transition Tariff. Under the agreement, Ormat will supply up to 150 megawatts of new geothermal capacity to Google's Nevada AI and data center operations. This is a landmark development for Ormat. The portfolio structure provides long-term profitable revenue growth and visibility into our development plans while solidifying our conviction in our expanded exploration and drilling activities we have undertaken over the past several years. It also establishes a strong framework for similar agreements going forward. The combination of these PPAs attractive terms and the extension of the geothermal tax credit under the OBBBA framework significantly enhances our ability to execute our long-term growth strategy. In addition to these 2 agreements, we have negotiated 2 blend and extend PPAs for existing plants that are currently pending final approval. These agreements are expected to improve revenues at 2 facilities by approximately $20 to $30 per megawatt hour beginning in 2027. Collectively, these new PPAs demonstrate our consistent strategic execution over the past several years and reinforces our ability to secure high-quality long-term contracts that drive sustainable growth. Turning now to Slide 17. Our product segment backlog stands at $352 million, representing a 19% increase on a sequential basis. This growth was primarily driven by the Topp 2 project, which was recently removed from our pipeline due to the customer exercising its option to purchase the facility and our agreement to sell. Topp 2 added approximately $100 million to the backlog that will be recorded as revenues in the first quarter of 2026. Moving to Slide 18. Our Energy Storage segment produced another strong quarter of year-over-year growth with total revenues increasing by 140%. We anticipate that this strong performance in our energy storage business will continue into 2026, driven by higher energy rates in the PJM market. On Slide 20, we continue to remain on track to achieve our portfolio capacity target of between 2.6 gigawatt to 2.8 gigawatt by the end of 2028. This confidence is underpinned by strong momentum in geothermal development and the accelerated exploration efforts. In addition, the efforts that we took throughout 2025 to secure both battery supply and safe harbor status for additional projects helped improve our visibility towards achieving our capacity growth targets. Turning to Slide 21 and 22, which display our geothermal and hybrid solar PV projects currently underway. We anticipate adding 149 megawatts to our generating capacity from these projects by the end of 2028. As you can see from the table, we added a new 30-megawatt greenfield project, first since 2017 that we expect to start operation by the end of 2027. Moving to Slide 23 and 24. We currently have 6 projects under development in our Energy Storage segment, which are expected to add 410 megawatts or 1,540 megawatt hour to our portfolio. These projects, as you can see from the table, include the new 100-megawatt, 400-megawatt hour Griffith facility that we plan to build in California and another 20 megawatts, 100-megawatt hour facility in Israel. Turning to Slide 25 for a discussion on our EGS efforts. In 2025, we made significant progress advancing our efforts to bring new technologies, including EGS towards commercialization. Our partnership with SLB is designed to accelerate the development and commercialization of EGS projects. While still in the early stages, we are confident this collaboration will streamline project deployment from concept through power generation. By combining Ormat's market-leading capabilities in power plant design, development and operations with SLB strength in subsurface reservoir engineering and construction, we believe we can unlock greater efficiencies, reduce execution risk and deliver projects more effectively. We also announced a strategic commercial agreement with Sage Geosystems to pilot its advanced pressure geothermal technology, which extracts heat energy from hot, dry rock at one of our existing power plants. In late January, we further advanced this partnership by serving as co-lead investor in Sage Series B financing, supporting the continued development and commercialization of its geothermal power generation and energy storage solution. This investment is a natural extension of our collaboration and underscores our confidence in Sage technology. Overall, we are encouraged by the meaningful progress achieved across both our external partnership and internal EGS initiatives in recent months, which includes 2 pilots that will be conducted utilizing Ormat facilities. We believe these efforts position Ormat to expand our existing market leadership and accelerate the broader deployment of geothermal energy globally. Importantly, beyond project development within our Electricity segment, we believe our proprietary binary on surface plant technology provides a competitive advantage in the emerging EGS market. Our decades-long operating experience and large installed capacity create a significant learning curve advantage versus new entrants. This positions us not only to develop EGS projects, but also to potentially supply equipment and technology solution to third parties as the market scales. Ormat origins are rooted in technology and innovation. These developments, particularly in EGS will complement our market-leading capabilities in traditional geothermal applications. As these technologies mature, they will represent an additional growth vector at top our long-established core business. Given our expertise and strategic partnership, we believe we are uniquely positioned to bring these technologies to market efficiently and profitably. Please turn to Slide 26 for a discussion of our 2026 guidance. For 2026, we expect revenue to increase by 14.6% year-over-year at the midpoint, ranging between $1,110 million and $1,160 million. Electricity segment revenues are projected to be between $715 million and $730 million. Product segment revenues are expected to range between $300 million and $320 million and Energy Storage revenues are now expected to range between $95 million and $110 million. Adjusted EBITDA is expected to increase by approximately 8.2% at the midpoint, ranging between $615 million and $645 million. I will now conclude our prepared remarks with reference to Slide 27. Looking ahead to 2026, Ormat is well positioned to capitalize on the evolving electricity landscape driven by accelerating AI adoption, rapid data center expansion and supportive market fundamentals, including record high PPA prices and a constructive regulatory environment. This sustained demand reinforces our confidence in delivering on our long-term growth strategy and earnings objectives. We remain committed to delivering reliable, sustainable energy solutions while leveraging our expertise, proven track record and market leadership to drive meaningful growth and create long-term shareholder value. This concludes our prepared remarks. Now, I would like to open the call for questions. Operator, please. Operator: [Operator Instructions] Your first question comes from the line of Justin Clare with ROTH Capital. Justin Clare: And I wanted to start off here just talking about the PPAs. You've obviously signed a lot recently here. You highlighted the 40 megawatts of PPAs signed under a blend and extend strategy. And just wanted to see how should we think about the additional opportunity in terms of the amount of capacity that could be proactively renewed and with PPAs extended ahead of expiration? And then also just wondering if you could provide an update on the amount of capacity that might be coming up for renewal still here in 2026, 2027, 2028? Doron Blachar: As you said, we initiated this blend and extend 40 megawatts that are in the approval phase. And hopefully, in the next few weeks, we will be able to announce once they are fully signed and approved. And we have a few more assets, not too many assets that we can blend and extend, and we have started to work on the next phase that will take a few months to get them updated to the current pricing. Justin Clare: Okay. Got it. So then maybe shifting over just on the curtailments. I think there was an $18.6 million impact in 2025. Wondering if you could quantify what the impact was in Q4. I think things improved in the quarter. Maybe if you could just speak to that improvement. And then your expectations for 2026, what level of curtailments might be assumed in the Electricity segment guidance? Assaf Ginzburg: Justin, this is Assi. I'll start by saying that the curtailment in Q4 did lessen. We saw around [ $3.5 billion ] of curtailment in Q4. I will say that for the full year 2026, we are not expecting more than $4 million to $5 million, maybe slightly higher than that. But at least what we know today from NVE, which is the one that caused most of the curtailment during 2025, we're not expecting too much into it. Also in 2025, if you remember in January, there was some fires in California. Luckily to us this year, we didn't. So we don't expect in Q1 any significant curtailment. So things definitely are coming our way as we look into 2026. Justin Clare: Got it. Okay. And then maybe just one more. Considering those factors, could you share what you anticipate for the gross margin for the Electricity segment in '26 and how that compares to '25 given the factors you mentioned? Assaf Ginzburg: Yes, we do expect anywhere from 1% to 2% increase in gross margin. It's around $14 million, $15 million in total, which is in line with the difference in the curtailment. One thing that we do see this year slightly less than last year is the prices in Puna are lower. But with the tension in the Middle East, this can change very quickly. So right now, the prices in Puna are slightly lower. But again, we took it already into consideration in the guidance. Operator: Your next question comes from the line of Noah Kaye with Oppenheimer. Noah Kaye: Lots going on, lots to talk about. And I want to start with the comments you made in reference to the Google PPA. You talked about this portfolio structure being a model for future activity. And I was just wondering if you could expand on that a little bit in terms of how the structure kind of came to be, why it was the right fit for both you and Google as a counterparty and some of the optionality that it gives you in terms of development. Doron Blachar: Thank you, Noah. So the Google basically, as we all know, is looking continuously for clean renewable energy, and that aligns perfectly with geothermal, it is a baseload. Over the last few years, we've invested quite a lot, and we're continuously investing in exploration and developing greenfields. And we actually released, as you've seen on the presentation, our first greenfield 30-megawatt project, the first time after close to 7 years. And we have a few in the pipeline that are in the final stages of exploration, and I expect to release a few more this year and the next year. And the structure of the PPA basically, which is up to allows us, on one hand, to know that we have a PPA, a very strong and profitable PPA if we are successful on the exploration. And it basically give us the confidence to continue with this investment and exploration effort that we are doing that will grow significantly the company in the coming years. I'm almost sure to say that if we do maximize this PPA, we will be able to add another one. At this stage, it relates to until the end of 2030. And with the exploration efforts we have, this gives us the confidence to continue with this strategy. Noah Kaye: Okay. And then I think on the blend and extend comments that you made in response to Justin's question. So as we understood it, at this point, most of what was expiring through, I think, 2028 has already been recontracted. This blend and extend seems like a pull forward of contracts that were going to expire beyond that. So maybe you could just give us a little bit more insight on the contracts that are being affected here and the amount of kind of post 2028 capacity that you're looking at recontracting right now? Doron Blachar: Yes. The contracts that are being blend and extend are contracts that end, as you said, in the next 3 to 5 years. We have one more contract in this time frame that we are looking to blend and extend. The next wave of contracts actually that are looking for recontracting are mainly in 2032 and 2033, that is Jersey Valley, Don Campbell, McGuinness 1, Tungsten. So we will be looking at this for blend and extend. I don't know to say we'll do it in the next few months because it is longer term. But today, when NV Energy and others that have contracts with us that are set to expire in the range of 5 years plus/minus, they want to secure the recontracting with them. The fact that we did sign with Switch and we did sign with Google PPAs for a similar time frame actually drives their willingness or their desire to sign blend and extend and basically secure the baseload geothermal energy for a longer period of time. Noah Kaye: Makes sense. One quick one to sneak in before I turn it over. Assi, I think you mentioned that the CapEx guide is $675 million, but once the Topp 2 conversion to product revs completes, it will actually be $575 million. Can you just walk us through the mechanics of that and explain the timing on that a little bit, please? Assaf Ginzburg: Sure. So in Q1, we closed the sale of the Topp 2 transaction to our customer after he basically exercised his option to buy the asset. As a result, you will see through the P&L around $100 million of revenue with approximately 20% margin that will boost Q1 results. And what you will see in the financials in addition in the cash flow section, you will see a line item that will be a sale of assets that will offset the CapEx. So when we look at the cash flow for 2026, we will expect to see a CapEx of $675 million. In addition to that, we did made an acquisition in Q1 that was another $80.5 million. So you will see also the M&A of the $80.5 million in Q1. And then you will see a sale of assets of approximately $100 million. So that's what we expect to see on the cash flow. This is just for modeling for you guys to understand the debt and the net debt of the company throughout the year. I want to mention one more thing. You ask us how did Google came about? I do have a recording call with you that you told me, "Assi, if you have to sign with somebody, you have to sign it with Google." So that there, I went to Doron and that's how it all started. So I think you can give yourself some kudos, and we appreciate the support here. Operator: Your next question comes from the line of Julien Dumoulin-Smith with Jefferies. Hannah Velásquez: This is Hannah Velasquez on for Julien. So I'll go ahead and just get started. I wanted to circle back on this curtailment question. So if I'm just using 2024 revenue for the Electricity segment as a baseline, around $700 million, that's also what you did in 2025 for the segment. You brought on -- yes, I mean you brought on over 100 megawatts in the Electricity segment across that time period. And if I do the math there, that would suggest -- that would just suggest about $30 million of incremental revenue from those new assets that came online. And so that gets you to where your guidance currently is. So does that imply that curtailment is not being recovered from 2025? Or I know you talked about $4 million to $5 million recuperating it, but I'm just having a hard time bridging to the new assets or new capacity that you brought online for that segment and then also the curtailment that you expect to recover in the year. Doron Blachar: Hannah, thank you for the question. First, some of the 100 megawatts that you mentioned is solar. So the capacity factor is closer to 22%. So I suggest that you look into it when you model the number. Second, as I mentioned, we do expect $4 million to $5 million curtailment in the year in -- maybe even $6 million in 2026 versus the $18.6 million. So there is around $10 million, $12 million reduction in curtailment. But I think the main difference is that some of the additions are solar. Hannah Velásquez: Right, about 42 megawatts. Yes, I did do the math, and I'm getting about $25 million to $30 million contribution from the new geothermal and then less than $10 million from the new solar. So it still suggests to me not recovering. Doron Blachar: As I mentioned earlier, the prices in Puna are slightly lower. And we're also trying to be quite careful with our guidance for 2026, making sure we can, if possible throughout the year, try to raise the guidance and not be in a position that like we've been in 2025 that we were behind on electricity sales. So it's again also us being proactive here. Hannah Velásquez: Okay. I got it. That's super clear. So you do expect some of the, I guess, segment headwinds that you saw in 2025 to extend over potentially, but you're being cautious in your guidance outlook. Okay. As a follow-up question, just on the EGS front, from what I understand, there are multiple technologies or variations within EGS. It sounds like you're currently betting through Sage Geosystems and also a partnership with SLB. But would you consider any incremental partnerships with other next-gen technologies just because, again, it seems like there's such a wide variance in how different companies are approaching EGS. I'm just trying to get a sense of like the probability of success here. Doron Blachar: Yes. Thank you. That's exactly the way that we are operating, the reason that we have started the joint venture with SLB and also signed a commercial agreement with Sage and invested in Sage, is exactly, as you say, multiple approaches to EGS. There are technological barriers in EGS, mainly the water loss and the economics of it. And we are looking at spreading the risk. We are discussing with other developers in the EGS arena, different cooperations agreement. We believe that EGS, if successful, will turn the industry into something that is much, much bigger because you will be able to generate geothermal energy, baseload energy in many, many places. So we are focused a lot on it. We are looking at the different players, all of them are speaking with us. We are the largest operator of geothermal globally. We are the largest binary seller of supply of products in EPC. And I assume that over the next time you'll see us making additional moves in the EGS in order to make sure that if EGS is successful, Ormat will be able to capture this opportunity. Operator: Your next question comes from the line of Mark Strouse with JPMorgan. Mark W. Strouse: Maybe a follow-up to Hannah's question there on EGS. Instead of kind of looking beyond the existing partnerships, within the partnerships that you have with SLB and Sage, do you think that we could see additional pilot activity announced in 2026, potentially different site selection with different conditions, whatever it might be? And then on that same slide, on Slide 25, you mentioned the equipment sales to third-party developers. Can you talk about what you've embedded in your guide for 2026 from that? And how we should think about the timing of when that could potentially become more material? Doron Blachar: Thank you, Mark. I'll start maybe with the second part of the question. EGS has technological challenges that needs to be solved. I think most of the players that we know are dealing with these challenges. I would expect that during 2026, we will be able to negotiate with some of them, maybe EPC contracts. But revenue from that, first, they will need to demonstrate the technological issue. They will need to drill wells. And then the EPC revenue will come. So we have multiple discussions with different of them, as I said before, both on EPC agreements. But this will be EPC that will impact product segment probably second half of '27, '28, definitely, if it is successful. Regarding additional developments, we are speaking with other companies that are looking at technological ideas that have already invested and raised cash in order to develop them. We are also building internal capabilities to see how we adjust our technology to fit these large-scale power plants. We are speaking with different hyperscalers and data centers on PPAs once the technology is successful. So there's a lot, a lot of work that is being done within Ormat in the different areas. I'm sure that during the coming quarters and discussions, we'll keep on updating you on the various issues. And as I said before, if this is successful, it will take Ormat and the industry into a different level. Mark W. Strouse: Yes. I understand. Okay. That's helpful. And then can I just switch over to the storage side of the business. Just given the initial guidelines that came out recently, just curious for your take on that and how you're approaching potential safe harbor before the July deadline that would give you further visibility out to 2030? Doron Blachar: Ormat, over the last year, have safe harbored over 1 giga of project, and we plan to install and use it over the next few years. I will start by saying that Griffith, which is a 100-megawatt, 400-megawatt hour, which is our largest project was also safe harbor. We have basically for all of our interconnection for 2028, 2029, safe harbor basically the majority of the project. We were able to reiterate our 2028 targets for the storage, taking into consideration the FEOC. All in all, we are in a very good situation to continue and grow. We also see more and more capacity of batteries coming from outside China, which is very favorable. We see also increase in U.S. production. So I believe that the FEOC eventually will not impact us. I think that our position in the queue, especially in California is very good, which should enable us to release over the next year, potentially additional 2 projects, almost similar size to Griffith. So again, all in all, the ability to buy batteries, the extension of the credit and the fact that we safe harbored a sufficient project for the next 3 years really put us in a good place. In addition to the fact, when you look at our pipeline, you see the majority of it is in California, which battery is really, really needed. And those lines that we have in the queue really put us in a position to sign good tolling agreements or good RA contracts. Operator: [Operator Instructions] Your next question comes from Ben Kallo with Baird. Ben Kallo: Just thinking about -- as you think about longer-term targets past the '28 and there's been a lot of changes from the federal level in the United States. When do you think that you're in a position to update us on longer-term targets? And then have you adjusted the operations to the benefit of any of that and specifically just faster permitting or anything like that? And then my second question is -- and thank you for that. You kind of answered this, but just on the EGS front, outside of technology, how do you think about just building the infrastructure around your own development if we look out to 2030, 2031, whether that's employees or its financing or other things there because scale will get bigger if and when you're successful. Doron Blachar: Thank you, Ben. So we are -- I'll start with the second part. We're definitely looking how to prepare ourselves to this transformation event of EGS is successful. We are doing the exploration. We have increased our BD efforts. Obviously, the land position that you need for an EGS project is significantly bigger than what you need for geothermal. So we are looking at much larger land positions in additional states, not just Nevada and California. So the look for EGS is much broader than just Nevada and California. We are looking on our binary technology, how you manufacture so many turbines to a power plant, heat exchangers, how to multiple Ormat's efforts. All of these are things that we are working on in parallel to make sure that once the technology is successful, we are able to utilize it and move forward with it. Regarding the question on the growth target. So one, we've increased significantly over the last few years, the exploration efforts. We see the greenfield, the first one coming to fruition now. We will see additional coming. The change in the permitting helped us a lot and moved that faster than what happened in the past. The fact that there are multiple land options by BLM in different states in the West, again, push us faster. We are planning an Analyst Day in the September time frame. And at that time, we will give longer-term targets for megawatt. Operator: And thank you. And with no further questions in queue, I'd like to turn the conference back over to Doron for closing remarks. Doron Blachar: Thank you all for joining us today. 2025 was a very good year for Ormat. Looking to 2026, we continue to see growth in all our segments and expect significant progress in EGS during 2026. Thank you. Operator: This concludes today's conference call. You may now disconnect.
Operator: Good day, ladies and gentlemen. Thank you for standing by, and welcome to the ACM Research Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now I will turn the call over to Mr. Steven Pelayo, Managing Director of Blueshirt Group. Steven, please go ahead. Steven C. Pelayo: Good day, everyone. Thank you for joining us to discuss fourth quarter and fiscal year 2025 results, which we released before the U.S. market opened today. The release is available on our website as well as from Newswire Services. There is also a supplemental slide deck posted to the Investor Relations section of our website that we will reference during our prepared remarks. On the call with me today are our CEO, Dr. David Wang; our CFO, Mark McKechnie; and Lisa Feng, our CFO of our operating subsidiary, ACM Shanghai. Before we continue, please turn to Slide 2. Let me remind you that remarks made during this call may include predictions, estimates or other information that might be considered forward-looking. These forward-looking statements represent ACM's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under the risk factors and elsewhere in ACM's filings with the Securities and Exchange Commission. Please do not place undue reliance on these forward-looking statements, which reflect ACM's opinions only as of the date of this call. ACM is not obliged to update you on any revisions to these forward-looking statements. Certain financial results that we provide on this call will be on a non-GAAP basis, which excludes stock-based compensation and unrealized gain or loss on short-term investments. For our GAAP results and reconciliations between GAAP and non-GAAP amounts, you should refer to our earnings release, which is posted on the IR section of our website and to Slides 14 and 15. Also, unless otherwise noted, the following figures refer to the fourth quarter and fiscal year 2025, and comparisons are going to be with the fourth quarter and fiscal year 2024. I will now turn the call over to David Wang. David? David Wang: Thanks, Steven. And hello, everyone, and welcome to ACM's Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. I'm pleased with our fourth quarter results, which capped off a solid year of execution. Revenue grew 9% in the fourth quarter and 15% for the full year. We continue to execute well across our core business. We made a lot of progress with new product platforms, and we strengthened our position in China and globally. Investment in AI and data center infrastructure is reshaping the global semiconductor demand, shifting capital towards advanced logic, memory and advanced packaging. The industry is looking to key supplier for new technology, many of which have not yet been invented. ACM differentiated technology portfolio has been aligned well with this high-value process steps and the market is how -- now the market is coming for us for solutions. A good demonstration is recent momentum with several key global customers outside the Mainland China market that we announced in today's press release. First, we announced that we have delivered multiple single-wafer cleaning tools to Singapore facility of our Asia-based foundry customer. This marks ACM's first tool installation to Singapore, a key milestone for ACM. Second, we announced that we're receiving multiple orders for our advanced packaging tool from 3 global customers. This included orders for multiple-wafer level advanced packaging system from a leading global OSAT customer based in Singapore with deliveries scheduled for the first quarter of 2026. A panel-level advanced packaging vacuum cleaning tool from a leading global semiconductor packaging manufacturer based outside Mainland China, also scheduled for delivery in the first quarter of 2026 and multiple-wafer level packaging system from a leading North America-based technology customer with delivery scheduled later this year. Now on to our business results. Please turn to Slide 3. For the fourth quarter of 2025, we delivered $244 million in revenue, up 9%. For the year 2025, we delivered $901 million in revenue, up 15%. Top line growth of 15% was better than growth for the overall China WFE market, which third-party estimate as generally flat for 2025. We consider this good result, especially since our 2025 revenue includes very little contribution from our new products. We expect a strong product cycle in 2026 from SPM cleaning and our furnace product as we made a very good technical progress for this new product across our customer base. We also made a good progress with our supercritical CO2 dry, Track, panel-level plating and PECVD, which we expect to contribute some more in 2026, but more in 2027 and beyond. Shipments for 2025 were $854 million versus $973 million. Remember, 2024 shipments increased 63% over the year. So we had a tough compare. We also had some shipment for new product pushed into the 2026. Importantly, we expect 2026 shipment growth to be higher than our 2026 revenue growth. Gross margin was 41% for the fourth quarter and 44.5% for the full year. Q4 gross margin was slightly below our long-term target range of 42% to 48%. We attribute the Q4 level to product mixing, including a few semi-critical products with a lower margin due to the competitive pressure and also higher seasonal inventory provisions. We expect lower gross margin to be temporary. We believe our new product ramp, combined with the product design and supply chain initiative will enable us to deliver the best product at a lower cost. There's no change to our long-term target model range of 42% to 48%. Moving on, we ended the year with a net cash of $845 million versus $259 million at the year-end of 2024. This balance sheet provides the foundation to continue our effort to develop world-class tools for the leading global semiconductor manufacturers. Before I review our product, I will provide our view on competitive dynamics in China and how we will win in this environment. We have recently seen a flood of new local entrants to the China capital equipment industry. In many cases, there are 5 or more players going after a single point product, all with very similar design and performance. We believe we will compete and win in China market because, number one, we have a differentiated technology with many products almost the best in the world. Two, we have a deep portfolio of IP with strong protection in China; and three, our local customer demand the best technology in order to compete in the global market. Now I will provide detail on product. Please turn to Slide 4. Revenue from single-wafer cleaning, Tahoe and semi-critical cleaning tool was $626 million, up 8% in 2025 and represented 69% of total revenue. We now estimate our cleaning portfolio address 95% of the application and process steps, and we are working on developing remaining solution that will bring us to 100% in 2026. We believe ACM now has the widest coverage of cleaning tool, far more extensive as compared to all competitors. The 8% year-over-year growth in 2025 included very little contribution from our newer cleaning line. We expect this new product, including single-wafer SPM, Tahoe and N2 bubbling wet etch to contribute more meaningfully to our 2026 revenue. As the industry moves to more advanced nodes, we expect increased demand for high-performance cleaning tools. The increased adoption of multiple patterning is driving higher layer counts, potentially impact yields and demand more cleaning steps with a higher cleaning efficiency. We believe this plays right into ACM's strength. For example, our proprietary N2 bubbling etching technology is uniquely positioned in the market. We are seeing growth interest for advanced 3D NAND application where larger bubble size and uniformity control will become more critical as the industry moves to 300 layer and above. In SPM cleaning, customers recognize the advantage of our proprietary nozzle and chamber design. We believe our platform outperforming leading competitors in small particle cleaning performance. We made a significant technical progress at the end of 2025 with our new SPM nozzle design. We achieved a 50 nanoparticle size count of under 20, which we believe is the best-in-class performance for the industry. Our unique nozzle design does not require any routine chamber DI water cleaning. This is a big deal for customers because it not only delivers a better cleaning environment for the chamber, but also increased uptime of our equipment. As a result, I'm pleased to report today that we have received a strong repeat order for our SPM cleaning tools from a major customer for delivery to module fab in 2026. We are also seeing very strong interest for our unique SPM technology from numerous global customers because they are not satisfied with the performance of their current plan of the record tool. Our supply -- our supercritical CO2 dry tool integrated ACM proprietary cleaning IP while reducing CO2 consumption by approximately 40% as compared to their competitors. This results in process efficiency with lower operation cost. We made a successful in-house demo for the multiple Logic and memory customer at the end of 2025. We have already received a demo PO for evaluation tools from 2 customers for delivery middle of 2026, and we expect to deliver additional tools to multiple customers later this year. In Mainland China alone, we estimate the incremental market opportunity for this next-generation cleaning product is nearly USD 1 billion. We remain confident in our long-term objective to achieve approximately 60% of the market share in China cleaning market, and we expect the cleaning to outgrow the China WFE this year and in the year ahead. We estimate our market share for ECP in China is now more than 40%, and we remain confident in our long-term goal to achieve 60% or more. Front tool was -- represent about 70% of the mixing for year, including our Map, MAP Plus, ECP 3D, ECP G3 products. ECP back-end tool were about 30% of the mix, including our ECP AP product line. In Q4, we delivered our first Ultra ECP ap-p horizontal panel-level electroplating tool to industry-leading large panel fabrication customer. We -- our customer prefer ACM preferred horizontal plating solution versus competitors' vertical plating approach due to the much better plating film uniformity and much less cross-contamination between multiple plating chemicals. We expect a growing customer interest in our panel-level solution as the industry looks for higher throughput and lower cost to support advanced packaging solution for multiple large die size and HBM AI chips. As discussed earlier, we received order from 3 global customers for both wafer-level and panel-level packaging tools. Our furnace tool are under various stage of evaluation of many customers. Revenue from furnace was relatively small in 2025, and we expect a more meaningful contribution in 2026. We made several technical breakthrough for LPCVD and ALD and PEALD in 2025. We see good demand across multiple applications, including high-temperature neo, especially 1,350-degree version, LPCVD, ALD and PEALD. We believe ACM differential design position us to capture meaningful market share. Revenue from advanced packaging, which exclude ECP, but including service and spare was up 45% in 2025 to $76 million and represents 8% of revenue. This includes coater, developer, etchers, stripper, scrubber and vacuum cleaning tools. We believe ACM is the only company to offer a full portfolio of wet process tool and world-class plating product for the advanced packaging. We think the combination is very powerful. It provides ACM with a valuable insight into the challenging of next-generation packaging as AI drives industry towards 2.5D and 3D integration. We are making solid progress with our new Track and PECVD platforms. Last September, we delivered our high-throughput 300 WPH KrF track tool for evaluation at a key customer. We expect mass production qualification in 2026 for the tool. And we anticipate this will lead to demand from additional customers, including both stand-alone and full integrated system in line with the lithography tool. We believe our high throughput design positions this platform to compete effectively with the current supplier. In Q4, we delivered our first Ultra Lith BK system. This milestone represents the first customer deploy of our Track series following early demonstration and validation. It also marked our entry into the display panel market, a new segment that require high-volume manufacturing and strong performance stability. We anticipate to develop our proprietary PECVD platform. Our design has 3 trucks per chamber, which we believe is the only one in the world. This provides flexibility for a wide range of process with the same hardware. We feel good about our positioning as the team works through the technical detail with a few tool in our Lingang mini lab running wafer test and custom demo wafer. We expect to ship multiple EVA tools in the near term. In summary, we innovation -- our innovation engine contribute to drive differentiated solutions across a broader growing portfolio. As AI drives a more complex semiconductor process, customers are turning into ACM as a trusted partner to help solving their increasing challenges. Next, let me provide an update on our production facility. First, on Lingang, please turn to Slide 8. Our Lingang production and R&D center is now our primary production center. The first building is in volume production and the second provides capacity for the future expansion. Together, the 2 facilities can support up to $3 billion in annual output. During 2025, we made a good progress on our mini line and Lingang. We have enhanced our process development capability and now support the on-site customer evaluation in fab-like conditions. Our mini line, including ACM tools and tools from other players and metrology tools. We believe the mini line will accelerate our internal product validation, shorten R&D and qualification cycle and strengthen collaboration with key customers as we introduce next-generation platforms. Next, our Oregon facility, please turn to Slide 9. We are accelerating investment in Oregon with the operation expected beginning in the second half of 2026. This facility will allow customers to evaluate our technology and to test their wafer locally, and it will serve as our initial base for production in the United States. Our global customers are encouraging by our commitment, which we believe will help them to choose ACM as a key supplier to scale production. We remain very pleased by the success of ACM Shanghai team, which continue to be a key supplier to the semiconductor industry in Asia. ACM Shanghai has also proven to be a great source of capital and financial flexibility for ACM. In September 2025, ACM Shanghai completed a private offering of ordinary share, generating approximately $623 million in net proceeds. In February 2026, we completed the sale of approximately 4.8 million ACM Shanghai shares at RMB 160 per share, generating approximately $111 million in gross proceeds. ACM Shanghai also has been a good source of dividends in 2023, 2024 and 2025. We received dividends net of tax of $19.2 million, $28.5 million and $29 million, respectively. Our major ownership in Shanghai -- ACM Shanghai remain a strategic asset. It enhances our financial flexibility and supporting disciplined execution as we continue expanding globally. Taken together, our expanding product portfolio, increased manufacturing capacity and strengthening capital position give us confidence in our long-term strategy. Now turning to our outlook for the full year 2026. Please turn to Slide 10. In middle January, we introduced our 2026 revenue outlook in the range of $1.08 billion to $1.175 billion. This implies 25% year-over-year growth at the middlepoint. We reiterate this outlook today. Since our founding in California in 1998 and the establish of ACM Shanghai in 2005, we're building a globally competitive semiconductor equipment company grounded in innovation and different technology. Our leadership in cleaning and electroplating created a strong foundation, and we are now expanding across Furnace, Track and PECVD as we broaden our multiple product portfolio. In Asia, we are recognized as a leader in wafer cleaning and plating, and we are engaging with a global customer across U.S. and Europe. With continued progress across SPM, Tahoe, supercritical CO2 dry, Furnace, Track, PECVD and panel-level packaging, we believe we are entering a new phase of a product cycle that are driving sustained growth. We have the customer, the product, the capacity and the capital to execute our global business plan, and we remain committed to our long-term target of $4 billion in revenue. Now let me turn the call over to our CFO, Mark, who will review details of our fourth quarter and full year results. Mark, please. Mark McKechnie: Thank you, David. Good day, everyone. Please turn to Slide 11 and 12. Unless I note otherwise, I'll refer to non-GAAP financial measures, which exclude stock-based compensation, unrealized gain/loss on short-term investments. Reconciliation of these non-GAAP measures to comparable GAAP measures is included in our earnings release. Also, unless otherwise noted, the following figures refer to the fourth quarter and full year of 2025 and comparisons are with the fourth quarter and full year of 2024. I will now provide financial highlights. Revenue was $244 million for the fourth quarter, up 9.4%. For the full year, revenue was $901.3 million, up 15.2%. Full year revenue was in line with our original guidance set a year ago and slightly above the updated range announced on January 22. Fourth quarter revenue for single-wafer cleaning, Tahoe and semi-critical cleaning was $159.9 million, up 3%. For the year, this category grew by 8.1%. Fourth quarter revenue for ECP, Frontend Packaging, Furnace and other technologies was $64.1 million, up 23.9%. For the year, this category grew by 32.1%. Fourth quarter revenue for Advanced Packaging, excluding ECP, services and spares was $20.5 million, up 23.8%. For the year, this category grew by 45.3%. I will now provide revenue mix by customer type for 2025. Starting this year, rather than disclosing specific customer names, we are now disclosing revenue by customer type once a year. For each customer type, this includes product, services and spare parts. We've included the mix table on Slide 7 of our presentation. For 2025, our revenue mix by customer type was split among Foundry, Logic and Other, 59%; Memory, 27%; Packaging and Wafer Processing, 14%. In 2025, we had 4 10-plus percent customers, including our top customer was 16.9%, next was 13.5%, then 11.6% and 10.2% for an aggregate total of 4 customers representing 52.2% of total sales. For 2024, we had 4 10% customer also for a total of 52.2%. Total shipments were $228 million for the fourth quarter, down 13.5% and $854 million for the full year of 2025, down 12.2%. David noted, we had a tough compare versus a strong 2024 when shipments increased 63% year-over-year. We also did have some shipments for new products pushed into 2026. We expect 2026 shipment growth rate to be higher than our 2026 revenue growth rate. Gross margin was 41.0% for the fourth quarter and 49.8%. For the full year, gross margin was 44.5% versus 50.4% in 2024. Q4 gross margin was slightly below our long-term target model. Adding to David's earlier remarks, gross margins were down 8.8 percentage points year-over-year on a quarterly basis. This was due to product mix and margin pressure concentrated in a few semi-critical products, which contributed about 5 points of the headwind and a higher level of inventory provisions that contributed about 4 points negative impact. As David noted, we expect the lower gross margins to be temporary. We believe our new product ramp, combined with supply chain initiatives will enable us to deliver the best products at a low cost and there is no change to our long-term target model range of 42% to 48%. For modeling purposes, we expect gross margins to be at the lower end of this longer-term target range for the first half of 2026 with an anticipated lift in the second half due in part to contribution from newer products, which generally have higher gross margins. Operating expenses were $70.6 million for the fourth quarter, up 21%. For the full year, operating expenses were $258.4 million, up 34%. For 2025, R&D was 15.1% of sales, sales and marketing was 7.8% of sales and G&A was 5.8% of sales. For 2026, we plan for R&D in the 16% to 18% range, sales and marketing in the 7% to 8% range and G&A in the 6% range. Operating income was $29.5 million for the fourth quarter versus $52.8 million. Operating margin for Q4 '25 was 12.1% as compared to 23.6%. For the full year, operating margin was 15.9% as compared to 25.6%. Long term, we look to grow our R&D spending in line with revenue, but we expect to show operating level -- operating leverage in SG&A with spending growth below our revenue growth level. Income tax expense was $6.6 million for the fourth quarter versus $17.3 million. For the full year, income tax expense was $13.3 million versus $35 million in 2024. For 2026, we expect our effective tax rate in the 8% to 10% range. Net income attributable to ACM Research was $17.3 million for the fourth quarter versus $37.7 million. For the full year, net income attributable to ACM Research was $110.2 million versus $152.2 million. Net income per diluted share was $0.25 for the fourth quarter versus $0.56. For the full year, net income per diluted share was $1.61 versus $2.26. Our non-GAAP net income excluded $6.4 million of stock-based compensation expense for the fourth quarter and $33.6 million for the full year. I will now review selected balance sheet and cash flow items. Cash, cash equivalents, restricted cash and time deposits were $1.13 billion versus $441 million at year-end 2024. Net cash, which excludes short-term and long-term debt was $845.5 million versus $259.1 million at year-end 2024. $585.4 million increase in net cash for 2025 included $623 million net raised in the private offering by ACM Shanghai in 2025. Total inventory at year-end was $702.6 million versus $676.4 million at the end of the third quarter. Raw materials were $349.7 million, up $23.5 million quarter-over-quarter. We made additional strategic purchases to support production plans and to mitigate any potential supply chain risk. Work in process was $61.4 million, up $1.9 million quarter-over-quarter. Finished goods inventory was $291.6 million, up $0.9 million quarter-over-quarter. Finished goods inventory primarily consists of first tools under evaluation at our customer sites along with finished goods located at ACM's facilities. Cash provided by operations was $33.9 million for the fourth quarter. For the full year cash -- 2025, cash used by operations was about $10 million. Capital expenditures were $58 million for the full year 2025. For the full year 2026, we expect to spend about $200 million in capital expenditures. This continues -- this includes continued investments in Lingang, including the mini line and the second production facility, fixed assets for the business and investments in Oregon, along with other items. That concludes our prepared remarks. Now let's open the call for any questions that you may have. Operator, please go ahead. Operator: [Operator Instructions] Our first question will come from the line of Charles Shi with Needham & Company. Yu Shi: I believe you gave pretty good color on shipment versus revenue growth this year. So I have a question since you mentioned about new products probably going to be a bigger driver this year for growth. And wonder if you can give us some color, let's say, excluding the new products, what's the growth, either shipment or revenue is expected to be excluding all the new products for the -- maybe -- I think maybe I'm talking about the existing product lines in cleans, plating, et cetera. David Wang: Okay. Okay. Thank you, Charles. And actually, you know that we -- as we said, we made quite a big progress, right, in the SPM process. Generally speaking, SPM, product SPM represent 25%, 30% of the cleaning market. And this market in the last couple of years, were not much touched so much. And as I said, last 2025, we made a very good progress both into the special module design for the high temperature and also Tahoe product. So we're getting to very aggressively into this market. And again, this is a very high-margin product and also a lot of customers, both in the Mainland China, also outside China, they suffered the particle issue with this high-temperature SPM process. And we think with our proprietary design model, we can control a very good environment, so therefore, can be -- will reduce particle size. So that can be really enhanced our market growth in cleaning. Secondly, I want to see that is our N2 bubbling proprietary bubbling wet etch technology is really critical for the 3D NAND silicon nitride etching process, which we believe our proprietary technology not only cover today's demand for 300-layer, we believe as people moving to 400 or even 500 layer will suffer this kind of uniformity on the wear top or wear bottom, right? So we're using large bubble and size. We also with our proprietary technology, we can make a very uniform and large bubble distribution in the tank. That will be really enhance the etching uniformity from the top to the bottom for the wear. So we believe that's not only demand in the market in China, we also see that demand outside in the global market, too. And third one, I also mentioned that is our supercritical CO2 Dry, we also made a lot of progress, right? And which is the past customer demo. We have 2 tools scheduled to be delivered in the first or second quarter of this year. We have additional interest in coming. Again, since the supercritical CO2 with our proprietary design, we got a capacity our CO2 chamber is about 40% smaller. So we believe that we're really providing customers a 40% reduction of the consumable cost. And that really also, again, right, driving this product not in the local, I call it China market, but also getting to outside China market. So with all this cleaning I call it add together, we believe also expansion in the future. This will probably represent even China, over $1 billion market potential for us to get in. So we're still very excited about our continued expanding our cleaning product in the China market, plus also give us really strong differential technology in global market, right? So that's for cleaning. And again, for copper plating, as I mentioned, we have a full set of the cleaning products, front-end, TSV, back-end, advanced packaging, including also this, I call it compound semiconductor. Plus recently, we just announced our panel horizontal plating, which we believe very, very key technology to driving for the panel size plating. This moment, everybody using vertical and copper plating for panel. We are the first one in the world so far doing horizontal plating, right? With our different technology, we believe probably most likely, we're the only one in the market to drive another horizontal copper plating. So this year also, we see the bigger interest, not only in the China market, we see also a lot of interest coming in for us to deliver this tool. So with that, all new products in our existing cleaning, copper plating can drive a lot of revenue this year, including next year, right? And then plus, as I said, our other Furnace and PECVD and also Track business, we are developing for the last 4, 5 years, really made a lot of technology breakthrough, too. So we believe those technology getting this year start getting market, and we're real sustaining our next 3- to 5-year growth. And which you know that last 3, 4 years, our major growth has come from cleaning and copper plating. And next few years, we see this new product coming will definitely strengthen our highgrowth profile in the next few years. So we are very excited, very try to execution our strategy to continue to grow our revenue. Charles? Yu Shi: Maybe a question on profitability. So you reported last year, you gave some color about this year. But I believe if my math is right, your operating margin will compress last year from maybe close to 26% in '24 to 16% in '25. But this year, based on your -- what you guided about gross margin, what you guided about R&D, SG&A, it doesn't look like operating margin can rebound. It feels like operating margin probably more or less the same or even coming down a little bit depending on how the gross margin trends for the remainder of the year. So I wanted to get some sense how -- what's the reason for operating margin being under pressure for almost 2 years? And how do you plan to address this and maybe try to expand the operating margin from here? David Wang: Yes. Actually, that's this way. Looking at gross margin, right, we are the probably top of the equipment company in China, right, for gross margin, right, for the last few years. And as you said, Q4 of -- Q4 last year, we do see our first time gross margin is lower than our range, 40% to 48%, right? As we explaining maybe 3 factors. One is the product mix. We have 1 or 2 products, which is a semi-critical tool, do have pressure from the competitor for pricing there. The next one is really this inventory provision. But we think this year, as we are new product coming, as I mentioned, the 3 products coming will definitely enhance our margin. And also our inventory provision, we believe will be also greatly reduced too. So with that, we still have confidence we're in the 42% to 48% gross margin in this year or beyond. And more than that is, as you said, we put quite a bit of R&D last year, right? It used to be R&D 13%, 14%. This -- last year, we're getting to 16%. We probably will keep that number in a way. Why? The next few years, AI is driving a lot of demand for the new technology. And everybody else, first tier company outside China, all people put a lot of R&D. And so we'll continue to invest that, which we know will impact a little bit our operating margin, but it's worth to spend money now. Why? I said the opportunity is there, right? And a lot of customers real demand for the new technology, which I believe a lot of AI technology today even not invented yet. So it really give ACM a good opportunity with our, I call it our innovation power, our different technology, development capability, we can use this AI trend, we catch a lot of new technology and also catch the customer. This horizontal plate is one good example, for example, right? So again, and it's worth to spend more R&D and even get a few percent of the operation margin lower, which is a real long run, and we're working for the investor interest and also the growth ACM market into the next few years. Mark McKechnie: Yes. David, I might add a few things. I think that was a good overview. But Charlie, I think kind of summarizing it up, we're spending into the $4 billion market opportunity. There's a number of products that -- areas that we've been investing in that haven't scaled yet, but we expect them to scale over the next few years. It's the right thing to do to spend into that. You're right about the operating margin for 2026 kind of comes in at the mid-teen level, similar to what it was here in 2025. You move out a few years, our target is to keep those gross margins at that target range and then grow our top line faster than our OpEx. I think you can see some leverage in the out years. Operator: Our next question will come from the line of Edison Lee with Jefferies. Yu Lee: Congratulations on the results. I just have 2 quick questions. Number one is that for the fourth quarter, the margin is a little bit low and the revenue growth also is a little bit slow and then your shipment, I think, declined on a year-on-year basis. So how much of that is just product mix and seasonality? And when do you think these numbers will actually start improving in 2026? And then the second question is about the USD 111 million you raised by selling down ACMS. Can you shed some light as to how you would actually utilize that proceeds? David Wang: Okay. So let's answer your first question, right? I think that you look in the -- I just mentioned last couple of years, our major growth engine from cleaning and also copper plating, right? Even the cleaning, I said there's one important product, which is SPM process were not touched too much. As I mentioned last year, end of last year, Q4 last year, we made a significant progress with this special nozzle design. We believe our performance is outperforming and top tier as a tool. So we see that growth continuously, right? And so then I would say our cleaning, copper plating and also horizontal panel continue to expand, too. So that keep momentum. Our cleaning market probably today in China about 35% range. We're expanding to 50%, 60% in the next few years. And the copper right now, the 40%, I still say we'll try to catch 60% beyond market in China. More than that is those product -- different products, we see a very high interest from global top-tier customer. So that's what we also reinforce our sales outside China. So that's where I see the impact or boost our revenue for our existing product. But -- and also, I want to see that through the last 5 years, we are really working with differentiated PECVD and Track and also Furnace technology, which we believe a lot of new technology we are putting in and nobody had it before, right? So that's what reinforce our, I call, market position. And plus those tool really with our differential technology, we put a lot of time to develop IP, develop the road map. It costs a little bit long time than the other guys. So -- and now it's come the moment for the market. And plus, I want to see another bigger impact is, I call it improvement is last Q3, we started using Lingang mini line, which we do not have it before. that was really helping our internal demonstration, internal R&D speed. We see the bigger impact already. So that will be helping our tool mature before we ship the customer. So with altogether, I want to say this new growth from the existing and also our new product coming, we're driving ACM is real high growth profile in the year -- this year and in the next few years. So we are very confident. Plus even I say WFE market in China is flat, we can get a higher growth rate because of new product coming. And plus also, as you say, we have made a lot of progress in the global customer, this news announced today. We also see a lot of interest in coming to our different technology from top-tier customer because we have a patent has been locked the technology already. They almost have no choice. They have to come to us. anyway, so that's really exciting for our technology. We're really trying to push in our technology will benefit the international global customer for their AI challenges. Dave, anything you want to add on that? Mark McKechnie: Yes. Let me add on to something before you answer his question about our Shanghai stock sales. So Edison, for Q4, you probably remember last call, we mentioned that Q4 and the year -- the overall year came in at the midpoint of where we started the year, maybe a little bit better. And don't forget, we had 2 things. Our newer products didn't kick in, very little in 2025. And then we did have a customer push out from Q4 into 2026. And so that was kind of -- those 2 things that hit 2024 -- I'm sorry, the Q4. When you look out to 2025, we're expecting linearity pretty similar to -- I'm sorry, 2026, we're expecting our linearity to be pretty similar. So the first half will be about 42%, 43% of revenue. Second half will be 57% to 58%. But I would kind of anticipate Q1 at about 18% to 20% of the full year mix. Maybe, David, if you wanted to take this question, what are we going to do with the cash that we raised in -- or that we sold -- the cash that we sold. Yu Lee: Sorry, Mark, Mark, Mark, can you hear me? Mark McKechnie: Yes. Yes. Yu Lee: Before we move on to the use of proceeds, can you also comment a little bit on what you said about, I think, some products having some pricing pressure, which I think partially account for lower margin in the fourth quarter? Mark McKechnie: Yes. And there's not much to add to what I said there. Or what David and I have both said. There were a couple of semi-critical products that had particularly low margins that hit us in Q3 and Q4. And we -- David mentioned in the prepared remarks, he talked about the competitive situation in China. We are very focused on developing world-class tools. We think that there is also a bigger provision in the back half of the year. So we think that will be -- the overall provision for 2026 probably be smaller than it was in 2025, and it will probably be more balanced throughout the year. Yu Lee: Okay. David Wang: So you want me to touch the how we're using proceeds, right? Yu Lee: Yes. David Wang: Okay. Well, obviously, we have a second offering in China, right? Those money will be really focusing on R&D again, our expansion for their manufacturing. We have a second building will start decoration this year. So with that add together, probably we can manufacture $3 billion annually, which really give us a lot of room for manufacturing. And plus, we're also putting money in the mini line, as I mentioned, this mini line really speed up our internal R&D and debugging tool and also even can do the joint development with the customer process, too. So it's really well spend for those money. And the proceeds we got from the -- so the 1.3% from Shanghai here, definitely the major purpose for that was spending global customer, global marketing sales. So we see that opportunity really big in the global market. As I mentioned, we do have some differential technology might be the only solution for their AI challenging. So those products, we think will be really gather attention from the global customer. So we have spent money and building the international strong sales channel and also where we already had a Korea manufacturer base already. And however, with this geographic tariff going on, we have to really minimize the tariff impact, right? So that's why we started assembly tool in the U.S.A. So that will be real reduce our concern or any dynamic changing for those tariff will impact our revenue. So anyway, that's really what we work on. And our goal is very simple. We try to working with satisfy all regulation and requirement and maximize the investor interest, we're building a global sales, global company. That's our goal. Operator: Our next question comes from the line of Jimmy Huang with JPMorgan. Jimmy Huang: Can you hear me? David Wang: Yes, please. Jimmy Huang: Congrats for the good results. I want to ask about we deliver single-wafer cleaning tools to a Singapore gas foundry. What would be the potential size of shipments in terms of units or dollars this year or next year and next year? This is my first question. David Wang: Yes. Very good question. Actually, we have a few tools, we're in the installation process right now, right? This tool will be qualified and go in production this year. And with that, we definitely will induce more of a cleaning tool. And also, we do have a copper plating and in -- behind. So that really will give us exposure of product in the Asian market. And so this will be real making more of, I call it, confidence and also get a high interest from other players in Asia and the market, too. So we see this will be a bigger milestone and for us, and plus we're not only looking at the customer only in Singapore, and we do have a customer in Korea and also we have a customer potentially in Taiwan. So we have really confidence we should have expanding quickly in the Asia market. And plus, again, we're also very focusing on our U.S. market, too. We do have advanced packaging tool PO and receiving and we should deliver by end of this year. And we see a lot of potential going on in the U.S. market, too. Again, because today, all the memory or logic, they are AI driven for their advanced technology. ACM, I want to say I feel good technology we needed for their production line. We believe that will be beneficial for the customer and also can help expansion of market to global. So it's a great opportunity because, again, innovation is a key and every customer and every key customer, they all demand for innovation technology, which will probably fit our strategy. Jimmy Huang: Yes. Yes. So for Singapore business, how is the chance that we penetrate to Singapore gas memory makers in the next few years? And my second question is for advanced packaging. We are making great process. But for Taiwan, Taiwanese foundries and OSATs are leading the panel-level packaging for AI GPUs . Could we talk about our POP progress with potential Taiwanese players? Do we have any like order forecast or purchase orders in -- from Taiwanese potential customers? David Wang: Yes. Actually, we are talking to a few key customers, right, even the panel large size, 515 x 510. And also, we're talking about their 310 x 310, right, which is a true vision right now, people try to push in. So we have very good exposure to those customers. By the way, April 7, 8, we have -- we're attending the panel conference in Taiwan. In that conference, we do the keynote speaker about the horizontal plating and also our vacuum cleaning technology. So that's really a lot of exciting, I want to say, interest coming. And also, I said -- I heard everybody say panel product or equipment, they're probably satisfy all other products, except plating. So plating become a bottleneck for their production expansion. So with that demand, I said we are the only one supplying horizontal plating. You probably heard that is the one key player in Taiwan, they said they only want horizontal plating. They don't want vertical. So our horizontal plating perfect fit their strategy or their demand. So as I said, really, we see a big opportunity and with our panel product. Actually, we're not only trying to introduce so far 3 products, right, panel plating, vacuum cleaning and also the bevel. We can develop also additional coater, developer, wet etcher, cleaning all kind of wet tool we are putting in. So that's really what we catch this wave of the panel, I call shift, right, for the advanced packaging. So we're in a very good position for those coming panel, advanced packaging expanding. We're very excited about this opportunity, right? Jimmy Huang: Yes. But do you know like in which kind of periods, quarters it will be more clear that whether we will have any order forecast or purchase orders for this POP equipment? David Wang: Well, let's put this way, we announced that we do have also PO from outside Mainland China, right? I mean we said already. So you know what I mean here. So -- and then we're continually expanding more, right? So again, I want to say this year, we have a confidence cash additional PO for our bevel, for our vacuum cleaning and also for the horizontal copper plating, not only in Taiwan market, we also see the opportunity in Korea, also in Singapore, by the way. So it's very exciting. Jimmy Huang: Yes. Maybe I can squeeze in my last question about the investor FAQ that ACM has disposed a small portion of stake in ACM Shanghai. How do we think about more further such disposal in the future? You mentioned that U.S. international capacity builds will require more funding. Will we dispose more stakes of ACM Shanghai in the future? David Wang: Repeat the question again. I'm sorry. Can you repeat again? Mark McKechnie: He's asking, are we going to sell more of our ACM Shanghai? David Wang: I see. I see. Okay. We sold 1.3% already, right? And we got a proceed of about $111 million. And we do have both arms to raise money. We can raise in U.S., we can raise in Shanghai. We're very flexible for what we're choosing, number one. And at this moment, I want to say our Shanghai stock is still -- we think it's still undervalued, okay, with our growth. So we maybe consider what the money demand and the time line, also what's the stock pricing in Shanghai. We decide where or when we should sell additional or not. And plus, as we have silver arm, we can raise the money in U.S.A. So it's quite flexible for us to raise the fund. And at this moment, I want to say, obviously we'll continue investing more in global market, and we have no concern for those money where it come from, right? We are very confident. We also have another , another tool we can get the money anyway. Operator: Thank you. Seeing no more questions in the queue. Let me turn the call back over to Steven Pelayo for closing remarks. Steven C. Pelayo: Okay. Great. Before we conclude, I just want to give everyone a quick reminder on our upcoming investor conferences. On March 9, we will participate virtually in Loop Capital Markets' Seventh Annual Investor Conference for one-on-one meetings. On March 23 and 24, we will present at the 38th Annual ROTH Conference in Dana Point, California. Attendance at the conference is by invitation only. For interested investors, please contact your respective sales representative to register and schedule one-on-one meetings with the management team. This concludes the call, and you may now disconnect. Take care. Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.
Operator: Good day, and thank you for standing by. Welcome to the WSP Global Fourth Quarter and Fiscal 2025 Results. [Operator Instructions] Please be advised today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Quentin Weber, Investor Relations. Please go ahead. Quentin Weber: Thank you, Sarah, and good day. Thank you for joining our call. Today, we will discuss our Q4 2025 results and performance, followed by a Q&A session. Alexandre L'Heureux, our President and CEO; Alain Michaud, our CFO; and Chadi Habib, our CTO, are joining us this morning. Please note that this call is also accessible via webcast on the website. During the call, we will make forward-looking statements. Actual results could differ from those expressed or implied. We undertake no obligation to update or revise any of these statements. Relevant factors that could cause actual results to differ materially from those forward-looking statements are listed in our MD&A for the quarter ended December 31, 2025, which can be found on SEDAR+ and on our website. In addition, during the call, we may refer to specific non-IFRS measures. These measures are also defined in our MD&A for the year ending December 31, 2025. Our MD&A includes reconciliations of non-IFRS measures to the most directly comparable IFRS measures. Management believes that these non-IFRS measures provide useful information to investors regarding the corporation's financial condition and results of operation as they provide additional critical metrics of its performance. These non-IFRS measures are not recognized under IFRS, do not have any standardized meaning prescribed under IFRS and may differ from similarly measures reported by other issuers and accordingly, may not be comparable. These measures should not be considered as a substitute for the related financial information prepared by IFRS. With that, I will now turn the call over to Alexandre. Alexandre L'Heureux: Thank you, Quentin, and thank you all for joining us today. This quarter marks the end of a year of strong execution for the company. In early 2025, we unveiled a 3-year strategic plan called Pioneering Change for Empowered Growth. We completed strategic acquisitions, including Ricardo and TRC and delivered margin improvements with organic growth and strong cash flow generation. Let me highlight key points relating to our performance for the fourth quarter and the year 2025. First, as outlined on Page 5 of the investor presentation, Net revenue organic growth for the quarter stood at 5.9%, when excluding the impact of much lower volume of emergency response services in the U.S. versus the prior year and revision to significant projects in Canada in 2024. For the year, net revenues reached the high end of our outlook. And referring to Page 5 again, we delivered strong performance with combined mid- to high single-digit organic net revenue growth in Canada, the Americas, EMEIA, while the APAC regions continued to improve throughout 2025. Celebrating the first year of POWER Engineers under WSP, we are also very pleased with the company's performance with organic growth in the mid-teens in 2025. Second, on profitability, adjusted EBITDA for the year exceeded the high end of our revised outlook range for the year. We continue to execute on our margin expansion journey, delivering approximately 40 basis point improvement for the year. Third, I'm especially pleased with our cash performance. We delivered a record high free cash flow of $1.7 billion in 2025, representing 1.8x net earnings attributable to shareholders and significantly exceeding our 100% conversion target. Additionally, DSO at year-end stood at a record low level of 63 days, well below the lower end of our outlook. Before I turn to 2026, let me state how excited I am about welcoming TRC, a premier U.S. power and energy brand founded in 1969, long recognized for technical excellence and one of the most significant players in the U.S. with approximately 8,000 professionals. This combination will supercharge our Power & Energy sector by expanding our offerings across the entire value chain, adding amongst others, significant advisory, digital and program management capabilities and providing unmatched leadership in the U.S. Now turning to 2026. Let me start by saying that we entered the year with more optimism and confidence than when we entered 2025. This statement is supported by a few key factors and our strong outlook for 2026. First, with the closing of TRC and the recent acquisition of POWER Engineers, we have deployed approximately CAD 7 billion over the last 15 months in the high-growth, high profitability Power & Energy sector, making us the leading pure-play firm in that space in the U.S. and globally. Second, the market trends continue to provide a strong tailwind and demand for our services. Governments around the world continue to spend extensively on infrastructure, mass transit, airports, ports, water and environmental services, data centers, health care, power generation, transmission, distribution, and we expect the demand for our services to be robust in 2026. Third, and to complement my comments on market trends, we have finished the year 2025 in better shape than we started. The proposal activity level is strong across the business and our backlog, master service agreement and sub backlog are growing steadily. Let me now give you a few comments on our regions, further supporting our sentiment about 2026. Starting with Canada, we expect the region to remain an important growth driver in 2026, supported by strong market fundamentals and federal strategic investment that will all contribute to an already healthy backlog, which grew by 13.5% in 2025, an equally strong pipeline of opportunity in the year ahead. We are well positioned to execute on the broad mix of mandates with major clients such Hydro-Quebec, Toronto Hydro-Electric, Rio Tinto, Ontario Power, Agnico Eagle Mines while continuing to capitalize on significant transportation assignments, including our role on the Bradford Bypass expressway project and the recent announcement of the federal government and defense. With that foundation, Canada is positioned to deliver solid performance with mid- to high single-digit organic growth expected in 2026. In the Americas, we expect strong growth in 2026, supported by robust activity across the U.S. We are very pleased with the closing of the TRC acquisition on Tuesday this week, which combined with our existing Power & Energy business offers continued high growth, high profitability potential in the sector, which now represent approximately 1/3 of our U.S. presence. Overall, our sentiment towards our U.S. is positive. Our hard backlog stand at approximately 10 months of revenues, and our sub backlog amounts to approximately $8 billion, of which 85% comes from MSAs and framework contracts. Our pipeline of opportunities is also trending positively, up approximately 15%, 1-5, I said, versus last year. We continue to strongly focus on our global client program, which is developing a healthy pipeline of opportunities, up more than 50% versus last year. Of interest, our win rates increased by approximately 10% year-over-year, especially on top opportunities with the highest impact, reflecting a clear focus on securing high-quality needle mover mandates. We also see AI and cloud infrastructure as a durable multiyear tailwind. Here, our global footprint and breadth of services are positioning WSP as a preferred partner, notably for campus master planning, permitting, design and data center delivery. According to the most Engineering News-Record Global, Sourcebook, WSP holds the #1 position globally in data center design. Separately, in Latin America, the mining industry is providing healthy growth opportunities as well. Overall, the Americas is positioned to be a key contributor with mid- to high single-digit organic growth expected in 2026. Moving to EMEIA. We expect the region to continue contributing solid growth in '26. supported by healthy backlog and ongoing demand across priority markets, specifically in the U.K. Our pipeline of opportunities is also growing significantly, representing an increase of more than 25% since the beginning of 2025. Book-to-burn in the U.K. ended above 1, even as the regions delivered robust growth. Our win rate increased by about 25% versus '24 with new work secured in energy, water and defense, in line with our strategic ambitions. Our global client program also demonstrated success in the regions, especially in energy and more specifically, in the transmission space in electric and gas. Our backlog is supported by a steady flow of mandates, including major programs with National Grid in the U.K., recent win with EirGrid and EFG Energy in Europe and a growing backlog in the Nordics. With healthy momentum across the regions, EMEIA is well positioned to deliver continued success in the year with mid-single-digit organic growth expected in '26. Turning to APAC. We continue to see improving market condition in '25 and healthy backlog growth, especially in Australia and New Zealand, and our focus is on a return to growth as we progress through the year. We are entering '26 with tangible catalysts, including the Sydney Metro West Linewide contract, the Anderson precinct infrastructure mandate in Western Australia and momentum in New Zealand under the Roads of National Significance program. Taken together, the pipelines in Australia and New Zealand support a gradual return to organic growth in '26, and we expect APAC to provide an improving contribution to overall performance as the year progresses. In summary, we are confident about '26. And just after the first year of our 2025, 2027 strategic cycle, we are already on track to meet or exceed several of our '27 targets. This early progress reinforces our confidence in the strategy, the strength of our platform and our ability to deliver leading financial performance across the cycle. With that, I will now turn it over to Alain, who will talk you through our financial results and our 2026 outlook in more detail. Alain Michaud: Thank you, Alex, and hello, everyone. I'm pleased to report on our strong financial results marked by several achievements. Let me start with the top line. For the fourth quarter, net revenue displayed a solid performance and healthy underlying fundamentals. As Alex mentioned earlier, the organic growth for the underlying business in 2025 brought us to the high end of our financial outlook range provided in early '25. For the full year, revenue and net revenue increased by 13% and 15%, respectively, compared to 2024, growing to $18 billion and $14 billion, respectively. Canada, the Americas and EMEIA delivered a solid performance, and APAC is showing positive sequential increase in results. Backlog reached a record high of $17 billion, up 10% in the last 12-month period. Our pipeline of opportunities is strong as evidenced by Alex earlier. Moving on to profitability. Adjusted EBITDA for the quarter was $694 million, up approximately 9% compared to Q4 2024. Adjusted EBITDA margin stood at 18.9% from 18.7% in Q4 2024, driven by continued productivity gain. For the full year, adjusted EBITDA grew to $2.5 billion, up 17% compared to $2.2 billion in 2024. Adjusted EBITDA margin increased to 18.3%, up approximately 40 bps from 2024, in line with our strategic ambition. Of interest, we absorbed in our margin rightsizing and restructuring costs incurred to further strengthen our business, which reduced our margin by approximately 40 basis points. Accordingly, our margin growth in 2025 is actually 80 basis points. Adjusted net earnings in the quarter reached approximately $346 million or $2.65 per share, up 14% compared to the fourth quarter of '24. The increase was mainly attributable to higher adjusted EBITDA. And for the full year, adjusted net earnings reached $1.25 billion or $9.58 per share, up 23% and 19% from '24, respectively. As for our cash position, I'm very, very pleased with our cash flow generation in '25. Cash inflow from operating activities increased to $2.25 billion in '25, an improvement of $865 million versus '24. Full year free cash flow totaled $1.7 billion, representing 180% of our net earnings attributable to shareholders. This strong outcome reflects our ongoing focus on working capital management and optimization under our new ERP platform. DSO stood at 63 days as of December 31, 9 days lower than at the same time last year, marking a record low level. Net debt to adjusted EBITDA ratio was at 0.9x, slightly below our target range of 1x to 2x. The decline in our net debt to adjusted EBITDA reflects the higher cash balance from common share issuance, which has been used to fund a portion of the TRC acquisition. And following the closing this week, our pro forma net debt to adjusted EBITDA ratio stands at approximately 2.3x. As part of our ongoing review of our operation, we have disposed of a few non-core businesses in the last 12 months, including an underground storage business in the U.S. and our rail business in Germany. We have also, in the same context, discontinued operation in various areas in Asia and EMEIA notably. These activities represent approximately 1% of our 2025 net revenue. Regarding our ERP deployment, platform adoption continued its upward momentum in 2025 and early '26 with POWER Engineers now onboarded on the platform as of Jan 1, '26. We now have accordingly 80% of our EBITDA on a new platform with key regions to be onboarded in '26, including Australia and New Zealand next week, Sweden, Central Europe and the Ricardo. With a significant portion of our deployment completed, we are gradually increasing our focus on optimization, automation and deep business insights to enhance scalability and financial performance. Turning to our '26 outlook. We expect net revenue to range between $16 billion and $17 billion, which represents a total growth in net revenue of over 18% at midpoint of the guidance, adding $3 billion of net revenue in one single year. Also, as you assess our guidance, please keep in mind the recent disposal we just completed in the U.S. and the annualization impact of our various disposal and discontinued operation of '25, which had an impact of approximately $150 million on net revenue. We also expect EBITDA to range between $3 billion and $3.18 billion, which represented a growth of 21% versus '24 and both calculated at midpoint. Organic net revenue growth is expected to range between 4% and 7%. At midpoint, our EBITDA target range, we expect to deliver 40 basis points of margin improvement in '26. We expect Canada and the Americas to deliver mid- to high single digit, EMEIA to deliver mid-single digit, and APAC to deliver stable net revenue versus '25. For Q1 '26, we expect net revenue to range between $3.575 billion and $3.775 billion and adjusted EBITDA to range from $590 million to $630 million. From a modeling perspective, Q1 '26 is expected to have fewer billable days, which is expected to have an impact of approximately 1.5% on organic growth with offsets taking place in Q2 and Q4 '26. Emergency response services in the Americas reportable segment are expected to be consistent with the historical average level of inspection. And I would like to remind you that this outlook is intended to help analysts and shareholders refine their perspective on our performance, and it's been prepared in light of current foreign exchange rate volatility and our full year assessment, including our hedging posture. And also, our selected financial outlook does not include any acquisition transaction or disposal that may occur after today. The financial outlook includes a contribution from recent acquisitions, notably TRC and Ricardo. And on that, back to you, Alex. Alexandre L'Heureux: Thank you, Alain. To sum it up, we are confident in our 2026 outlook and the opportunities ahead. We entered the year from a position of strength. We run a resilient and diversified platform. We have a healthy backlog and pipeline of opportunities, and we remain focused on quality growth, operational efficiency and disciplined capital allocation. Today, I also wish to take a few moments with you to provide context on the topic that's top of mind for many of our investors and analysts. The rise of AI address the many speculative research reports being published almost daily and specifically its implication for WSP. While we acknowledge market sentiment, we feel clarification and perspectives are needed. In recent months, many actors have painted all professional services firm with the same AI brush, worrying that we are entering an era where advanced AI will replace firms like WSP. WSP recent share price performance was not immune to that sentiment. Artificial intelligence is changing the way we all work, and WSP is proactively embracing it as a productivity enhancer, but more importantly, as a value driver for clients. First, let's contrast WSP's business model with other consultancies and industries. Lumping all industries together is, in our opinion, an inaccurate way of considering the impact of AI. Our 83,000 experts design and manage complex physical projects, including bridges, transit systems, water treatment plants, energy facilities, environmental remediation and so much more. This work inherently involves the real world, physical material, on-site construction supervision, safety critical decisions, regulatory compliance and public stakeholder engagements. It represents service work that blends advanced domain expertise, inherent know-how, technical analysis, field execution, and professional judgment along with massive amounts of proprietary data, knowledge and experience that is not publicly available. In contrast, other industries to which WSP may be compared to largely operate in the virtual sphere. For instance, software-focused companies, organizations specializing in business process management and system integration. Their core activities typically center on programming, configuring systems, handling data and streamlining workflows. Much of their code, operational processes and consulting frameworks are accessible to advanced AI models. These distinctions are crucial when discussing AI impact and exposure. Large language models today are far better at automating digital, virtual and repetitive tasks such as coding, data entry and document generation that are performing deterministic tasks and providing guaranteed correctness in the physical world. In the engineering world, that simply cannot occur. Now let's discuss why scale and domain expertise matter. Our competitive moat is built on profound expertise in the physical sciences and engineering, coupled with decades of proprietary intellectual property and design standards and best practices that are not publicly accessible. Additionally, our professional accreditation, legal standards and obligation foster a high level of trust and establish significant barriers to entry. Projects often require collaboration with public agencies, communities and countless stakeholders while WSP reputation and relationship are crucial. In fact, technology often complement our services. Let me now delve into 3 aspects of our services where our scale and deep domain expertise set us apart and provide significant advantages. First, on the human expertise and the physical world front. Every project WSP tackles is unique. Today, WSP is the largest platform globally in its industry with the highest level of diversification and expertise. WSP works on 250,000 live projects, each different. Whether it's a transit line or coastal erosion protection program, our work is fundamentally rooted in understanding countless local and physical variables, geotechnical constraint, site conditions, materials, vibration, seismic factors, climate, community priorities, safety regulation, even politics and historical context. We must earn social license by engaging with communities and stakeholders, holding town halls, consulting indigenous partners and addressing public concerns. No algorithm can navigate city politics and replace these human dynamics. And AI can negotiate with the city council and a construction permit, and it certainly can take accountability in front of a professional board if something goes wrong. These are unique WSP roles that define our leadership. Second, every site and project is unique. By nature, infrastructure environmental projects don't lend themselves to one-size-fits-all solutions. We can't simply feed a prompt into a computer and get a turnkey design for a new highway interchange or climate adaptation plan, because the answers depends on the specific terrain, traffic patterns, stakeholder inputs, regulatory reviews, river flows and hundreds of other factors that most of the time, AI models do not have access to. In practice, our engineers must continuously adapt, be agile and use judgment. Unlike AI, they do not simply predict the most likely output based on data patterns. If a geotechnical survey reveals unexpected soil condition, something that AI models do not have access to, we redesign the foundation. If stakeholders raise concerns about a heritage site, we adjust the project plan, and if needed, collaborate on a redesign to protect what matters to the communities. Again, this type of information is not accessible in the database. AI can assist and support with scenario analysis, stress testing. For example, scanning through geotechnical data or suggesting design optimization, assuming the quality of the data is reliable, which is often, not the case. What it does not have is the situational awareness or mandate to make judgment calls. WSP does. Our expert combine technical data, sometimes with AI assistance with on-the-ground observation and stakeholder dialogue to get it right. This is why we say AI augments our capabilities, but is not a decision-maker in our field. It's an enabler to our expert, not a replacement. And third, safety and accountability are simply not negotiable in our industry. Our projects often involve public safety in a very direct sense. We must comply with building codes and environmental laws that differ from jurisdiction to jurisdiction. License engineers are those who can certify that a design meets all those specific codes and can be built safely. This is not just a policy, it's the law and the core value of our profession. AI-generated outputs are always subject to rigorous human oversight, thorough quality control and professional accountability. Our clients require us to stand behind our advice and design with substantial professional liability insurance and the financial strength of a strong balance sheet. Our machine in the middle approach means that while AI can support design or reports, our engineers review, validate and take responsibility for every outcome. This approach ensures we harness AI efficiency and applied strict quality management and risk oversight. To make this even more tangible, let's consider a few actual WSP projects and how they illustrate the indispensable human element in our work with AI as an enabler, not a replacement. The Eglinton Crosstown light rail transit in Toronto, Canada is a 19-kilometer light rail line we've been helping deliver through the heart of Canada's largest city. Think of the complexities, coordinating with city officials on permits, relocating utilities, managing traffic disruption, engaging local communities and businesses, ensure safety and dense urban construction and meeting rigorous city building codes. We do use digital twins and simulation models, some with AI components to optimize the design and construction schedule, but all those models are overseen by experienced professionals who know how to interpret the results and make judgment calls. The project has strong curve balls. For instance, unexpected soil condition only discovered on site had to be considered and our team had to quickly redesign support structure. Also, the Interstate Bridge Replacement in Oregon, Washington, U.S.A. is another project worth highlighting. WSP is a program manager for replacing a complex agent highway bridge between 2 states. Here, the challenges include navigating 2 states, regulatory regimes and federal approvals, designing for seismic resilience in a high earthquake zone and conducting extensive stakeholder engagement across multiple cities and transit agencies. We have, again, a digital model of the bridge that uses machine learning to stimulate -- to simulate traffic and structural performance under various scenarios. That's AI at work. But again, the use of that tool is led by our bridge engineers who ensure the design meets all safety margins and serve community needs. Importantly, our roles involve bringing together dozens of stakeholders, including state DOTs, transit authorities, federal regulators, port authorities and local communities to forge consensus on the solution. No AI negotiator is going to do that for WSP. It takes experienced professionals with years of cultivating relationship and fostering trust to work through concerns and requirements. I could go on. The story is similar in projects after projects. Engineers and scientific consulting in the physical world is fundamentally a domain expertise, a human creative and interactive endeavor. Consider the market drivers around us. The world is investing trillions in infrastructure renewal, energy transition and climate resilience. Those drivers are increasing demand for our deep domain expertise and scale. In fact, they often create complex problem that feed into the need for services. Governments are funding massive infrastructure and clean energy programs here in Canada, in the U.S., in Europe and in Australia, and those projects require exactly the kind of high-end consulting WSP provides. We don't see that demand diminishing due to AI. If anything, clients want to know how to incorporate AI and smart technology into their infrastructure, and they turn to us the domain expert for support and assistance. By leveraging digital and AI solution to augment our engineering and science expertise, we help clients achieve significant value through the asset life cycle, beyond the front-end advisory, planning and design phase, which is usually accounts for 5% of our project total cost. Again, it is important to note that for most of our clients, the decision made in the first 5% design phase have a massive impact on the remaining 95% of the cost of their assets, making it an area where investment and innovation continue to grow and be very strategic. The takeaway is clear. We're not complacent about technology impact. Instead, we are embedding digital and technology tools throughout our operation and client solutions. We fully expect that some task in design and consulting will be automated, and that is a very good thing. To the question, can AI design an asset on its own? The answer is no. AI can help with preliminary sizing and drafting, parametric optimization, code lookups, scenario generations, but it cannot guarantee compliance, verify safety, carry legal liability, produce deterministic proofs, ensure physical correctness, explain every step with guaranteed traceability, sign, seal the drawings, engage with the physical world and all stakeholders. As we are suddenly going from AI euphoria to AI hysteria in our space, let me leave you with a few key messages. First, I want to reassure everyone that the fundamentals and the market trends fueling our industry are intact and AI is a fantastic opportunity. We expect more work and we can now, for example, further leverage data through AI and digital enablers and generate more value for clients throughout the full life cycle of an asset. And with more value to our clients, we expect more value to our shareholders. Keep in mind that 1/3 of our platform benefits from the AI tailwind, including in the Power & Energy business, data centers, mining and advisory -- digital advisory that -- and these businesses are growing at double-digit rates right now. Second, our work is inseparable from the physical world. We all remember that. Third, our work relies on domain expertise and knowledge that is not readily available in the public domain, creating a significant barrier to entry. And fourth, scale matters to fully and safely leverage AI in a world of high stakes, complexity and uniqueness. Lastly, AI does not displace our work, it augments it. AI is probabilistic while our clients are expecting engineers and scientific -- scientists to be deterministic. It's a matter of safety and the stake are too high. We are super excited for WSP, its engineers and scientists. We see it as an opportunity because at WSP, we are not writing a single solution and selling it 1 million times. We are solving 1 million unique problems with bespoke solutions for each client, each site across 250,000 live projects. I would now like to open the line for questions. Operator: [Operator Instructions] We'll now take our first question, and this is from Yuri Lynk from Canaccord Genuity. Yuri Lynk: Just a follow-up, Alex, on AI. Can you talk a little bit about the AI, the partnership you launched with Microsoft almost, I guess, exactly a year ago. How that's evolved over the last 12 months? Alexandre L'Heureux: Yes. I think I've been talking a fair bit, Yuri. So I'll take a breather, and I'll turn it to Chadi, but in a nutshell, we're extremely pleased with the headway that we've made. And Chadi, perhaps you can talk about this partnership and the other ecosystem partnership that we have signed in the last 12 months. Chadi Habib: Happy to do that. Thanks, Alex. Good morning, everyone. Let me start off on the Microsoft [ our second ] year into it. We had 3 big objectives: enable one of the largest agentic and AI deployment for our frontline to make sure that they are front and center on how they use this stuff responsibly to deliver to clients, that is exceeding expectations today; number two objective of the partnership, is continue to work with Microsoft as a client in their data center objectives and that is also beyond our target for 2025. We closed out the year really well and are very positive in the pipeline going forward; and last but not least, if you remember, we had an ambition to co-create products, not just with Microsoft, but with what we call client zeros, where we co-create the future with digital and AI with clients to solve tangible problems. Two of our solutions have gone into production now with 4 clients, and we're looking for a general availability release in March. So very, very positive for Microsoft. But let me add, and this is part of our strategy. We talked to you about this about a year ago. Our approach is ecosystem. So beyond Microsoft, we've talked to you about start-ups that are innovating. So I'll give you some names about UrbanLogiq, Fathom. We're also working with other companies at scale. You would have -- you may have heard recently, we announced a very targeted partnership with Google in the transportation space. We're looking at offerings with Schneider in the Property & Building space, and we'll continue to expand. There's about 4 or 5 other discussions that are in progress essentially. Yuri Lynk: Okay. That's helpful. And maybe just expand a little bit on the data center work with Microsoft. I think they're looking at spending tens of billions of dollars on data centers. That's work that -- I guess you're a preferred supplier, you still have to bid on that work, but maybe just expand on how significant or not that is at this point? Chadi Habib: Just to clarify there. Microsoft is not the only hyperscaler that is our clients, right? So the tailwind for us is across all of the major hyperscalers, we're not exclusive with them. Having said that, across the board, every single one of the hyperscalers, as Alex mentioned, we're looking at double-digit growth in the mission-critical space because the demand, frankly, is beyond the capacity of the talent in the market and what's exciting. You'll hear this a lot from me in the coming months. What's exciting by the AI, it allows us to do things we could not do before and have more opportunity to serve the clients. So the -- to answer your question on Microsoft, we have a specific objective in the alliance, and we're tracking to the objective as the contract progresses as one of their preferred supply. Alexandre L'Heureux: And to be more specific, Yuri, there are many instances because of this partnership with Microsoft, where we are sole source and we don't have to bid for the work, obviously, because of our strategic -- being the engineer of choice with them. Operator: Next question today is from Devin Dodge from BMO Capital Markets. Devin Dodge: Yes. Alex, just thanks for the perspectives on AI. It's really helpful. Not surprisingly kind of sticking with the AI theme here. And maybe picking up on the last -- one of the last questions. But look, there's multiple AI start-ups looking to make inroads into the engineering consulting sector. I suspect you actually have dialogue with many of them. But WSP elected to go down the path of developing these tools internally and via those partnerships that Chadi just talked about. Just wondering if you could talk about the decision to build versus buy and why building was the right path for WSP. Alexandre L'Heureux: Before I turn to Chadi, I think it's a very good question. And to us, the AI strategy is part of a broader digital strategy. So for us, AI is only a subset of our overall strategy, and I'm pretty sure over the course of this call, we'll have an opportunity to briefly talk about our digital posture. But I think over time, the answer is it's going to come broadly, again, from organic growth, obviously, and we have been doing that from strategic partnership that we are going to continue to sign. If you recall in February of last year, when I unveiled the plan, I said expect WSP to announce and sign more ecosystem partnership. We think it's a great way to go. But as part of our broader digital strategy, I also said last year that, yes, you should, at some point in time, expect some acquisitions because it's a muscle that we're learning to flex right now and have been over the last 2, 3 years. So perhaps, Chadi, you want to complement what I said. Chadi Habib: Yes, I'd just like to also take a moment to just remind the 3 aspects of the digital posture, what Alex just mentioned. So number one is start with the clients, focus on the value that it creates for clients and proof point it with revenue. So that's our first aspect. The second lever of our digital strategy, and I'm going to answer your question in a second, is put it in the hands of our front line because why is this an exciting time for all of our engineers and scientists. Just like they've seen some massive evolution in the way they work with clients, this is another massive evolution that allows them to drive a lot more value to our clients. This is why we have one of the largest deployments across our industry in terms of putting it in the hands of the front line and investing in our proprietary models. The third aspect is ecosystem partnerships. And yes, they are both with large and smaller firms. I do want to highlight to you that for the small firms, one of the most valuable aspects, Alex touched on this, is domain expertise at scale. I think you all know this. These models compound with knowledge, knowledge across projects, geographies and volume. The start-ups do not have that. We actually get more calls from start-ups because of our access to that domain expertise than we approach them. So we are working with several. We have a non-negotiable, which is protecting our IP. And what you've seen from our announcements like UrbanLogiq and Fathom is we'll work with the ones that are willing to work with us on protecting our domain expertise while driving value to our clients. And in another cases, we're building internally our own proprietary models that are -- that will remain within our parameters so we can retain that IP and the value we bring to our clients. Devin Dodge: Okay. That's excellent color there. Second question, just wondering if the push to develop more AI tools and capabilities. Does that have much or any impact on your strategy for complementary resource centers? I'm just trying to get a sense of leveraging AI puts a bit less stress on the talent pools in your regions such that more work can be done locally. Alexandre L'Heureux: Well, my straight answer straight up answer to this is for as long as we remember. And you will recall all of you on the line today, numerous occasions where we had discussed the fact that there was a war on talent. Sometimes life is done in a certain way and it's natural evolution. I mean, there are many instances and many places in our business where we don't -- we are not in a position to recruit as fast as we would like to do it. Thus enhance the GCC strategic initiatives that we've put in place 10 years ago. But you look at Power & Energy sector right now, we are not in a position to recruit at the pace that we would like to recruit. So in that regard, the assistance of our GCC is paramount and also the assistance of technology is paramount for us to do more with less. So that's why we believe that technology augments our work. It's not displacing it and why we are feeling good about the future prospect of WSP in that regard. Operator: Next question today is from Ian Gillies from Stifel. Ian Gillies: Alex, I was wondering if you could talk about the interplay between revenue per employee, AI and I guess, the revenue model that you currently employ and how you see that evolving over the next 24 to 36 months or maybe not evolving at all because you're clearly comfortable with the way it is. Alexandre L'Heureux: Yes. Let me try to [ rebuke ] a bit of a couple of themes and points that you just mentioned. First and foremost, if you look back -- and I mentioned that in past analyst calls, if you look back the last decade, you look at the fee per employee that we have been generating in the last decade and you go back, whatever, 2015 or '16 and you fast forward today, and this is all publicly available information, you'll find that we have been increasing our fee per employee steadily over the last 10 to 15 years. I don't have the data with me, but it's certainly probably 80%, 70% higher today than it was 10, 15 years ago. So we have changed our model over time, and we have embraced technology. And we are running a tighter boats, and we are taking advantage of technology. So I do see the future to not be significantly different. We are going to continue to change. We are going to continue to embrace what's coming to us as an opportunity, not as a roadblock. And I'm highly confident that we are going to be -- we're going to continue between, as I just mentioned, our main platform, the GCC, the technology and AI to do more with less. Second point, and that may not be known by all of our investors and analysts, more than 60% of our work is fixed price. And for as long as you've known me, I've said we prefer fixed price. I preferred fixed price 10 years ago. I prefer fixed price 5 years ago. and I still prefer fixed price because it's an opportunity for us to provide more value for clients. Although there is place for time and material and there's a need for cost plus and time material in our space, this is not where you can create and innovate. And we see that as a true opportunity. So -- and we have seen fixed price going up over the last 10 years, not going down. Clients more and more are not looking for price. And remember that oftentimes, 80% of our qualification criteria are qualification-based or not price-based. So more and more, our clients are looking for a solution, are looking for an end product rather than a price. So we believe that this is going in the right direction. And if you ask me, I believe that it's just going to continue to evolve in that direction. So in that regard, I think this is not a revolution. This is evolution. And I think we're tracking extremely well. And our clients are looking for solution -- innovative solutions. So I expect to see fixed price going up as we progress in time. Anything else, Chadi, you want to add? Chadi Habib: Yes. Just to reinforce the impact of digital and AI with our clients, what we're actually seeing, think about a scenario where we're doing master planning or scenario planning for the client before we would do 5, 10 scenarios and optimize across that. Now with the technology we're leveraging, we're doing -- clients are asking us to do more scenarios, 1,000 scenarios. You have better impact on the run cost of the assets. You have better impact on optimizing the rest of the life cycle. So the reason we see in our digital posture, double-digit growth is because of these new tools and progressive clients, they're asking for more work to navigate the challenges that they have. So we're seeing a trend where it's driving more effort from our teams. Alexandre L'Heureux: I think the very important point that we all need to -- when we leave the call that we need to remember is this perception that people are not -- because we have not access to more technology that our clients are not asking more. What's happening right now, as Chadi just mentioned, is 10 years ago, with no technology, engineers were in a position for a certain price to do 4 or 5 scenario analysis. Today, for the same price, we can do more work and provide more efficient design and a better service. So they're not asking us to do less work at a lower price. What's happening right now is they want more. They want more data. They want more output. They want more stress test analysis. They want more scenario analysis. So I think what's happening is with the arrival of technology, and that has been happening for the last 20 years, we are in a position to provide better design but our clients are looking for more output, not less in that regard. Ian Gillies: That's very helpful. And maybe another question along different lines. The engineers you're hiring today maybe managers in 5 years' time or managing projects, larger projects 10 years down the road. And how do you manage the risk of making sure you're hiring enough people, embracing AI and balancing those things out? Because it feels like that's probably one of the more serious challenges in implementing all these items because people are a key part of your business. Alain Michaud: Thank you, Chadi (sic) [ Ian ]. Yes. So in the second posture of our digital posture is to make sure, internally, we equip our frontline. This is why I mentioned we have one of the largest deployments in our industry to get into the hands, both of our front line, and you hit a really good point, by the way. Leadership is as important as the front line, equipping them with what these tools can do. And by the way, it's changing extremely fast and keeping them up so that it puts them in the driver's seat on how they impact the future. We can't predict all the unknowns of all the industry evolution around this. But what our posture in terms of frontline professionals and leaders is put it in their hands, get them to innovate, and we're seeing some really exciting stuff with clients. And to continue to invest, so we stay in the driver's seat rather than having to react to these evolutions. So that's our current posture in terms of making sure our folks are there. The second thing I would tell you is we also have a lot of people moving into their well-earned retirement. Alex talked about this last year. We're building our own proprietary models that -- and this is another advantage of this technology. It allows us to take the brilliance of somebody who did a design in Toronto and spread it across the company within hours rather than historically, we would have had to have forums and meetings where they interact together. So I'll give you those two areas where we're leveraging AI to multiply our impact. Ian Gillies: And I must say this has been a nice break from asking about M&A every other question. Operator: Next question today is from Benoit Poirier from Desjardins. Benoit Poirier: Thanks, Alex and Chadi for the very thoughtful discussion on AI. Maybe the question for Alain. When we look at the free cash flow performance in Q4, very solid, driven by record low DSO pushing down leverage to 1.4x. So just looking at 2026, assuming DSO returns to the midpoint of your guidance, would it be fair to assume that free cash flow conversion would still be above 100%? And it looks like that you could be in a position to finish 2026 with a leverage more at the midpoint of the guidance of 1.2x, which could still open the door for M&A if conditions, permits. So just want to understand a little bit more about the potential leverage and free cash flow for 2026. Alain Michaud: That's a neat way to get to M&A, Benoit. Just to clarify, the -- our leverage pro forma now 2.3x, absolutely right with our deleveraging profile. We don't anticipate to decline. We're still targeting far beyond the 100% conversion target. We should be in the range of 1.6x, 1.7x by year-end next year. So the ambitions remain as solid as what we've done this year. ERP is helping us. I remind you, there's a couple of conversions this year, but things are pointing -- all pointing out in the right direction to deliver strong free cash flow still in '26. Benoit Poirier: Perfect. That's my only one and congrats. Operator: Next question today is from Maxim Sytchev, NBCM. Maxim Sytchev: Alex, just continuing on sort of the AI topic. I mean some of your service providers obviously work in a fully digital environment. And I'm wondering how you think about some of the potential cost-saving opportunity from your side when you're interfacing with service providers who deal on kind of like on a per seat basis. I'm wondering if you have any thoughts there. Alexandre L'Heureux: Just to clarify, Max, I mean, provider providing services to us? Maxim Sytchev: Yes, software providers because, I mean, I assume, obviously, you pay quite a bit in terms of the outlays for their services. And again, like if AI sort of gets better from your own sort of modeling perspective, I mean, how much need is required for some of the kind of the legacy software providers if there's an opportunity to extract certain concessions over time, which would be beneficial from a margin perspective. Alexandre L'Heureux: Chadi, you're leading the way on that front. So maybe you have a view on this. Chadi Habib: Yes. Let me kick it off in a couple of areas. First of all, there are sort of providers that are key to delivering the end services. So think about our modeling partners, think about our partners that help us deliver those work products. And we constantly co-innovate with them to figure out how to solve for some of those solutions. There are then more back-office partners, and maybe that's what you're alluding to, where we are seeing massive simplification. We're investing to automate, putting our platform that Alain mentioned in place, harmonizing the way we grab our domain data and protect it allows us to shed some of the costs that previously would have been necessary. Today, we can optimize and automate some of those things internally. And that will happen as we continue to optimize our functions, and there are several programs that are in play today to do that. And as we do that, if there are some software providers or providers that are giving us some services today that are not necessary, we work with them to optimize that cost structure. And that's an ongoing process, by the way, well before AI and post AI. Alain Michaud: And if you recall, Max, when we unveiled our strategy, we talked about the different levers that we have to improve our efficiency and levers we have now in front of us with the ERP with AI coming in more tools, definitely to keep optimizing the back office to deliver better efficiency and simplify the life of our frontline people as well. Maxim Sytchev: Okay. Makes sense. And then one sort of fundamental question. I think IIJA money has to be allocated by September, October time frame. Just wondering if you think actually most of that capital is going to be -- actually going out of the door and any impediments to that potentially not happening and how that could impact kind of 2027, 2028 run rates in the U.S. Any color would be helpful. Alain Michaud: Yes. What we hear, there's more to come on that, Max, but you're right, IIJA expires third quarter of '26. But the Congress and the administration is working hard now on what's called the next surface transportation reauthorization. And what we're hearing through the grapevines there is -- there's lots of focus on the back-to-basic infrastructure program, transportation, public safety, public transit safety and the like. So it doesn't feel like less investment, but certainly more focused investment in more of the basic transportation space, which, frankly, is right in the middle of the alley for us. So more to come, but it feels like there's going to be continuation of investment as we read it right now. Operator: Next question is from Michael Tupholme from TD Cowen. Michael Tupholme: I didn't want to just sort of pivot back to M&A, but in a different fashion than perhaps we're used to talking about it. The question ties into the AI discussion that you provided Alex and Chadi. So I'm just wondering if you can talk about how, if at all, accelerating adoption and use of AI in the engineering services industry may affect WP's M&A strategy and the types of targets you're interested in. Alexandre L'Heureux: Look, it's a very good question. 10 years ago, I was not talking about our digital posture. I was not talking about our digital sector as a P&L. We've done that 2 years ago. And as Chadi expressed and can talk about, we are right now growing at double digit in our digital P&L, our digital sector. I think the way I would characterize what the question that you asked, Michael, and the way I would answer it is as part of my review of potential targets now and as we're entering due diligence, and TRC is a perfect example of that, we are paying way more greater attention to the complementary fit of the target digital offering. I'll give you an example, TRC, which we announced 2 days ago. During due diligence, we spent an enormous amount of time talking about their digital posture, their digital strategy, their digital offering. Today, if I look at the TRC business, they probably have USD 150 million of digital offering in the power space, so intelligence grid solution that Chadi can talk about as an example of that. Well, it's $150 million out of $1.2 billion. So you may say, well, it's only 10% or a bit more than 10%, but we spent an enormous amount of time with the leaders there to see how we can double-digit grow that business. And with our network and the fact that we have a network around the world, how can we leverage this in Australia, in New Zealand and elsewhere. And I can tell you that we're super excited about that. Do you want just to briefly talk about it? Chadi Habib: Yes, I'll just add a couple of things. Again, if you consider Power & Energy, mission-critical, the growth, our digital offerings and the criteria we look at from an M&A point of view, I just want to make sure I come back to this notion, domain expertise at scale is the differentiator. I'm going to say something controversial. The AI models are getting actually commoditized. If you listen to any of their webcast in the recent months, they're all talking about how we integrate domain expertise. We actually get more calls because of our domain expertise in order to create value. These models need that domain expertise. So if we look at the criteria of M&A going forward and what's exciting about what comes with TRC or what came in power is these folks don't master technology, just technology. They master technology in the context of transmission, distribution, generation, renewable energy, and that's where we think we drive massive value to clients. Alexandre L'Heureux: And again, to reinforce the point, Michael, technology player coming in the power sector with no domain expertise or the Big 4 coming in or the major IT consulting firm coming in the power sector with not having the domain expertise, they're missing 75% of the solution. So again, to reinforce Chadi's point, we are getting more calls from technology players than we are making calls. to support them because they don't have what we have and the proprietary knowledge that we have in the power sector, for example. So we honestly see this as a tremendous opportunity in the years to come for WSP. Revenue streams that 5 years ago did not exist for us. So it's a very, very exciting time, and that's why I talked about euphoria and hysteria. We need to be balanced here and compose and let us prove the point to you. Operator: We'll now take the next question. This is from Jonathan Goldman from Scotiabank. Jonathan Goldman: And Alex, thanks for setting the record straight. But maybe if we can do a diversion to maybe some less topical items. Maybe, Alex, if you could just elaborate on what gives you confidence in the U.S. business that we can see a reacceleration of growth this year. And I was also interested in the -- I think it was 10% increase in win rate. I was wondering if you can talk about what's driving that performance? Alexandre L'Heureux: I think what gives me high confidence in the U.S. business and frankly, our business globally at the moment is really the proposal activity level that we see. And to my earlier point, though, the win rate, I think we have a very clear strategy right now on client. That has been the focus of our 3-year plan. We spent most of 2025 setting up the business for future success. We have developed a very, very strong global client program and diamond client program where we see the growth on those high-impact clients growing at a faster rate than the rest of our business, and we see this paying off. So -- and also, we're -- we rarely talk about the brand, but the brand that WSP has developed in the U.S. and elsewhere today compared to where it was 5 years ago. I mean, clients are looking to work with WSP. They're looking for domain expertise. And they're looking for professionals to provide the service, number one. What was the second part of your question, I'm sorry? Jonathan Goldman: I think you addressed both of them, but I do have a second question. Maybe if we switch to capital allocation, Alex, you alluded to kind of the share price at the beginning of the call in your prepared remarks. How does that change your view on capital allocation and whether or not you lean into the buyback more here? Alexandre L'Heureux: It's not changing my view because you cannot lead 83,000 people firm with a short-term view. We've always had a clear vision of who we want to be and what we don't want to be as a company. I've always had a clear strategy of where I want to take this business forward. And you cannot do this if you have -- you navigate and drive the company with a short-term view. I've always had a long-term view. We've seen the downside, the downturn in oil and gas in 2014, having a huge impact on our stock price at the time. At the beginning of COVID, if my memory is not failing me, our stock price was at $94, it went down to $50 and went back up. We have faith that our investor base understand our business model. I have faith that our Board, our management team and our investors understand where we want to take this business forward. And in the last 2 years, we've deployed $7 billion in the high-growth, high profitability Power & Energy sector. I'd like to think we've been more opportunistic and more strategic than anyone else in our space. And I'm saying that very respectfully and very humbly. I'm just proud of what we've done. And I remember the second part of your question, why I'm so confident about our U.S. business. Well, we've transformed our U.S. business in the last 60 months. 2 years ago, we had 350 people in the Power & Energy sector. Today, 30% of our top line in the U.S. alone and more than 20% of our business globally. I think we have deployed capital in high-growth, high profitability sector, and I don't expect that to change. This week, I spent the week with our leader in mining. We are the largest mining consulting firm in the world. And we really think about the need when we talk about the rise of AI, the need for precious metal for copper and how uniquely positioned WSP is to cope and to service clients to deal with the world needs. So overall, I'm very, very pleased. And I think it would be a mistake to react to short-term views. We know where we're going. We're busy dealing and servicing our clients to deliver a backlog. And I feel that if we do a good job with our clients and we create an exciting time for employees, the stock price will take care of itself. So I don't have right now a desire to change our strategy and our view at this time. Operator: Next question is from Sabahat Khan from RBC Capital Markets. Sabahat Khan: Maybe just bringing some of the color sort of together on this sort of topic around customers and how you're engaging with them. Maybe just at a high level, are you able to share some thoughts on when you sort of go into the customers, kind of their -- how is the conversation starting around AI? Is it more you bringing to the table what you can do for them? Is it them asking help with implementation or leveraging AI for projects? Just maybe you can walk through how the conversations at the customer level are going today and sort of the ask that the customers are making. Alexandre L'Heureux: Our clients, and I think we touched base on that in numerous occasions, Saba, this morning. Our clients are looking for domain expertise and to help them support embedding technology in the assets that we design. They are not the expert. Otherwise, they wouldn't be calling us. They're calling us and say, look, we see all that technology coming to market. How should we be thinking about technology? And how do you believe we should be integrating that technology in the assets that we wish to invest in? And perhaps, Chadi, I can turn to you. Chadi Habib: Yes. I'll take the opportunity to make it very tangible. So if you think about the physical world coming with the virtual world, nobody knows more about the physical world than we do. And I'm giving you two examples. We are working with a country as we speak today because I think everybody knows this. AI cannot do what it needs to do if the data is not structured, if it's not understood, if the domain expertise and the context of that data is not put in place. So I'll just give you a tangible project. We just worked on client reached out to us, not any other third parties to structure data that touches 150,000 kilometers of road, 35,000 kilometers of track, trails and 5,000 kilometers of rail. Why would they come to us, is because nobody understands that data and the architecture of that data for this entire country from a transportation point of view because before they can leverage AI to predict CapEx investments to optimize their run costs and so on, they need somebody to take that operational data and who masters that data and that context on those physical assets, and how it intertwines with the physical world around it, whether it's satellite information or geotechnical information better than WSP. And that's an active project. I'm giving you that project as an example, before extracting value from these solutions. Clients are coming to us and saying, okay, how do we extract value? We need somebody who knows the physical environment and the designs that have been done. So that's one example. Another example I'll give you tangibly is one of the premier cities in the world, we're working with them to build a truly live digital twin that allows them to make the right investments in the right places to impact the well-being of millions of people. So whereas historically, we do an environmental twin of physical layouts or 2, 3, 5, 100 variables. Today, we're talking about thousands of variables in 14 AI models that will cover things like air quality, that will cover things like water, biodiversity, marine, climate, putting it all together so that -- this specific city not only can manage in the short term, the outcomes, in this case, citizen well-being or optimizing capital investment, but do it over decades. And they're partnering with us because, once again, beyond the tech that underlines it, the understanding of that physical world and domain expertise is critical to them. So I want to just give you 2 examples to make it very tangible, Saba. Sabahat Khan: Great. And then maybe just sort of revisiting the commentary earlier around the U.S. and the IIJA and potential renewal. I guess just from your vantage point, are you finding particularly in the U.S., a bit more stability relative to last year and sort of these perspectives around either a renewal or some sort of an extension of the infrastructure investment program. Is that sort of based on what you're hearing from the clients either at state level or some of the federal agencies you work with? Alexandre L'Heureux: Saba, the answer is yes. Absolutely. We feel we're operating in a more stable, more -- may sound strange what I'm going to say, but more predictable environment than perhaps a year ago. Operator: We'll now take the next question. This is from Chris Murray from ATB Capital Markets. Chris Murray: And Alex, thanks again for the commentary around AI and the next generation of tools. I guess I want to maybe stay away from AI, and I've got some other questions. More about the guidance, I think, and EBITDA margin. I know it's something we've talked about. But right now, at the midpoint, we're looking at about a 40 basis point improvement. I guess a couple of pieces to this question. I mean if we look at last year, I think, Alain, you noted you really were on track for about 80 basis points year-over-year. 40 basis points seems a little thin. But can you just maybe walk us through any puts and takes that we may see about the high end versus the low end? It feels like between the IT platform, some of the AI tools, what you're seeing in backlog and the mix you would think that, that would be trending higher, but just any thoughts around how to think about the evolution of margin over the next year? Alain Michaud: Yes. Thank you, Chris. Extremely committed to our 30 to 50 bps a year. So some of the moving parts just to keep in mind, for example, recently completed the acquisition of Ricardo. That's -- they have a much lower margin, and that's a good thing. That's an opportunity for us to bring them to our level. But for '26, it is a 15 to 20 bps drag on our margin guidance. So that's to be taken into consideration. And for TRC, they run at a slightly lower margin than us, and we just closed the transaction. So we will now get into work and look at what we could do together better. So there's potential upside opportunity there. But for now, the 40 bps is what we feel is a realistic guide. But keep in mind the Ricardo drag. And keep in mind also, we've been -- if there's one thing that we're very proud of is you look at our margin track record for the last 3 years, it's beyond 500 basis points. So we will continue to push. You could sleep peacefully on that front. We will continue to push on making margin grow and build more efficiency in the business. Chris Murray: Okay. That's great. And then just one other question. And again, it's something that we haven't heard a lot of, but it seemed to come out a lot in different regions is resources. Can you just remind us or kind of maybe give us some more color on what you're seeing in the resource industry and the types of work you're doing right now? Is this sort of pre-feasibility study? Is this development work? So any additional color on how the resources business is evolving and what you expect over the next couple of years would be great. Alexandre L'Heureux: Yes. I just talked briefly about our mining consulting offering. I think we're feeling extremely good about it given the demand that are projected in the years to come. We are seeing and have seen in the U.S., gas, for instance, also increasing. So when we think about mining and resources, we are quite bullish about the future for our sector and for our business internally, but for the industry as a whole. Operator: Thank you. And there are no further questions at this time. So I will now hand the conference back to the speakers for closing comments. Thank you. Alexandre L'Heureux: So again, thank you so much for attending the call. I understand that there were a lot of you attending the call. And so we look forward to updating you on the performance of the company over the course of the next 4 quarters. And again, thank you, and I wish you a great day. Bye-bye. Operator: Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.
Ana Fuentes: Good evening, and thank you very much for taking the time to attend Gestamp 2025 Full Year Results Presentation on what I know is a super busy for many of you. I'm Ana Fuentes, M&A and IR Director. Before we begin, let me refer you to the disclaimer on Slide #2 of this presentation, which has been posted on our website and that set out the legal framework, under which this presentation must be considered. The conference call will be led by our Executive Chairman, Mr. Francisco Riberas; and our CFO, Mr. Ignacio Mosquera. As usual, at the end of this conference call, we'll open the floor for Q&A session. Now please let me hand the call over to our Executive Chairman. Francisco Jose Riberas de Mera: So good afternoon, and thanks for attending this call with us in this busy day. So moving forward, overall, 2025 has been a good year for Gestamp by year, which has been marked by a complex context with the global tariff war that is still alive with many regulatory changes in different geographies, but mainly in U.S. and Europe. A year also with the major OEMs realigning their strategies to slower EV adoption and also with a limited growth in terms of volumes everywhere, but in China or India. In this context, Gestamp has focused on delivering a strong set of results in 2025, taking action in order to align our exposure to EV programs in line with our customers and enhancing our balance sheet profile with more -- adding more flexibility and more optionality for us in the future and of course, also delivering in our commitment for North America in the frame of the Phoenix Plan. In terms of the market, in terms of global manufacturing of light vehicles in our footprint has had limited volumes, again, another year, but probably volumes which were better -- which have been better than initially forecasted. In fact, by February 2025, we were expecting volumes in 2025 to be very much in line with 2024. Then when the tariff war started in April, the forecast was reduced. But at the end of the year, final volume has been around 85.5 million. So that meaning around a 4% increase. So a growth, clear growth, but only driven by Asia. In fact, between China mainly and India, the growth has been around 3.5 million units comparing with 2024 and it's been again a decrease in Europe and also in this case, in this year in North America. So moving to Slide 6. And as mentioned, Gestamp has met all the 2025 upgraded targets. In terms of revenues, we have been below the market growth with Gescrap also performing below 2024 due to the lower prices of the scrap. But in this environment, we have been able to increase our auto margin profitability by 78 basis points, generating a very sound free cash flow of EUR 228 million more than guided. and reducing our leverage ratio to 1.4x EBITDA, which is the lowest since the IPO. So basically, a quite solid year, reinforcing our fundamentals. So that means focusing in increasing profitability and increasing our balance sheet strength. With more focus on revenues, some revenues at FX constant have underperformed the market. In fact, the light vehicle manufacturing in our footprint has increased by 4.1% while at the same time, Gestamp sales at FX constant has been reduced by 1.2%. So that means a 5.2% underperformance, only 0.6% underperformance if we exclude in this analysis, the China impact. By regions, in Europe, the overperformance in East Europe has been cash compensated some slight underperformance in Western Europe. Basically, in North America, we are in line with the market. We had some underperforming in Mercosur due to some specific problems of some of our relevant customers in that area. And in Asia, we have a clear underperformance in China, but in the rest of the Asian countries, including India, we have more than a 15% overperformance. In our revenues in a reported basis, we are below 2024 figures by 5.4% from EUR 12 billion reported revenues in 2024, we have this year EUR 11.350 billion in 2025. There is a decrease, which is mainly coming from FX impact versus euro in most of the geographies, but also due to some lower activity and also to some lower scrap prices. If we go to the Slide #9, during 2025, Gestamp has entered into different agreements with certain customers impacting our profit and loss accounts, mainly in the fourth quarter 2025 and around EUR 34 million positive accounting impact at the EBITDA level with an asset write-down totaling EUR 52 million regarding these programs. So overall, these both items generating a net EUR 19 million negative impact at EBIT level. So these are effects, which are linked to the realignment strategies announced by several of our customers, largely driven by a slowdown in their EV rollout plan. And of course, these settlements fall within the framework of Gestamp's ongoing constructive negotiations with customers and always preserving our long-term relationship with them. So moving to Slide #10. So basically, 2025 has been another year of increasing profitability without growth. Our EBITDA margin for the auto business has increased from 11.1% in 2024 to 11.9% in 2025. Even without taking into consideration the extraordinary impact explained before, this increase has been to 11.6%. So again, a very solid recovery of profitability in our auto business activities. And we have been able to increase this profitability because we have a very clear focus in different actions like cost reduction initiatives, trying to introduce all kind of flexibility measures, of course, this constructive customers negotiations and with a clear focus in delivering on the Phoenix Plan. Moving to the Slide 11 about the Phoenix Plan. For the second year of the Phoenix Plan, we have been able clearly to match the target. And in this case, the target was to achieve more than 8% EBITDA margin. And we have done it in a market, which has been much weaker than expected when the Phoenix Plan was launched. At that time, we were forecasting a manufacturing level in North America of around 14.9 million units of light vehicles, but the real figures in 2025 have been EUR 14 million. So that means almost 6% decrease in terms of volumes, in terms of car manufacturing in North America. In this context, in the full year with sales of EUR 2,241 million, we have been able to generate EUR 182 million EBITDA. So that means 8.1%, which means a clear improvement comparing with the 7% EBITDA margin we had in 2024. And that we have been able also to do it with a very solid result in the fourth quarter with more than 11% EBITDA margin. So -- and we have been able to do it with extraordinary Phoenix cost below the plan with EUR 16 million in terms of profit and loss account and EUR 30 million in terms of CapEx cost. And in terms of Gescrap, we had a year which has been the performance of Gescrap has been clearly impacted by the scrap prices evolution. The scrap prices have been going down month after month in Europe with a total decrease of 12% in the scrap prices in Europe, more than 20% decrease in China and a little bit more stable in U.S. So that means that our revenues in terms of sales have been decreasing by 6.8%, even though in terms of tons, we have been able to preserve a very good level of activity. But this continued decrease of the price of the scrap has forced our company to reduce the profitability in terms of EBIT from EUR 42 million EBIT in 2024 to EUR 28.3 million. So -- but we are expecting for 2025 the scrap of the prices to be stabilizing and even growing. So that means that the profitability of the scrap for the future should be able to recover. Apart of that, we have also made an important acquisition. In this case, the company Industrias López Soriano. With this acquisition in scrap basically in the Iberian Peninsula, we have been able to get ourselves introduced in a different sector, the sector of the Shredding and also in the sector that now we are an active player in the recycling of waste of electrical and electronic equipment. Okay. So now with this, now I hand it over to Ignacio Mosquera. Ignacio Vazquez: Thank you very much, Paco, and good evening to everyone. Moving to Slide #14. Let's have a closer look to our financial performance in 2025. We have reached revenues of EUR 11.349 billion, which entails a 5.4% decrease when compared to the EUR 12.01 billion from 2024. As we have seen before, revenue has been strongly impacted by ForEx in most of our geographies. In the auto business, at FX constant, revenues have declined by 1.2% year-on-year. In terms of EBITDA, we have generated EUR 1.307 billion in 2025, meaning an 11.5% margin and a 1% increase year-on-year. Excluding the Phoenix impact, EBITDA in absolute terms would amount to EUR 1.323 billion, therefore, an EBITDA margin of 11.7%. As a result of the one-off impacts mentioned before by Paco and higher amortizations, reported EBIT decreased by 6.2% year-on-year to EUR 546 million with an EBIT margin of 4.8% or 5% excluding Phoenix impact. Phoenix Plan aimed at restructuring our NAFTA operations, has had a EUR 16 million impact in P&L and a EUR 13 million impact in CapEx for the entire year. Net income in the year has been EUR 152 million that compares to the EUR 188 million reported in 2024, mainly due to an increase of depreciation and amortization levels and a higher interest expense due to increased exchange impacts in 2025. Net debt has closed the year at EUR 1.821 billion, therefore, a decrease of EUR 276 million on a reported basis. As for free cash flow, we have reached EUR 278 million in 2025, excluding the extraordinary impact of the Phoenix Plan or EUR 249 million as reported. To sum up, we continue to demonstrate our ability to perform strongly and strengthen our balance sheet in a challenging market environment together with a negative ForEx evolution. If we now move to Slide #15, we can see the performance by region on a year-on-year basis. Looking at each region in detail, revenues in Western Europe have decreased by 4.2% year-on-year in 2025 to around EUR 4 billion. Performance in the region has been strongly affected mainly by volume pressure in the period and to a lesser extent, the fall in raw material prices. In terms of EBITDA, it reached almost EUR 453 million, and EBITDA margin stood at 11.2% in the period, down from the 11.4% reported in 2024. Profitability in the period has been impacted mainly by volume drop with still limited operating leverage despite the flexibility measures, which have been taken. As we mentioned in our previous call, results of these measures will take some time with limited tangible results in the short term. In Eastern Europe, the performance in 2025 has been very solid, proving again our strong market positioning in the region. On a reported basis, during 2025, revenues have grown year-on-year by 1.2%, up to levels of EUR 1.925 billion, and EBITDA levels have increased by 15.4% to EUR 293 million. Eastern Europe region has been strongly impacted by ForEx this year. EBITDA margin of 15.2% is above the 13.3% reported last year. The reported -- the profitability improvement is mainly attributed to a better project mix, highlighting the strong project ramp-up in Turkey and the good evolution of the business in the remaining countries. In Europe, overall, considering both regions as a whole, we have managed to improve our profitability, partly due to the shift in the mix to Eastern Europe. In NAFTA, Phoenix Plan continues to show signs of improvement in the underlying operations with a very good EBITDA margin evolution in 2025 despite the underlying end market conditions and FX impact. Our revenues have decreased by 6.7% year-on-year, while EBITDA has increased by 7.8% if we exclude Phoenix impact of EUR 16 million in full year 2025. This higher EBITDA in absolute terms leads to an EBITDA margin of 8.1%, improving last year's profitability and also slightly surpassing the target we had set of 8% for 2025. As you all know, turning around the operations in NAFTA to improve our market positioning and profitability is at the top of our priorities, and these show results and the profitability achieved in Q4 sets the way to achieve the target of a 10% margin in 2026. In Mercosur, 2025 has been marked by the ForEx evolution in Brazil and Argentina, leading to lower revenues in the period decreasing by 15.7%. Despite the revenue decrease, EBITDA has increased by 4.9% year-on-year, leading to an 11.8% EBITDA margin versus 9.4% last year. We have been able to improve our profitability in 240 basis points, thanks to the flexibility measures and the turnaround of our business in Argentina, where last year, we did some restructuring. In Asia, reported revenues have decreased by 7.7% year-on-year in 2025 to EUR 1.823 billion within a complex and very competitive market environment. Our negative revenue evolution in the period is partially explained by the ForEx evolution in China. However, our performance continues to evolve very positively. Despite negative revenues evolution in the period, we have managed to maintain similar levels of profitability with an EBITDA margin of 14.5% for 2025, which places Asia as the second most profitable region for the group. Our approach continues to be focused on premium products in the region. We keep on working to gain positioning in this region, maintaining strong levels of profitability. Asian region remains a great opportunity for us, not only China, where we continue to develop these high value-added products, but also India, where we have undertaken new projects with a strong performance. Finally, Gescrap has seen revenues decreasing by 6.8% year-on-year to EUR 534 million as a result of the sustained decline in scrap prices, as mentioned before. As a consequence, EBITDA in absolute terms has decreased by 23.5% year-on-year, reaching EUR 39 million in the period. Overall, we have seen that our unique business model and geographic diversification has supported and driven our performance in a year marked by volumes volatility and lack of growth. Turning to Slide 16. We see that we ended 2024 with a net debt of EUR 1.821 billion, which is EUR 276 billion below the EUR 2.97 billion reported in December 2024. This EUR 276 million decrease includes dividend payments of EUR 111 million and cash in of EUR 220 million of minorities acquisitions, so M&A and equity contributions, mainly due to the transaction executed with Banco Santander earlier in the year. During the year, the company has generated a positive free cash flow of EUR 278 million, excluding extraordinary Phoenix costs, surpassing significantly the updated guidance for 2025, partly due to one-off compensations mentioned earlier by Paco, which came in, in Q4. Moving to Slide #17. We ended December 2024 with a net financial debt of EUR 1.821 billion, which implies a net debt-to-EBITDA ratio of 1.4x, driven by free cash flow generation as well as cash inflow from the partial real estate asset sale of EUR 246 million. This is the lowest debt level since the IPO of the company, both on net level and on leverage ratios and complying with our commitment to be between 1 to 1.5x net debt-to-EBITDA target. As we have mentioned, our priority is to preserve our financial strength, and we remain disciplined over leverage in absolute and relative terms. Looking at Slide #18, we are proud to share the actions carried out during 2025 and that have been key to provide a strong balance sheet. Firstly, and as a reminder, in September, we closed our partial real estate sale and leaseback agreement of our assets located in Spain, strengthening our balance sheet. Secondly, in October, we closed the new senior secured bonds issuance that contributed to extend our debt maturity structure at a very attractive cost. As a reminder, Gestamp's new EUR 500 million senior secured bonds represent the tightest price callable bond by an auto parts issuer since September 2021 with a coupon of 4%, 375%, which underpins the debt investor support to the group. Further to that, in January, we executed an amendment to our syndicated facility agreement and our revolving credit facility, extending the maturity from 2027 and 2028 to 2030 and 2031. These 2 transactions have allowed us to increase pro forma average debt life from 2.6 to 4.3 years. We continue actively managing our balance sheet structure to strengthen it and flexibilize our financial profile. Finally, on Slide #19, we present the return on capital employed. We have managed to reach 15.8% return on capital employed in 2025, improving by 80 bps between 2024 and 2025 and by 180 bps since 2022 when we first released our new return on capital employed KPI. As we have made clear, Gestamp aims at remaining disciplined on CapEx investments and improving profitability. Our long-term strategy is focused on generating value for our shareholders. Thank you all. And now I hand over the presentation to Paco for the outlook and closing remarks. Francisco Jose Riberas de Mera: Thank you, Ignacio. So moving to the Slide 21. I would say that in terms of the market, nowadays, we are not expecting any growth for the market in 2026 versus 2025. And for the following years up to 2029 or 2030, we're assuming a limited growth of around 0.9% CAGR. In 2026, even though we are assuming a flat market, we are considering that the volumes in Europe will be stable with some decrease in Western Europe that could be more or less compensated by some increase in Eastern Europe. We see some increase in terms of volumes in areas like Mercosur and India. And probably we are now expecting a slight decrease for the first time in many years in China. In terms of the -- what we can expect for Gestamp in 2026, so basically very similar to what we have in 2025. So we see a market context in 2026, which means with a limited volume growth in our key geographies with, of course, still regulatory changes, especially in Europe, but also in NAFTA to happen with cost pressure expected coming from customers and also coming from the environment. And of course, some slower EV adoption, but probably with a little bit less volatility. So in this context, we will remain executing the same way we have done it in 2025, trying to base ourselves in kind of this execution of this solid backlog, trying also to focus ourselves in increasing profitability, even though we are not expecting any kind of volume increase. The idea is that we need to keep on improving the strength of our balance sheet and also increasing the flexibility of our balance sheet and of course, trying to focus in meeting the guidance for 2026. In terms of the backlog, at the end of 2025, we had EUR 47.5 billion backlog, which is covering more than 85% of the revenues expected by the group in the next 5 years. Solid backlog, but less backlog than we had 1 year ago because this has been impacted in terms of euros due to the negative ForEx and also it has been impacted by the rethinking of some of our customers of some of their EV programs. So basically, now what we have is a kind of a change in the backlog that we have because we have more content of programs, which are carryover with a less capital-intensive profile. And of course, we are using our CapEx in the future in a kind of conservative approach, trying to ensure the profitability and to be able to mitigate risk, but also to preserve some CapEx in order to be able to support the new customers and to support also footprint diversification with the new area. So again, I think, again, the message is the same. We are going to keep on in 2026 being very focused in working on profitability with a clear road map. The idea is to reinforce all kind of actions in order to have a very good control of all levels of cost, whether it's corporate division level or in the plant level trying to increase flexibility, trying to implement all kind of rightsizing of our operation whenever is required and trying to be more flexible and try to do our CapEx more in a steady basis. Of course, trying to be able to keep on moving with constructive negotiation with our customers and all the different regions and of course, also trying to be able to remain very focused in the third year of the Phoenix Plan, which is a very important milestone as I stated 2 years ago and which is going to provide our group to be able to get the profitability levels in NAFTA region equivalent to the rest of the group. In terms of the financial profile, and as Ignacio has already explained in the previous slide, by the end of 2025, we have been able to achieve a very, very solid financial profile, with a leverage of 1.4x net debt to EBITDA, which is the lowest since the IPO and mainly thanks to a very positive free cash flow generation during the last 6 years of more than EUR 1.4 billion. So taking all into account for 2026 in terms of the guidance, what's clear, the focus of the group is going to be to be another year of reinforcing our financial positioning. We are assuming a scenario in terms of market which is going to remain very flat. And in this environment of a flat market, we are guiding in terms of profitability, to be able to increase our EBITDA margin as a reported basis of more than 11.7% EBITDA margin in 2026. That means that we are guiding for an increase of the profitability in our auto market to be above 11.9% and in terms of Gescrap to increase also the profitability of more than 7.4% that we had in 2025. And in terms of our balance sheet, we are, again, looking for a less capital-intensive business profile. And what we are guiding is to have a good group operating cash flow conversion in the range of 35%. So that means that the operating cash flow defined as reported EBITDA minus the net cash CapEx. So again, clear focus in increasing profitability, a commitment to increase profitability in both auto business and Gescrap and improving our financial position by limiting our cash CapEx to the EBITDA that we are going to generate in this year. Moving to Slide 27. In the Phoenix Plan, the last year of the Phoenix Plan, the third year of the Phoenix Plan, we are expecting to complete the plant with a CapEx impact expectation of EUR 21 million and EUR 90 million impact in terms of profit and loss account, so a total of EUR 40 million. And in the total amount if we include the 3 years in the plan of EUR 100 million as guided 3 years ago or 2 years ago. And for 2026, we stress again our commitment to generate an EBITDA of more than 10% in 2026. And of course, a target that is right now very achievable in what we see and of course, a first stage in order to be able to increase the profitability of our North American operations to the level -- average levels of the rest of the group. So that's all with us. So message that full year 2025, we have been able to achieve very solid results in a difficult environment. For 2026, we are not expecting the market to recover, but we commit ourselves to increase our profitability and to increase also our financial profile. And of course, third year of the Phoenix plan, absolutely committed to be able to deliver. So that's all from my side and now open to your questions. Operator: [Operator Instructions]. And our first question came from the line of Francisco Ruiz from BNP Paribas. Francisco Ruiz: I have 3 questions, if I may. The first one is on your guidance for top line. I mean you commented that you do not expect any growth in this year, mainly also with deceleration in Asia. But mainly I still remember the old stamp when we talk about the -- I mean, the increase on growth above the market due to the increase of outsourcing. I mean, what is this driver? I mean it's already over. And on the other hand, I mean, could we think that the flat growth that the market expected and you are also assuming is because you are projecting nonprofitable projects that in the past you used to assume? The second question is a more modeling question. And if you could give us what's the split of the EUR 34 million extraordinaries in the different divisions -- and if this is something what we could expect also in the future or there are more contracts like this to be accounted in 2026 or '27? And last but not least is on the leverage. I mean, you are reaching a level, which is well below, I mean all-time low. What are you going to do with the cash, I mean, from here? Francisco Jose Riberas de Mera: Okay. Thank you very much for your questions. In terms of the revenues, in terms of the top line, it's true that we are not giving a clear guidance for that. It's true also that the market has not been growing in the last years. And also, we have been reporting in Europe, we have been quite impacted by the FX. In fact, we have made the analysis. And if we were to have the revenues in the kind of currency levels that we had in 2022, we are losing more than EUR 1.5 billion just because of FX because we are reporting in euros. For this year, we don't see a growth. As mentioned, the market is not assuming any growth. And of course, we are always planning that we will do our best, but we consider that it is better for us now to assume that we need to focus in profitability and rather just to be waiting for volumes to come back. So we are doing our job. We are assuming that the bad news are going to be there, and we are putting a lot of stress in the operations. As you know well, because you know us for years, we have been growing for many years. We have a very good position in the market. We have this kind of position with the traditional customers and also with the new customers. And that's why I feel very comfortable that our positioning and our market share remains quite intact. In terms of the leverage that you mentioned, I think it is true that we have reached this 1.4x, which is below all the different levels. I think for us, right now, the focus is in the cash flow generation. I think it's very clear for us. And what to do in the future with that is something that is not now our first priority. Of course, as we have already commented, the market that will have some opportunities. There will be some consolidation. There will be opportunities to increase the remuneration to shareholders. But today, it's very early. Today, I think the clear focus for us is to really focus on profitability and focus and generate a very sound free cash flow. You had another question around the claims. I don't -- I prefer not to provide you with data around what kind of customers or programs or regions. But I think I am quite positive surprised that even though customers are suffering, the kind of negotiations that we are having with them are very positive and I think are fair, not easy, but are fair. And I think the kind of this impact at the end of the day is no more than a compensation of the different expenses that we had in these programs and now these programs are canceled and the customers are doing a clear recognition of what we have been doing for them because they also want to preserve our long-term relationship. So I would prefer not to give you much more details, but probably there will be more -- a little bit more in the -- during 2026. Operator: [Operator Instructions]. And our next question comes from the line of Robert Jackson from Banco Santander. Robert Jackson: First question is related to your comments, Francisco, on the footprint diversification. Could you elaborate more on this comment, give us a bit more detail what the thoughts are on this outlook? That was my first question. Francisco Jose Riberas de Mera: Okay. So if I understand well around our footprint diversification, so that means that we are trying to, of course, to try to invest whenever the markets are growing. Even though, of course, we are trying to preserve our strength in terms of balance sheet. Probably in terms of the more clear bets in terms of growth is India. And India is a place that we are growing. We are investing. We are investing in opening new plants over there and also, which is something which was a kind of surprise to me, increasing in some specific high-tech technologies for that market. And we are growing a lot in areas like specific chassis solutions and also a lot in new hot forming lines. So India is a market that we see growth, and we are investing in that growth. Of course, in terms of growth, there could be other opportunities. There are other markets that we have a very good position like Brazil that we see still some room to grow, areas like, for instance, in Morocco that we are growing. But this is what we are expecting to do that. In terms of where we need to reduce in some extent our position, I think clearly, we are doing year after year some kind of downsizing of our operations in Western Europe. Robert Jackson: Okay. Second question is related to the NAFTA improvements. We saw a significant improvement in the rise in the EBITDA margin from the third to the fourth quarter. Is there -- what are the main drivers behind these relevant increases? Or is it just a general improvement? Ignacio Vazquez: Well, Robert, just to confirm, you're asking because we cannot hear you very well. You're asking about EBITDA margin drivers in fourth quarter? Robert Jackson: Yes. Yes. EBITDA margin in NAFTA, more specifically the improvement in NAFTA, in NAFTA, yes. Why is the NAFTA EBITDA margin increased so significantly. Just to get a better understanding looking forward into the next few -- into 2026? Francisco Jose Riberas de Mera: Yes. Well, I think, Robert, as you know, we usually have some kind of increase in the EBITDA margin in the fourth quarter compared with the -- that happened also in 2024. So it's in line with the trend that we have every year because we have -- and we have also this year some kind of agreements by the end of the year, for instance, when we are trying to be paid by the different agreements with customers around tooling and programs. So basically, it's a kind of trend that we have that we try to do this settlement and accounting of these agreements and negotiations with customers by the end of the year. So that's why basically we have this EBITDA margin in the fourth quarter more than the average EBITDA margin of the previous quarter, but this was very similar to the kind of evolution we had in 2024. Robert Jackson: Okay. I was just wondering whether there was any specific changes on an operational level, but you've answered my question. Operator: There are no further questions from the conference call at this time. So I will hand back to the management team. Thank you. Ana Fuentes: Well, thank you for your time today. We hope the call has been useful. And as always, the IR team remains at your disposal for any further questions you may have. Wishing you all a very [ good evening ]. Francisco Jose Riberas de Mera: Okay. Thank you. Ignacio Vazquez: Thank you very much.
Operator: Good afternoon. This is the conference operator. Welcome, and thank you for joining the Technip Energies' Full Year 2025 Financial Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Phillip Lindsay, Head of Investor Relations. Please go ahead, sir. Phillip Lindsay: Thank you, Maria. Hello, and welcome to Technip Energies' financial results for full year 2025. On the call today, our CEO, Arnaud Pieton, who will discuss our full year performance and business highlights. This will be followed by CFO, Bruno Vibert, who will discuss our financials. Arnaud will then return to the outlook and conclusion before opening for questions. Before we start, I encourage you to take note of the forward-looking statements on Slide 3. I'll now pass the call over to Arnaud. Arnaud Pieton: Thank you, Phil, and a very warm welcome to our 2025 full year results presentation. Before discussing the highlights, let me remind you of what truly sets Technip Energies apart. We are focused on delivering controlled quality growth underpinned by our robust selectivity-driven backlog and differentiated market positioning. We are frontrunners in energy and decarbonization, harnessing our distinct strength and driving transformation to unlock superior profitability. Our strong net cash balance sheet gives us real payout, and we consistently convert most of our profits into free cash flow. And as we execute our business strategy, channel capital into dividend growth and value-enhancing investments, we are accelerating value creation for our shareholders. Turning to the highlights. 2025 was a year of successful delivery. We demonstrated strong execution across our global portfolio. We strategically positioned the company for sustained profitable growth. And through some disciplined capital deployment, we enhanced our earnings quality, reinforcing the resilience and stability of our business model. In terms of headline figures, 2025 marks our strongest year yet with revenue and recurring EBITDA both rising by 5% to reach new highs at EUR 7.2 billion and EUR 638 million, respectively. Both our business segments delivered year-over-year growth in EBITDA with a robust performance for project delivery and solid margin expansion in EPS to above 14%. Free cash flow, excluding nonrecurring items, increased by 5%, reaching EUR 578 million. And consistent with our capital allocation framework, we are proposing a dividend of EUR 1 per share, up 18% and a EUR 150 million share buyback program. In summary, a solid 2025 that sets a strong foundation for us to achieve our growth objectives. Let me turn now to our execution, beginning with project delivery. Our portfolio continues to demonstrate the power of replication, modularization, digital tools, and we are executing with disciplined management of scope, cost, and risk. To provide perspective into the scale of our operations, at T.EN, our workforce now exceeds 18,000, yet we take on responsibility and care for more than 100,000 across our sites. In 2025 alone, we surpassed 320 million worked hours with zero fatalities. We strive to be the industry's reference on safety. Operationally, across our major projects, we achieved strong progress on LNG execution, including NFE and NFS in Qatar, advancement towards completion of key downstream and petrochemical assets, and solid early progress on decarbonization projects, including Net Zero Teesside and Blue Point No. 1. This performance reflects the culture of operational discipline that defines Technip Energies. And as you know, excellence in execution is the cornerstone of our value proposition and a prerequisite to our continued commercial success. Staying on the execution theme, but now spotlighting TPS, an important component of our equity story. In 2025, TPS delivered solid EBITDA margins, advancing by 140 basis points year-over-year to more than 14%. This improvement was driven by a strong performance in our product activities, including ethylene furnace deliveries. Furthermore, catalyst supply and strength in project management consultancy also contributed to this margin expansion. What this performance clearly demonstrates is the potential of TPS to drive margin accretion and improved quality of earnings for the group. 2025 was further distinguished with the completion of our first major acquisition. This transaction exemplifies our disciplined capital allocation strategy to enhance our technology and products offering. It extends T.EN's capability across materials science and the catalyst value chain and enhances our ability to deliver high-performance process critical solutions to our clients. With around 70% of its revenues tied to operating expenditure, AM&C materially expands our TPS offering across the asset life cycle. In terms of financial impact, we closed the transaction on December 31, and the cash outlay is reflected in our year-end balance sheet. As a result, TPS will benefit from a full year contribution in 2026, which we anticipate exceeding EUR 200 million in revenue with EBITDA margins of around 25%. In summary, AM&C is immediately accretive and accelerates our TPS growth strategy. It benefits from positive long-term market trends and establishes a strong platform to unlock further value for our stakeholders. Let me now turn to the significant announcement made yesterday, the award of North Field West in Qatar. This major EPC contract builds on our FEED engagement and incumbency in the NFE and NFS projects, which are under execution. As we embark on this next phase for NFW, we will deliver 2 state-of-the-art LNG trains, each of 8 million tonnes per year. The project will benefit from something we like very much, replication and consistency in train design, plus it will leverage construction synergies, ensuring efficiency and excellence in execution. The facility will also be complemented by a fully integrated carbon capture system. With this award, Technip Energies has 82 million tonnes per annum of LNG under construction globally. It further strengthens our medium-term visibility and solidifies our leadership in LNG. Before I hand over to Bruno, let me briefly reflect on our sustainability journey to 2025 and the launch of our new roadmap to 2030. Sustainability at T.EN is a core element of our strategy, our culture, and our value proposition. And 5 years into our journey, we can be proud of our progress on many fronts, including the reduction in our Scope 1 and 2 emissions by 46%, our work on human rights and a material gender diversity improvement in our organization. Looking ahead, our journey is evolving. We have enhanced our strategy and developed our 2030 scorecard. It is more business-oriented and further integrate sustainability as a core driver of value creation. This new scorecard, which features in the appendix of today's presentation, aims, in particular, at delivering impact through continued innovation. With that, let me now hand over to Bruno to walk you through the financial performance in more details. Bruno Vibert: Thanks, Arnaud, and good afternoon, everyone. Technip Energies delivered a year of strong execution and high-quality growth in 2025. Turning to the highlights. We achieved record revenues of EUR 7.2 billion and recurring EBITDA of EUR 638 million, both metrics up about 5% year-over-year. The growth was driven by a notably strong performance from project delivery and robust margin in TPS. For reference, in Q4, in acknowledgment of the strong performance delivered, better than expected really, we recorded a supplemental EUR 20 million expense for bonus payments to our employees, which was pretty much evenly split between business segments. This momentum translated into a 4% year-over-year increase in EPS, excluding nonrecurring items, despite lower net financial income. Our strong operational performance also drove healthy free cash flow generation with more than 91% conversion from EBITDA, excluding nonrecurring items. These results provide a solid foundation for continued shareholder returns, which I will discuss later. After the completion of the AM&C transaction at the end of 2025, we maintain a strong balance sheet with net cash adjusted for project-related cash of approximately EUR 1 billion, providing us with significant flexibility for capital allocation. In summary, our teams continue to execute well and deliver our leading financial performance. Turning to our segment reporting. I'll begin with project delivery, where strong growth continues. Revenues rose by 10% year-over-year to EUR 5.4 billion, fueled by major projects in LNG, decarbonization, and offshore, which are advancing through high activity phases. Execution remains solid as evidenced by EBITDA margins consistently in a tight range. Our backlog remains high quality and our margins best-in-class with medium-term upside potential as we progress on the execution of our portfolio. Finally, with some major awards shifting right in 2025, project delivery backlog has declined by 18% year-over-year to EUR 14.4 billion. However, as Arnaud will elaborate, our near-term award momentum is strong, and we anticipate an inflection that will reinforce our growth outlook. Moving to Technology Products & Services, TPS. The clear highlight for TPS in 2025 was margin strength with EBITDA margins up 140 basis points year-over-year to a new record of 14.3%. This was driven by strong performance in our proprietary product activities as well as favorable mix due to catalyst supply and project management consultancy. These margin gains more than offset a 9% revenue decline, impacted by low cycle for chemical as well as foreign exchange. Finally, TPS achieved a book-to-bill of 0.84 as strength in services awards was more than offset by lower T&P awards. As a result of this and FX, TPS backlog fell to just over EUR 1.5 billion. As a reminder, TPS backlog is typically understated by several hundred millions of euros as PMC work is booked only when called up by the customer. Additionally, the inclusion of AM&C, while not a backlog business, provides predictable recurring revenues and is expected to generate over EUR 200 million for TPS in 2026. In summary, a favorable mix driving strong profitability for TPS, and we continue to advance the strategic shift towards higher-value technology solutions and scalable product platforms that enhance the resiliency and earnings power of the segment over the cycle. Turning to other key performance items, beginning with the income statement. Net financial income totaled EUR 89 million, down EUR 30 million from last year, reflecting the downward global trend in interest rates. The effective tax rate at 29.7% was consistent with the upper end of our guidance. Net profit adjusted for nonrecurring items edged higher year-over-year. Notably, we delivered a robust 19% return on equity, underscoring the strength of our earnings relative to equity. Moving to other balance sheet items. Gross debt rose to EUR 1 billion, mainly as a result of commercial paper issuance to partially finance the AM&C acquisition. Commercial paper market conditions were particularly favorable as we were closing the transaction, offering an attractive arbitrage versus prevailing rates on our cash investments. In December, we fully drew down on the EUR 40 million facility from the European Investment Bank as part of the TechEU initiative. This loan supports our R&D in clean energy technologies, including the development of Reju. Finally, T.EN's economic net cash position adjusted for project associated cash is circa EUR 1 billion, ensuring flexibility to invest in value-accretive opportunities and deliver shareholder returns. Now let's take a closer look at our cash flows. Free cash flow, excluding working capital and provisions reached EUR 497 million, with cash conversion from recurring EBITDA at 78%. However, this is presented inclusive of nonrecurring items. If we adjust for nonrecurring items, which is a basis for our proposed dividend, cash conversion exceeds 90%. This reflects our asset-light business model, operational excellence, and strong financial income generated from our cash position. Working capital was a modest inflow of EUR 22 million for the year. As I've highlighted before, working capital inflows can be uneven, but are broadly neutral over the long-term as we have demonstrated. Capital expenditure represented about 1% of our group revenue, totaling EUR 89 million. Notable investments include the planned expansion of our Dahej facility in India and upgrade to our lab and office infrastructure. The integration of AM&C is not expected to materially change our capital intensity. Other items of note include the EUR 150 million in dividend distributed in the second quarter and the cash outlay associated with the AM&C transaction. We closed the year with more than EUR 3.8 billion gross cash. Before talking about capital allocation, let's review our guidance for 2026. Project delivery revenues are expected to be between EUR 6.3 billion to EUR 6.7 billion, with an EBITDA margin of approximately 8%. For TPS, we anticipate revenues in the range of EUR 2 billion to EUR 2.2 billion with an EBITDA margin of 14.5%. As a reminder, this guidance reflects a full contribution from the AM&C acquisition. Other items, including effective tax rate and corporate costs are consistent with the prior year. In addition, as we did for 2025, we have earmarked up to EUR 50 million to invest into adjacent business models, including Reju. Reju continues to advance on maturing its technology, site selection, and building the full ecosystem, positioning it for a possible FID by year-end 2026. Looking beyond our 2028 financial framework, I'm happy to report that we are trending comfortably ahead in establishing T.EN as an EUR 800 million plus EBITDA company, an ambition we first declared at our 2024 Capital Markets Day. Before passing back to Arnaud, let me address our capital allocation priorities and shareholder returns. With EUR 578 million in recurring free cash flow generation in 2025 and our balance sheet in excellent shape, we remain disciplined and focused on how we allocate capital. Our strategy is clear. First, we are committed to rewarding shareholders through dividend, distributing a minimum of 25% to 35% of recurring free cash flow. The proposed dividend today equates to a payout of circa 30%. Second, we prioritize value-accretive investments. This means actively pursuing M&A to grow our TPS segment and looking at adjacent business models that can enhance our quality of earnings. Additionally, when it make sense, we can and we will supplement these investments with share buyback as an additional means of returning capital to our shareholders. With the EUR 150 million buyback program announced today alongside the proposed dividend, we intend to return approximately EUR 300 million to investors in 2026, equivalent to about 5% of our market cap. And together with our ongoing ability to deliver sustainable earnings growth, this underpins the highly attractive total returns we can offer to our shareholders. With that, I'll pass on to Arnaud to discuss the outlook. Arnaud Pieton: Thank you, Bruno. Turning now to the outlook and how we see our markets evolving. The macro landscape remains complex, shaped by geopolitical shift and policy uncertainty. Yet the underlying fundamentals across our markets are strong and resilient. Energy demand is rising and plastics consumption is set to grow, while the lowering of carbon intensity together with circularity and products end of life responsibility remain central themes. As electrification accelerates, grid stability becomes crucial. Natural gas plays an indispensable role here. No gas, no grid stability and with no grid stability, no renewables scale up. The global energy system demands innovation and technical sophistication, qualities that T.EN delivers. The investment cycle in gas and LNG will continue well into next decade with focus shifting from oversupply concerns to risks of further future undersupply. A pragmatic decarbonization is essential and affordability is needed to drive adoption of carbon capture, cleaner fuels, and other low-carbon solutions. Circularity solves for more sustainable solutions, but also for sovereignty through development of localized ecosystems. And as we prepare this future through Reju and other industrial partnerships, T.EN will selectively target opportunities in adjacent markets, including nuclear. In summary, T.EN's engineering expertise and project execution enable us to deliver sustainable and economically viable solutions at the scale required for today's and tomorrow's markets. Let's turn to our near-term commercial momentum, which is exceptionally strong. Beyond the Qatar NFW win already discussed, our strength in enhanced replication is further illustrated by progression on Coral Norte floating LNG in Mozambique. Also this month, we confirmed a substantial contract to develop a 100 kPa plant to produce sustainable aviation fuel in the Netherlands for Sky Energy. Further cementing our leadership in the sustainable fuels market. For TPS, we have good line of sight for technology licensing and product awards in ethylene, hydrogen, and phosphates and expect to be able to confirm details in the coming months. When we consider awards already confirmed this year in SAF and in LNG, plus prospects anticipated to materialize in the near term, including Commonwealth LNG, this yields an inflection of new awards exceeding EUR 12 billion. This is equivalent to 75% of our year-end backlog. Beyond our near-term award potential, as shown in appendix, our global commercial pipeline remains strong and well balanced, and we anticipate reaching our highest ever annual order intake in 2026. Let me now put this into context with respect to our backlog. An important attribute of Technip Energies' equity story is the clarity and confidence afforded by our multiyear backlog. This is not just our base load. It is the foundation upon which we build sustainable free cash flow and our enablers for effective deployment of capital and the growth of TPS. It's what allows us to look to the future with certainty and ambition. We prioritize quality, not quantity. Through discipline and selectivity, we focus on opportunities where we bring differentiation. Project delivery is not a quarterly business. Lumpiness is inherent to this business and does not hinder our long-term progress. In fact, when we look beyond the quarterly fluctuations, we see a clear pattern of incremental growth in our backlog, reinforcing our long-term resilience. We are in a period of sustained structural demand for our capabilities. And with the strength of our near-term commercial pipeline, we are confident that 2026 will establish new highs with potential to reach EUR 24 billion of backlog. This milestone will provide us with one of the most exciting execution pipelines in our history, firmly underpinning our growth trajectory. So to conclude, 2025 was a successful year of delivery, marked by strong execution and excellent results. We delivered revenue and EBITDA growth. We achieved high free cash flow conversion, and we completed our first major acquisition. We also positioned for important awards that will secure our growth trajectory for the coming years. And we are trending comfortably ahead in establishing Technip Energies as an EUR 800 million-plus EBITDA company. The confidence we have in our outlook is demonstrated through significantly enhanced shareholder returns, and we continue to build for the long-term, supported by our robust net cash balance sheet. And with that, let's open the line for questions. Operator: [Operator Instructions] The first question is from Richard Dawson of Berenberg. Richard Dawson: Firstly, on NFW, and congratulations on getting that award in yesterday. And the timing of that award is maybe slightly earlier than we had expected. So could you provide any color on what brought that forward, and maybe any comments on the actual size of the order intake? And then secondly, on the buyback, should we read anything into the launch of that buyback and maybe your outlook on further value-accretive investments? I appreciate you've just closed AM&C. -- but given your capital allocation priorities of dividends first and accretive M&A, followed by a buyback if there are no M&A options. Is it fair to say that maybe there are a few M&A options out there and hence you're launching this buyback? Arnaud Pieton: Hello, Richard, thanks for the question. So NFW, I'm happy that you're surprised by the timing of it. We are not totally. As you know, we at Technip Energies like to be involved in the early engagement on FEED stage. And so we were engaged there. And NFW, the timing of it, why now? It's -- well, simply because as being the incumbent on NFE and NFS, NFW being somewhat an addition to NFS. There was, I would say, a sweet spot for maximizing synergies with notably site utilization, storage areas, construction resources. So there was really a sweet spot for NFW to kick off, which was presented to our client and the client was aware of that, and we worked jointly with them on converging towards taking advantage of the sweet spot for synergies between NFS and NFW. So this is exactly what has driven the award of NFW. As a reminder, maybe, those 2 additional megatrends of LNG were first announced by Qatar Energy CEO early 2024 at the time when they mentioned that they would -- Qatar would have the ambition to go beyond the -- 140 sorry, MTPA of LNG per year. So that's about NFW. On capital allocation, I would say, no, there is no shortage. You should not read anything into the fact that we have decided to initiate, I would say, a reasonable amount of share buyback. When you look at Technip Energies, you are facing a company that is extremely financially healthy that is capable of returning to shareholders through increased dividends through a little bit of a reasonable amount of share buyback and through further capital allocation. So doing share buyback is not at all affecting our ability to invest nor is it the reflection of a lack of M&A targets for Technip Energies. We have, on the contrary, quite a few on the radar screen. So I can't say much more, as you can imagine, for now. But we're excited about the opportunity set outside, so inorganically, but we also wanted to demonstrate that we are very confident in our future. And hence, why we are combining this time a bit of buyback as well as an increased dividend by 18%. Operator: The next question is from Alejandra Magana of J.P. Morgan. Excuse me, Alejandra Magana withdrew the question. The next question is from Sebastian Erskine, Rothschild & Co. Sebastian Erskine: Congratulations on the announcement of the enhanced distribution. I'd like to start on the AM&C acquisition. So EUR 200 million revenue contribution in FY '26, that would imply kind of TPS at EUR 1.9 billion at the midpoint. So that's kind of in line with the commentary you gave at the third quarter. But on AMC specifically, can you give us -- a few questions. Can you give us an indication of the operational performance of that business in 2025? I think there have been some concern in the market around Catalyst Technologies given the sale of that business under Johnson Matney to Honeywell. There was some concern in that market. And potentially, any detail on the growth outlook? I think, Bruno, you mentioned that the growth of that business should be around a mid-single-digit revenue level per annum going forward. Is that still intact? Any color on that would be great. Bruno Vibert: Hello, Sebastian, I'll take the question. So yes, the deal for AM&C was completed at the end of the year and will start to contribute to our top line in TPS starting Jan 1. I think AM&C closed the year pretty much where we expected. They have 2 main businesses, one on advanced features -- and they are basically addressing hydrocracking and also polyolefins market. Of course, from a quarter, it's more product. So you can have one refill, which may slip by 1 month in 1 year and then it's transferred to the other year. But overall, I think the momentum and market share of this business was absolutely where we expected. And the initial signals we have for the beginning of the year is exactly at this level. Now of course, the teams have started. We started to engage with our joint venture partners on Zeolyst International, which is Shell. So this integration is working very well. We've also started to see how this business of AM&C can create cross-selling synergies with our businesses, because they have advanced materials expertise. So that can complement to our process technology portfolio. And their client proximity, our client proximity are somewhat complementary. So the teams are starting to engage on creating those bridges, which, of course, may take a bit longer than just one month or a couple of months to manifest or evidence in themselves. But we're quite confident that the trajectory we've given through the cycles will be absolutely there. Arnaud Pieton: Sebastian, I will also add something. There is one key attribute to AMNC that one must not forget. It's the quality of the portfolio and I would say the vitality of the portfolio in the sense that about 35% of AM&C's portfolio is less than 5 years old. Therefore, you're talking about solutions that are not solutions of the past, but solutions of today and into the future. So the field of applications for AM&C solutions is one that is actually well into its time and well into what's needed for the years to come. Sebastian Erskine: Super. Thank you very much for that. And if I can squeeze in a question unrelated, but Arnaud, you gave very insightful interview in upstream on the opportunities presented by FLNG and kind of other floating solutions in the E&C market. Can you maybe provide an update on that pipeline and when we might see some kind of related orders on FLNG? And of course, you have that partnership with SBM Offshore. So could we see you involved in some of the FPSOs that are up for tender in the coming years? Arnaud Pieton: Yes. There's an exciting set of opportunities for floating solutions, FPSOs or floating LNG. So first of all, we are -- and we announced a bit more clearly that we are progressing with Coral Norte at the moment for ENI in Mozambique. We very much love a little bit like for NFW, we love the Coral Norte floating LNG because it's a true replicate of Coral South. And I would say, an enhanced replicate to paraphrase our clients because it's not only a replication, but we'll be able to deliver it with a much shorter lead time than the first unit. So we like that. We have indications that there's interest for maybe more than 2 FLNGs in Mozambique. And floating LNG in Africa on the East or the West Coast seems to be gaining momentum. So it is a solution for some markets. And indeed, our presence for delivering floating solutions being gas or into floating LNG or gas FPSOs or oil FPSOs, I think, is enhanced by the associations that we have formed with SBM purely on FPSO and purely for Suriname at the moment. But as we -- this project is progressing really well. And at T.EN, we like replication. So if we are all having good experience, and most importantly, if our customer has a good experience with this JV and this association that we formed, why not replicating it? I think that will be pretty powerful. Operator: The next question is from Henri Patricot of UBS. Henri Patricot: I'll stick to 2 questions, please. The first one, following up on Qatar NFW. You mentioned your synergies with the existing projects. I was just wondering if you have any comment on how the margin on that project compared to the previous ones and the rest of the portfolio. I think you mentioned medium-term upside potential to the margin. Wondering to what extent NFW plays a role here. And then secondly, still on the margin, this time on TPS. So you're guiding to 2026 EBITDA margin, 14.5%, that's compared to last year, there was 14.3%, but you also mentioned AM&C at 25% margin. So that will imply a bit of a decline for the rest of the TPS business. Just wondering what's the driver of the lower TPS margin ex AM&C in '26 and the outlook beyond that? Arnaud Pieton: Okay. Henri, I'll start with Qatar, and then I know Bruno is burning to answer the TPS margin question. So Qatar NFW, right, we -- like I said, we like it very much because it is coming at the right timing, and it provides a lot of synergies with NFE and NFS, mostly NFS. And it is a true replication of the NFS LNG train. So limited engineering, and it's a unique opportunity. And very rarely in this industry, will you see basins or clients ready to invest this way. There's Qatar Energy onshore on LNG, the way they are doing it, you will have ExxonMobil in Guyana with a delivery model that an execution model that is a bit like a conveyor belt and therefore, very successful because there is replication and replica. We always, in our industry, including at Technip Energies, have a tendency to underestimate the power of replication. And so yes, I mean, we are entering into NFW starting the project with a level of margin at the start of the project that is absolutely in line with our margin trajectory at Technip Energies for the long-term. But you can trust us with having expressed a different type of ambition to our project execution team. And in particular, because it is replicate. So let's see what the future will provide. As a reminder, we have a very nonlinear margin recognition at Technip Energies. So the first couple of years are about early works, if I may say, or early part of the project. It's going to be slightly dilutive. You will only see the full breadth of NFW's margin contribution later, so into 2028, and 2030. That's where you will see the full contribution and I would say, the full power of the replication. But again, this is a -- it's a unique opportunity for T.EN, a unique opportunity in the industry, and we are extremely excited to continue with Qatar Energy on this partnership. I think it will yield some very interesting results for us. Bruno on the TPS? Bruno Vibert: Sure. Thanks, Arnaud. Good afternoon, Henri. So on TPS, it's true that we ended the year at 14.3% at a quite high position. Quite high, and we were, of course, very happy about that. Even that, as I said in my prepared remarks, in Q4, we made some provisions because of this very good performance of the year for increased payout and bonuses to our employees, which impacted Q4. So to some extent, Q4 would have been even higher without that. But when we started the year, we were at 13.5% as a guidance for TPS and 14.5% was actually the target for 2028 in our medium-term outlook. What happened in 2025 was really a good performance for tail end project of property equipment like furnaces, furnace islands and the delivery of that with slightly lesser revenues. Now for the organic portfolio, what we expected as new awards will come and some of them were unnamed, but highlighted and flagged by Arnaud in the prepared remarks, we would expect a bit of a normalization of this portfolio, not maybe going back to 13.5% EBITDA, but with somewhat of a normalization before being able to step up again. So you have a bit of a normalization, which was to be expected from the TTS portfolio. That's then you add on the accretive part of AM&C. And basically, that puts us around 14.5% as a guidance. Of course, then we'll want to accelerate and continue to step up as the full of the portfolio will continue to deliver. But at 14.5%, we are already ahead and already had the previously mentioned 2028 kind of target. Operator: The next question is from Victoria McCulloch of RBC. Victoria McCulloch: Can we just focus for a second on the commercial pipeline? Can you give us some color as to -- of that EUR 70 billion, how is decarbonization as a percentage of the commercial pipeline changed maybe over the last 12 months? We've seen calls for EU carbon market to be suspended. The latest of these has been from Italy today, which feels like a stark difference, I guess, to a couple of years ago. How have the conversations with your customers within this decarbonization portion of commercial pipeline, how have they been evolving over the last 6 months as the sentiment in the sector has changed significantly? Arnaud Pieton: Hello, Victoria. It's a very interesting topic. And I would say the past year have been a clear reminder that there will be no whatever, so-called energy transition or no decarbonization that is not an affordable one. And it needs to be a market-driven transition. And unfortunately, there are, I would say, areas and spaces and also domains in terms of being carbon capture, sometimes SAF, sometimes low carbon molecules such as the blue ammonia, et cetera, where things have slowed down for the lack of takers. So it's obviously disappointing that those projects could not find a path forward in the near term, ultimately due to the challenges with offtake and policy. And those projects, they need stable policies. They don't need moving goalposts. They also need a carbon price that is adapted to creating a market. One project alone is not sufficient to create a market. So I think there has been a bit of realization that we've reached the end of the fairy tail when it comes to some of those domains. But I'm going to look at the glass half full rather than half empty. There are areas and there are pockets of opportunities where those projects are viable in Spain, Southern Europe, in India, some in the Middle East. We just signed the SAF project in Netherlands. So we Technip Energies, we invested when we were created 5 years ago, we invested into carbon capture, SAF circularity and other blue molecules. But we also did that and green actually as well on green hydrogen. But we did that in -- without deploying too much capital. And so I am personally not so disappointed about the way the market is -- because we, as T.EN, we are present when those projects are happening. We are executing the large green ammonia project for -- I mean, in India. We are on SAF in Europe and elsewhere. We are on carbon capture in the U.S. and Northern Europe. So the important for us is to be present and to be winning in those spaces, and we are. The only, I would say, space for a slight disappointment is that, yes, we would have loved for the volume to be greater. But where it's happening, you will find Technip Energies, and that's the most important. And all this is happening while the rest of the business, the core business like LNG, like everything around gas continues to thrive and continues to grow and continues to decarbonize because let's not forget that our clients in the more traditional space are looking at solutions to lower the carbon intensity of their products. That's why you see large carbon capture being deployed on all LNG facilities in Qatar. But not only, that's why you see LNG facilities being electrified on Ruwais in UAE by ADNOC powered by nuclear electricity, therefore, decarbonized electricity. Same story for TotalEnergies in Oman for LNG as a shipping fuel, where associated solar plants are being built. So I think the train around towards lowering the carbon intensity of the product has left the station. We are onboard that train and it's fantastic. What is a bit slower than one could have dreamed or dream, sorry, it's really some of the blue molecule and around that space, yes, it's much slower. But the important is that to remember that the rest has not disappeared, it continues to grow and that Technip Energies is present where the blue or the green or the carbon capture or the sustainable aviation fuel is happening. And that plays to the strength of the portfolio. Victoria McCulloch: That's great. Thanks very much for that color. And just as a follow-up, maybe one for Bruno. Could you give us some color on what you expect working capital movements to look like through the year? Bruno Vibert: Sure. Hello, Victoria. So working capital, first, I'll start maybe with year-end because we had a bit of unusual working capital swings, a bit more, if you look at our balance sheet, a bit more accounts receivable because we had EUR 100 million, EUR 150 million plus of invoices, which were supposed to be paid just at the tail end and which were instead were received on the very, very early Jan. So as you know, always the lumpiness of having one invoice and a few days can present and also from an accounts payable side, as we migrated an ERP for our largest operations to be France, Middle East and so on, we decided to anticipate some payments to subcontractors and suppliers so that projects would go ahead despite any issues of ERP migration and as you ramp up. So you should expect this kind of accounts payables or working capital to unwind. Then you will have the more traditional aspect of working capital, which means the new generation of projects, so NFW with the advanced payment and the first milestones being reached plus all the rest of the projects that may constitute the EUR 12 billion plus order intake that Arnaud highlighted in the slide, this will positively contribute in terms of working capital. It will be dilutive from a P&L and bottom line perspective, but it will be accretive from a cash flow and working capital perspective. Then you will have the more tail end projects that which you may have a bit of an unwind. But I think with the momentum of the portfolio, you should expect somewhat of a positive movement on working capital overall because that of the portfolio plus the reversal of the somewhat specific end of the year '25 situation. Operator: The next question is from Jean-Luc Romain of CIC CIB. Jean-Luc Romain: I have 2 questions on LNG. The first is in the NFW contract you announced yesterday. Is there a TPS component, for instance, of part of the carbon capture? And the second is, in your incoming orders, I noticed there's nothing about Rovuma LNG. Is this a decision that ExxonMobil plans to take later in the year or maybe next year? Arnaud Pieton: Thank you, Jean-Luc. So first on NFW, short answer, no, there is no TPS content into NFW. In this case, the carbon capture is pre-combustion and not post combustion. We own and we deploy solutions that are part of TPS in the post-combustion world. That's why that is what is deployed on net zero T side and other applications. So -- but precombustion, we deploy someone else's solution as we have done it for now many years, so we master that one. We know how to scale it up, but it's not Technip Energies, and therefore, it doesn't provide for TPS content through NFW. So Rovuma, as you would have seen in the news flow, there is quite a positive momentum on this one, and that's -- we're very happy about that. We know the lifting of the force majeure on TotalEnergies, Mozambique LNG. This is a positive development. And we see increased momentum on Rovuma prospect from our conversations. So as always, a reminder, we do not control the timing of the FID. That's very much in Exxon's hands. This Rovuma project is absolutely very high on our radar screen, but it is competitive. And it is worth noting that we've been engaged on Rovuma for several years already. As you know, we've done the FEED, and we've been engaged with Exxon, assessing the project from different solutions and development perspectives. And this project will be modular and which is, as you know, our preferred solution. So FID 2026 or 2027, let's see, lots of engagement, lots of interest and a very good momentum, but it is competitive. Therefore, we're going to remain cautious with our comments, but it's a project with attributes and characteristics that are extremely interesting and attractive for us. And yes, we intend to be the fierce competitor on this race. Operator: The next question is from Bertrand Hodee of Kepler Cheuvreux. Bertrand Hodee: Yes. I have 2. The first one is on your prospect in TPS. Regarding either carbon capture or ethylene, especially ethylene in the Middle East. Do you see more momentum here? And then the second question, I was doing some very rough math, EUR 16 billion backlog end of year '25, your projection EUR 24 billion H1 '26. It looks to me that you are -- if you achieve that, you will be already above EUR 12 billion of order intake for H1? Or am I doing any mistake here? Arnaud Pieton: Hello, Bertrand, I mean, you rarely do mistakes. So -- but we like to have a bit of a cautious approach as always. And on our communication, we are providing a -- I would say, a number that is about what has been announced or what is known and what is supposed to be awarded in the very near term. So it's a very short, I would say, window that we are projecting. Of course, then there's the rest of the year, H2 in particular, with some opportunities. So the -- we always -- like I said, lumpiness is part of our life. And whether a project is awarded on the left side or the right side of the 31st of December, it doesn't change much for Technip Energies, except of course, that it does change -- it can change drastically the shape and form of an order intake for a year. But yes, the potential is the one you're describing. Let's see if it realizes. But there is -- it's a realistic scenario. But we've seen last year, a few things pushing to the right. And so -- and it wouldn't be the first time. So that's why we decided to report on, I would say, what is a shorter window. And we don't guide on order intake, as you know. And also just a reminder for everyone on the call, we don't reward on order intake. That's because we want the right orders to make it to our portfolio, we don't want to race to volume. We want to race on quality. In terms of the prospects for TPS, Yes, we do have -- and we -- I believe on the slide, we decided to call them undisclosed prospects, but we are very clear -- if they are on the slide, it's because we have a very clear line of sight for them, in particular, in ethylene and phosphates and others. So there's a bit of a restart on that front, and that should provide for a positive momentum ahead. Bertrand Hodee: Thank you very much. And congrats again for this new win in Qatar that resemble more of partnership than anything else. Arnaud Pieton: It is, thank you. Operator: The next question is from Paul Redman of BNP Paribas Exane. Paul Redman: My first one is just going back to TPS quickly. I just wanted to ask what gives you the confidence to guide to EUR 2 billion to EUR 2.2 billion of revenue in '26? The reason I ask is when I look back at last year, you have EUR 1.3 billion of buyback into backlog in 2025 and you guided to EUR 2 billion to EUR 2.2 billion. This year, it looks like you've only got EUR 1 billion in the backlog at the moment. And then secondly, just to touch on NFE. Just to touch on timing for when you expect start-up, interval between trains, kind of how is that project progressing? Arnaud Pieton: Hello, Paul. I'll start with NFE and then I'll hand over to the -- to our TPS expert, because Bruno has been diving on TPS quite a bit recently. So NFE, I was on site just earlier this month on NFE and on NFS. And I'm just happy to report that the project is progressing well with the first train being in a commissioning and pre-commissioning and commissioning phase. So construction on the first of the 4 NFE LNG trains is actually mostly completed. And we are progressing per plan on the ramp-up of -- when you start up the plant, you need to be -- to put everything under pressure, pressure test everything, everything makes a pre-commissioning and commissioning activity. A reminder as well of the fact that in order to start up the first train on NFE, we needed to have all of the utilities up and running. So the utilities for the totality of the 4 trains, right? So I would say the level of effort to reach Train 1 readiness is much higher than what has to be achieved for Train 2, 3, and 4 readiness. And the fact that we are in pre-commissioning and commissioning mode should signal to you that all the utilities are actually up and running and that we are capable of bringing the gradually the first train on stream. So it's -- and that construction is broadly over there. And I could see it in my own eyes just earlier this month. So I would say, let's not believe everything that we can read in the press. If the client was unhappy, I think we would have heard about it and probably we would not have been awarded NFW. We stay very close to them. And for any commissioning and pre-commissioning of that scale, this is -- it's an activity that is happening hand-in-hand with the client and the client's operations team to bring such a large facility on stream. It's not only with Technip Energies, it's hand-in-hand with the -- it's a teamwork with the clients' team. So there is really no reason to doubt the timing that you have heard from our clients. Bruno Vibert: Yes. So on the TPS momentum and backlog versus the projected revenues. So first, of course, as I said, AM&C will be consolidated from Jan 1. It's not a backlog business, so that will contribute despite that it's not really part of the backlog at the end of the year. So of course, that's the first element. Second, as I also said, you always have some PMC work, which was quite successful over the last couple of years, which are not recognized in backlog. But as the services are called off, then they are delivered. So they are absolutely representing kind of a book and burn element. But third and maybe most importantly, last year, we were having some tail end delivery of property equipment, so more technologies and products backlog, which pretty much have been completed during the year and represented a bit of a boost to the bottom line, as I said before. Now this is a bit of the reverse this year. And as mentioned by Arnaud to Bertrand's question, we have a clear line of sight in more meaningful awards in ethylene, in hydrogen and for instance fossil projects, which were not in the backlog of revenues in the prior years, that should complement. So that should give us some contribution this year, although not in the backlog. So that's why it's not exactly easy to compare last year's momentum with this year's momentum. Arnaud Pieton: Paul, it's good because we will be adding product content into the TPS backlog, and that's like putting more volume and also provides a bit of a longer cycle content into a short-cycle business. Operator: The last question is from Jamie Franklin of Jefferies. Jamie Franklin: So firstly, just on project delivery revenues. I know you typically don't give any quarterly guidance, but given the significant step change in revenues through 2026, could you help us think about the phasing this year? Should we assume kind of a slow ramp-up and more of a back half weighting? Or is it more evenly split than that? And then obviously, projects revenues are very well covered by backlog already, and you talked to the EUR 12 billion near-term order intake potential. In terms of NFW, how should we think about the revenue phasing for that particular contract? Could there be much of a contribution in 2026? Bruno Vibert: Hello, Jamie. So I can start and Arnaud may complement. So yes, in terms of there will be a ramp-up, and you would have -- you could have some cutoff and milestones and so on, but you would expect some ramp-up during the year. Now it's true also to your point, that NFW won't have a major contribution this year because it's early phase. It's going to be this year early phase since it's a replication, the detailed engineering and so on is, to some extent, already done. So that's why you would have a bit of low start for NFW in terms of P&L contribution and then you will ramp up as the orders are placed to the market. So for the ramp-up of revenue for project delivery, I think it would be fair to have a bit of a gradual step-up as we go throughout the year. Operator: Gentlemen, I turn the call back to you for any closing remarks. Phillip Lindsay: That concludes today's call. Please contact the IR team with any follow-up questions. Thank you, and goodbye. Operator: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.
Operator: Good morning and welcome to UMH Properties Fourth Quarter and Year-end 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. It is now my pleasure to introduce your host, Mr. Craig Koster, Executive Vice President and General Counsel. Thank you. Mr. Koster, you may begin. Craig Koster: Thank you very much, operator. In addition to the 10-K that we filed with the SEC yesterday, we have filed an unaudited fourth quarter and year-end supplemental information presentation. This supplemental information presentation, along with our 10-K, are available on the company's website at umh.reit. We would like to remind everyone that certain statements made during this conference call, which are not historical facts, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements that we make on this call are based on our current expectations and involve various risks and uncertainties. Although the company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the company can provide no assurance that its expectations will be achieved. The risks and uncertainties that could cause actual results to differ materially from expectations are detailed in the company's fourth quarter and year-end 2025 earnings release and filings with the Securities and Exchange Commission. The company disclaims any obligation to update its forward-looking statements. In addition, during today's call, we will be discussing non-GAAP financial metrics. Reconciliations of these non-GAAP financial metrics to the comparable GAAP financial metrics as well as the explanatory and cautioning language are included in our earnings release, our supplemental information and our historical SEC filings. Having said that, I would like to introduce management with us today: Eugene Landy, Founder and Chairman; Samuel Landy, President and Chief Executive Officer; Anna Chew, Executive Vice President and Chief Financial Officer; Brett Taft, Executive Vice President and Chief Operating Officer; Jim Lykins, Vice President of Capital Markets; and Daniel Landy, Executive Vice President. It is now my pleasure to turn the call over to UMH's President and Chief Executive Officer, Samuel Landy. Samuel Landy: 2025 was another strong year for UMH Properties, marked by continued operational excellence, strategic growth and solid financial performance. We made significant progress in increasing the value of our portfolio, driving occupancy gains, breaking our sales record, growing the company through external acquisitions and positioning the company for sustained future growth. The affordable housing crisis has gained national attention. Factory-built homes for sale or rent in communities is a solution to that crisis. Normalized FFO was $0.24 per share in the fourth quarter of 2025 compared to $0.24 in the prior year. Normalized FFO for 2025 was $0.95 per share compared to $0.93 in the prior year, representing an increase of 2%. Gross normalized FFO increased 7% for the quarter and increased 15% for the year. We strive for per share earnings growth and anticipate strong earnings growth in 2026. At this time, we are announcing 2026 guidance of $0.97 to $1.05 per share, representing an increase of approximately 2% to 10%. During the year, we strengthened our balance sheet through prudent capital management. We refinanced 17 communities for $193.2 million in total proceeds at a weighted average interest rate of 5.67%, using the proceeds to repay existing debt, fund our rental home program, support capital improvements, pursue acquisitions and repurchase stock. These refinanced communities were appraised at $309 million, representing a 121% increase over our original $140 million investment, underscoring the significant value we've created. Additionally, we issued $80.2 million in 5.85% Series B bonds due 2030 to foreign investors, providing flexible capital for general corporate purposes. Further, in the fourth quarter, we repurchased 320,000 shares of our common stock at an average price of $15.06 per share for an aggregate cost of $4.8 million, reflecting our confidence in the company's undervaluation. We also realized $5.7 million in gross proceeds from the sale of 100,000 shares of Realty Income Corporation from our securities portfolio. Rental and related income, a core driver of our business, grew to $226.7 million for the year, representing a 10% increase over last year. Our total revenue, including home sales, was $261.8 million for the year, representing an increase of 9% over last year. Our same-property results continue to demonstrate the effectiveness of our long-term business plan. We generally purchase properties where we believe we can improve results through increased home rentals, sales income and finance income. Our team and our platform have proven time and time again that we can preserve and increase the supply of affordable housing while delivering solid and sustainable operating results. In 2025, we delivered same-property revenue growth of 8.2% or $16.9 million and same-property NOI growth of 9% or $11.1 million. This growth in same-property revenue and same-property NOI was driven by site rent increases of 5% and increase in occupancy of 354 net units. Our occupancy gains continue to be driven by the successful implementation of our rental home program. During the year, we added and rented 717 new homes across our portfolio, including those in our joint venture communities, bringing our total rental home inventory to approximately 11,000 units with a 93.8% occupancy rate. Our rental home program continues to operate efficiently with a turnover rate of approximately 20%. Our expenses per unit per year are approximately $400. Our capitalized turnover costs vary but we are generally able to increase rents to earn 10% on any additional investments in the rental homes. Our home sales business also performed well, generating gross revenue of $36.4 million for the year, including contributions from our new Honey Ridge community in our joint venture with Nuveen Real Estate, representing a 9% increase from $33.5 million in 2024. In the fourth quarter, gross home sales reached $9.3 million, up 8% from the prior year period, including sales from Honey Ridge. We have acquired and developed communities in strong locations, which should allow us to further increase our gross sales and sales profitability in the coming quarters. On the acquisition front, we completed the acquisition of 5 communities during the year, adding 587 developed homesites for a total purchase price of $41.8 million. The average occupancy in these 5 communities was 78% at acquisition, providing immediate upside through the infill of vacant sites, which should result in value creation through our proven turnaround strategy. On the expansion and development front, we officially opened Honey Ridge, our 113-site greenfield development in Honey Brook, Pennsylvania. Sales at this community are going very well, and we anticipate a rapid infill pace. Additionally, we completed the development of 34 expansion sites and made progress obtaining entitlements, which should allow us to develop 400 or more sites in 2026. Over the past 4 years, we have developed an average of approximately 200 sites per year. Expansions greatly increase the value of our existing communities. A large asset generally operates with better margins as a result of economies of scale. Additionally, these expansion sites are well located and have the potential to greatly increase our sales and sales profits. As we fill our recently developed sites, our earnings will grow. Expansions in development require patient capital but lead to strong returns over time. UMH continues to deliver solid results while growing the company through the infill of our existing communities, acquisitions and development. We have built a best-in-class operating platform that continues to produce results year after year. We invested significant additional funds for long-term growth, which will result in stronger improvements in our operating results over the years to come. Our long-term business plan allows us to acquire communities at a discount to their stabilized value, complete improvements and over time, realize the increases in value through refinancing. Our quality income stream is derived from our 24,000 families that have chosen to make UMH communities their home. This income stream has proven resilient through all economic cycles. Overall, these accomplishments demonstrate the resilience and growth potential of our business model. I'll now turn the call over to Anna, our CFO, to review our financial results in more detail. Anna Chew: Thank you, Sam. Normalized FFO, which excludes amortization and nonrecurring items, was $20.5 million or $0.24 per diluted share for the fourth quarter of 2025 compared to $19.2 million or $0.24 per diluted share for 2024. For the full year 2025, normalized FFO was $80.1 million or $0.95 per diluted share for 2025 compared to $69.5 million or $0.93 per diluted share for 2024, resulting in a 2% per share increase. We were able to obtain this increase in annual normalized FFO despite our operating results being impacted by our investments in growing the company through value-add acquisitions and developments and increased expenses. Rental and related income for the quarter was $58.2 million compared to $53.3 million a year ago, representing an increase of 9%. For the full year, rental and related income increased from $207 million in 2024 to $226.7 million in 2025, an increase of 10%. This increase was primarily due to acquisitions, increases in rental rates, same-property occupancy and additional rental homes. Community operating expenses increased 12% during the quarter and 10% for the year. This increase was mainly due to acquisitions and an increase in payroll costs, real estate taxes, snow removal and water and sewer costs. This increase also includes onetime legal and professional fees of $724,000 for 2025. Despite the increase in community operating expenses, community NOI increased by 7% for the quarter from $31.1 million in 2024 to $33.3 million in 2025 and increased by 9% for the full year from $119.7 million in 2024 to $130.7 million in 2025. Our same-property results continue to meet our expectations. Same-property income increased by 8% for both the quarter and for the year, generating same-property NOI growth of 6% for the quarter and 9% for the year. From a liquidity standpoint, we ended the year with $72 million in cash and cash equivalents and $260 million available on our credit facility with a potential total availability of up to $500 million pursuant to an accordion feature. We also had $129 million available on our revolving lines of credit for the financing of home sales and the purchase of inventory and $55 million available on our lines of credit secured by rental homes and rental home leases. During the year, we issued $80.2 million in 5.85% Series B bonds due 2030 to foreign investors, providing flexible capital for general corporate purposes. As we turn to our capital structure, at year-end, we had approximately $761 million in debt, of which $556 million was community level mortgage debt, $28 million was loans payable and $177 million was our 4.72% Series A bonds and 5.85% Series B bonds. 99% of our total debt is fixed rate. The weighted average interest rate on our mortgage debt was 4.73% at year-end compared to 4.18% at year-end last year. The weighted average maturity on our mortgage debt was 6.1 years at year-end and 4.4 years at year-end last year. The weighted average interest rate on our short-term borrowings was 6.38% as compared to 6.54% last year. In total, the weighted average interest rate on our total debt was 4.9% at year-end compared to 4.38% at year-end last year. In 2025, we successfully refinanced 17 communities, generating total proceeds of $193.2 million at a weighted average rate of 5.67%. This capital was used to repay existing debt, invest in our rental home program, capital improvements, acquire new communities and buy back our common stock. The appraisals conducted for the refinancing demonstrates the value created by our business plan. Our total investment in these communities was approximately $140 million or $37,000 per site, and they were valued at approximately $309 million or $82,000 per site, generating an increase in value of $169 million, representing an increase of 121% in value, which, as Sam mentioned, underscores the significant value we've created. During 2026, we have 6 mortgages maturing totaling $38.2 million and expect to have the same success in refinancing these communities. At year-end, UMH had a total of $323 million in perpetual preferred equity. Our preferred stock, combined with an equity market capitalization of over $1.3 billion and our $761 million in debt results in total market capitalization of approximately $2.4 billion at year-end as compared to $2.5 billion last year. In the fourth quarter of 2025, we repurchased 320,000 shares of our common stock at a weighted average price of $15.06 per share for a total of $4.8 million, reflecting our confidence in the company's undervaluation. Our common stock repurchase program allows us to repurchase up to $100 million of our common stock, and we will continue to monitor the market to determine the appropriate time to continue using the program. During the year, we issued and sold 2.6 million shares of common stock through our common ATM program, generating net proceeds of approximately $44.1 million. Currently, the common ATM program remains closed. The company also received $9.3 million, including dividends reinvested through the DRIP. In addition, we issued and sold 93,000 shares of our Series D preferred stock during 2025 through the preferred ATM program, generating net proceeds of approximately $2 million. Subsequent to year-end, we issued 66,000 shares of our Series D preferred stock through our preferred ATM program, generating net proceeds of approximately $1.5 million. From a credit standpoint, we ended the year with net debt to total market capitalization of 28.3%, net debt less securities to total market capitalization of 27.3%, net debt to adjusted EBITDA of 5.4x and net debt less securities to adjusted EBITDA of 5.2x. Interest coverage was 3.6x and fixed charge coverage was 2.3x. Additionally, we had $23.8 million in our REIT securities portfolio, most of which is unencumbered. The portfolio represents only approximately 1.1% of our undepreciated assets. We are committed to not increasing our investments in our REIT securities portfolio aside from dividend reinvestment and have, in fact, continued to sell certain positions. During 2025, we realized $5.7 million in gross proceeds from the sale of 100,000 shares of Realty Income Corporation from our securities portfolio. We are well positioned to continue to grow the company internally and externally and are introducing 2026 normalized FFO guidance in a range of $0.97 to $1.05 per share. And now let me turn it over to Gene before we open it up for questions. Eugene Landy: Thank you, Anna. UMH is well positioned as a leader in the manufactured housing industry. We now own 145 communities containing 27,100 developed homesites with approximately 11,000 rental homes on those sites. Every year, we make a considerable amount of progress building an irreplaceable company and best-in-class operating platform. Our business plan has resulted in outstanding operating results, growing earnings per share and an overall larger, more profitable company. We intend to continue growing the company through compelling acquisitions when they are available, developing our vacant land, the investment in rental homes and further increasing the profitability of our sales company. We accomplished all of this while executing on our mission of providing the nation with much needed high-quality affordable housing. Our portfolio of communities has materially grown over the years. We have selectively acquired well-located communities that have benefited from our capital improvements and rental home program. I am proud to say that every community we own is in better condition today than the day we bought it. Our investments in our communities provide the highest quality of living at the most affordable price in just about any market we operate in. These investments generate strong demand, which results in waiting list for rental homes and increased home sales. Our 4,000 acres of land in the Marcellus and Utica Shale areas have considerable unrecognized value that will become more apparent as we continue generating revenue through lease signing bonus and royalty income. Our 2,300 acres of vacant land also carry substantial value as we explore the expansion of our communities or other uses such as single-family home developments, apartments or data centers. In addition, the recent announcement to build a new natural gas generation facility in Portsmouth, Ohio, which will be the largest natural gas generation facility in history, generating 9.2 gigawatts of power, further supports the untapped potential value we have in the 4,000 acres we own within the Marcellus and Utica Shale regions. Our country needs an affordable housing solution. We are working diligently to do more to help provide this housing and position manufactured housing as the preferred solution to the problem. Housing is a bipartisan issue, and we believe that new legislation will encourage new development of manufactured housing communities. Additionally, 2-story and duplex homes will increase the viability of manufactured housing in urban areas and areas with higher land costs. Changes to finance laws could result in lower cost loans for our tenants, which will further improve the fundamentals of our business. We are well positioned to benefit from these legislative changes and are excited about the prospects of each of them. Looking ahead to 2026, we anticipate strong growth prospects supported by positive industry fundamentals. Demand for affordable housing remains high, and our sector benefits from limited new supply and favorable demographics. Our recent acquisitions and ongoing community improvements will further contribute to organic growth, while our joint venture and opportunity zone fund provide additional avenues for long-term growth while limiting the impact on our short-term earnings. We expect these factors to drive continued FFO growth in 2026. Our team is focused on executing our strategy to deliver long-term value for shareholders. Thank you again for joining us today. Operator, we are now ready to take questions. Operator: [Operator Instructions] And the first question will come from Rich Anderson with Cantor Fitzgerald. Richard Anderson: Great year and forward-looking perspective. I want to ask about the rental versus home sale strategy. You sort of focus on rentals as the sort of the driver to the growth story, you're breaking records in selling homes. I know the rental business is a byproduct of the Dodd-Frank legislation and so on. But I'm curious if you guys have an idea in mind and what the ultimate breakout in the portfolio might be between rental and owned homes if there's sort of a sweet spot in your mind? Samuel Landy: Rich, Sam here. We will always use the rentals because there's so many people just looking for short-term housing, 1 year to 3 years. There are so many people who never lived in a manufactured home community, don't really know what to expect, don't understand the houses. So the renting program creates buyers and fill sites so much quicker than selling homes. So we never won't have rentals, and we have 11,000 of them today. But the new changes to the Title I finance laws, right now, there's a limit to how much you can finance approximately $70,000, and they might increase that. And those are government-guaranteed loans that the customer only needs 3% down. That could dramatically increase our sale of the older rental units because somebody can switch their home rent portion of their payment. If they're paying $1,000 a month, $500 lot rent, $500 is the rent for the house, they could convert that $500 rent for the house to a loan payment so that for the future, they're always building equity. It will never increase. It's beneficial to them, and then they own the house, which is beneficial to us. So we could be buying brand-new homes for $75,000, selling old homes for $60,000 and only needing $15,000 cash as to replace them. So we're perfectly happy doing Memphis Blues as 100% rental communities. Rentals work. We consider it horizontal apartments. We take all the efficiencies of factory-built housing and that efficiency is cumulative. Even people in the business don't really understand how much better and more cost-effective our houses get year after year. If you look at a 1970s home and you look at the house of today, there's nothing in common. They're complete different houses. And yet the affordability component is better than ever in comparison to any other type of housing. So we take that fantastic efficiency of the factory-built home plus the efficiency of managing 250 lots on approximately 40 acres and pass that on to the customer and how many people have household income of only $40,000, and they can rent the house from us for $1,000 per month, which is 30% of income, and there's nothing else they could have as good in such a high-quality community. So it works every time and then generate sales because as people live in our communities as they think they might want a bigger house, a multi-section house, they feel comfortable buying it. Richard Anderson: Okay. So would you say like the sweet spot rental versus home owned is just for a lack of a better number, 50-50 as an efficient frontier for UMH? Samuel Landy: I'm going to say yes, and I just want to -- every community is different. So some communities can be 100% rental. You get to New Jersey, you almost have 0 rentals. So every community is different. But as a company, do I think we'll have 50% rentals? Yes. Richard Anderson: Okay. On the same-store performance, you had some elevated expenses in the fourth quarter. I assume that was snow removal and weather related. What would it have been without that if you were to normalize a normal quarter's worth of expenses, would have been approaching a 10%-ish type number, same-store NOI? Brett Taft: Yes, exactly, Rich, and this is Brett here. And just looking at the numbers for the year, we were very happy with the 8.2% revenue growth, the 7% community operating expense number and the overall 9% community NOI increase. So that's pretty close to where we expect it to be. We're always out there saying we anticipate expenses to rise 5% to 7%. We did have elevated snow removal costs. We did have overtime related to snow removal. We also had additional tree removal related to snow removal in the fourth quarter. And then you've got some real estate tax increases and some insurance expenses that also increased that overall number. So looking at a normal quarter without the bad winter we've had, we do expect that we would have been in that 10% range. But looking forward, we anticipate being able to get our 800 new rentals installed and rented. We anticipate to get our annual rent increases and we should be able to control our expenses in that 5% to 7% range, which, again, should result in high single-digit or low double-digit NOI growth, which is where we've been over the past few years. Richard Anderson: Okay. And last for me. Any meaningful change to home prices, supply chain issues, tariffs, blah, blah, blah. Like how is that changing what the wholesale cost is for your homes when you kind of bring them into your community and then either rent or sell them? What has the dynamic been there lately? Samuel Landy: Yes, Sam here, Brett will elaborate. But everything I see is favorable. No dramatic waits for houses. Prices actually, in some cases, coming down. Go ahead, Brett. Brett Taft: Yes. No, prices are in a very similar position to where they were all of this year and last year. We'll keep an eye on that going forward. But we're still able to get our rental homes in the $75,000 to $80,000 range, which positions us well to rent homes at $1,000, $1,200 or $1,400 a month depending on the market. Factory backlogs for the most part, are in good shape in the 6- to 8-week range. There's a few factories that are a little bit further out than that but we're working with those manufacturers to try and either get homes or find a comparable home from another factory. So we don't anticipate any problems getting homes, getting them set up with the one caveat being that it's been a very snowy winter in most of our locations. So that does slow down sets a little bit. But demand is strong for both sales and rentals. We have homes either on site or being delivered to the sites. They're being set up in a timely manner, and we anticipate similar occupancy gains in 2026. Operator: The next question will come from Barry Oxford with Colliers. Barry Oxford: Sam, real quick, if you could kind of walk me through -- I understand some of the headwinds that existed in 2025. But then when I look at what you're doing on a same-store NOI internal growth, very strong numbers, no reason to think, at least at this particular juncture, that you won't be able to put up similar numbers. But yet when I look at the low end of your guidance at $0.97, that's only $0.02 more than what you did this year. Can you help me kind of walk through what's holding back the FFO per share? Samuel Landy: I think you're better suited asking Jim to answer on the guidance. Go ahead, Jim. James Lykins: So that could be a number of things, Barry. Home sales could be worse than what we're anticipating. We could potentially raise capital that we're not anticipating right now. But sitting here right now, we would expect to come in right in the middle of that range. That's kind of a sitting here right now, worst case and best case scenario, we don't consider that number to be either conservative or overly optimistic. We think it's straight down the fairway. Samuel Landy: And the only thing I'll add to that, we really don't know what sales will be. Two -- communities in 2024, between the 2 of them had approximately $8 million in sales that were full in '25. So we couldn't have any sales from them in '25. And they will have available lots in '26. So that there's a potential of all the sales in '25 plus $6 million just from those locations. Additionally, there's other expansions just built, places where you're getting to -- as expansions or new communities become more mature, the sales get easier. So there's a lot of reason to be even more optimistic on sales but you just never know because there's so many factors that come into it. But if everything goes right, sales can really get beyond $40 million in a year. Operator: The next question will come from Gaurav Mehta with Alliance Global Partners. Gaurav Mehta: I wanted to ask you on the rental homes outlook of 700 to 800 homes this year. What's the timing of that? Do you expect that to be evenly split during 4 quarters? Brett Taft: Probably not evenly spread as we are seasonal. And as I just mentioned, the first quarter, we are experiencing some challenges with incredibly cold temperatures and snow, which unfortunately, does slow things down on the home side and in some cases, the move-in. But I am happy to say that sitting here now, we're happy with where sales are. We're happy with the occupancy gains we've seen so far this year. We do have 100 homes in inventory that are fully set up and ready for occupancy at the moment, and we've got another 380 homes being set up. So we should see some occupancy growth in the first quarter. The second and third quarter is where the majority of that occupancy growth will come in and the fourth quarter does tail off a little bit. But we do expect it to be heavily weighted to the spring and summer months, and that's pretty consistent with previous years as well. Gaurav Mehta: Okay. Second question, maybe on the acquisition opportunities. What are you guys seeing in the market as far as acquiring new properties? Brett Taft: Yes. The acquisition market remains competitive, high-quality assets that are well located and stabilized are trading in the sub-5% area in most cases, in some cases, sub-4%. We are looking at several smaller portfolio opportunities and one-off acquisitions that could trade in the 5% to 6% range but we're out there analyzing the opportunities, doing our detailed underwriting and making sure that we fully account for any capital items that may be needed and get the right deals in the right locations to continue our growth and try and put together deals that are accretive to earnings. So nothing to report on the pipeline at the moment. We were very happy to find 5 communities to acquire last year. Those 587 sites for $41.8 million in markets that we like and think we'll do well in for the future. So we're out there looking for those similar opportunities in 2026. Samuel Landy: And I'll just mention the joint venture with Nuveen for newly built communities as well as the opportunity zone fund create incredible opportunity to expand what we've done in new community construction. UMH, the parent company, can only develop so many new sites per year because it's a lost business for 3 to 5 years. But doing it in a joint venture or doing it in the opportunity zone fund, there's almost no limit to how much we can do, and that has incredible potential to allow us to build new communities throughout the country. Operator: The next question will come from John Massocca with B. Riley. John Massocca: So apologies if I missed this earlier in the call but been hopping around between a couple of different earnings calls. But with regards to the guidance provided, any color on what you're expecting in terms of the contribution from new home sales and just the kind of scale of potential new home sales in 2026? Samuel Landy: Jim, you can tell us what you used. Yes. James Lykins: So we -- John, we haven't disclosed what we -- or what the amount will be in anticipated home sales this year or the number. I would just tell you that we assume an improvement. Sam mentioned earlier that we could get to $40 million. So I would keep that in mind but we haven't disclosed an actual dollar amount where we anticipate sales coming in. Samuel Landy: I was just going to -- sales are very difficult to predict, but we have more available expansion sites than we've ever had in the past. We have the turnaround communities such as Oak Tree in New Jersey. We have a lot of locations that could potentially increase sales more than conservative people would expect. John Massocca: Okay. In terms of the in-place portfolio, any changes you're seeing in terms of delinquency or the bad debt outlook? Brett Taft: No, Collections remain incredibly strong in that 98.5% range. It really hasn't fluctuated too much. Every year around the holidays, it goes down a little bit but then picks back right up towards the end of January. So rent continues to be paid. We haven't had any issues passing through our annual rent increases and don't anticipate any changes coming here shortly but constantly monitor it and if anything changes, everybody will know. Anna Chew: And our write-offs are approximately 1% or a little less of our rental and related income. And that has been consistent for the last, I don't know how many years. John Massocca: And then one thing, apologies if this is already addressed in the call, but you sold some shares out of the marketable securities portfolio. Is that something you think you could continue doing going into 2026? Or was that kind of one-off in nature? Eugene Landy: No, no. We have announced that we have a $100 million buyback. And of course, the timing of the buying back shares depends on whether we have any acquisitions, whether we invest in new greenfield developments more than we originally planned. And the whole purpose of the securities program is always to keep liquidity. And so we have about $26 million in liquidity there but we also have unused bank lines of $260 million. We've been conservative, and we plan to keep being conservative but we do eventually intend to carry less cash because it puts a drag on our earnings, and we do plan to eventually take down the securities program to 0. But at the present time, we like having $26 million available for any acquisition or other reason we would need capital. We're a very conservative company, and we intend to continue to do that. But we will be reducing the securities program. John Massocca: Okay. And I guess was the reason for tapping that due to the buyback you had in place, you thought your stock was more attractive than maybe the valuation on some of the assets in the marketable securities portfolio? Eugene Landy: No, the securities portfolio at its present low level, we're very pleased with the securities portfolio, have nothing but admiration for the 3 basic companies that are in it, and we think they're great investments. We just think our own properties are better investment. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Samuel Landy for any closing remarks. Samuel Landy: Thank you, operator. I would like to thank the participants on this call for their continued support and interest in our company. As always, Gene, Anna, Brett and I are available for any follow-up questions. We look forward to reporting back to you in early May with our first quarter 2026 results. Thank you. Operator: The conference has now concluded. Thank you for attending today's presentation. The teleconference replay will be available in approximately 1 hour. 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Operator: Good morning. Welcome to the Aurinia Pharmaceuticals Fourth Quarter and Full Year 2025 Conference Call. Please be advised that a Q&A session will follow Aurinia prepared remarks. [Operator Instructions]. I will now turn the call over to Peter Greenleaf, President and Chief Executive Officer of Aurinia. Peter, please go ahead. Peter Greenleaf: Good morning. We want to thank you all for joining us today to discuss Aurinia's Fourth Quarter and Full Year 2025 Update. Joining me on the call today are Joe Miller, our Chief Financial Officer; and Dr. Greg Keenan, our Chief Medical Officer. On today's call, we will report fourth quarter and full year 2025 financial results and provide an update on recent business progress. During today's call, we may make forward-looking statements based on current expectations. These forward-looking statements are subject to a number of significant risks and uncertainties, and actual results may differ materially. We are pleased to have delivered strong LUPKYNIS sales in 2025, growing at a rate of 25% year-over-year. And for 2026, we expect net product sales of $305 million to $315 million, up 12% to 16% compared to 2025. And with that introduction, I'd like to now turn the call over to Joe to review our financial results. Joe? Joseph Miller: Thank you, Peter. Total revenue for the fourth quarter of 2025 was $77.1 million, up 29% compared to $59.9 million for the same period of 2024. Net product sales of LUPKYNIS for the fourth quarter of 2025 were $74.2 million, up 29% compared to $57.6 million in 2024. Net income for the fourth quarter of 2025 was $210.8 million, up 14,957% from $1.4 million in 2024. In the fourth quarter of 2025, the company recorded an income tax benefit of $175.1 million, primarily due to the release of its valuation allowance on deferred tax assets that the company now expects to realize. Net income before income taxes for the fourth quarter of 2025 was $35.7 million, up 2,875% from $1.2 million in 2024. Diluted earnings per share for the fourth quarter of 2025 was $1.53, up 15,200% from $0.01 in 2024. Lastly, cash flows from operating activities for the fourth quarter of 2025 were $45.7 million, up 52% from $30.1 million in 2024. Total revenue for the year ended December 31, 2025, was $283.1 million, up 20% compared to the $235.1 million for the same period of 2024. As a reminder, the 2024 period included a milestone payment of $10 million associated with LUPKYNIS regulatory approval in Japan. Excluding the onetime milestone, total revenue increased by 26% over the same period in 2024. Net product sales of LUPKYNIS for the year ended December 31, 2025, were $271.3 million, up 25% from $216.2 million in 2024. Net income for the year ended December 31, 2025, was $287.2 million, up 4,852% from $5.8 million in 2024. For the year ended December 31, 2025, the company recorded an income tax benefit of $173 million, primarily due to the release of its valuation allowance on deferred tax assets that the company now expects to realize. Net income before income taxes for the year ended December 31, 2025, was $114.2 million, up 1,443% from $7.4 million in 2024. Diluted earnings per share for the year ended December 31, 2025, was $2.07, up 5,075% from $0.04 in 2024. Lastly, cash flows from operating activities the year ended December 31, 2025, were $135.7 million, up 206% from $44.4 million in 2024. As of December 31, 2025, the company had cash, cash equivalents, restricted cash and investments of $398 million compared to $358.5 million at December 31, 2024. For the year ended December 31, 2025, the company repurchased 12.2 million common shares for $98.2 million and fully diluted shares outstanding were reduced from $149.8 million to $139.7 million. As a result of LUPKYNIS continued momentum, we are pleased to announce our 2026 guidance. We expect total revenue of $315 million to $325 million, up 11% to 15% compared to 2025. We expect net product sales of $305 million to $315 million, up 12% to 16% compared to 2025. Now I would like to turn the call back over to Peter for some business updates. Peter Greenleaf: Thanks, Joe. Turning now to aritinercept. We are very excited about the potential of this novel biologic in the treatment of a wide range of autoimmune diseases. As we've previously discussed, aritinercept is a dual BAFF April inhibitor that was well tolerated at all dose levels tested in the Phase I single ascending dose study. Single doses of aritinercept led to robust and long-lasting reductions in immunoglobulin supportive of once monthly dosing. Aurinia has initiated a clinical study of aritinercept in one autoimmune disease and plans to initiate a clinical study in an additional autoimmune disease in the first half of 2026. So in summary, we continue to drive growth in our commercial LUPKYNIS business, while at the same time advancing the clinical development of aritinercept. We want to thank you for joining us on today's call and we look forward to taking your questions. Now let me ask the operator to open up the line for Q&A. Operator? Operator: [Operator Instructions]. Our first question is coming from Maurice Raycroft from Jefferies. Farzin Haque: This is Farzin on for Maurice. So your issued guidance for 2026 seems somewhat conservative given the 4Q run rate. So what are some of the specifics in forming the commercial outlook? And as it relates to the -- what you're seeing in the first 2 months of this year? Peter Greenleaf: Farzin, on the first part, I don't think I got the first part of your question. Can you repeat it on what you're looking for there? I think you want to understand what's underlying the growth for the company for the year? Farzin Haque: Right. Like what's the underlying assumptions for the 2026 guidance? And then what are you seeing in the first 2 months of the year to inform that? Peter Greenleaf: Well, I think first off, our strategy for the commercial business of LUPKYNIS continues to be similar to what we've done for the last probably 6 to 12 months, and that's to continue to stand on the incredible data that we have in terms of the efficacy of the product and the treatment of lupus nephritis and the reduction of proteinuria as early as 3 and 6 months that we've seen leveraging the expanded data set that we had with the extension study we did with the AURORA trial, which gives longer-term data, the biopsy study. And then last year, the introduction of the ACR and ULAR guidelines that actually did a really nice job, not just promoting novel products like LUPKYNIS, but more importantly, more aggressively using diagnostics to identify proteinuria earlier in patients suffering from lupus to identify lupus nephritis. So our strategy hinges on really trying to change the whole treatment paradigm, the diagnostic paradigm and then the early treatment aggressively of proteinuria, and we believe our drug does that better than not the drugs that have historically been used to treat the disease and what's been seen to date with even the novel newly approved or novel drugs that have produced data. As for the question about the first 2 months of the year, we're not really giving any steer for the quarter, but nothing is out of ordinary for what we've seen historically. We've tried to put emphasis on the best predictor for what we're seeing going forward has been past history. So we would refer you to Q1 of 2025 to look for any friends in the business. Farzin Haque: Got it. Makes sense. And then a follow-up is on the -- you recently dominated the Phase III and the open label studies in the vocal study and the vocal extension, the pediatric study. And it mentioned like part DSMB recommendations. So can you clarify whether DSMB is asking to stop? Or is FDA refocused on the drug in any way? Peter Greenleaf: Do you want to take that, Greg? Greg Keenan: Yes. Thanks for the question. Greg Keenan here. So the local study in its current form was one where due to technical issues working with the clinicians that proved to be very, very difficult to recruit patients for that particular study. So we made a decision based on what we saw at that point that we terminate the study and plan to have negotiations soon with the FDA for further plans for meeting our pediatric commitments in lupus nephritis. Peter Greenleaf: Yes. I think just one thing to add, in addition to that is, we have data from the work that we've done up to this point. We have in-market data that we know from treatment of patients, both on the adolescent and the pediatric side in the current market. So there's data that we can actually provide to the agency, and we look forward to a conversation with the agency about: One meeting commitment that we had to the agency and; two, what that would mean for how physicians should be guided in the treatment of pediatric patients. Last point here, remember that this disease is primarily disease of women in the middle part of their life. It's not really a prominent pediatric condition. So while we had the commitment with the agency, this is not -- the burden of this disease in pediatric patients is quite small and the thereby the business opportunity being probably smaller than that. Operator: Next question questions coming from Joseph Schwartz from Leerink Partners. Will Soghikian: This is Will Soghikian on for Joseph Schwartz. Congrats on the quarter,and thanks for taking our questions. Just to start for us. I think previously you guys guided to a development update for aritinercept in early 2026. But can we still expect this update? And could you please provide some additional context for what this might entail. I understand that's the competitive reasons, you're keeping the indications of focus close to the vest. But what about the overall study design and the size? Just so we can have some visibility to the potential data disclosures? And is this a Phase Ib or Phase II and I have a quick follow up. Peter Greenleaf: Well, thanks for the question. We're -- obviously from the last couple of calls, it should be obvious that we're excited about the therapeutic potential for BAFF April inhibition across a wide range of these B cell-mediated autoimmune diseases. As we mentioned on this call, we initiated a clinical study of aritinercept in one autoimmune disease, and we plan, obviously, as we said, to initiate another on our immune disease in the first half of 2026. At that time, we'll disclose the indications for each study in the second quarter of 2026. So look for more from us end. I can't say whether we're going to get into trial design, et cetera, that -- up until that point, but more to come by the second quarter of 2026. Will Soghikian: Great. That's super helpful, Peter. And then just one on new LUPKYNIS. I guess things have been going pretty well. I think raising guidance twice last year is a great indication that there's still some growing demand and momentum here. So I guess could you qualitatively just talk about what's going better than expected? Are patients staying on therapy longer? Are you adding more patients on commercial drug than expected? Are you seeing a better mix of insurers? I guess, what's the main driver of this continued strong performance as we head into 2026? Peter Greenleaf: While we don't give individual commercial metrics anymore, what I can tell you -- thank you for the question, is we are seeing growth across patients. We are seeing very solid and continued adherence to the product and persistency, and even the mix of our business when looking at the average price per commercial patient per year all continue to perform with a level of consistency, again. Why we've kind of steered to -- if you look at the historical growth pattern of this product over the last 3 years, it's probably the best way to think about its growth pattern going forward. And if you do that, I think you'll see why we landed in the guidance range that we did. Operator: Our next question is coming from Arthur He from H.C. Wainwright. Yu He: Congrats on the quarter. So I just -- kind of follow up with the last question. So given the guidance for the 2026, I'm just curious how much the growth is coming from the rheumatologists versus nephrologist. And given we have the guidance -- the new guidance in hand for a while, do you believe we have reached a steady state of the guidance-driven prescribing? Or it's still too early like for the tails? Peter Greenleaf: So let me break that question just in half. The first half was, are we seeing any break in terms of the trends on rheumatology prescribers as it relates to total revenue contribution versus nephrology? The answer to that is slightly. One of the things that is key to our mid- to longer-term strategy is to get earlier diagnosis and earlier treatment, which, by the way, I don't think is unique to Aurinia. I think for the patients, for physicians and for the future of this disease, we're strong believers that earlier treatment with drugs like LUPKYNIS are only going to have a short- and longer-term patients benefit and probably save more kidneys and more patients, extend more patients' lives over time. So rheumatology is key to that. Since these patients are SLE patients before they ever become diagnosed as lupus nephritis and catching them early and getting more aggressive treatment is going to -- is really going to start in the rheumatologist office. What I can tell you, because we aren't giving the specific metrics anymore, as we continue to see more prescribers in the room space. And while the business is pretty evenly broken between rheumatology and nephrology, it does favor the rheumatologists slightly, and that has been increasing over the last 2 years. The second part of your question was centered on -- why am I blanking now? Can you repeat it for me? Yu He: Yes, I said like which meaning for the -- coming from the ACR guidance, post impact to the prescriber. Peter Greenleaf: Well, I think it's -- for me, it's -- I'd ask Greg to jump in here, too, if I miss anything. The guidelines emphasize earlier diagnosis. And we know there's a long way to go here. They recommend that every time a lupus patient comes in that they get a urinalysis and look for proteinuria as well as other indicators of the disease progression when they visit. What we do know is that doesn't happen every time they visit. And matter of fact, it probably happens less than 50% of the time that a patient visits in office. So if we can see that increase, we believe more proteinuria will be identified when more proteinuria is identified, if -- and this is the second part, it's identified, we see aggressive treatment. The guidelines say when you hit a certain target treatment level that the patients should then be treated. We also know from payer data and database data that's out there that, that doesn't happen either. So more aggressive diagnosis, more aggressive to specific target of proteinuria. Lastly, the target of keeping a patient on drug for 3 to 5 years is clearly written in the guidelines, and we know that not just for LUPKYNIS, but for all drugs included treating this more like a chronic progressive disease than an acute flare up within the disease would all be a major progression for the treatment of the disease. Greg Keenan: Yes. No, I just -- I agree with all the points. I think as clinicians become increasingly comfortable confident in the new agents to include LUPKYNIS more consistently treating for longer periods of time. And so that's something we look forward to continuing to support in rheumatology and nephrology communities. Yu He: Maybe just a quick one for Greg. So speaking of the aritinercept receptor. Greg, could you remind us how the ADA situation for the payer drug when you see in the health form here. Greg Keenan: Right. So we mentioned one of the previous calls that you have seen antidrug antibodies that low titers at doses from 25 milligrams and above. At this point, as I noted previously, we didn't see any impact on association with injection site reactions or changes in the pharmacokinetic profile of those with positive ADAs relative to those that have not. I'll just remind it's -- each ADA assays bespoke antibody. It's not uncommon for drugs to have ADA levels, and we're quite confident as we go into subsequent work in our clinical trial program that we'll be able to understand more of the impact of these things. At this point, we're very encouraged with what we see in our confidence is high in this molecule. Operator: Our next question today is coming from Sahil Dhingra from RBC. Unknown Analyst: This is [ Sahas Badami ]. My question is related to the competitive landscape. So we have seen that Gazyva was recently approved in the LN indication. So first question is, have you seen any impact of the positioning of LUPKYNIS in the treatment landscape following that launch? And the related question is that is the approval of Gazyva incorporated in your guidance? And how do you think it will impact LUPKYNIS going forward? Peter Greenleaf: So your first question about near-term impact from the launch, our answer would be no. We continue to see the business performing consistently as it has historically. The question of how it will perform on a go forward? Is it represented our guidance. I think our guidance represents a lot of factors, including new competition and progression of implementation of the guidelines and a multitude of different factors. As it relates to Gazyva, we actually -- and all new potential competitors, as I mentioned earlier, I do think there's major room that can be made improvement that can be made both in awareness building at the patient level, awareness building on the treatment guidelines and diagnostic guidelines for the treatment of lupus nephritis, identification and more aggressive treatment of the disease. And all of these things will grow the market significantly before you ever get into the question of what's the better treatment option? And there, we believe we have an incredibly competitive profile because the guidelines emphasize rapid reduction in proteinuria as early as 3 to 6 months. And I would challenge those on the call to go back and all these drugs stand on their own merits and will be used by physicians based upon the labels that they get. But if you look closely at the data, in terms of rapid improvement and reduction in proteinuria, generally speaking, the novel competitors that we're seeing in the marketplace appear to not have the ability to reduce proteinuria levels to target treatment guideline levels as quickly as what we've seen with LUPKYNIS. Greg, what would you add? Greg Keenan: Just to put a punctuation on that point. In our pivotal trial, we saw a 50% reduction in proteinuria within 1 month's time from initiation of LUPKYNIS in those that were studied. And we know that for hitting the primary endpoint, our study was designed to show the benefits at 12 months. the goals were achieved for the most part by 6 months' time, I remind you that with Gazyva, the primary endpoint is at week 76, and it took that long to be able to get important clinical responses, complete renal response. It took 1.5 years. So the speed with which works is notable. Also emphasize relative to Peter's point, Gazyva and B-Cell targeted agents are one access of the immune system, LUPKYNIS the only indicated treatment for LN that targets the T-cell and also has a photocyte protection effect. So, these are complementary maxims action, the speed with which LUPKYNIS works is notable. And to Peter's point, the awareness with regard to aggressive treatment that will be created by additional important agents in this area will just improve the likelihood of getting better patient outcomes. Operator: Thank your. Next question today is coming from David Martin from Bloomberg. David Martin: Congratulations on the quarter. I realize LUPKYNIS was launched in the U.S. market first. Do you expect the other global markets will catch up to the U.S. as far as penetration in the lupus nephritis patient population? Peter Greenleaf: While I can't speak directly for Otsuka, our partner in Europe and in Japan, I can give you what we hear through them and what we understand about the market, I think the short answer there, David, is no. Every country has individual pricing and reimbursement and guidelines as to how they implement the global guidelines to the treatment of the disease. Pricing in every market is different and historically has been lower than what we've seen in the U.S. and North America. So at least from our expectation standpoint and contribution to this company, as we've said historically, we don't see it as a major contributor for our balance of the overall LUPKYNIS business. Now that being said, it has been every year a good contributor to our growth and sustaining of the business. Just on a relative basis, it's not a large percentage. And we don't expect that it's going to see the same type of aggressive treatment pricing and/or reimbursement that we see in the United States. David Martin: Okay. And second question, are docs -- are you finding -- are they combining B and T-cell therapies or choosing one or the other? Peter Greenleaf: I think it's a really good question and one that we plan to continue to think about and potentially explore moving forward and welcome Greg's comments here, but just one intro, if you think about it, there's a rationale to potentially combine B-cell and more T cell-mediated therapies that could potentially even reduce proteinuria faster, but -- faster and/or more effectively. But in addition, what we see probably in the market more often is that lupus patients more are being initiated or looked at as potential candidates for B-cell -- novel B-cell therapies earlier in the treatment paradigm. And what needs to be considered as a lupus patient when they have controlled symptoms of their lupus, i.e., maybe fatigue or skin condition or tender and aching joints. If those are controlled, yet they have a breakthrough of proteinuria, we often get the question of how to initiate a drug like LUPKYNIS if they're already on a B-cell and they don't want to take them off of that B-cell. So point being there are two reasons to potentially address this: One is to more effectively manage lupus nephritis; the other is, would you -- could you not stop one therapy to continue another and is there a safe and efficacious reason for that. And we are seeing it, and we are discussing and planning internally to potentially look at how we might address this through research and development work in the combination of the two. Greg? Greg Keenan: Craig? Yes. So thanks, Peter. And the only thing I'd add because it is logical to consider combining these. I'll point out that the targeted approach of specific B-cell and T-cell related targeting makes logical sense relative to nonspecific immunosuppression, think of MMF and higher doses of glucocorticoids. So an additional question we get is what's the possibility of reducing some of those other nonspecific agents. So relative to your question, the science and the academics in the field are very much posing this as a logical way to do much more targeted, efficient treatment of patients with lupus general but lupus nephritis specifically. So more work to be done there. It's a logical question, and we intend to think about that a lot more in the upcoming months. Operator: Our next question today is coming from Olivia Brayer from Cantor Fitzgerald. Olivia Brayer: On aritinercept, what's the cadence of updates that we should expect from that program. I mean it sounds like next quarter, we got some more meat on the bone. But beyond that, when can we start to expect to see more meaningful updates and data behind the program? And then given that you are looking at two indications, is there one that you maybe have higher or feel like your program has a better chance in? Peter Greenleaf: Thanks for the question, Olivia. So I would expect to hear more in second quarter of 2026. I kind of leave it at that because we're not giving any future view as to what we're going to disclose or not disclose for that matter. And I would say we don't have a preferential indication in mind in terms of probability for success or one we feel more committed to. I will say, what we're excited about the most here is the fact that this looks like not just from our work but from the work of everyone working on both BAFF April combination or straight BAFF or straight April that these products can address a multitude of different autoimmune diseases, inflammatory conditions. And that's probably what we're the most excited about. And we're trying to take a very thoughtful methodical approach to where we start, where we create a beachhead. And if we're successful there, we think there's great opportunity to potentially build that -- potentially build from there. And I think that's been proven by those who are doing work here as well. So more to come. A little bit of a nonanswer, I apologize for that, but -- it's not because we don't want to talk more about the details of our plan. We just want to be purposeful about how we roll it out. Olivia Brayer: Okay. Understood. And then a follow-up on Gazyva. What are you guys hearing in terms of what Roche is doing to grow that market? And what's maybe been the initial feedback from physicians just around how they're thinking about sequencing therapies now that there are multiple options available? Peter Greenleaf: Surprisingly, it's been a little bit quiet. I mean, it's much like Benlysta, the -- the focus appears to be on the larger piece of the population. For context purposes, you've got an SLE population that's hundreds of thousands of patients in the U.S. and an LN population, which is a subset of that SLE population that's probably tens of thousands of patients. So if you think about it strategically and from a positioning standpoint, and I think as many are aware, Gazyva has also produced their data in lupus and it looks like they'll have a good regulatory pathway in lupus as well, you probably want to position these products further upstream for earlier treatment in lupus was the potential to, and not that they've done research this way, avoid kidney complications down the road. We know that's how Benlysta is currently positioned in the marketplace, and I would think it highly likely that Gazyva is going to be positioned there as well. We don't have any specifics on marketing materials or how they're positioning it in lupus nephritis specifically. But Greg did give a good articulation earlier of where we see the competitive profile here. And we honestly and truly do believe that a rising tide lifts all boats here. More patients getting identified with nephritis, more patients getting aggressively treated with lupus, awareness building, treatment guideline adoption, all grow this market for patients and for the drugs that are trying to be utilized here for those patients. Operator: Thank you. We have reached the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments. Peter Greenleaf: No. I want to thank everybody for joining us on the call today. We look forward to further updates in the future, and have a great day. 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.
Operator: Ladies and gentlemen, thank you for joining us, welcome to the Thryv Holdings, Inc. Fourth Quarter 2025 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. I will now hand the conference over to Cameron Lessard, Senior Vice President, Corporate Development and Investor Relations. Cameron, please go ahead. Cameron Lessard: Good morning. Thank you for joining us for Thryv Holdings, Inc. fourth quarter 2025 earnings conference call. With me today are Joe Walsh, Chairman and Chief Executive Officer, Sean Wechter, Chief Technology Officer, and Paul Rouse, Chief Financial Officer. During this call, we will make forward-looking statements that are subject to various risks and uncertainties. Actual results may differ materially from these statements. A discussion of these risks and uncertainties is included in our earnings release and SEC filings. Today's presentation will also include non-GAAP financial measures, which should be considered in addition to, but not as a substitute for, our GAAP results. Reconciliation of these measures can be found in our earnings release. With that, I'll turn the call over to Joe Walsh, Chairman and CEO. Joe? Joe Walsh: Thank you, Cameron. Good morning, everyone. 2025 was a solid year. Our team accomplished a lot. SaaS revenues grew 34% year-over-year. SaaS adjusted EBITDA margin was strong at 16.8%. We are accelerating on the AI front. It is advancing our product roadmap. We are well-positioned as a leading SaaS platform for small businesses. I want to spend my time today clearly framing the future of Thryv Holdings, Inc. I want to be direct about what we are building, because the results you see for the quarter and our guidance for the year only make sense when viewed through that strategic lens. Over the past several years, we have communicated our transition from legacy print and marketing services into a leading SaaS company. This has been a successful transition that is well underway. What we have not shared yet is our next phase, not just evolving into a leading SaaS company, but becoming the platform of choice for small businesses who need to market, get found and chosen, who need to sell with automated follow-ups and capture every lead, and who need to grow by reaching more customers than ever before. Let me explain why this is important and what we have been building toward. Our Marketing Center is our fastest-growing product, a differentiated and valuable offering in the market that is growing north of 50% year over year. In fact, in 2025, it more than doubled in revenue. If you look at our old paradigm of centers, it would be our largest center. We recognized a gap. We were very good at helping businesses get found online and attract customers, but we needed to be equally strong at helping them convert those leads into sales, turn those customers into repeat buyers, and scale the entire cycle. Small businesses simply do not need more leads. They need to drive more revenue. That requires mastering the full journey, get found, land the sale, deliver great service, earn repeat business, and do it again and again. A network effect with increasing efficiency. That is precisely why the Keap acquisition was so strategic for us. We acquired years of development time and product sophistication that would have been nearly impossible for us to replicate internally. The value is not in Keap's revenue today, it is in the platform capabilities and the engineering talent integrated into our new platform that has let us accelerate our entire roadmap by multiple years. That is exactly what we have been engineering, combining Marketing Centers' proven ability to grow your business and get found online, with Keap's powerful capability to move leads through the sales funnel and turn them into customers, all in one unified platform. No more separate products, no more fragmented experiences. Going forward, our entire strategy centers on one powerful offering. The Thryv Platform, powered by AI, will be launching later in 2026. The Thryv Platform represents a fundamental paradigm shift from selling individual products and centers to delivering a unified growth platform for small businesses. This is an architectural go-to-market and operating model transformation designed to help businesses market, sell, and grow within one integrated system. Historically, our software portfolio evolved as a collection of distinct solutions. That structure worked in a sales-led world. Small businesses do not think in terms of products. They think in terms of outcomes. How do I attract customers? How do I convert demand? How do I manage relationships? How do I grow revenue with limited time and expertise? The Thryv Platform is built to deliver those outcomes through a single experience, with 3 tiers aligned to where a business is in its life cycle, from a very small business just getting started, to growing small businesses, and then eventually to established businesses that want one platform to run their growth. A critical foundation of this platform is our CRM and automation layer. We invested here because the system of record is essential to building modern, product-led experiences. CRM is no longer a standalone tool. It is the backbone, really, that facilitates onboarding, automation, AI-driven insights, and expansion across the customer life cycle. At the same time, we are modernizing the platform around AI to reduce the effort required for customers to see value. AI is embedded directly into the customer journey to accelerate time to value, guide next best actions, and help small businesses grow without needing specialized marketing or technical expertise. This platform strategy also underpins a major evolution in how we go to market. We are moving deliberately toward product-led growth and a product-led sales hybrid model. Entry-level customers increasingly come in through self-service, product-led motions, while our sales organization focuses on higher value tiers, more complex needs, and expansion over time. There is one additional point I want to address directly as you think about our outlook. Over the past several years, our SaaS growth benefited materially from these initiated upgrades, where we took marketing services clients and moved them from legacy platforms onto our modern SaaS platform. That motion was effective and helped us scale quickly, but it was always going to reach a conclusion. As we exited 2025, that upgrade pool is largely behind us. We have some remaining on our roadmap for the next few years, but they are smaller as a proportion of our overall revenue growth. Going forward, our growth will be fueled by 3 primary drivers: organic customer acquisition, expansion, and retention. The Thryv Platform is explicitly designed for this next phase. As a result, near-term growth rates will moderate, but the underlying quality of that growth improves meaningfully as we move out. How to think about us going forward? Let me discuss how you should evaluate Thryv Holdings, Inc.'s performance, because I think there is an important distinction between signal and noise in our metrics. I want to make sure you are focused on what exactly matters on our long-term business value. Our business quality is fundamentally defined by customers spending $400 a month or more. We call these quality customers. This is not an arbitrary threshold we picked for convenience. This is where our unit economics work and where retention is materially stronger, where stronger expansion is attainable, and where we are building a compounding business model. Who are these customers? These are established small businesses, typically doing close to $1 million or more in annual revenue, and they have 4, 5, 6, even more employees. These are not solopreneurs agonizing over a $50 expense. These are real businesses with real operational complexity. We are spending $400, $500, $600, $700 a month on a platform that drives customer acquisition, manages their sales pipeline, and helps run their operations, is, frankly, a straightforward return on investment decision. The data on this segment tells a really clear story. Retention rates are significantly higher than our blended average, and they are improving. They tend to expand over time, adding capabilities, increasing their monthly spend, and deepening their investment in the platform. This segment is growing both in absolute customer numbers and as a percentage of our total base. These are businesses that integrate Thryv Holdings, Inc. into their core operations, and they see measurable returns. Together, we become true partners in their growth. This is where we win, and this is where we are deliberately concentrating our product development, sales resources, and our customer success efforts. Now, let me address what has created noise in the overall numbers. We carry a legacy tail of smaller customers, many spending well under $200 a month, that came into our base through acquisitions, upgrades initiated by us, or promotional offers that made sense at different points in our history, but do not align with our current platform value proposition or our current pricing structure. These are fundamentally different businesses. These are micro-businesses, solopreneurs, side hustles, operations where $100 or $150 a month is a meaningful recurring expense that they are constantly evaluating. We manage this segment in two ways. First, we actively upgrade these customers into higher value packages. We run targeted outreach, demonstrate additional capabilities. We show them the ROI of expanding their use of the platform, and it works. Many do upgrade. They see value, scale their usage, and transition into that $400+ segment, where the retention and expansion economics really kick in. You can see evidence of this working in our ARPU trends. The second way we manage them is we accept the fact that these smaller customers do sometimes churn, and we are okay with that outcome. While it creates some pressure on our aggregate retention metrics, it does have minimal impact on our overall revenue. Here is the key distinction: If you evaluate us purely on total customer count or on blended retention metrics that treat all customers equally, you are essentially measuring the wrong thing. You are giving equal analytical weight to a $75 a month customer, a solopreneur who is extremely price sensitive, and likely to churn software vendors regularly, and a $600 a month established business with $1 million in revenue that views Thryv Holdings, Inc. as mission-critical infrastructure for their operation. Those are not the same business relationships. They do not have the same economics, and they should not carry the same weight in how you think about our business trajectory. What should you be measuring? Growth in quality customers spending $400 a month or more is 18+% in the fourth quarter of last year. We have had steady growth in that segment. Quality customers now account for 69% of our revenue in Q4, compared to 60% the prior year. Marketing Center is our largest and fastest-growing center within our market sell growth strategy. At two-thirds of our SaaS revenue, growing 34% in Q4, it is one of the clearest signals of where this business is headed. You know, Marketing Center as a center is actually growing faster than the 34%. The 34% refers to the whole kind of platform of market sell growth. This matters enormously because Marketing Center represents an AI-enabled platform. These are customers saying, "I want technology that helps me acquire customers, manage my pipeline, and grow my business, and I am willing to pay for it." Here is what we are learning: customers genuinely love software when it delivers results. Marketing Center customers fit our ideal profile almost perfectly. They are spending meaningful amounts. They are seeing return on investment they can measure. They are expanding into additional capabilities as they see value. They are sticking with us because the platform becomes increasingly embedded in how they run their business. This is our business model. This is what Thryv Holdings, Inc. looks like at scale. It is the right product for the right customer profile. The performance validates everything we have been building toward. When you are thinking about how to evaluate our performance and trajectory, do not just look at the blended customer counts or aggregate metrics. Look at the growth that we are seeing in our market sell growth strategy. Look at the $400 a month cohort expansion. Those are your forward-looking indicators. That is where you can see proof that when we execute our strategy with our target customer base, we can drive strong, sustainable SaaS growth. Let me bring this together. Performance of MSG proves the model works. We are taking those learnings, combining them with Keap's customer conversion and lifecycle capabilities, and scaling that proven success across the unified Thryv Platform. Judge us on the quality and trajectory of our customer base, not just the quantity. That is where the real value creation story is unfolding. With that context, let me introduce our Chief Technology Officer, Sean Wechter, who will talk about the progress we are making on the AI front. Sean has multiple tours of duty at market-leading public and private technology companies and joined our company about half a year ago. I will hand it over to Sean now to share a bit about what his team has been focused on. Sean? Sean Wechter: Thank you, Joe. Good morning. My name is Sean Wechter, I am the CTO of Thryv Holdings, Inc. I joined Thryv Holdings, Inc. in October and have been super impressed with the foundation that we have built and the large customer base we have to build on. The first two levers I pulled when I arrived were to amp up our AI efforts and our data assets, get them cleaned up. I was fortunate to be starting on third base because the products and ecosystem at Thryv Holdings, Inc. are already API rich. Since we are going to be talking about artificial intelligence, I just wanted to go over a few caveats. Things in the AI world are rapidly evolving, our strategy is to adopt the latest and greatest AI tools and partners, and this may change as new leaders emerge. Our strategy is also to conduct a portfolio of experiments and double down on the winners. What we are going to cover today, we are going to go over a summary of our AI strategy and my favorite AI programs. A summary of our AI strategy at a macro level is that we want to partner with the latest and greatest AI solutions on the market. When we think about our strategy, we break it into a few buckets. We have the enterprise, we have our engineering team, and we have our product. On the enterprise, my favorite author is Jim Collins. He wrote the book Great by Choice and Good to Great, and he has this concept of bullets versus cannonballs, which means, you know, you try lots of things, and then you double down on the winners. We are going to do that, exactly that in the sales, customer success, and engineering domains. The reason for that is there are lots of new AI solutions hitting the market every day, and some of them are great, and some of them are not so great, and you have got to sift through them all, and thus, bullets versus cannonballs. On the engineering front, developer productivity is the name of the game. We want to make sure our engineers have the latest and greatest tools in their hands, and we also want to be great at rapidly integrating and interoperating within our customer's ecosystem and our ecosystem. On the product front, we want to bring AI down market to small businesses in an ambient way. Meaning, ideally, AI does the intended task for you, hopefully proactively. For example, if you want to reschedule your next appointment or move a lead from one system of record to another, simply do it by voicing your request, and it is done. We want to be strongly embedded in the top AI models. We believe that that is going to make our products more sticky, and we want to partner like crazy with the winners and rapidly evolve and iterate as those winners rotate every 6–12 months. My favorite uses of AI so far at Thryv Holdings, Inc. is one, our Budget Optimizer, which is a super cool program that used AI to transcribe calls, then used AI to score those transcripts. Then we used machine learning to optimize that data for the best lead sources and the best use of the customer's budget. When we think about our data and our scale, we have LLM data like everybody else, but we have industry data and customer-specific data that helps us on our AI journey. Another cool program we have is the New Zealand Directory Assistance Program, where we used market-leading AI voice interaction solutions with market-leading AI workflow automation solutions and our data to bring a fully AI directory assistance experience to New Zealanders. Then we have our MCP solution, which, you know, really helps us integrate with the top frontier models. I think we were second to market in launching our native MCP solution, which made me happy because we are in the race. We are going to keep it right now as a frontier program because MCP, in general, is still maturing, but we are committed to being deeply embedded into the best AI models. To wrap up, we are working to accelerate our AI efforts meaningfully. I am really proud of the teamwork and excited about this next chapter of the technology industry. 10 years ago, our customers needed a mix of technologies to market and sell and grow their business. 10 years from now, they are going to need a mix of technologies to market, sell, and grow their business. I am committed to ensuring we are leading the way. With that, I will turn it over to Paul Rouse, our CFO. Paul Rouse: Thanks, Sean. Let us dive into the quarter. SaaS revenue increased 14.1% to $119 million in the fourth quarter and was within guidance. Keap contributed $16.2 million in the fourth quarter. SaaS revenue increased 34.2% year-over-year to $461 million for the full year. SaaS adjusted gross margin was 70.4% in the fourth quarter. SaaS adjusted gross margin increased 70 basis points year-over-year to 72.7% for the full year. SaaS adjusted EBITDA increased to $20 million in the fourth quarter, within guidance and resulting in an adjusted EBITDA margin of 16.8%. SaaS adjusted EBITDA increased to $73.8 million for the full year, resulting in an adjusted EBITDA margin of 16%. We ended the fourth quarter with 100,000 SaaS subscribers. SaaS ARPU reached $373, representing a 15% increase year-over-year. Seasoned NRR stayed flat at 94% for the quarter. Growth in quality customers spending $400 a month or more grew by 3,000 or 18% year-over-year, and now represents more than 20% of our client base. Multi-product adoption continued to accelerate in the fourth quarter. Clients with two or more SaaS products grew to 19,000, or 23% of our base, compared to 15,000 or 16% of our base one year ago. Thryv Holdings, Inc. clients with two or more centers was 15% at the end of the fourth quarter, compared to 12% in the prior year. Marketing services revenue was $72.6 million for the fourth quarter, in line with our guidance. Marketing services revenue was $324 million for the full year. Marketing services adjusted EBITDA was $18.8 million in the fourth quarter, within guidance and resulting in an adjusted EBITDA margin of 25.9%. Marketing services adjusted EBITDA was $78 million for the full year, resulting in an adjusted EBITDA margin of 24.1%. Fourth quarter marketing services billings totaled $60.9 million, down 34% year-over-year, reflecting our intentional shift in our strategy as we continue to initiate upgrades of legacy digital marketing services products for clients to our SaaS platform. The decline will persist, but at a managed pace. We remain on track to exit marketing services by 2028, with cash flows lasting through 2030, providing liquidity as we fully transform to a pure play software business. Free cash flow was $31.1 million in 2025, for the first time, we expect the number to grow meaningfully to $40 million–$50 million in 2026, a direct reflection of our software business having reached size and scale that is now driving the majority of our profitability. We ended the fourth quarter with net debt reduced by $15 million to $251 million, bringing our leverage ratio to 1.7 times. Turning to our outlook for 2026. For the first quarter, we expect SaaS revenue in the range of $114 million–$115 million. For the full year, we expect SaaS revenue in the range of $461 million–$471 million. For the first quarter, we expect SaaS adjusted EBITDA in the range of $12 million–$13 million. For the full year, we expect SaaS adjusted EBITDA in the range of $70 million–$75 million. For the full year, we expect our marketing services revenue to be in a range of $150 million–$160 million. For the full year, we expect marketing services adjusted EBITDA in the range of $30 million–$35 million. I will turn the call back over to Joe. Joe Walsh: Thank you, Paul. You will have noticed in Paul's guidance that is a little bit conservative on the quarterly guide and the guide for the year for SaaS. We have a tremendous amount of faith in our market sell grow platform, this initiative I talked about in the opening. We basically have struck oil. This is really selling very quickly and working well. As we are setting up this transition, we expect slower growth for a few quarters, re-accelerating later in the year and going strong into next year. We are taking a conservative guide as we work our way through that transition. I will turn it over now to the operator for questions. Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand now. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Arjun Bhatia with William Blair. Your line is open. Please go ahead. Arjun Bhatia: Perfect. Thank you guys so much. Some interesting announcements there. Joe, with the new platform, maybe we can touch on that first. I am just curious how you kind of envision the adoption kind of curve of the new platform. Like, is there going to be a migration of existing customers? You know, like what are the kind of, you know... Is that disruptive for customers? How do you plan to do that? Then just how long might it take before the new platform is sort of fully ramped up for your entire customer base, and you are selling it to new customers as well? Joe Walsh: That is a great question. Thanks, Arjun. It is interesting, you know, Marketing Center has been around, and it has been steadily building, and we have been sort of dialing it in, and it is fitting in beautifully in a market where, you know, there are a lot of people with vertical CRMs and, you know, other kinds of offerings. You know, we are uniquely placed in this ability to find customers. You know, we still own and control, you know, lots of big directories like YP and Superpages, and we have got a big network of partners like Yelp and Nextdoor and many, many others, both here in the U.S. and over in Australia and New Zealand. We are really plugged in, and we are really good at finding new customers and bringing them in. This top-of-the-funnel thing, we have always been amazing at. What Keap gave us was it gave us sort of the bottom of the funnel, the ability to follow up and convert, and then once the customer was a customer, to nurture them for more business, for a longer lifetime value run. What we have done is we have engineered everything together into one platform, and the more progress we have made on that, the more we have met with customers and begun to put that in place, the more we have realized that, you know, we have just captured lightning in a bottle. Like, this is really good. You know, you do not have to get somebody to take out their other CRM to put it in. We can actually be agnostic about what CRM you have, and we can work with you. It is really opened up a whole new vista for us of people to work with, of partners, the whole bit. We are really excited that this is a space that we have a tremendous right to win in. I am not sure we have a right to win in just the kind of original BC product. You know, there are people that are doing a lot of work deeply down into verticals, mapping processes in particular industries and all that. You know that is a harder putt, if you will. Back to your question, how do we see it sort of developing? Well, it is the Market Sell Grow platform is made up of some bits that we have been doing for a while, and some of the newly developed AI kinds of tools that Sean talked about a couple of minutes ago. We, you know, we have sort of replatformed everything and are building it in that way. It is well over $300 million in revenue already. And yeah, there is a little bit of cannibalization where it is eating up some of Business Center customers who bought it, who really more had an interest in growing and, you know, and leads, lead gen and some of those tools. There has been some people, you know, moving from Business Center over to this exciting new Platform. Look, you know how this happens in a company. When you bring out something that is just hot and really working well, everybody gets excited about it. It becomes the thing that, you know, they really believe in, and they want to talk to customers about. In some cases, you know, that enthusiasm is transferring into them, you know, moving customers over, because they feel it is a better fit, and it is going to really help them. You know, we are still selling some new business center customers, and we have a large installed base of business center customers that are using it and doing well on it. But it does not have the heat and light that it had before because the market sell and grow platform has really captured everyone's imagination, and that is where the focus is. Hopefully that answered your question. There is kind of a little bit of cannibalization. It is mostly selling new out there, but there is a little bit of people moving from Business Center. Arjun Bhatia: Yep. Yeah. Perfect. Very helpful. Appreciate that color. Then, going back to just how you think about your customer base and the new sort of segmentation around quality customers, how should we just view the retention metrics and LTV dynamics of this quality customer cohort? How does it differ, or maybe the better way to phrase it is, what is the overlap with the seasoned customer metric? You know, are these all tenured customers, or are there new customers that are also spending over this $400 mark per month? Joe Walsh: There are definitely some new customers that are coming in right away. I mean, if you look at what our field sales force is selling right now, on average, they are selling customers that are over $400 a month. I mean, they, you know, they are out there selling big, and they are having a lot of success, you know, selling this kind of fully hatched program. We tried to talk about it a little bit in the press release, prepared remarks. You know, we have been transforming the directory business of the past into this SaaS business, and in so doing, we... Some of the legacy platforms that date back to some of the old Regional Bell Operating Companies that were bought and rolled up and were a part of this, some of these platforms were, you know, 20 years old and older, that clients were running on, and we literally needed to shut those down and get them off. We landed them on our modern SaaS platform, and we gave them a lot more value, gave a lot more functionality, a lot more tools, and we moved them over, you know, without disrupting them with a big price increase. A lot of these people came over, and they were, you know, below our rate card and not necessarily natural, you know, SaaS customers or natural customers that really were wanting to invest and build and grow their business. We have been working with them, trying to get them engaged with their tools, and in many cases they are getting engaged, and they are buying more, and they are becoming quality customers. In some cases they are saying: "Look, you know, I do not really care about this. It is not really what I want," and they are churning away. That is part of why you are seeing noise in the gross customer number and why we have kind of pointed you to what is going on under the hood. You have got this $300 million plus dollar business that is growing fast, that is really strong, and you have got this big client base. About, you know, 69% of our clients are this quality metric where, you know, we make good margins. These are a little bit larger businesses. These are businesses that have the ability to buy more from us. I get it. There is so much noise in our numbers, it is hard to kind of see it all. That is kind of been our approach. Arjun Bhatia: All right. Perfect. Thank you. Operator: Your next question comes from the line of Zach Cummins with B. Riley Securities. Your line is open. Please go ahead. Zach Cummins: Hi, good morning. Thanks for taking my questions. Joe, I wanted to ask you how your go-to-market approach is going to evolve now with this greater focus on quality customers. Can you just dive a little bit deeper in terms of how you are thinking of serving the lower end versus your direct sales approach and maybe even working with some larger partners over time? Joe Walsh: Yeah, thank you. We made, you know, sort of a natural mistake, if you will, in the early going. You know, we were, you know, anxious to build a software company. We were anxious to talk to anybody that would talk to us to sell it. We sold anybody that would talk to us. In the process, we did a massive experiment to figure out who our ideal client profile is. We sold a lot of solopreneurs, very small businesses, where, you know, they may have come in for an initial kind of $300 a month-ish kind of deal, and that was a big bill for them, and they, you know, worried every month about it. You know, they were not necessarily able to fully utilize all the functionality in the software. At the same time, we went out and we sold some bigger businesses, and we saw them really engage with the product, really begin to use it. We saw them buy more, and so on. What we pretty much have decided is that our phenomenal, you know, in-person sales organization should really spend its time with the larger businesses. We should develop more of untouched by human hands motion for the smaller. We are, you know, we have been building this sort of product-led growth approach, where, you know, for a smaller business that wants to come in, you know, we are going to have products that they can buy, and, and they will be able to do that. There will be, you know, all kinds of, you know, communities and, frequently asked questions and videos they can watch, and so on. We are not necessarily going to, you know, deploy somebody who makes six figures out there calling on them to help them with that. The economics of that just are tough to support. We really have put, you know, most of our emphasis and most of our focus on marketing to and prospecting for larger businesses, more businesses with more like, you know, $1 million in revenue or close to it, and less of the kind of very, very small person that works alone or maybe a two-employee business. Those we hope will still come in and, you know, come in through our product-led growth motion that we are developing. You know, we think the majority of where we will spend our time is with these bigger businesses. Zach Cummins: Understood. Just one follow-up question around the launch of the new platform. Can you clarify how much more development work needs to be done, and when you are planning to really kind of broadly roll out this new MSG platform as you referred to it? Joe Walsh: Yeah. We are selling it right now, and it is going really, really, really well. What is happening though is we are doing more work to put more functionality, and I do not know if any product is ever really done. Bringing it, you know, further along, there are some really bold AI initiatives where we use the MCP layer, and we are making it do all kinds of interesting things that are sort of happening in the lab that will be, you know, coming into the product fairly soon. It is progressing nicely. We, you know, we have a, you know, a trial version out and a small beta that will be expanding more broadly fairly soon. It is all coming together now. It is not like a flash cut where we are not doing it, and then we are going to do it. We are selling it right now. There are dramatically improved versions of it that we plan over the course of the year. Operator: Your next question comes from the line of Matthew Swanson with RBC. Your line is open. Please go ahead. Matthew Swanson: Yeah, great. Thank you guys so much for taking my question. I was curious on the tiers of kind of how you are pricing the new platform. I think it makes a lot of sense from kind of a streamlined standpoint. What are you seeing or kind of what are your expectations in terms of how your quality SaaS customers are going to transition over, at what tier, and does that have any kind of distinct differences from a pricing standpoint compared to the existing products they are on? Joe Walsh: I think it is more. It is a great question because, you know, you have got different kinds of businesses. You have got the very small kind of dreamer, just getting started business, and we are going to have a product for them. As I mentioned, that we are not really going to talk to them about it, per se. We are going to, you know, let them come to our website and sort of do it on their own. We are going to have kind of a mid-price thing that is a nice step up for those people who start on that trialer tier, and that second tier might also be an area that an in-person salesperson might be able to land somebody on, and then there will be a higher tier. You know, my experience is to scale anything. You need to keep it relatively simple. It cannot really be, you know, a blizzard of different choices, and all that just becomes too confusing. You know, that is why we are coming up with this more streamlined, simple approach. There will be add-ons and things that you can buy over and above that initial triplicate of choice so that we can continue to grow the customer. You know, we will have an offering, you know, at the low end for a smaller business so that they can come and they can buy, but we are not going to deploy a whole bunch of sales or services costs against that. Matthew Swanson: Yeah, that is helpful. Maybe following up right where you left off there and just kind of thinking about some of the efficiency gains that you could have by having such a, you know, simplified or centric go-to-market approach, would the plan be to end of life the other centers or other products over time, or is it just too early to think about that? Joe Walsh: I think it is too early to think about that. I mean, the market sell growth platform is pulling across our product range, all the things that we think support that. What was it, at one time, Thryv Reporting Center is powerfully in the middle of that now. You know, Thryv Business Center is a separate thing, and I mentioned quite honestly, there are, you know, some numbers of customers that have opted more toward the market sell grow piece because that is really what they want. They really want the phone to ring. They really want a bunch of business coming in. You know, they were not prepared to really fully use all the functionality of an operating system in their business. That is kind of right. That is the way it is working out. That is part of the reason that you are seeing a little flatness in our top-line revenue growth and our guidance, is we are trying to give a little room because we are seeing some of that cannibalization. In terms of the longer term, you know, we have got a very large base of Business Center customers engaged and using it and happy. You know, we do not intend to kick them off. We want to continue to serve them, and we are really happy with them. In some cases, they have got Business Center, and they also are buying all the marketing tools and doing that as well. We have more cleaned up and segregated that. We feel like we can scale bigger, better, faster, and run a more efficient business with a more streamlined set of product offerings. Operator: Thank you. Your final question comes from the line of Jason Kreyer with Craig-Hallum Capital Group. Your line is open. Please go ahead. Jason Kreyer: Thank you, guys. Joe, I was wondering if you could talk more about the AI functionality that you are embedding in the platform, and how that creates more value or more efficiency for your customers. Joe Walsh: I would love to. I am going to share my answer with Sean. I am going to give him a look at it because Sean is, I think his middle name might be AI. He is Mr. AI. I will start a little bit, and then I will give it to Sean. You know, there is just a long list of different things that AI can do, and I know there is a lot of debate out there about, you know, will AI, you know, replace software, or will it augment it, or whatever? You know, look, the price point that we are offering here, it is not worth your time to sit down and try to figure out how to hack together your own stuff. I mean, we are organizing and pulling it all together and making everything in a complete package to help you accomplish growing your business. Most of the people that we work with do not have a lot of expertise in marketing. They do not have a lot of expertise in AI. They are good plumbers or carpenters or, you know, whatever they do, and they really need us. It is sort of AI with human in the loop, but the whole idea is this platform becomes easier and easier to use. If I am really honest with you, our biggest problem over the last, you know, decade has been getting the small business to really engage and do even small things that they need to do to make the whole wheel work, and the AI can come in now, and it can do those things to kick it over and create, you know, a cycle that works. The automations that we got in Keap do that same thing. There is a lot of really cool stuff like, you know, your customer calls you, and this thing can, you know, capture the transcript of the call. It can rate, grade, you know, was it a one through five lead? Where should it go in your lead funnel? It can follow up on that thing for you. It is really incredible, the stuff that it is doing. Sean, I know you have got some observations the way you think about it. I cannot seem to shut you up about it when we talk about it. Sean Wechter: Yeah, I am equally excited about it as well, Joe. Jason, you know, we sit in the value chain between buyers and sellers and have for a long time. That means we have got a lot of really rich data around that, from call transcripts to leads to form fills. We are just trying to get creative on how to use that to benefit the actual small builder and small business. You know, there are just things that our small business needs to evolve into, like, you know, we call it AEO, answer engine optimization. You know, you had SEO, well, now you have to show up in all the frontier models and helping them do that. We have website generation, we have social posting, call analysis, AI Receptionist, you know, they are missing calls. They can now have an AI help them take that call, transcribe it, moving data around from a mix of ecosystem, you know, solutions in their ecosystem, you know, systems of record for finance and other CRMs and so forth. Eliminating that complexity is pretty exciting. When I talked about our strategy, there are new awesome tools that are popping up left and right, and we are committed to taking the best of them, simplifying them, and bringing them down market to our customers. That is really just a race without an end. Did that answer your question? Jason Kreyer: Oh, that was great. Thank you. I appreciate that. Maybe just one follow-up for me. Curious if you have any expectations for churn as you migrate customers kind of from where they are into these higher value packages? Thanks. Joe Walsh: Yeah. We are seeing churn overall gently trend down. Now, we definitely had a little bit of a hump of churn following the massive migration. I mean, you will remember if you have been tracking our numbers closely, we went from around 50,000 customers to 100,000 really fast, and that was, you know, just a whole bunch of systems that we were sunsetting in the old, you know, phone company, you know, marketing services and Yellow Pages environment that we wanted to move over. We have had a chance now to, you know, really work with those customers and some of them, we worked with them out, and some we worked with them up. There is a little bit more of that to go, but the way I would say, Jason, is I think that when you look at our business over the next, say, you know, three years, kind of the arc of where we are going, we are subtly moving up market. As we move up market, I think we will get lower churn. Just when I study the base that we have now, you know, those customers that are, you know, down in that lower spend tier or the smaller businesses, have churn profiles that are higher than the bigger businesses that we are selling. When we sell a business that has, you know, eight or 10 employees and, you know, maybe $1.5 million of revenue or something like that, they tend to be very stable and behave really well. They have a persistent need for leads. They have an employee staff that is counting on, you know, the business ticking over and doing that next thing. When we sell a solopreneur or a two-employee business, they sometimes hit a rough patch and just decide to go get jobs and stop doing the business anymore, and it becomes a churn, and it has nothing to do with our software. I think my expectation is where we are trying to run the business is for lower churn over time. I am not saying we are going to go to enterprise-level churn, because we still are dealing with small businesses, but I think you will see it trend down over time. Operator: There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.
Operator: Hello, everyone, thank you for joining the Butterfly Network, Inc. Q4 and FY 2025 earnings call. My name is Gabrielle, I will be coordinating your call today. During the presentation, you can register a question by pressing star followed by 1 on your telephone keypad. If you change your mind, please press star followed by 2 on your telephone keypad. I will now hand over to your host, John Doherty. Please go ahead. John Doherty: Good morning, thanks to all of you for joining our call today. Earlier, Butterfly released financial results for the fourth quarter and full year ending December 31, 2025. We also provided a business update. The release, which includes a reconciliation of management's use of non-GAAP financial measures compared to the most applicable GAAP measures, are currently available on the Investors section of the company's website at ir.butterflynetwork.com. I, John Doherty, Chief Financial Officer of Butterfly, along with Joseph M. DeVivo, Butterfly's Chairman and Chief Executive Officer, will host the call this morning. During the call, we will be making certain forward-looking statements. These statements may include, among other things, expectations with respect to financial results, future performance, development and commercialization of products and services, potential regulatory approvals, revenue attributable to embedded collaborations through revenue share, chip purchases or otherwise, and the size and potential growth of current or future markets for our products and services. These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve a number of known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our filings made with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, and the company disclaims any obligation to update such statements. As a reminder, this call is being webcast live and recorded. To access the webcast, please visit the Events section of our investor website. A replay of the event will also be available on this page following the call. I will now turn the call over to Joe. Joseph M. DeVivo: Thanks, John. Good morning, everyone, and thank you for joining our fourth quarter and full year 2025 conference call. I am pleased to announce that our fourth quarter revenues came in at $31.5 million, growing 41% year-over-year. It is also the first quarter in our history where we realized positive operating cash flow, driven by upfront payments from our Midjourney deal. We are now nearly two years into our strategic growth plan that we introduced in early 2024. The message was clear: execute with focus and financial discipline, strengthen our core franchise, and unlock the full value of our semiconductor ultrasound platform beyond handheld devices. We are doing just that, and we now have material contribution outside of our core POCUS business. Earlier this month, Jim Cramer was asked a question about Butterfly Network on Mad Money, and he said, I quote, "It is a very competitive market, and I do not want to be in that part of the medical device group. Too hard for this guy, just too hard." You know, I am a big fan of Jim Cramer, and like you, watch CNBC every day, and he is right about one thing: traditional medical devices are a tough sector, but Butterfly is not a traditional medical device company. We were never just a handheld company shaking at the knees of big ultrasound. We are David, faithful and committed to our cause, not backing down regardless of how large our opponent is. We are the disruptor. We are playing our own game with our own rules and our own playbook. We are digital eating analog's lunch and plan to revolutionize imaging with digital ultrasound everywhere and images taken. Goliath just does not know it yet. We are changing ultrasound imaging with our differentiated chip platform while deploying secure cloud software, AI tools, and mobile applications, and are the only healthcare company in the world over the last seven years to receive an Apple Design Award. We are not a medical device company alone. We are a transformative semiconductor-based ultrasound company. As you are all aware, the strategy we introduced has three core tenets: accelerate our core POCUS business with an enterprise-ready, cloud-connected imaging solution, execute strategic initiatives to reach new care settings and enable entirely new applications, namely home care and Ultrasound-on-Chip co-development. Lastly, deliver an R&D roadmap that sharpens our technology edge with next-generation chips and new form factors getting more and more powerful and capable. Let me walk you through the progress in each of these. In core POCUS, revenue grew 15% year-over-year on top of a 35% growth in the fourth quarter of last year, which, as you recall, was a record product launch year. We closed a second large system-wide enterprise deal in the fourth quarter of 2025 and continue to deepen medical school and enterprise relationships. I will let John cover the financials in more detail, but we feel much better about macro trends and the deal cycle than earlier in the year and expect to carry that momentum into 2026. The fourth quarter Compass AI launch is a big tailwind for our enterprise strategy. Enhancing our enterprise solution helps refresh existing accounts, continue attracting new customers and drove more than 50% growth in our enterprise pipeline since launch. At the same time, we have been building what we believe is one of the most secure cloud infrastructures in healthcare. In the U.S., we most recently achieved GovRAMP and TXRAMP, and FedRAMP is anticipated in the coming months, meaning we will soon be even more qualified for cloud deployments in now the world's largest government market. Internationally, we see meaningful opportunities in 2026 as we open markets in South America and continue expanding across Middle East and Asia, alongside a renewed momentum in global health. We have surpassed 1,000 NGO partners worldwide, and many expect to increase activity in 2026. We also continue to make progress in our Butterfly Garden partners, and as you know, HeartFocus became the first FDA-cleared app in 2025, and we expected additional partners to reach that clinical milestone in 2026. We announced plans to release our proprietary beam steering API in the first half of this year. The API will open 3D imaging capabilities that have been reserved for Butterfly products only. Because our beam steering is fully digital on a semiconductor chip and not mechanically driven like other legacy systems, we can uniquely extend those capabilities to partners. The goal is to advance what they can build, expand the AI ecosystem, and help accelerate ease of use. We are excited about the new opportunities this welcomes. Moving to the strategic growth engines. We have built a home business determined to accelerate the use of POCUS devices where the patient is, expanding the reach and empowering nurses and other clinicians to perform scans using AI tools. I believe we will reach a commercial agreement in 2026, allowing home care to enter its commercial phase. This is a powerful new channel that reduces hospital readmissions, lowers costs, and expands Butterfly's reach beyond the hospital. Home care is a reality, we think it can be a real growth driver, starting to add revenue in late 2026 and into 2027. We also ventured out to develop a new business to make our core Ultrasound-on-Chip available to companies with large new market opportunities that are not competitive with Butterfly's focus business. That was previously known as Octave. Well, to start the new year, we have officially sunset the Octave name and have centralized our semiconductor platform strategy under Butterfly Embedded, reminiscent of the Intel Inside model. What began as an adjacent effort is now emerging as a foundational business, enabling other category-defining innovators to build entirely new application on Butterfly's Ultrasound-on-Chip technology. The big news for the fourth quarter, though, was signing Midjourney deal in November, and as you can see today, it contributed $6.8 million of revenue in the quarter and was a key driver of our 41% year-over-year growth. Midjourney is an independent research lab pushing the boundaries of generative AI and human imagination. Their scientists have envisioned a breakthrough new application for ultrasound that we believe the world will be learning about very soon. This partnership combines Butterfly's core Ultrasound-on-Chip technology and imaging software with Midjourney's generative AI compute power to do something very special with ultrasound. This deal is more than revenue, it is validation. It is a foundational step towards Butterfly's reinvention into a platform company. The initial partnership and revenue contribution is pre-commercial. Based on the plan that Midjourney has shared with us, once commercial, we believe there is meaningful additional revenue opportunity for Butterfly in the form of chip sales and revenue share on top of the licensing fees that will continue through the deal. We expect this to happen in the outer years of our 5-year plan, and if it occurs, could represent meaningful progress towards our goal of reaching $500 million in annual revenue by 2030. Beyond Midjourney, we signed an additional Butterfly Embedded research share partner this quarter and expect another one shortly, while managing an active pipeline of some of the largest technology and healthcare companies in the world. Before I look ahead to our R&D roadmap initiatives, I will turn it over to John to discuss the financials. John? John Doherty: Thanks, Joe. I am very excited to have joined Joe and the talented team here at Butterfly, which includes Megan Carlson. Megan, who you all know, did a great job in the interim CFO role and has been an awesome partner to work with, along with the rest of the leadership team. With about three months behind me, I want to open with a few comments and my thoughts on Butterfly overall. I joined Butterfly because I was excited by the incredible potential this company has going forward to provide a valuable and meaningful experience to our customers, as well as to create value for our shareholders. I was also impressed by the strength of the leadership team and the passion and commitment demonstrated by employees across the company. This is a company I am proud to be a part of. Butterfly certainly navigated a few challenges in its early years as a public company. However, the company has made the necessary difficult adjustments, including improving its operating efficiency, choosing the markets it can win in, selecting the best ways to leverage its IP and technology advantage, and allocating its resources towards higher ROI opportunities and markets. No doubt, based on these actions, Butterfly is a stronger, more agile company today. With continued steady execution, the company has the potential for significant core growth in an incredibly meaningful domain through its focused and related conscious AI software and Butterfly Garden business, and we are well positioned to gain outsized share in the markets that we compete in. We also have a significant opportunity to leverage our core platform of Ultrasound-on-Chip into other nascent and disruptive markets consistent with our strategy through Butterfly Embedded, as the Midjourney partnership demonstrates. With that, let us move on to a few highlights for the fourth quarter, including a record level of revenue for the quarter and exceeding the high end of our total revenue and adjusted EBITDA guidance ranges, a record level of quarterly probe sales, significant improvement in adjusted EBITDA margin, driven by our revenue performance and continued financial discipline, the lowest annual cash use in the company's history, and we generated positive free cash flow in the quarter, and the execution of the Midjourney contract, which helps to solidify and amplify all of our efforts to drive a new wave of ultrasound-enabled platforms and use cases through Butterfly Embedded. Let me move on to our results. We had a strong fourth quarter of 2025, with revenue of $31.5 million, the highest quarterly result in the company's history. This represents a 41% increase year-over-year for the quarter. The increase is driven by increased revenue from Butterfly Embedded, as well as a 27% increase in year-over-year volume in our core focused business, with continued penetration of the iQ3 in all markets. The 41% year-over-year growth is significantly higher than the at least 17% year-over-year growth that we put out in January. We did better in the core business and realized more revenue from Butterfly Embedded, given the work we had already performed relative to the Midjourney contract. This is the primary reason we used the at least language at the time, as we were still finalizing the accounting treatment. Our results and the guidance I will provide later in the call for first quarter and full year 2026 all include updated financial expectations from this contract. Breaking things down between the U.S. and international channels, during the quarter, U.S. revenue was $26.8 million, which was 55% higher year-over-year, driven by revenue from Embedded, as well as strong demand in the core business, with unit sales up 44%. Total international revenue decreased by 6% year-over-year to $4.7 million in the fourth quarter. While sales of the iQ3 in the quarter were up 42% year-over-year, sales of the iQ+ were down 79%. Breaking our revenue down between product and software and other services, product revenue was $18.1 million, an increase of 23% versus the fourth quarter of 2024. This increase was driven primarily through growth in volume across all channels, with U.S. health systems, e-com, and vet leading the way, as well as higher average selling prices in international markets with the higher mix of iQ3 sales. Software and other services revenue was $13.4 million in the fourth quarter, up 76% year-over-year. Software and other services mix was 43% of revenue, increasing from 34% in Q4 2024. This increase can be attributed to the significant step-up in revenue contribution from Butterfly Embedded in the quarter, related primarily to the Midjourney partnership. I will talk more about this as well when I come to guidance for the first quarter and full year 2026. When looking at the full year 2025 versus 2024, total revenue increased 19% to $97.6 million. This was driven by two areas. First, growth in our core focused business, with both increased volume and a higher average selling price, driven by an increased mix in the sales of the iQ3 and strong performance by U.S. sales, our vet channel, and international distributor channels. Second, growth in our emerging Butterfly Embedded business, primarily from the execution of the Midjourney contract in November of last year. Moving on to gross profit. Gross profit was $21.2 million in Q4 2025, a 55% increase as compared to the prior year adjusted gross profit of $13.7 million. Gross profit margin percentage increased to 67% from 61% in the prior year period. Gross margin percentage was positively impacted by the higher-margin Butterfly Embedded revenue and lower software amortization. Moving to EBITDA and cash. For the fourth quarter of 2025, adjusted EBITDA loss was $3.2 million, compared with a loss of $9.1 million for the same period in 2024, an improvement of 65%. For the full year 2025, adjusted EBITDA loss was $26.5 million, compared to $38.9 million for 2024, an improvement of 32%. The improvement in adjusted EBITDA loss for both the fourth quarter and full year was driven by contribution from higher margin revenue and continued financial discipline reflected in our lower year-over-year payroll costs for the quarter and full year. This improvement in adjusted EBITDA and continued financial discipline has led to a cash and cash equivalent balance, including restricted cash at year-end of $154.5 million, and the use of cash in 2025 of $19.4 million, excluding the funds from our offering last year. This compares to a use of cash of $45.9 million in 2024, an improvement of $26.4 million. We also had positive cash flow of $6.3 million in the fourth quarter. These results demonstrate that we are very well positioned as we move forward to continue to invest in the business areas where we see significant opportunities for additional growth and disruption, including expanding our core POCUS business and penetration of Compass AI as a core operating system for health systems. Continuing to enable third parties to build tailored ultrasound AI solutions in Butterfly Garden to provide deeper and expanded access to our platform. Expanding our home care business following the execution of our anticipated first commercial agreement, which we believe could be finalized in the first half of 2026, as Joe mentioned earlier. Enabling a new wave of Ultrasound-on-Chip-enabled technologies through Butterfly Embedded, and continued AI and semiconductor innovation with the development of our 4th-generation chip. Before turning to guidance, I want to update you on the general macroeconomic environment relative to Butterfly. While there were some concerns in 2025 relative to the government shutdown and impact on the FDA's processing of fee-based submissions, regulatory processing delays, and delays in customer purchasing decisions, we have managed through this, and it is very much behind us. Our fourth quarter results are indicative of that, and we were able to close some of the larger deals in the pipeline and still have a number that are active. I would now like to turn to our outlook for the first quarter of 2026 and for the calendar year ending December 31, 2026. In the first quarter, we expect revenue in the range of $24 million–$28 million, as we ended the fourth quarter somewhat higher than expected, and the first quarter is typically a slower quarter for the company due to seasonality. As is typical for Q1, adjusted EBITDA is impacted from expenses related to payroll tax and 401(k) reset, as well as our national sales meeting and POCUS Innovators Forum, which took place in January. As a result, we expect slightly higher expenses and higher adjusted EBITDA loss in the first quarter relative to the remainder of the year in the range of $8 million–$10 million. For the full year 2026, we expect revenues to be between $117 million and $121 million, an increase of approximately 20%–24%. We expect our adjusted EBITDA loss to be between $21 million and $25 million. Our guidance for adjusted EBITDA includes investment in key areas to support continued innovation, as well as our emerging embedded business, as well as the impact from tariffs initiated in 2025. In summary, we had a great quarter, a record quarter. We closed the year out strong, we exceeded expectations for revenue and adjusted EBITDA, and we are very well positioned going forward. As our 2026 full year guidance indicates, we look forward to continued growth this year and beyond, and our overall outlook on the business is brighter with this past quarter reinforcing our view. In 2025, we believe the company enhanced its position in the core POCUS markets and can continue to gain share in 2026 through deeper penetration of existing customers, new customers, and applications. We also amplify our Ultrasound-on-Chip platform and the potential of Butterfly Embedded with the licensing partnership with Midjourney. We did all of this while continuing our intense focus on driving operating efficiency across the business and ROI. As I said up front, I am excited to have joined Butterfly late last year, and I am excited about what is ahead for the company in 2026 and beyond. Now, let me hand it back to Joe for some closing comments. Joseph M. DeVivo: Thanks, John. It is an exciting time for Butterfly. We are in a strong position and are delivering on all fronts. The future is even brighter. Before closing, I will touch briefly on R&D. We recently spent two days with 60 leading POCUS thought leaders at our annual POCUS Innovators Forum, and the alignment was unmistakable. The goals, needs, and future state vision shared was directly in line with where we are taking our portfolio. That level of synergy only strengthened our conviction that we have a path to enable every doctor and nurse with powerful, affordable, compact imaging and can meaningfully unlock enterprise adoption. As I mentioned on the last call, our fifth generation P5.1 chip was moved to production by year-end. We are excited in achieving harmonics and delivering a new level of imaging for handheld ultrasound. This will open additional subspecialties and support our enterprise selling efforts in 2027 and beyond. Next up on our chip roadmap is Apollo. This new chip architecture is now receiving the full attention of our engineers and will deliver 20 times the current data rate and compute performance, ushering in a new era of digital imaging and AI. We are already working with several Butterfly Embedded partners based on the capabilities of this platform. I would like to close by sharing exactly why I am so excited about Butterfly's current chapter. We are pioneering semiconductor-based digital ultrasound everywhere it is needed. In the traditional ultrasound market, that means continuing to lead in point-of-care solutions that truly meet the demands in and out of the hospital, empowering doctors, nurses, and caregivers, expanding new subspecialties, strengthening our enterprise roadmap, moving imaging to the bedside and beyond it. It is also bigger than that. Ultrasound is being researched and deployed in brain therapy, continuous monitoring, robotics, organ preservation, and the list goes on. If you do a simple search of ultrasound in the magazine Nature, just this month alone shows applications in neuromodulation, ablation, antiviral therapy, and soft robotics. The real inflection point comes when ultrasound in these use cases move to silicon, when it becomes programmable, power efficient, AI native, scalable. That is the common thread. Whether it is a Butterfly handheld in a clinician's pocket, a new form factor on our roadmap driving enterprise or home adoption, or a partner building something novel with our technology that we can never do ourselves, it is the same core technology, the same architectural advantage. We are not just building devices, we are opening markets. We are enabling a new age of digital ultrasound imaging and sensing, all in one strategy. This is Butterfly. We are not just a medical device company. We are a true disruptor building the ultrasonic backbone of the AI era and one of the most exciting technology growth stories in healthcare and technology today. With that, operator, please open it up for questions. Operator: Thank you, Joe. To ask a question, please press star followed by 1 on your telephone keypad now. If you change your mind, please press star followed by 2. When preparing to ask your question, please ensure your device is unmuted locally. Our first question is from Joshua Thomas Jennings from TD Cowen. Your line is now open. Please go ahead. Joshua Thomas Jennings: Hi, good morning. Thank you. Impressive to see all the progress in so many different channels. Gives us a lot to ask about, challenging to choose one of those lanes, wanted to start with Butterfly Embedded and just, absolutely. Just wanted to better understand, and you may not be able to share, but any details around potential timing of the technology offering that Midjourney is going to put forward, implementing Butterfly's semiconductor and ultrasound chip technology? Any help just thinking about the cadence of revenue contributions from this partnership over the course of 2026 and what is embedded in guidance? Joseph M. DeVivo: Thanks, Josh. Well, I will let John answer the second part of that in a moment. Let me just get to the first. I think we are probably going to see something, you know, in the relative near term from Midjourney. You know, one of the things about a Butterfly Embedded program is we are enablers for our partners. This is not our business, this is their business, and we do everything we can to amplify their business. I do not want to get out ahead of them, and all I want to do is do everything that we possibly can as a partner to support them. That said, I think, you know, they probably want to get this out sooner rather than later. The moment they do, you know, we will do the best to show you how it, you know, translates into Butterfly. John, do you want to take the second part of that? John Doherty: Yeah, sure. Thanks, Joe. Appreciate it. How you doing, Josh? Joshua Thomas Jennings: Good. John Doherty: So— Joshua Thomas Jennings: Thanks a lot. John Doherty: when you look at Embedded, you know, obviously, yeah, as Joe touched on during the opening remarks, Midjourney kind of lit it on fire, if you will, with the contract we signed at the back end of 2025. We are very excited about that contract. There is also, you know, a number of other partners that we are working with in Embedded. While right now, Embedded and our revenue is, you know, there is a big contribution from Midjourney, we do expect, you know, other contributions from other partners that we have in there, and, you know, we are really excited about what that part of our business can be, as we discussed at the back end of 2025. You know, relative to Midjourney, it is a $74 million contract, as we mentioned. There are different components of it. You know, there is the upfront payment, there are annual license fees, and then there is milestone work that we do that ultimately, you know, allows us to, you know, do the, you know, take the revenue, ultimately, you know, quarter by quarter, if you, if you will, year by year. You know, we expect to get a good amount of contribution throughout 2026 into 2027 from the contract. In addition, when they commercialize, ultimately, you know, as Joe mentioned upfront as well, there is an opportunity for chip sales as well as for a revenue share as part of their business. Ultimately, really excited about the overall contribution from Midjourney, but Embedded is not just Midjourney. Joshua Thomas Jennings: No, I appreciate that answer, and kind of leads into my next follow-up is, I mean, our understanding is that the team was focused on the Midjourney partnership and development work and then locking that in in 2025, but there were some other potential partnerships on the periphery that sounds like you guys are engaged and moving forward. Any help thinking about the Butterfly Embedded pipeline that you just referenced? Joseph M. DeVivo: Yeah. I mean, we are talking to a lot of people. As I mentioned, some, you know, very large organizations and also a lot of startup organizations. Kind of the way it works is, you know, we saw a, you saw a contract in the 8-K with Midjourney, in November of 2025. They had been an embedded partner for over a year prior. So the way it kind of works is, you know, people will buy a license to our software, and then they will start buying chips, and they will do some research. They will do research, you know, as far as how does, you know, does a chip meet their performance that they need? How does it integrate with their systems? Then, and they do a bunch of work. You know, whenever they are done and ready, you know, if everything worked out well, then it will turn into a commercial agreement. They will come back and say: "Okay, well, we want to now do, you know, X, Y, and Z." That is kind of how Midjourney happened. There is really no formula. It is just, you know, we have, I think, now, eight or nine embedded partners today, and the pipeline is pretty large. It is also, you know, we are not selling off-the-shelf product. You know, we have to take our product, and we have to do labs and show them how it can fit with their tech and whatnot. It is a bit of a sales process, but, you know, do we have another Midjourney in there? I hope. You know, there are some very big opportunities people are going after, massive opportunities, actually. You know, we are going to continue to add people into the research phase of our relationships and do everything possible to meet their needs and get them, you know, committed to a commercial phase, like Midjourney did. Joshua Thomas Jennings: Excellent. Maybe one question on the home care franchise, and it sounds like you have made progress in this first commercial partnership. I mean, what steps are left before that commercial effort kicks in? Maybe just remind us of the home POCUS market opportunity or the revenue opportunity for Butterfly in this channel. Thank you, guys, for taking all the questions. Joseph M. DeVivo: Hey, thank you, Josh. Appreciate them. Yeah, I think, you know, we are pretty confident that this is going to, you know, get to a commercial conclusion. You know, as John said, in his notes, we think it will probably happen before middle of the year, which will give us the second half of the year to start getting it ramped up. It would probably be nominal revenue in 2026, but start contributing in 2027. Once we get it started, and we have a line of sight, and we are able to give a better shape of what the impact is, we will tell you as far as, you know, and incorporate it into our guidance. You know, in aggregate, I think I have mentioned in the past, you know, if just this one use case we are working on, if it became a national use case, it could be a $40 million–$50 million revenue opportunity if everything went, you know, the way that we saw it. That is. You know, when we think about the amount of chronic care patients are in nursing homes and also the amount of patients that are in the home, who are being cared for by nurses, you know, as they get sicker, they need to be, you know, moved. They need to have an image. You know, they have to go to the hospital, whether it is by ambulance or by some other transport, be brought up into radiology and then have, for example, a cardiac echo or something else. You know, empowering caregivers to be able to take images where they are is efficient, is low cost, and has high impact on being able to quickly give a diagnosis for a patient so their meds can be modified to make them healthier and keep them into the home, or keep them wherever they are. That is literally every facet of healthcare is about being where the patients are, being where people are, and helping them get healthier faster in the lowest cost environments. You know, our home care business is basically an extension of our POCUS business. It is not a third business; it is an amplifier of POCUS. You know, ultimately everyone will figure it out, and they will use our stuff to do all of this using the AI apps, etc. Home is kind of a catalyst for us to, you know, take a lot of the workflow, the logistics, and the ramp-up and the learning curve out. I have mentioned before that we think the home business can be bigger than POCUS, and the opportunities are certainly there. We have, you know, we have to prove it, and we have to get some more... Our pilot was excellent. We need to get, you know, the first few states up. We need to prove what we are doing there. We need to prove we can go to a larger geography. It is a process, but it is a big opportunity, and it will teach, you know, core healthcare providers and payers that point-of-care ultrasound with Butterfly is a significant way to reduce costs at the exact same time of improving quality and care for patients. Operator: Thank you, Josh. Our next question is from Chase Richard Knickerbocker from Craig-Hallum. Your line is now open. Please go ahead. Chase Richard Knickerbocker: Good morning, guys. This is Jake on for Chase. I was wondering if you could, maybe, John, if you could give us any more color on the macro environment, if you guys are seeing any of the same trends that affected 2025 and how they are abating now in 2026? John Doherty: Sure, and I appreciate the question. As I touched on, you know, with the opening comments, I am not going to say everything is behind us, but certainly, you know, we feel, you know, a lot more confident going forward. Irrespective of the Supreme Court's action relative to tariffs, you know, it is still a very mild, say mildly, and an unpredictable area, given what happened post that. You know, we do still expect to have a bit of some downward pressure. Not a lot, but some downward pressure from tariffs. We did sign a number of contracts late in the year, so we see that things have been opening up a bit there. We still have a number of, you know, good-sized deals in the pipeline. I would say, you know, the timing did move out kind of the back half of last year as the company had touched on when they did third quarter results, but we are seeing some improvement there. We are starting to see some things move. Ultimately, as I mentioned, you know, the company, we are managing through it, and we do not expect it to have except for the, you know, the tariff component, we do not expect it to have a lot of impact on the company. Chase Richard Knickerbocker: Great. I appreciate that color. Apologies if I missed this, but is there any more color on the opportunity with medical schools going into the year as well for the one-to-one partnerships? Joseph M. DeVivo: Yeah. Medical schools, I think, should be a pretty, a pretty strong contributor to us this year. You know, the, you know, second quarter of the year is the big medical school quarter when we, when we put them all in. We have a lot of conversations for one-to-one buys, and you know, we did get a bit of a pause last year when the decision to cap student loan debt occurred, and so it caused people to pause. You know, what is so exciting about what we are doing is there is such a strong commitment for new medical students to learn ultrasound. They are actually now starting to choose where they go and the types of programs they get into based upon the commitment of building that competency. You know, kids that are graduating today, and are going into their residency, completely distinguish themselves when they have this capability. Even, you know, even their, you know, their attendings, who are working with them, you know, are kind of, surprised when they see what can be done by a resident with ultrasound skills. There is not a lot of daylight out there. This is not a new thing. Students want Butterfly. They are trained on Butterfly. They want that experience, and then when we build the brand equity with these students, they go into their residency and then into practice with that loyalty, with that understanding, and we are looking to grow with them, especially, you know, with our whole, you know, chip platform improving and getting more and more powerful, and then more apps coming in over the years. You know, we are going to grow with them through their career. We start off with medical schools. Medical schools will be a very positive contributor in 2026. Chase Richard Knickerbocker: Appreciate the answers, guys. Thank you. Joseph M. DeVivo: Thanks, Jake. Operator: Thank you. Our next question is from Andrew Frederick Brackmann, from William Blair. Your line is now open. Please go ahead. Andrew Frederick Brackmann: Hey, guys. Good morning, thanks for taking the questions. I will echo Josh's comments. Certainly a lot of progress here and a lot to dig into. Joe, maybe with that in mind, I would like to start a little bit higher level. I mean, it is sort of hard to miss the underlying transformation going on here, towards Butterfly Embedded. Can you maybe just sort of talk to us about why now for this transition from med devices towards embedded and the semiconductors type of business? Then just as you sort of think about organizational focus, perhaps, are there any sort of changes in terms of your view on focus versus the opportunity with Embedded? Thanks. Joseph M. DeVivo: That is a great question, Andrew, and I actually, I probably should have emailed that to you and planted that in, because it is, that is a very appropriate question. You know, we are not trying to pivot away from focus. You know, we, you know, we want to have every doctor and every nurse in the world, have a device that allows them to help diagnose their patients sooner, easier, low cost, where they are at. We will never, you know, move away from that vision. You know, in accomplishing that vision, Andrew, we solved the problem. We solved a major problem in technology where we can digitize, we can digitally control the ultrasound image. We can control it in a way that is much more than what medical ultrasound uses with, you know, multiple planes and depths. Because we control 9,000 sensors in a rectangle, which allow us to send out information, send out sound a certain way, and listen to sound a certain way. You know, what we solve for ourself for point-of-care ultrasound is a major solution for many other people out in the marketplace. You know, there is this whole concept that AI and the human body are going to merge together. You can Google it. There is a whole sci-fi fantasy out there. You know, there. If you even think of brain-computer interface, you know, Neuralink today is putting wires into the brain. There is this thing in DCI called the butcher factor, which is, you know, how many neurons do I have to kill before I get to the neuron I want to talk to? Well, one of the beautiful things about ultrasound is, and about Butterfly, is we do not have a stagnant beam that sits in a fixed position. You know, normally, ultrasound is like a flashlight. You know, you have to move the beam in order to capture the image. We can actually, in a fixed location, move our beam and scan. If you implant something in the brain, you are going to be able to communicate and see and listen to 25% of the entire brain or the entire lobe. It is being seen today that ultrasound is potentially a portal between AI and the human body. Just read Nature and you will see all these articles about brain-computer interfaces, and you will hear about ultrasound, you will hear about neuromodulation, you will hear about all different types of, you know, even if it is therapeutic, people are going to be looking at the brain signals through vasculature and how vasculature flows through the brain. It ultimately, you know, you can potentially heat it and put energy. This is kind of happening. It is not like we just did a prospect, a randomized study, and we are now pushing the market. The market is calling us. They see our 600 patents, they see the excellent technology that we have, and quite frankly, we have been approached prior to me getting here by companies asking to partner with them, but they were turned away because the company was trying to focus on point-of-care ultrasound. What we have said to ourselves is, "No, we have solved the foundational problem." you know, I would hate to compare ourselves to NVIDIA because there is no way there is a scale or anywhere to draw a line. You know, from 93 to 2005, they were a video game company, and they focused on their core markets of building technologies to be better gamers, that had to be complex. You know, and then with CUDA in 2006, it opened up their platform for developers who could use these incredible chips for other applications. You know, or you look at Amazon, you know, they did not set out to become the leading cloud compute company in the world. They realized that they needed cloud compute. There was not a large enough vendor to take their volume. They built it themselves. When they were done, they had excess capacity, and they said, "Let us go sell that capacity." Now it is the highest profit-generating part of their business. Sometimes in business, you solve problems for your customers that benefit others, and we are just simply now allowing ourselves to work with those partners. The beautiful part about it is that the roadmap that we have set ourselves, so, you know, our Poseidon platform, our P5.1 platform, our Apollo platform, we are now not going off and developing new things for other people and losing our focus on Point-of-Care Ultrasound. What we are actually doing is amplifying our current roadmap, and we are exposing our roadmap to those customers and those and to allow them to meet their needs. It actually is going to make our ability to serve point-of-care ultrasound better, and the roadmap that we have for point-of-care ultrasound and what is going to happen, you know, with our next launch of our platform, with Harmonics and P5.1, and what we are going to do with, you know, some new things that we will unveil in 2007, there is so much synergy here, Andrew. It all ties together. We are not putting something on the shelf and then focusing someplace else. We are pulling our core tech, we are partnering with people who have real interest of building businesses and have technical challenges that we can solve. Instead of having an analog ultrasound device that, you know, yes, you have digital behind the lens, but then once you push the signal through the lens, that lens is cut to do one thing. Our lens can be anything, and developers love the fact that they can see the signal and then change the software, see the signal, change the software. That, you know, kind of infinite iteration cycle is how, you know, we will fit our ultrasound into many different types of devices throughout the world. Andrew Frederick Brackmann: Okay. That is terrific color. Thank you for all that, Joe. Maybe if I could just sort of switching lanes here. You referenced the Compass AI, and sort of the launch there. Can you maybe just expand on sort of what that does in practical terms for your moat within that focused business? What does it give you that competitors do not have today? As you sort of think about, you know, defending against some of these potential, you know, AI disruptors that are out there, how does this sort of expand the moat there? Thank you. Joseph M. DeVivo: Thank you so much, Andrew Brackmann. We were, you know, the prior team before I got here, you know, Todd Fruchterman and the team were very visionary on making sure that if Point-of-Care Ultrasound is going to be adopted enterprise-wide, that we need to manage the data. The systems, you know, the EMRs, the DICOMs, all the current hospital systems were not geared and built to operationalize Point-of-Care Ultrasound. Butterfly became the first ultrasound company that invested in an enterprise SaaS-based software that not only allowed it to collect its own data, push it into the record, push the image into DICOM, and set that record up ready to be submitted for reimbursement with the revenue cycle management software. We have built the most powerful, you know, SaaS-based system out there in order to do this. Now hospitals, when they put our software in place, they now recognize scans that were not getting reimbursed, and they increase their revenue and profitability. It is, it is just good, and good. Now, on the other side, doctors hate new things. They do not like to have to go through new steps. They just want to do everything in their EMR. They do not want to have one software for this, one software for that. Getting to an ease-of-use paradigm is essential, because the doctors are already asked, and nurses, to do so much in their everyday lives. To now go into another platform to go through a whole other set of workflow is just something that they dread, regardless of how good it is for, you know, the patient or the economics, it is just more work. Getting our system to be easier, faster, simpler, more integrated into the, their daily workflow and to use the power of AI to where so we take their dictation. Every doctor dictates. If we can take their dictation and then pull apart the data in that dictation and populate the forms for them, you know, those two or three or four minutes that they save is massive to them as they and that multiplies with each patient that they see. We are very committed to making our workflow now. We have solved the major problem of connecting them and aggregating data. Now we are going to be incessant and passionate about making it easier and easier and easier and easier for them to implement, for them to use on a daily basis, for it to be intuitive, and to let the hospitals continue to have the type of ROI they need of capturing all these images. We are never going to stop making it, and we are going to use every new tool available to us in AI to make it easier for our customers. Andrew Frederick Brackmann: Great. Thanks, guys. Appreciate the questions. Joseph M. DeVivo: Appreciate it. Operator: Thank you, Andrew. Our next question is from Benjamin Charles Haynor from Lake Street Capital Markets. Your line is now open. Please go ahead. Benjamin Charles Haynor: Good morning, folks. Thanks for taking the questions. Joseph M. DeVivo: Hey, Ben. Benjamin Charles Haynor: ... for me on the, yeah, how are you? Excellent. Just on your own internal development, pipeline, new P5.1, you know, when should folks expect you to go to the FDA with that? Anything new on kind of the new form factors, whether that is, you know, iQ Station or, you know, in some of the wearable sort of form factors that you showed at the investor day two years back? Joseph M. DeVivo: Thank you for the question. You know, we are hoping in the beginning of 2027 to have the P5.1 ship into a next program. That is kind of our timing. We think that we just sent it into production. Normally, it would take us some time, you know, late this summer to get them back, and then we start, you know, putting it into the hardware, validating, testing, and then hopefully get our clearance, and then we will be out, you know, sometime early of 2027. That is kind of our schedule. At the same time, you know, we have a vision to bring one-to-one in hospitals and how, you know, we can make a cart-based experience with Butterfly better. iQ Station is actively on our roadmap, and it is probably a later 2027 timeframe for that. We are actively working on that program, and we think that will really codify the one-to-one model on the enterprise side. You know, we are working on making software easier, we are working to make our devices more powerful, we are working to make the workflow in the hospital easier. It is just a fate of it is just inevitable what will happen, and we are on the right path there. You know, on the wearable side, you know, if we wanted to launch a wearable tomorrow, we could, or theoretically, we could, we can put that... Wearables is not an R&D thing, it is more of a what is the use case and what is the market and what is the business? Our philosophy right now is the success of home care will determine, you know, what our wearable use case is. The more that we push ultrasound, alt site, and we push it into nursing homes, we push it into the home, and then the more we will be, "Okay, now this is what it is being used for. This really makes sense. This is sticking, and now let us automate it, and let us make it easier, and let us put a wearable out there." You know, we have there is one of our partners, Forest Neurotech, took our technology and created a wearable. Go on their website, you will actually see it. They put it right there. It is the technology around creating a wearable is not the challenge, it is, hey, what is the business use case? When does it make sense to invest the next several million dollars in hardware to put that out there? Our home care business, in my view, will determine the success and the timing of what is the right use case for wearables. Benjamin Charles Haynor: Got it. That is very helpful. Any more you can share on that POCUS Innovators Forum that you held? That sounds like, quite the interesting event. Joseph M. DeVivo: You know, you probably need to come next year. I probably have to invite our analysts. You know, we— Benjamin Charles Haynor: No problem. Joseph M. DeVivo: private the first year. The second year, we brought our whole management team and commercial team in to listen, which was a great education session. I think, you know, what is fascinating about that forum is it is not all one specialty. You have a cardiologist sitting next to an anesthesiologist, sitting next to an ER doctor, sitting next to a primary care doctor, sitting next to an intensivist, sitting next to a nurse, and sitting next to an administrator. They all have a tremendous passion for the power of being able to do a diagnosis immediately at the point of care. We all heard them present their experiences, but we also gave them a forum to tell us what they need. That is where actually Compass AI came from for the, from the last year's forum, was when they said: "It just takes too long to document each one of these records." We went now from four to five minutes down to 30 seconds. You know, we listened to them, and that is why this forum is so important. I think while we had 60 people, we had about 40 people the first year, 60 people the next year, but we will probably open it up to, you know, 100 or more, and even maybe allow you guys to come, too. We learned a lot, and the biggest thing that we learned is that we are on the right track. If we keep listening to our customers, and being honest with ourselves on what we need to do to improve, we will win. It was a great session, Ben. Benjamin Charles Haynor: Sounds fantastic. Lastly, for me, just with Midjourney, you know, you phrase it as a revenue share potential rather than a royalty. Should folks read into that in any way? I mean, that strikes me more as a service offering rather than a device offering. Joseph M. DeVivo: No, I think you just look into this like a partnership. We are all in with them, and we are doing everything we can to make them successful, and we will do everything we can to make them successful. We do not look at them as someone we are going to sell chips to. We look at them as someone that we are going to invest in, and we are going to do everything to amplify their use case. If all of a sudden we need to do something that was not planned, we are just going to do it because, you know, we both believe in what they are doing, and we are going to be the best partner possible. Benjamin Charles Haynor: Great. Thanks for taking the questions, guys. Joseph M. DeVivo: Awesome, Ben. Thank you. Operator: Thank you, Ben. We currently have no further questions, so I will hand back to Joe for closing remarks. Joseph M. DeVivo: Well, thank you all for being with us this morning. I know that this time of the season is busy for all our investors and analysts. I hope you can see the excitement. You know, I think the most important thing, you know, for me is, you know, we put a plan together, and we are executing to our plan. Everything that you hear on this call, there is not one surprise. Not one. Everything that we are delivering, we have told you we are going to deliver. Everything that we are focusing on are things that we have mentioned, if not recently, you know, a year or two ago. We are executing to our plan because there is a massive opportunity in digital ultrasound. We are digital to film, and we are digital that will take over analog. It is just a fait accompli. We have put a plan in place. We are executing to it. We have an awesome team. We are beyond the time where there was doubt about the company, and the only doubt should be in that, you know, for anyone who is in our way. I appreciate your attention, and I look forward to continuing to deliver results. Thank you. Operator: Thank you, everyone. This concludes today's Butterfly Network, Inc. Q4 and FY 2025 earnings call. Thank you for joining. You may now disconnect your line.
Operator: Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Koppers Holdings Inc.'s fourth quarter and full year 2025 earnings conference call and webcast. At this time, all participants are in listen-only mode. If you need assistance, please alert a conference specialist by pressing star followed by zero. Following the presentation, instructions will be given for the question and answer session. Please note that this event is being recorded. I will now turn the call over to Quynh McGuire. Please go ahead. Quynh McGuire: Thanks. Good morning. I am Quynh McGuire, Vice President of Investor Relations. Welcome to our fourth quarter and full year 2025 earnings conference call. We issued our press release earlier today. You can access it via our website at www.koppers.com. As indicated in our announcement, we have also posted materials to the investor relations page of our website that will be referenced in today's call. Consistent with our practice in prior quarterly conference calls, this is being broadcast live on our website. A recording of this call will be available on our website for replay through May 26, 2026. At this time, I would like to direct your attention to our forward-looking disclosure statement seen on slide 2. Certain comments made on this conference call may be characterized as forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a number of assumptions, risks, and uncertainties, including risks described in the cautionary statement included in our press release and in the company's filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking statements included in the company's comments, you should not regard the inclusion of such information as a representation that its objectives, plans, and projected results will be achieved. The company's actual results, performance, or achievements may differ materially from those expressed in or implied by such forward-looking statements. The company assumes no obligation to update any forward-looking statements made during this call. Also, references may be made today to certain non-GAAP financial measures. The press release, which is available on our website, also contains reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures. Joining me for our call today are Leroy Ball, Chief Executive Officer of Koppers Holdings Inc., and Brad Pearce, Interim Chief Financial Officer and Chief Accounting Officer. At this time, I will turn the discussion over to Leroy. Leroy Ball: Thank you, Quynh. Good morning, everyone. I am pleased to join you this morning to provide more insight on Koppers Holdings Inc.'s performance in 2025 and how we see 2026 developing based upon current information. Let me start on page 4, which lists highlights for last year overall, which include adjusted EBITDA of $256.7 million and a 13.7% adjusted EBITDA margin, the second highest year on record for both when you exclude KJCC, and on an as-reported basis, 13.7% adjusted EBITDA margin actually represents a new high watermark for Koppers Holdings Inc. We reached operating profit of $167.8 million, also the second highest year on record, $4.07 in adjusted earnings per share, marking the sixth consecutive year above $4 after never reaching that mark previously, and operating cash flow of $122.5 million for the seventh straight year of more than $100 million in that category. In addition, we have tapered back our capital expenditures to a normalized $55 million, enabling a heavier capital deployment allocation to shareholders, as demonstrated by $38.2 million in share repurchases and $6.4 million in dividends. $21 million went towards inorganic growth, with a small acquisition of a utility pole procurement business in one of our targeted growth areas, UIP, and we still had $12 million remaining to pay down debt. In early 2025, we launched our transformation process named Catalyst, which delivered $46 million in benefits during the year. Catalyst helped to deliver EBITDA within 2% of prior year, while our sales declined by 10%. The conscious decisions to exit our phthalic anhydride business and sell our railroad structures business accounted for 4% of the overall sales decline, with the other 6% resulting from softer market conditions and some net loss of market share. Other benefits derived from Catalyst in 2025 include reducing our adjusted SG&A costs by 15%, while also reducing our employee count by 11% from year-end 2024, and 17% from our employment high water mark in April 2024. With 1 year of Catalyst under our belt, I believe we are on track to reach our goals of double-digit adjusted EPS growth over the next 3 years, $300 million of cumulative free cash flow over that same time period, and a mid-teens margin run rate by 2028. To ensure that our leaders remain highly motivated to achieve those goals, earlier this year, our board approved a long-term incentive program that has target goals that substantively align with the external targets I just summarized. I will speak in more detail on Catalyst later in this presentation. Let us move on to our zero harm accomplishments, as seen on page 5, which are just as important as our financial performance. We had 21 of our 41 sites work accident-free with our European CMMC and PC businesses, as well as our Australasian PC business, having zero recordables in 2025. Significant improvement was achieved company-wide, with leading activities up by 26%, which is a key contributor to our serious safety incidents being down by 70% compared with the prior year. It also led to a 19.5% year-over-year improvement in our total recordable injury rate, driving it to a new all-time best for the second year in a row. It is a true testament to our team and their leaders, who persevered through a stressful environment in 2025 and never lost focus on what is most important, the health and safety of their colleagues. Congrats to the Koppers Holdings Inc. team on a tremendous accomplishment and never losing sight of our goal of zero. Turning now to page 6, Koppers Holdings Inc. was named in Newsweek magazine's listing of America's Most Responsible Companies 2026, representing our 6th consecutive year on that list. This honor is a result of some 600 companies being evaluated on upholding their social responsibility based on key performance metrics that include environmental, social, and governance performance, financial results, and more. During the past year, we also earned recognition as one of America's Best Mid-Sized Companies of 2025 from TIME Magazine, based on employee satisfaction, revenue growth, and sustainability transparency. Like zero harm, sustainability has been woven into the fabric of how we operate at Koppers Holdings Inc., which has enabled us to punch above our weight in this area. National recognition from organizations like Newsweek and TIME help lend credibility to our results, and while this alone will not win us business, it will most definitely be part of the overall decision-making progress and maybe tip the scales in our favor when we are in a tight competitive situation. Kudos to the Koppers Holdings Inc. team for refusing to just check the box on zero harm and sustainability, and instead making it a way of life at Koppers Holdings Inc. I will return in a bit to provide my view on how we are seeing the current year within each business, while also reviewing our 2026 projections and give more flavor for our potential in 2027 and 2028 as Catalyst hits peak acceleration. Before I turn things over to Brad Pearce, our Interim CFO and Chief Accounting Officer, I would like to take a moment to recognize Jimmi Sue Smith, who announced her retirement from Koppers Holdings Inc. earlier this year. Jimmi Sue joined Koppers Holdings Inc. as our VP of Finance and Treasurer mere weeks before the pandemic in 2020. She was part of a leadership team that navigated the company through those trying times and positioned us for success as the world gradually returned to a new sense of normal. She was promoted to be the company's CFO, excuse me, in January 2022, and continued making her mark by leading the shift of capital deployment towards shareholders by reinstating the company's quarterly dividend and taking a more aggressive approach to repurchasing our undervalued shares. I could go on and on with Jimmi Sue's accomplishments. I will save that for her retirement celebration and just finish by saying that I thank her for her contributions and wish her the best in retirement. Now, I will turn it over to Brad, who has done a wonderful job stepping into the CFO role as we go through a more deliberate search process for Jimmi Sue's successor. He will speak in more detail to our fourth quarter and full year financial performance. Brad Pearce: Thanks, Leroy. Earlier today, we issued a press release detailing our fourth quarter and full year 2025 results. My remarks today are based on that information. As seen on slide 8, we reported consolidated fourth quarter sales of $433 million, down $44 million or 9% from the prior year. Relative to the prior year quarter, RUPS sales decreased by $7 million or 3%. PC sales were down $20 million or 14%, and CMMC sales decreased by $17 million or 15%. As shown on slide 9, full year sales totaled $1.9 billion, a 10% drop from prior year sales of $2.1 billion. RUPS continued to be our largest segment, with sales of $927 million, followed by PC with sales of $544 million, and CMMC with sales of $409 million. Each segment was lower as compared to the prior year, with a 2% decrease at RUPS, followed by 17% and 18% decreases for PC and CM&C, respectively. On slide 10, adjusted EBITDA for the fourth quarter was $53 million, which represents a 12.3% EBITDA margin on sales. By segment, PC delivered adjusted EBITDA of $28 million, followed by RUPS of $22 million and CM&C of $4 million. PC led with adjusted EBITDA margin of 22%. RUPS maintained adjusted EBITDA margin above 10%, while CM&C reported a 4% margin. Full year adjusted EBITDA results, as seen on slide 11, were $257 million, reflecting a 13.7% margin. RUPS adjusted EBITDA was $108 million, returning a 12% margin, while PC delivered adjusted EBITDA of $103 million, a 19% margin. CMMC adjusted EBITDA totaled $46 million, resulting in an 11% margin. Focusing on the RUPS business, slide 12 shows fourth quarter sales of $209 million, compared with $216 million in the prior year quarter. Approximately $5 million of the decrease in sales was due to lower volumes of commercial crossties and lower activity in the maintenance of way businesses. The lower maintenance of way revenue is due in part to the sale of our railroad bridge services business earlier this year. These were partly offset by volume increases in our domestic utility pole business of around 10% and $4 million of price increases, mostly in crossties. Rupp's delivered improved adjusted EBITDA of $22 million, compared with $18 million in the prior year. The improved profitability was primarily driven by approximately $7 million in lower operating expenses, coupled with decreased SG&A costs and net sale price increases. These improvements were partly offset by net lower sales volume. Turning to slide 13, our Performance Chemicals business reported fourth quarter sales of $128 million, down from $148 million in the prior year quarter. The decline in sales was primarily due to volumes decreasing by 16%, mostly as a result of market share changes in the United States. This was partly offset by net sales price increases. In spite of the drop in sales, adjusted EBITDA for PC was $28 million, just below the $29 million of adjusted EBITDA in the prior year quarter. While profitability was impacted by lower sales volumes, it was largely offset by lower raw material costs, net of our Koppers Holdings Inc. hedging program, lower logistics costs, and higher royalty income. Slide 14 shows that sales in the fourth quarter for our CM&C business were $96 million, compared to $114 million in the prior year quarter. This decrease was primarily driven by $17 million of lower volumes related to our discontinued phthalic anhydride product line, lower volumes and sales prices for carbon black feedstock, and a 7% reduction in prices globally for carbon pitch. These were partly offset by volume increases in carbon pitch, primarily in Australia, and around $4 million of favorable impacts when translating our foreign currency sales into U.S. dollars. Adjusted EBITDA for CM&C in the fourth quarter was $4 million, compared with $9 million in the prior year quarter. This was due to net sales price decreases and lower plant utilization, partly offset by operating cost savings associated with discontinuing our phthalic anhydride business. Compared with the fourth quarter of 2024, the average pricing of major products was lower by 4%, while average coal tar costs were higher by 10%, which led to lower EBITDA margins. As shown on slide 16, we continue to pursue a balanced approach to capital allocation. In terms of investments to position ourselves for the future, $12 million was related to the termination of our U.S. pension plan. $21 million was earmarked for the acquisition of the utility pole procurement business, and approximately $48 million was allocated for capital expenditures, net of cash received from insurance proceeds and asset sales. Our share buyback activity in 2025 totaled approximately $38 million, or a total of just under 1.3 million shares. We have approximately $67 million remaining on our $100 million repurchase authorization. In addition to the share repurchases, we also returned capital to shareholders during 2025 through our quarterly dividend of $0.08 per share. At December 31, we had $383 million in available liquidity and $881 million of net debt, representing a net leverage ratio of 3.4 times. We remain focused on our long-term goal of reducing the net leverage ratio to 2 to 3 times. On slide 17, total capital expenditures for the year were $55 million gross, or $48 million net of asset sales and insurance recoveries. The majority of our investment was allocated to maintenance capital spending of $45 million, with spending on zero harm initiatives and growth and productivity projects, each totaling less than $6 million. Capital expenditures were evenly distributed among the three business units of between $15 million and $19 million apiece. We are projecting CapEx to be approximately $55 million in 2026, a level on par with 2025. Finally, as highlighted on slide 18, our board of directors declared a quarterly cash dividend in February of $0.09 per share of Koppers Holdings Inc. common stock, reflecting a 13% increase from 2025. This dividend will be paid on March 23 to shareholders of record as of the close of trading on March 6. While future dividends are subject to ongoing board approval, maintaining a quarterly dividend at this rate will result in an annual dividend of $0.36 per share for 2026. With that, I will turn it back over to Leroy. Leroy Ball: Thanks, Brad. Before I dive into each of the businesses, I would like to provide our perspective on the recent Supreme Court ruling, which vacated tariffs under IEEPA. Prior to the ruling, we were estimating a tariff impact on our business of around $5 million-$6 million in 2026. Removing the IEEPA tariff and replacing it with a worldwide tariff of 10% essentially reshuffles the deck and leaves us in a slightly better position. Of course, these are only in place for 150 days, the administration has promised to use this time to put more permanent tariffs in place, it remains to be seen how it will impact our business. Perhaps a greater concern are potential tariffs under Section 232, which has an ongoing investigation into refined copper imports. We do not import copper for our products, as we use domestically sourced scrap copper, for unhedged copper requirements, any tariff on refined copper will increase the market price of this key raw material for our PC business. The uncertainty of tariffs continues. The numbers seem to change from day to day. While I am providing our most current view, that can obviously change quickly. For now, I am going to review the market outlook for each of our businesses, starting with Performance Chemicals on page 20. Let me lead with the good news. We are projecting a top-line increase of approximately 11% in 2026, driven entirely by market share expansion in both our residential and industrial product lines. A large component of our Catalyst initiatives for PC centered around converting commercial opportunities that we knew were in play coming into 2026 as new business. We realized success on a number of accounts, refocusing our attention on serving the customer, while also demonstrating the value of our R&D and tech service capabilities to convert a portion of business to new technology. In addition, our PC team continues to be focused on commercializing the next generation of reduced copper wood preservatives and in-demand fire retardants. Moving to the external market data, we interpret market sentiment as neutral to slightly positive for 2026, with our internal models reflecting overall flat market demand. Existing home sales in 2025 were flat compared to 2024, and while a fourth quarter upswing gave some hope of stronger existing home sales activity in 2026, January's numbers were disappointing as they registered an 8% month-over-month decline, getting the year off to a tough start. The average mortgage rates fluctuated between 6.2%-6.3% in the fourth quarter, down from earlier in the year. The rates are currently at about 6%, and expected to moderate slightly in the near term, although that is not expected to have a meaningful impact on the housing market. The leading indicator of remodeling activity, or LIRA, is forecasting year-over-year growth in home renovation and repair spending of 2.9% in early 2026, and eventually easing to 1.6% growth by the fourth quarter. Building product sentiment remains neutral, with cautious optimism in select commercial and infrastructure segments. Listening to our customer base, it seems the disappointment of 2025 is still fresh in their minds, and so they are reluctant to build in any significant rebound until they can get clearer signals. This has our model for 2026 baking in flat organic volumes for residential products, with a modest low to mid-single-digit volume increase expected for our industrial product segment, driven by growth in utility pole demand. On the cost side of the equation, excluding copper, we are expecting a mix of increases and decreases in our raw materials to mostly balance out and have little impact. Copper prices have continued their steady rise over the past year and currently are 25% higher than average prices for 2025. Because of our hedging strategy, we are mostly insulated from the increase at current price levels, assuming scrap copper pricing continues to behave as it historically has. The price separation between the LME and COMEX indices that we discussed last year has not been an issue recently, but changes in the tariff environment could see this return. In the meantime, we continue to work to manage this risk. If the copper markets do not abate as we enter into contract discussions later in 2026, current prices would represent a $50 million pricing pass-through necessary to account for the increased copper costs. The Catalyst benefits for Performance Chemicals targeted in 2026 are mostly commercially driven and are already secured, where PC results ultimately end up in 2026 will depend more on the direction of base demand compared to our flat outlook and the uncertain cost environment driven by tariffs. Moving on to our utility and industrial products business, shown on page 21. Market sentiment remains bullish, mainly due to increasing electrical demand related to build out of AI infrastructure. In addition, it is anticipated that crypto mining, EV development, and new manufacturing will contribute to increased electrical demand over the next five years. Utilities are being pressured to limit price increases resulting from higher demand, and data centers owned and operated by large tech companies are expected to be required to share the resulting cost burden with consumers. Now, we entered 2025 with a clear objective to grow our business outside of our traditional regional markets in the U.S., and we were able to do that, growing our non-traditional markets by 17% on the top line while keeping our core regional markets flat, which resulted in an overall 6% sales increase. We are targeting an even greater top-line performance in 2026, driven once again by growth in targeted regions, added sales from the pole procurement acquisition made in late 2025, and a modest organic market improvement after lower than expected growth last year. In 2025, we made investments in our distribution assets, fiber supply, technology platform, and sales team, including adding new sales leadership at the beginning of 2026 that we believe position us as a formidable competitor on new accounts. As to the acquisition I referenced, in December, we acquired a small business specializing in the procurement of Douglas fir fiber, which is traditionally used for transmission poles. This is important for solidifying opportunities to grow our sales base by adding to the opportunities we have historically been shut out from, due to not having that wood species in our portfolio. It represents our next step in building out our portfolio in a measured way. To quell any worries that we would spend significant amounts of capital in the hopes of future business, this transaction represents a lower cost, lower risk approach to securing a new critical supply chain. This will open doors in existing markets while also providing a platform to potentially build from as we think further about the Western markets. While sales showed modest gains in 2025, we took a step back on our cost management in UIP last year. That makes this business ripe for the planning and execution discipline that Catalyst fosters. Opportunity abounds on the cost front in UIP. We will be going after it hard in 2026. Of the improvement targeted for UIP in 2026, over three quarters of it is cost related. Part of the cost improvements relate to a consolidation of production resulting from the recent idling of our plant in Vance, Alabama, mentioned earlier. That production has moved to our nearby facility in Kennedy, Alabama, which will realize the benefits of improved cost absorption. Vance will remain in our network, but not operate as we continue to monitor our long-term manufacturing requirements in this important growth market. The market outlook for our railroad products and services business is summarized on page 22. Railroad industry consolidation continues to impact market trends and the pressure to improve operating performance, resulting in reduced capital spending by our customers. As mentioned on prior calls, for the second straight year, our railroad customer base reduced their forecasted tie requirements communicated to us heading into the calendar year, as they pulled back on their tie programs. Thankfully, this past year, we were able to balance out the lower than anticipated volumes with some aggressive cost actions, improving our profitability in this business to a level not seen in a decade. As we approach customer discussions for 2026, two Class I customers indicated an additional pullback in volume for this year, which would have a significant impact on our RPS profitability without some counteraction. We believe we have been able to primarily offset that impact in 2026 by agreeing to provide price relief while receiving a larger contractual commitment from one customer, as well as an extension of our current agreement. We are also mitigating the impact of lower volume from a second customer by idling production capacity and consolidating operations across our remaining treating network, as mentioned earlier. There is a lot going on with the Class I customer base, but the main point for our shareholders is that we are in the most competitive position to capitalize on a Class I market dealing with a lot of uncertainty right now. While the pie may be smaller, our piece of it is expected to grow to volumes that we have not seen since 2017. The commercial crosstie market remains very competitive, but we continue to make inroads there, and as of the end of January, have the highest backlog that we have had in the past five years. As for operations, we have realized much of the low-hanging fruit over the past 18 months and are looking to maintain the gains we have made heading into 2026. Much of the benefit has been derived by doing more with less. In 2025, we had 1% more in crosstie sales than 2024, with 38 or 7% fewer people than where we ended 2024. In the crosstie portion of our business, we are down by 105 people, or 16%, compared to our peak employment level at April 2024. The idling of the plant that I mentioned will result in another net 76 employee reduction, which will serve to offset anticipated price reductions. Sawmills are experiencing the impact of the industry pullback, resulting in sharply reduced production and widespread mill closures. It remains to be seen what long-term impact this could have on hardwood availability and pricing, but in the near term, it is a buyer's market. Catalyst benefits included in our 2026 projections primarily relate to plant consolidation, material waste reduction, and commercial and operations improvements. The outlook for our CMC business is summarized on page 23. Overall, the CMC market remains in turmoil, as evidenced by sharply reduced financial performance realized in Q4. Structural improvements made in 2025 by closing our phthalic anhydride plant, along with successfully executing on several Catalyst initiatives, are projected in the near term to be offset by higher net global coal tar costs, reduced throughput as a result of a key raw material supplier exiting the market, and pricing pressure brought on by trying to maintain business in a troubled market. On the plus side, we do have a strong base of raw material supply locked down for several years in each of our geographic markets, which assures us a certain level of throughput. Also, as mentioned during my RPS commentary, I believe we are positioned to grow our share of the crosstie market, which will provide a strong baseload of creosote demand. The strong connection of our U.S. and European logistics network also keeps us on par with our major competitor. It also provides an advantage against other European competitors, more reliant on less attractive export markets to supplement their domestic customer base. We think we will see some capacity rationalization in Europe at some point as it gets tougher to withstand the current market headwinds. The loss of tar supply in the U.S. from a supplier that is closing their coking operations presents a challenge to U.S. operations. It presents an opportunity for our European operations to increase their share of the market as they have ample raw material availability. Catalyst benefits targeted for CMC in 2026 cover all aspects of the business, from production to logistics, procurement, and sales. Our greatest opportunity for improvement remains in CMMC, I have confidence that we will see it realized over the next three years. As shown on slide 24, we are about a full year into our Catalyst transformation and executing successfully on many initiatives. The $46 million of benefits that we realized in 2025 more than offset the $40 million something impact of lower sales on our PC business, and almost got us back to our 2024 adjusted EBITDA level. As we have continued to evaluate Catalyst opportunities, we have been able to increase our pipeline from what we previously communicated, and now believe we can generate up to $75 million of benefits in the 2026 through 2028 time frame, compared to the $40 million that we had expected back in November. The main driver for the increase is due to the optimization of our manufacturing network, and we were also able to add to each of the other targeted functional areas. Of the $75 million estimated over the next three years, we have targeted between $20 million and $40 million as achievable in 2026. Like 2025, we are experiencing headwinds that are preventing the full impact of the benefits from being reflected in EBITDA, although adjusted EPS and operating and free cash flow should both increase significantly. I will reiterate what I said back in November. When I look at our full potential, I see an organization that should be able to deliver 15%+ margins on a consistent basis, an organization that should be able to drive earnings improvement of greater than 10% on average over the next three years. An organization that should be able to reduce leverage to the low end of our stated range, below two and a half times, driven by significantly greater free cash flow generation. What we have targeted to be $300 million or more over the next three years. Our path to get there is the continued evolution of our portfolio that would make PC and RUPS a larger share of our top and bottom line as we focus on our more structurally sound businesses that have opportunity for growth and have proven to consistently generate higher margins with lower capital requirements. You are seeing that playing out in our 2026 projections, which I will move on to now. As shown on slide 26, our consolidated sales guidance of $1.9 billion-$2 billion in 2026 compares with $1.88 billion in 2025, with PC and RUPS making up 80% of our top line, the highest percent of total sales in company history, and closing in on our 85% of sales target. On slide 27, we are forecasting adjusted EBITDA of $250 million-$270 million in 2026, compared with $257 million in 2025. The biggest risk to achieving the midpoint include realizing the lower end of our Catalyst capture rate and seeing further end market softness. Additional risks are higher costs, driven by tariffs or other factors, and extended operational disruptions. Our biggest opportunities of exceeding the midpoint are if we meet the higher end of our Catalyst capture rate and see end markets strengthen. Slide 28 shows our adjusted earnings per share bridge, reflecting a range of $4.20 to $5.00 per share in 2026, compared with $4.07 in 2025. At the midpoint, the contribution from operations, interest savings, lower depreciation and amortization, and benefits from a lower share count are partly offset by higher taxes from higher net earnings. While we do not provide quarterly earnings guidance, it is worth noting that our first quarter this year will be the weakest of the four. This is due to the greater than normal effect of the severe winter weather that has impacted our operations and shipping schedules. In addition, there are several Catalyst initiatives that are in earlier stages and will not pick up momentum until the second and third quarters. On slide 29, as I have been signaling for the past several quarters, we are expecting to see a sizable jump in both operating cash flow and free cash flow this year. As a result, this will provide the most cash we have had for debt paydown since 2020, when we received the cash proceeds for selling our KJCC business. Not only would operating cash flow and free cash flow represent new highs at these projected levels, but more importantly, 2026 will represent an inflection point for our step change in cash generation, as we expect these new higher levels to become the norm. At our current market cap, this equates to a better than 15% free cash flow yield. This places Koppers Holdings Inc. at the top end of whatever industry you want to compare us to and provide several attractive options for how we deploy our excess cash. This also implies about a 50% opportunity in our share price just to bring it back to the current 10% yield level based on 2025 free cash flow. The foundation we have built over the previous five years has set us up to create significant shareholder value over the next several years. I am confident we will deliver. We still maintain leading shares in niche markets that utilize our essential products with low capital requirements in the near term and rising cash flows to deploy towards further reducing our share count and our debt. I would like to open it up to questions. Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Gary Prestopino with Barrington Research. Please go ahead. Gary Prestopino: Good morning, everyone. Leroy Ball: Hi, Gary. Gary Prestopino: Hey, Leroy. I want to refer to slide 20 here with the PC business. Last year, you said there was a competitor that came in and took share, lowered prices, now what you are saying is that for 2026, you are looking at market share capture in both residential and industrial markets. You have raised prices. Could you maybe square what is actually going on and take a deeper dive into that market, how you are able to get share? Prior share was lost because of, you know, price competition. Leroy Ball: Yes, so Gary, we did take a market share hit in 2025. It was the, you know, the most significant portion of our PC sales decline. Gary Prestopino: Mm-hmm. Leroy Ball: You know, there was some business that was available to potentially recapture in heading into 2026, and we were able to, you know, convert on a portion of that. There is, I would say the bulk of the business that we are adding in 2026 is unrelated to that market share loss. It is current customers where we, you know, had already had a pretty good footprint with them, but through some consolidation that they had done, that had business with, again, one of our major competitors, they had elected to move some of that business over to our new technology in those areas. That is a good piece of it. You know, the industrial business we have made inroads in over the past number of years, so there is kind of nothing new from that standpoint. I will say, and I do want to make sure I clarify, like, we are not growing market share and improving price in 2026. That is not happening. You know, it is a competitive market out there. It continues to be. You know, I expect that we will see some price compression in 2026, but we will see market expansion in 2026 on the PC side. Gary Prestopino: Okay. You may have done this. There is a lot of information here we have got to go over, obviously. Did you kind of segment what you anticipate the Catalyst benefit to be in 2026? Leroy Ball: Yes, I mentioned in my prepared remarks, I think, We are targeting somewhere between $20 million and $40 million of Catalyst benefits in 2026. Gary Prestopino: Okay, thank you. Leroy Ball: Yes. Gary Prestopino: I am sorry, I missed that. Leroy Ball: No, no worries. Gary Prestopino: I am trying to keep up with everything. Leroy Ball: Yep. Gary Prestopino: Lastly, and it just a kind of a philosophical question here. You, in the slide 24, where you are talking about your objectives of getting PC and RUPS up to 85% of sales. Leroy Ball: Yep. Gary Prestopino: I would assume that you would expect at least the percentage of EBITDA contributed to be at that 85% or better from both of these divisions? Leroy Ball: That would be correct. Gary Prestopino: Okay. Can I just... The rationale for even keeping the CMMC business, now I understand that you have got, you know, some intercompany sales there with the creosote and all that, but is that really the rationale for keeping that as it becomes so small? Could you possibly sell it and get, you know, contracts locked in, that would be advantageous to you for your supplier creosote? Leroy Ball: Yes. Good question, right? Complicated answer. Long complicated answer. Gary Prestopino: Oh, no. Leroy Ball: No, no. I mean, you know, because it is a, you know, it is a significant, it is a significant component of our supply chain. There is no question there is that. Gary Prestopino: Yeah Leroy Ball: that component of it, right? Gary Prestopino: Mm-hmm. Leroy Ball: Which, you know, can, I think, you know, you can probably work through that potential complication. You will end up having to deal with it whenever, you know, whatever contract you put in place ultimately ends up coming to an end, which it will at some point in time. Gary Prestopino: Right. Leroy Ball: In terms of in initially, yes, that can probably be overcome. You know, I would say, you know, you have got issues around a descaling of the entire organization as a result of that, and stranded costs that would come. You know, the environmental footprint around that would probably be somewhat restrictive in terms of what you might be able to get in terms of an attraction for an individual wanting to come into the market. Gary Prestopino: Mm-hmm. Leroy Ball: You know, consolidation opportunities are really limited, because there is only a few folks that are really doing it, in our geographies that we serve. You know, there is just a whole host of constraints around that. Gary Prestopino: Right. Leroy Ball: Look, I mean, I have continued to say, and, you know, it is not just, you know, it is not just bluster. I mean, we continue to look at our business portfolio actively. If you have looked over, you know, the 11 years that I have been doing this job, our portfolio has shifted dramatically in terms of businesses that we have gotten into, businesses we have gotten out of, operations that have been rationalized, those sorts of things. We are constantly looking at that. Where we see opportunities to improve by, you know, by peeling back in some of our lower value areas, we will look to do that. You know, nothing is off the table, and that is something that we will continue to look at as we do regularly. Gary Prestopino: Okay. Thank you so much. Leroy Ball: No, you are welcome. Operator: The next question is from David Marsh with Singular Research. Please go ahead. David Marsh: Hey, thank you guys for taking the questions. Appreciate it. Leroy Ball: Yep. David Marsh: Just wanted to start, if I could, with a couple of kind of housekeeping type items. First, noticed that the DNA went up about $2 million sequentially versus Q3. Was hoping maybe you guys could give a little bit of clarification around that and kind of what the execution would be going forward. I did not know if maybe that was because of the sale of the business. Leroy Ball: I, you know, I, I do not have, you know, those details handy. I will say that, you know, you know, we are, again, as part of what we are doing relative to, you know, keeping costs in check, there is a lot of work and initiatives that continue to be in process around, SG&A and operating costs in general. Any particular. David Marsh: I am sorry, Leroy. I am sorry, Leroy. If I said SG&A, I meant DNA. Leroy Ball: DNA. Okay, thank you. David Marsh: DNA bumped up a couple million dollars sequentially. I was getting a little confused there. Leroy Ball: Oh, okay. Okay, no problem. I will, you know, I will turn that over to Brad, maybe, and ask him to comment on the DNA. Brad Pearce: Yeah, you know, I think the DNA obviously is going to change as we close, you know, projects and begin to depreciate them. I think it is really just probably a combination of some timing, right? We came off a couple of years of some higher capital spending, and that is now, you know, moved into depreciation phase. What can also be coming through depreciation might be some impacts for, you know, asset retirement obligations. As you know, we closed our phthalic operation in 2025, and some of those charges might be coming through for that. Leroy Ball: One thing I will say, David, is, you know, I referenced, we are expecting DNA to drop by a couple million, I think, in 2026, and would expect some further moderation as we, you know, basically have a certainly the next several-year run rate at a more normalized CapEx number that is below, you know, that current DNA run rate. Would expect that to improve as the years, at least over the next several years. David Marsh: Got it. You talked about Catalyst perhaps driving as much as $20 million-$40 million in savings in 2026. I mean, how would that break out in terms of a split between, like, COGS and SG&A? Would it have a, you know, kind of a little, maybe a little heavier impact on the COGS side, or is it kind of equally split, or how does that play out? Because I noticed the gross margin in the quarter was really nice. It was up really nicely. Leroy Ball: Yeah. It will be heavier on the COGS side. I mean, we got a lot of the low-hanging fruit on SG&A. There is still more we think we can do there. But it will be heavier on the COGS side. COGS and commercial benefits as well. You know, there is pieces to it, so we tend to default and sort of think of Catalyst as it relates to the cost side, but there is a, you know, a heavy component about this that is about putting ourselves in a position to, you know, win more profitable business. When I mentioned PC as an example, 2026, most of our Catalyst initiatives were centered around commercial, it was about being able to win additional business, take some additional market share, and we have achieved that, right. That is going to come through in the form of some of the market share penetration and increased revenues, as well as the profits that will come from that. David Marsh: Got it. Got it. Very helpful. Your interest expense in the fourth quarter was down a good bit sequentially on a percentage basis. You know, the overall debt was not really down a lot. Like, is there what, can you talk about what is at play there? I noticed, you know, it did look like you guys put some swaps back on in terms of the derivatives contracts coming back on the balance sheet. Maybe just give us a little bit of color around that. Brad Pearce: Just, sorry, interest expense? Yeah. Yeah. David Marsh: Yeah, it was down sequentially. Brad Pearce: Yeah, well, yeah, I mean, we are obviously getting some benefit on lower rates coming through, you know, as well as, you know, again, just lower overall borrowing. You know, that did have an impact. You know, our swap profile, where we have converted, you know, some of our variable into fixed, that has not changed, you know, over the past year. David Marsh: Okay. All right. Well, hey, thanks very much for taking the questions, guys. Leroy Ball: Yep, thank you. Operator: The last question comes from Michael Mathison with Sidoti & Company. Please go ahead. Michael Mathison: Good morning, you guys, and congratulations on all the margin improvement. Leroy Ball: Thank you, Michael. Michael Mathison: In particular, the adjusted EBITDA margin in PC was up 370 basis points sequentially, so quite an achievement. Can you comment on what drove the upswing, and is that the new normal? Is that margin level sustainable? Leroy Ball: You know, there is things that move around, if you will, right? It is not always, you know, clean quarters, I would say. We did have a benefit of an asset sale that I think helped their results for the quarter and probably added a little bit of that. That is, you know, something that is not repeatable. Overall, I would say the margin profile, I was really pleased with what they were able to do through a challenging, you know, sales year. I think with what we are doing moving forward, we certainly expect that we are going to be able to generate margins that are in that range on a go-forward basis. I will not necessarily commit to, again, getting back up above the 20% profile at this point. There is just still too many moving parts. You know, as Brad talked about, you know, relative to, you know, copper and things like that, you know, those sorts of things, you know, we try to insulate ourselves from, but there is always some level of exposure. We have, sometimes we are more successful at getting greater discounts than others, there is a whole bunch of factors that come into play there. I guess the main point I would say is, we were pleased with the overall margin performance, not just in Q4, but for the full year for PC, and expect that we will be able to continue to generate in that range, and obviously targeting to do a little bit better than that. You know, we think we have done a pretty good job of putting that business in a position to still consistently generate on the high end of the margin profile spectrum. Michael Mathison: Thanks. Turning to the CMMC business, you have spoken previously about potentially reducing the footprint at Stickney to a single column. Are you still planning to go ahead with that? What would that mean for CMMC margins? Is there any revenue impact from lost business? Leroy Ball: Yes, it is a good question. There is a high likelihood that we will be heading in that direction because we think that there is a whole host of benefits that come about as a result of that. In terms of what impact that would have on the revenues and profitability, nothing, as it relates to 2026, because of raw material that we already have in inventory that we need to run through and things of that nature. That would not be something that would be realized until, you know, we kind of really move out into 2027, the 2027 timeframe. The fact that we have less raw material to work with obviously means that, you know, we will be generating less sales as a result of that. If we move down to a single column, we think we can certainly cut costs as part of that, and, as long as pricing remains stable, improve our overall margin profile for that business. That is, it is part of the Catalyst initiatives that, you know, we are continuing to do some work around. You know, as I have more information on that, we will talk about that and potentially up in upcoming quarters. Michael Mathison: Great, thanks. Looking at your utility pole business, I did not see a press release about the Douglas fir acquisition. Could you just give us a little. Leroy Ball: Yeah. Michael Mathison: more color about Leroy Ball: Yeah. Michael Mathison: where they are located? Leroy Ball: Yeah. Michael Mathison: Will that help with your effort to, for geographic expansion? Leroy Ball: Yeah. Yeah. Yeah, small business. It is, it is out in Oregon, and it just, it really secures up a, you know, Douglas fir supply chain for us that we were, you know, beginning to access out over the last, 12 to 18 months. You know, there was a level of risk that, you know, that could potentially put us in a spot where, you know, we, you know, we would be, you know, dependent upon a source that, could move away from us at any point in time. We saw it as an opportunity to lock that in, secure that source of supply and assets, and capabilities, and bring that into our portfolio, which actually, you know, we think helps improve our opportunities in some of our traditional markets, where we might have been shut out of bids that would require some Doug Fir component that we, you know, could not offer, or we would need to try and, you know, work with others to be able to provide that. Right now, it is more geared towards helping us in markets that we are already in and trying to grow. You know, it could be a, you know, a, an initial jumping off point, at some point in the future if we want to think more aggressively about expanding out further west. Michael Mathison: Well, great. Thank you for taking my questions. Congratulations again. Leroy Ball: Thank you, Michael. Yep. Operator: We have an additional question from Liam Burke with B. Riley Securities. Please go ahead. Liam Burke: Thank you. Good morning, Leroy. Good morning, Brad. Leroy Ball: Good morning. Liam Burke: Leroy, on PC, we talked about the puts and takes on residential, but are you making significant enough headway on the commercial side of the business, where it is actually moving the needle and contributing to this anticipated revenue growth? Leroy Ball: I mean, we believe so. I mean, I think, if you again go back to our 2026 projections, I think that, you know, we are happy with the commercial wins that the team generated in the back half of 2025, that will carry into this year. You know, it is all good business, and it certainly helps us on the throughput side as well in our plants. You know, we are a manufacturer, right? I mean, the more we can put through our plants, the better we are going to do. You know, you are always balancing those things out against any potential price trade-off that you have. Throughput is king in our world, and so, it is important to be able to have that volume. The team again, our team came back strong in 2025 with a sort of a really a refocused effort on ensuring that we were making sure that our customer base understood that we value what they do for us, and we want to do everything we can to not just meet their needs, but exceed their needs and expectations. I think we were able to regain some confidence in some areas, and we already had confidence in others that I think, ultimately resulted in additional business coming our way, again, as certain customers consolidated their own production activities. Real happy and pleased with the efforts our PC team did in 2025, coming back from a tough year. Liam Burke: Great. In the past, you have talked about adding to the utility pole business by tucking in a pretty fragmented area. Leroy Ball: Yep. Liam Burke: Do you see opportunities there, or has pricing got out of hand with the bigger demand or increasing demand for infrastructure build? Leroy Ball: I, you know, I think that, you know, we are always open to those opportunities and always looking and, but wanting to make sure that again, we are disciplined in that process and how we go about it. You know, there are opportunities there, Liam. You know, it is tough to say if and when any of them could shake loose, but in the meantime, we think we, you know, we still have capacity to fill, and that opens up enough opportunities for us to continue to grow our business with the existing capacity that we have on hand. That is, you know, 2025, there was a tremendous amount of effort in terms of sort of upping our, you know, sales skills, if you will, and technology, right? We have added technology, we have added new sales leadership, we have added more boots on the ground. You know, we have gone hard in areas that we feel were underrepresented and provided opportunities for us. Again, also pleased with the efforts of our leadership and team on the UIP side, and I think we will continue to see, you know, those benefits come through in, you know, 2026 as well. Liam Burke: Great. Thank you, Leroy. Leroy Ball: Yeah. Thank you, Liam. Yep. Operator: This concludes our question and answer session. I would like to turn the conference back over to CEO Leroy Ball for any closing remarks. Leroy Ball: Thank you. I just want to thank everybody for participating on today's call and for your continued interest in Koppers Holdings Inc. Look forward to connecting with you again next quarter. Take care. Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Cindy Rose Quackenbush: Good morning, everyone. Good morning, and warm welcome to our 2025 preliminary results and strategy update. By the way, that's our new brand refresh. I hope you like it, created by Landor AMP and Man versus Machine, WPP agencies, all powered by WPP Open. So look, I'm delighted to welcome you all here to One South Work Bridge to our campus here in London, which in many ways is symbolic of the future of WPP. It's modern, it's adaptive, it's collaborative workspace for our talent, our clients and our partners. So the plan this morning is I'm going to start with some opening remarks, and then I'm going to hand over to Joanne Wilson, our Chief Financial Officer, to share our 2025 preliminary results. Then I'll share our strategy update, and then we'll open up to Q&A. Before we start, I'd like to recommend that you take a moment to read this cautionary statement while I get out of your way. So Joanne and I will be joined on stage later by Brian Lesser, who's CEO of WPP Media. When we get to the media section of the presentation, and most of my senior management team are here in the audience as well. Let me start by saying that WPP is an extraordinary company. We are built on agency brands with remarkable histories going all the way back to the 1800s. Some are still well known today. Others have evolved into new parts of WPP. But together, they have roots in creating iconic work that moves people and shapes culture. We serve some of the biggest, most demanding clients in the world, and we steward and grow some of the most well-known brands on the planet, several of whom you'll hear from and see referenced throughout today's presentation. And our business model is actually very simple. We exist to make our clients successful. We help our clients build brands that matter, drive meaningful engagement with their consumers and drive outcomes for their business. It drives growth for them and growth for us. However, it's really clear that what has made us successful in the past will not make us successful in the future. And as you can see from the numbers that we released this morning, our performance is not where it needs to be. Yes, of course, there are externalities we can point to market volatility, economic headwinds. But really, the results point to the need for us to embrace a single unified growth strategy to execute with increased rigor and evolve as the needs of our clients evolve. After several years on the WPP Board of Directors, I took this role with a clear thesis in mind as to what we need to do differently. We've spent the past 6 months as a team validating this thesis through rigorous analysis and by speaking directly to our clients and actively listening to their feedback. And the good news is we haven't been waiting for today's presentation to take action. We've already made several decisive changes, and you can see the positive results in our recent new business success. In the fourth quarter of 2025, WPP was #1 in JPMorgan's net new business rankings for the first time since 2020 with a series of excellent client wins across media, creative and our integrated offer. These include being appointed the U.K. government's lead media agency, Reckitt and Henkel Media in Europe, Kenvue and Haleon Creative globally, TruGreen Media in the U.S., Norwegian Cruise Line Global Media, Suncor Media, just to name a few. And I'm delighted to say we've maintained this strong momentum into 2026, winning Jaguar Land Rover, Global Media and Integrated Services. In fact, the impact from new business wins in 2026 already exceeds the impact of new business wins for all of 2025 combined, and it's only February. So while the turnaround of our business will take time, our momentum is undeniable, and these wins give me huge confidence that we are firmly on the right path. My team is united, committed and hungry to win. Today's session is the culmination of months of detailed work by our team. We have a bold plan to make WPP a simpler, more integrated company, one that's fit for the future, relentlessly focused on growth and brilliant execution. Personally, I'm very excited to be here at a time of such revolutionary change, and I feel quite privileged to lead WPP as we play a defining role in shaping the future. So I'll come back shortly and talk about our view on the evolving landscape and our growth plan for the new WPMP, which we're calling Elevate28. But first, I'm going to hand over to Joanne to take you through our 2025 results. Joanne? Joanne Wilson: So thank you, Cindy, and good morning, everybody. And can I add my warm welcome to you here today. So let me start by taking you through the main financial headlines for 2025. Our like-for-like revenue less pass-through costs fell 5.4% for the full year due to client assignment losses and spending cuts. Now this is slightly better than our most recent guidance for a decline of 5.5% to 6%, and it reflects a Q4 like-for-like decline of 6.9%, and that's a deterioration from the third quarter decline of 5.9% -- in the context of the weaker top line, we delivered a headline operating margin of 13%, in line with our expectations and down 180 basis points year-on-year on a like-for-like basis. Our fully diluted EPS was 63.2p, a decrease of 28.4% year-on-year, with the impact of reduced headline operating margin and a higher headline effective tax rate, partially offset by lower net finance costs and noncontrolling interests. Turning to cash flow. Our adjusted operating cash flow before working capital was GBP 1.2 billion, down from GBP 1.3 billion in 2024 and at the top of our most recent guidance range and includes GBP 82 million of cash restructuring charges. On my next slide, I provided some color on our net sales performance, both for the fourth quarter and across the full year. And please note that we have included more detail in the appendix to this deck. Now you have some of the detail here on trends by business, by region and by client sector, but I thought it would be more useful to unpack some of those trends by theme to help give a sense of what is WPP specific and what is more market driven. And when we consider what is WPP specific, the major negative impact to call out both for the full year and for the fourth quarter is the impact of gross client losses, which deteriorated through the year. Now this was driven by the impact of incremental losses in year in 2025. And by segment, this particularly weighed on media, by geography on the U.S. and the U.K. and by client sector on CPG and TME. Now against this, we had the positive impact of new business wins in 2024 and '25, which indeed contributed progressively through the year. The aggregate level of in-year wins, however, was lower than we initially expected and significantly below what we have experienced over the past number of years. This was in part because of a lower win rate, but in EMEA, it was because of a lower level of aggregate new business activity. Industry estimates are that global pitch activity was down double digit in the year. While we saw an encouraging new business performance in the fourth quarter with the wins of Reckitt, Henkel, the U.K. government, Pizza Hut, NCL and JLR, the impact on our like-for-like performance is expected to take time to ramp up, and we expect the overall net new business headwind to sustain into the first half of 2026. The final theme to call out is spend by existing clients. We characterize the year as one of more cautious spending from clients with a higher degree of volatility than we would typically expect to see. Now the impact was seen most strongly across the CPG, auto and the tech and digital services sectors. And while many of our businesses were impacted, it weighed most heavily on Ogilvy. The waterfall chart on this next slide bridges our headline operating margin from 15% in 2024 to 13% in 2025, a 1.8 percentage point deterioration on a like-for-like basis. There are a number of moving parts and starting with staff costs, including our severance and incentives on the left. Now these reduced by GBP 576 million on the back of lower permanent headcount, which ended the year down 8.7% and reduced use of freelancers, which was down 14% year-on-year. However, due to that lower revenue, this resulted in 180 basis points drag on our margin. This was amplified by the impact of increased severance and other associated costs, which was up GBP 89 million in the year, taking a further 100 basis points of margin. And we did increase investment levels in WPP Open in AI and data, and this was more than funded by a reduction in back-office costs, leading to a net reduction in tech spend and other costs of GBP 128 million. Again, with the impact from those lower revenues, this translated into a 60 basis point drag on margin. These drags on margin were offset by a 50% reduction in staff incentive payments to GBP 182 million, providing a margin cushion of 140 basis points, which is equivalent to 120 basis points like-for-like if we exclude FGS. And taken together, this resulted on that net margin move of 200 basis points on a reported basis and 180 basis points on a like-for-like basis, which includes 20% of the impact from the disposal of FGS and from FX. Now moving to my next slide, we show our headline income statement. Overall reported revenue less pass-through costs was GBP 10.2 billion, a decrease of 10.4% year-on-year on a reported basis. Our headline operating profit was GBP 1.3 billion, which was down 22.6% year-on-year on a reported basis and is consistent with that 13% operating profit margin. Our net finance costs of GBP 274 million were slightly down year-on-year on lower average net debt and lower interest rates. And our effective tax rate increased to 32% given that lower profit base and the impact of nondeductible fixed elements. By contrast, noncontrolling interest of GBP 43 million was down year-on-year, partially driven by disposals. Our headline diluted EPS, as I said, was 63.2p and down 28.4% on a reported basis. The Board has recommended a final dividend of 7.5p, giving a total dividend of 15p for 2025. Now while this is a reduction year-on-year, it represents a stable dividend from the first half, and it underlines our commitment to maintaining shareholder returns. We include a full reconciliation between our headline and our reported financials in the appendix. And the main items I would call out are the impact of restructuring programs as well as further goodwill impairments of GBP 641 million, which primarily relate to our integrated creative agencies and property impairments of GBP 114 million, both of which are noncash in nature. Now this next slide bridges the year-on-year movement in net debt, which ended 2025 at GBP 2.2 billion versus GBP 1.7 billion in 2024. Our adjusted operating cash flow before working capital was GBP 1.2 billion and reflects a lower level of cash profit, partially offset by a lower level of CapEx and a year-on-year decrease in cash restructuring costs, which came in at GBP 82 million. Our working capital saw an outflow of GBP 334 million, primarily driven by the temporary impact of reduced staff incentives, adverse FX movements and business mix. Within this, our trade working capital, excluding the impact from FX was broadly flat year-on-year. We remain disciplined on our working capital management and saw an improvement in underlying operating metrics year-on-year, including reduced overdues. We saw an outflow of GBP 17 million from earnouts of GBP 65 million and the net impact of dividends to minorities and from associates and earn-outs have decreased year-on-year and are expected to continue to progressively fall in 2026. Our net interest and tax contributed to a total adjusted free cash flow of GBP 202 million and note that the tax payment includes GBP 43 million of one-off taxes related to the disposal of FGS Global. And turning to the uses of cash, M&A spend was GBP 147 million and largely related to the acquisition of Infrum, while cash dividends amounted to GBP 343 million. Adding in the impact of buybacks at GBP 97 million to offset the dilution from incentives and other factors, including FX, our spot net debt was GBP 2.2 billion, up GBP 500 million year-on-year. Now my next slide provides more detail on our overall net debt and our leverage profile. As we've already said, we think it's more prudent to look at average adjusted net debt through the year rather than the year-end level, which typically benefits from a favorable working capital position. Now our average adjusted net debt was slightly down year-on-year at GBP 3.4 billion compared to GBP 3.5 billion in 2024. However, given that lower headline EBITDA, the average adjusted net debt to headline EBITDA ratio for 2025 was 2.2x, which was up from 1.8x in 2024. While our average leverage ratio has increased, our maturity profile stands at 5.8 years and the average coupon on our net debt is 3.5%. We, of course, also completed a successful GBP 1 billion bond issue in December 2025, which more than covers our GBP 650 million bond maturity in September 2026. We have no covenants. And as of December 2025, we had GBP 4.4 billion of liquidity, including an undrawn committed RCF of $2.5 billion, which does not mature until 2031. And furthermore, I'm very pleased to share that today, Fitch Ratings has assigned WPP a BBB rating with a stable outlook, reinforcing our investment-grade balance sheet. And on my final slide for now, I have shared guidance for 2026 across key financial metrics. Now we will talk about the impact of our strategy update later this morning. But for 2026, we're setting the following parameters in terms of our headline guidance. Our like-for-like net revenue growth is the most important metric for judging our business, but it is a lagging indicator with account losses continuing to drag for around 12 months after they first start to impact. And meanwhile, new account wins take time to bed in and move toward a steady state. For the year as a whole, we estimate that gross client losses will represent a 500 to 600 basis point drag, an increase from the 300 to 400 basis points in 2025. At the same time, the positive impact on like-for-like from gross client wins in 2026 already exceeds that for the full year 2025. Now while it is still early in the year to indicate the impact of new business in the full year, we do expect it to be a more significant drag in the first half in 2025. We are encouraged by the new business performance in the fourth quarter and the performance year-to-date and the nature of the pipeline. And as a result, we anticipate a progressively improving impact from net new business through the course of the year. Now reflecting all of this, we are guiding to like-for-like revenue less pass-through costs down mid- to high single digits in the first half of 2026 with an improving trajectory in the second half. And we also anticipate that the first quarter will see the weakest like-for-like for the year. On profit, there are a number of moving parts that will impact our headline operating margin. On the positive side, we will benefit from the annualized impact of cost actions, which were taken in 2025, alongside a part year benefit from the cost initiatives we are implementing as part of our new strategy. We also expect a lower impact from headline severance costs. Against this, we will continue to invest in WPP Open in AI and in data as well as our growth drivers and also expect to rebuild our incentive pools. Cindy and I will share greater detail on both the growth drivers and the cost initiatives as part of our strategy update. Taking all of that into account, we anticipate headline operating profit margin in the range of 12% to 13%. And turning to cash flow, we continue to focus on adjusted operating cash flow before working capital as the most important metric, reflecting the potential for volatility in the year-end working capital position, including both the anticipated costs associated with historical plans as well as the restructuring costs linked to the Elevate28 8 plan, we anticipate adjusted operating cash flow before working capital of GBP 800 million to GBP 900 million. This includes total anticipated cash restructuring charges of around GBP 250 million, of which around GBP 190 million are associated with the Elevate28 plan. Excluding these charges, we would anticipate adjusted operating cash flow before working capital of GBP 1 billion to GBP 1.1 billion. And finally, in terms of leverage, given the expectation of a further moderation in headline EBITDA, we would anticipate our average leverage metrics to move up further in 2026. We do, however, expect average net debt to remain broadly stable, and we note that any proceeds from asset disposals during the year will be used to strengthen our balance sheet, providing a greater degree of financial flexibility. Now you will find more detail on other modeling assumptions for 2026 in our preliminary results press release. And that is it for me for now, and I will hand back to Cindy, who I know is very keen to share our strategic update. Cindy Rose Quackenbush: Thank you, Joanne. Thank you. Look, the first thing I want to say to you is that I fully recognize that recent years have been disappointing from a shareholder perspective. I acknowledge our performance on core metrics like net sales margin, free cash flow. It's disappointing. No one is more determined to turn that around than I am. And as I said in my opening remarks, I took this role with a clear thesis as to what we needed to do differently. We've spent the past 6 months as a team really validating that thesis with rigorous analysis and by actively listening to feedback from our clients. There are plenty of reasons for optimism, and I'm going to get to those in a moment. But first, I thought it's just appropriate to share with you some of the feedback that we have received from clients. It's clear and consistent and not only supports my thesis, but provides us with an excellent blueprint for what we need to do differently going forward. Clients pointed to the fact that our complexity got in the way of true client obsession. We were siloed. We were hard to navigate. We haven't been intentional enough about evolving our integrated proposition to adapt to the changing needs of our clients. It's taken us too long to land our data proposition and our media business has suffered as a result. Now the good news from my perspective is that all of these issues are fixable. And as I said, we've already started to do so. So while it's true that our performance hasn't been where we want it to be, it's also true that WPP is full of potential and has all the ingredients that we need to win. We have incredibly talented, hard-working people with deep domain expertise who do amazing things for our clients, for some of the most demanding clients in the world, I might add, every single day. We have world-class capabilities that span the entire marketing workflow from media to commerce, creative, PR, production, digital experiences, software engineering, data, AI and more. We've made really smart investments over the years in technology that have now enabled us to build WPP Open into a powerful future-facing agentic marketing platform, giving us a real competitive advantage. We have a presence in over 100 countries around the world, which means we can serve the most complex multinational, multi-client brands in the world. We have a scaled media offer and partnerships with every relevant player in the ecosystem. But maybe most importantly of all, we have an ambitious, competitive, high-energy team that is ready to embrace change and hungry to win. So notwithstanding the challenges, which are clear, I stand here with immense optimism because we're at a really pivotal moment in WPP's journey. We're not just adapting to change. We're actively shaping the future. We are building a WPP that is more agile, more connected, more powerful than ever before, a WPP that is simpler to work with, fit for the future and built to win. A WPP that is obsessed with the client -- the success of our clients and as a result, that drives better returns for our shareholders. So our strategy starts with a new mission, to be the trusted partner for the world's leading brands in the era of AI, valued for combining cutting-edge media intelligence, trusted data solutions, world-class creativity, next-generation production and transformative enterprise solutions to help our clients navigate change, capture growth and capture opportunity. Now there's 4 key objectives of our strategy, and we're going to unpack these in some detail. But just to summarize, our objectives are to drive superior growth for our clients, to become a simpler, more integrated company, to leverage our agentic marketing platform, WPP Open for competitive advantage and to create firm financial foundations for the future. As I said earlier, this is going to take time, but we've already made a promising start. And to support our growth strategy, we've built a very detailed execution plan that broadly spans these 3 distinct phases. Our immediate priority is to stabilize the business, make the structural changes needed, strengthen our execution, win and retain clients to sustain our current market momentum. The next phase is about building on these foundations and returning the company to growth sometime during 2027. And the third phase will be about accelerating our growth so we can capture our fair share of the market from 2028 and beyond. And just to summarize what you can expect from this plan in terms of outcomes, you can expect the stabilization of our performance in the near term, a return to growth sometime in 2027, gross cost savings of GBP 500 million over 3 years, a reallocation of investment against our key growth priorities and a more focused portfolio, an investment-grade balance sheet, as Joanne said, and greater financial flexibility. So that's the basic framework, the time line of our growth strategy and what you can expect in terms of outcomes. We're going to unpack all of this in more detail. But before we do, I would like to step back, if I may, and just do a bit of scene setting to offer some perspective on how we see the world changing, the needs of our clients evolving and the opportunity of AI. So for some time now, we've known that our industry is experiencing dramatic transformation. With the rapid diffusion of AI, we're not just seeing incremental shifts in consumer behavior, like this is a complete metamorphosis of the commercial ecosystem. Brands are now discovered in AI-driven conversational search. All the old barriers that protected established brands are gone. creators and influencers have reshaped consumer preference and can launch brands in an instant. Media is everywhere. It's in everything. It's no longer episodic and campaign-driven. It's continuous, always on, a stream where social, search and physical spaces all blend together. Commerce is the new organizing principle. Every action, every interaction is shoppable, and we're rapidly shifting to agented commerce where AI agents do the shopping on our behalf. Trust is scarce, right? It must be earned every day in this world of synthetic content and deep fakes. Brands need to balance hyperpersonalization with personal privacy. And as the world is flooded with AI-generated content, the demand for verifiable human creativity, craft, empathy, taste is increasing as key brand differentiators. These changing dynamics are not fleeting trends. The acceleration of AI is unstoppable. And as I said, it's driving a complete metamorphosis of the commercial ecosystem. And this is the reality our clients are navigating every day. The fragmentation, the complexity, the pace of change is dizzying for our clients and the paths to growth are much harder to find. He's never been more urgent to build compelling trusted brands that endure for generations and provide competitive advantage and long-term enterprise value. To cut through this noise and find new growth audiences in this environment, brands need to embrace new strategies grounded in deep data insights, real-time signals and AI that acts on these signals at the speed of light. In this perpetually changing environment, clients don't need more traditional marketing agencies. What they need is a new playbook for growth and a trusted partner who can help them build it and operationalize it. A partner that operates as an intelligent orchestration layer across creativity, media, commerce, data and tech who fuses technical expertise with breakthrough creative thinking into one cohesive approach to modern brand building. At WPP, we work with some of the most consequential brands and clients on the planet, Coca-Cola, Unilever, Nestle, Kenvue, Ford, so many more. We know how to navigate disruption. We know how to find signal in noise and help clients build new paths to growth. Now for many clients, this new playbook for growth means real transformation at every level. So I spent the last decade delivering large-scale technology transformation to enterprise clients around the world. And I can tell you, it's not easy. Clients need to have AI-ready data foundations and agentic tool and governance in place. They need to be trained and skilled. Processes need to be reimagined. There's really no shortcut when it comes to AI transformation. Every client I meet is going through it, and they all need our help. So for WPP to seize this opportunity, we need to evolve from being a collection of traditional marketing agencies to being a trusted partner for growth and transformation, helping our clients build modern marketing capabilities and move boldly and confidently into the future. A wonderful example of this kind of partnership in action is the Coca-Cola Company. Let's hear from Manolo. [Presentation] Cindy Rose Quackenbush: Commerce and Retail media at 23% and high-velocity content production at 38%. These changes that we're making at WPP to integrate our client proposition will enable us to cross-sell more effectively and grow our share in these fast-growing markets. So that's my perspective on how the world is changing, what it means for our clients and the opportunity of AI. Thanks for indulging me in that. But I'd like to now unpack our growth strategy in a bit more detail. So as I mentioned earlier, we have 4 strategic objectives: to deliver superior growth for our clients by reorienting around an integrated proposition to become a simpler company moving to 4 operating units across 4 regions with common incentives across the company, to leverage the power of our agentic marketing platform, WPP Open for competitive advantage and to create firm financial foundations for the future. We've built a detailed plan that sets out the actions we're taking to deliver on these objectives, and the entire management team worked together to build this plan. This was the ultimate team collaboration. We're all behind it. We're all aligned and committed to its execution. There are 8 core pillars to the plan, which you can see on this slide, but I'm going to double click and I'm going to double-click briefly on each of them, but I do want to start with WPP Open, our pioneering agentic marketing platform because it sits at the center of everything we do. It's where all of our capabilities come together into one integrated end-to-end platform. It's the cornerstone of WPP's own transformation, and it's how we deliver services, transformation and growth to our clients. WPP Open is a platform that we've been investing and building for a few years now. We recognized that we needed an end-to-end orchestration layer to connect workflow inside of WPP. And the platform enables us to scale intelligence and best practice across our group and reimagine business process and client solutions with the agentic capabilities that now live inside Agent Hub, an important recent addition to the platform. But let me show you an example of the power of the platform with a recent example from Google Pixel. Using WPP Open and AI personas, we analyzed millennial conversations from across social media, uncovering a shift towards romantasizing everyday life and reframing mundane moments as cinematic moments. Guided by this insight, our brand agent recommended focusing on Pixel's camera coach feature to help users take control of their story. Thanks to specialized agents, our workflow moved from social listening to creative concepts in just 1 hour. With Google's advanced AI models within WPP Open, campaign assets were approved and live within 24 hours. And this delivered a 3% increase in brand uplift, demonstrating a new marketing flywheel where insight, creativity and production really move at the speed of culture. So recognizing the pace of technology change, we knew that the future of marketing would look very different than in the past. And to anticipate these changes, we've significantly enhanced the platform over the past 12 months. Open Intelligence is our foundational intelligence layer that securely connects trillions of live data points from clients, partners and WPP in a privacy-first way. And it's now integrated and powers the entire WPP platform end-to-end. We consolidated our technology and data solutions into one organization. We have one WPP development team, one integrated product road map and one set of design and portfolio management principles, which dramatically simplifies how we think about evolving this platform in the future. Our people work on WPP Open every day, and it features in every client pitch as the single unified agentic platform that clients need to deliver integrated marketing workflows and a collaborative workspace where humans and agents can work together to deliver a system of growth that clients can trust. There are many, many point solutions available in the market today that address pieces, fragments of the marketing workflow, and they're often tied to specific platforms, leaving clients to manage costly complex tech stacks with fragmented workflows. WPP Open solves this problem in a single end-to-end platform. It's an agnostic system built on a common data model. It gives clients one source of truth to integrate operations, optimize investment and drive growth at scale. It's really hard to explain technology, though. So let me show you how this works. [Presentation] Cindy Rose Quackenbush: Great. So I talked about the importance of partnerships because in today's changing world, like no single company can go it alone. WPP Open, as the name indicates, is open by design. We will continue to enhance our own technology with the very best and latest AI models and agentic tool sets through our groundbreaking strategic technology and data partnerships with Google, Microsoft, TikTok, Meta, Amazon, Stability AI and more. These partnerships don't just give us access to new AI models and tools. They enable us to bring cutting-edge innovation resources to our clients and unlock important new routes to market, particularly important for our Enterprise Solutions business. You might have seen earlier this week, we announced a significantly expanded partnership with Adobe, embedding their industry-leading AI marketing suite directly into WPP Open. This is a powerful integration that delivers effective streamlined marketing operations for our clients, enabling them to scale personalization, optimize media and create on-brand content efficiently with agentic AI workflows. This build, buy and partner approach that ensures that WPP Open remains at the forefront of cutting-edge technology innovation so that our clients always have state-of-the-art capability at their fingertips. WPP Open is a significant source of competitive advantage for WPP. This platform puts AI to work to transform our clients' marketing function and enable new outcome-based commercial models, tying our success directly to client growth. So that's WPP Open. Now let's go back to the strategic plan and briefly step through the actions we're taking to deliver on our growth objectives. Our first key action focuses on media and data and positioning these capabilities at the core of our integrated client proposition. Brian Lesser joined WPP 18 months ago and has done a fantastic job spearheading the transformation of WPP Media. He's implemented structural change and led the acquisition and integration of InfoSum, which now underpins our differentiated data approach. We know there's more work to do, but recent wins in WPP Media that Brian and his team have secured give us full confidence that we're on the right path. So I'd like to invite Brian to the stage now to dive a bit deeper on WPP Media's transformation. Brian? Brian Lesser: Hi, everybody. Good morning. And thank you, Cindy, for the introduction and for leading the way at WPP. 12 months ago, I promised a transformation, and we delivered. We have united WPP Media, placing our clients at the heart of everything we do, ready to unlock limitless growth in a media everywhere future. Our foundation is built on our proprietary open intelligence, driving real-time predictive decision-making. Today, I'll detail how we're now perfectly set up for success with the client always at the core of a truly integrated WPP, powered by a differentiated platform that sets us apart. This is our winning recipe, and I'll share tangible case studies proving this model is designed to win. From the outside, it might seem as if all marketers have the same basic needs. The truth is that every client is unique with vastly different context, growth strategies and audiences. This is why we have restructured the way we work to ensure each client's unique needs sit at the heart of our business. This radical client centrality is allowing us to unlock true integrated marketing across WPP. We have built a single financial and data ecosystem that eliminates siloed operations to bring the full power of WPP's people and tech to life. This empowers us to deliver seamless connected solutions that cut across the traditional ways of doing business like customer experience, commerce and social and influencer that accelerate client growth. Whether it's a media pitch, a creative pitch or a production pitch, more than ever, clients are looking for a single integrated solution. This is what we're now set up to deliver and why clients are choosing us. You can see the power of this integrated approach with Mazda. When creative is as intelligent as you're targeting, you don't just reach people, you move them. Mazda's first to the finish was a groundbreaking branded content series. It spotlighted trailblazing female racecar drivers connecting on a human level beyond motorsport. This innovative program became the first branded content designated a prime video original. It showed how media intelligence fuels powerful storytelling. The series achieved 16 million minutes watched, drove 93% new website visits, increased purchase consideration by 23% and contributed to Mazda's highest sales year ever. This is the type of results the new WPP media generates. Our data approach isn't merely an evolution. It's a fundamental revolution. Traditional marketing with its static definition of identity and commoditized view of audiences is increasingly obsolete and constrained by privacy risks. We ask a different question, what signals truly matter to our audiences. We unlock intelligence from diverse live signals, context, interests and behaviors to find new patterns in the consumer journey. This identifies new growth audiences and predicts their future actions to accelerate business growth. Central to this is our market-leading solution, enhanced by InfoSum, which establishes private data networks directly within our clients' environments. This enables secure multiparty data collaboration without any data ever moving. This decentralized approach breaks down silos, creating comprehensive AI-ready consumer insights from previously inaccessible sources, far surpassing traditional ID matching alone to deliver truly predictive intelligence. For the first time, clients can harness the full potential of their first-party data from any cloud or warehouse environment. including Adobe, AWS, Microsoft Azure, Google Cloud, Salesforce, Databricks and Snowflake. This proprietary intelligence can then be connected and enriched with our comprehensive identity data and robust network of over 350 integrated partners, giving us access to quadrillions of real-time signals. This allows us to produce faster, smarter and more effective marketing across all leading global platforms like Amazon, Google, Meta, LinkedIn, Snapchat and TikTok. By synthesizing this vast data, we build predictive media strategies that deliver deeper engagement and superior client growth, moving beyond just reach and frequency and validating actual outcomes with historical performance data. To bring this to life, consider our work with Heineken. They needed a way to connect their first-party consumer data with ITV's on-demand viewing audience and Tesco shoppers. Powered by InfoSum, Heineken was able to identify relevant audience segments based on age and real-time drinking preferences. Crucially, Tesco provided closed-loop measurement of sales impact, all without moving or sharing any customer data out of Heineken's environment. In a world where measurable outcomes truly matter, the campaign success wasn't measured in brand uplift or impressions, but in real sales data from Tesco stores, which increased by an impressive 189%. Another real-life example of driving business results through our market-leading data and technology solution. Powered by Open Intelligence and enhanced by InfoSum's federated learning infrastructure, WPP Open offers a unique agentic marketing platform. This gives our clients speed, simplicity, scale and AI innovation to modernize marketing, optimize media and accelerate their growth. Our differentiated approach to data is helping move marketing beyond legacy static databases by enabling more connected and intelligent ways of working. For Coca-Cola, this means bringing together creativity, technology and real-time insights to create more integrated marketing experiences. There's no one better than Manolo to share how WPP Open and Open Intelligence are transforming marketing at the Coca-Cola Company. [Presentation] Brian Lesser: Our strong Q4 2025 momentum continued into 2026. with WPP Media achieving its best January in 4 years for net new business wins, leading all media holding companies. We have an inspired, dynamic market-leading team of winners leading this charge. The change in our culture has been palpable. Major integrated wins like JLR and Estee Lauder confirm our strategy works. Our winning client-centric proposition built on this future-proof integrated foundation rapidly meets evolving client demands and delivers truly predictive intelligence. With media at its core, WPP is now exceptionally positioned to drive continued growth, sustain client relationships and deliver significant value for our investors. Thank you, and now I'll hand it back to Cindy. Cindy Rose Quackenbush: Thank you, Brian. Thanks so much. So the next key action we're taking is to establish next-generation production and creative capabilities. And I'm going to start briefly with production. Just last month, we announced the creation of WPP Production, our new production unit led by Richard Glasson. And of course, we marked the occasion with a video. [Presentation] Cindy Rose Quackenbush: So as I think you can see, production is being pretty radically transformed, and we're facing into this head on by fundamentally reimagining how it all works. WPP production, it's a mouthful. It's designed to solve for both volume and performance. We operate an end-to-end content orchestration through WPP Open as one unified content production engine. We're establishing high -velocity studios deeply integrated into WPP Media for real-time measurement and content optimization. And we're centralizing commissioning and supplier management to in-source more work where appropriate and create a more curated roster of external production partners. We're investing. We're investing in cutting-edge capabilities, high-velocity studios, as I mentioned, Gen AI studios, virtual production, video effect of virtual effects and digital twin pipelines. With WPP production, we are well positioned to support our clients as they look to transform and often consolidate their content production activities. And we're confident over time, we will take a greater share of this market. So next, I want to talk about creative. Like we know how critically important creativity is to our clients. I talked a bit earlier about the increasing demand for verifiable human creativity and craft in the era of AI. This is an important source of brand differentiation and value creation for our clients. And while the market for creative service is projecting limited growth over the medium term, creative capabilities are still a vital element of an integrated proposition, and there is significant opportunity for us to unlock white space across our client portfolio through joint propositions and cross-sell. So recognizing these factors, today, we are formally announcing the launch of WPP Creative, led by John Cook, and this organization will be home to our most iconic agency brands, VML, Ogilvy, AKQA, Berson, Landor, Design Bridge and Partners. I want to be very, very clear on this one. We are not merging agency brands. We are not consolidating agency brands. We are not sunsetting agency brands, okay? On the contrary, John and our agency leaders will unite them in new ways and empower them like never before. I've spoken to many clients. They all share with me how much they value choice and the unique perspectives and cultures that our agency brands provide. However, they also want to make it easier for those agencies to collaborate and efficiently access the whole breadth of WPP's capabilities. A simplified structure also removes barriers for our global client leaders, creating a frictionless path to our top talent so we can put the right resource in front of the right client at the right time without the constraints of the past. With WPP Creative, all of our agency brands will have access to the full modern stack of commerce, customer experience, digital platforms, enhancing their client proposition and expanding the go-to-market channel for these services. Much greater alignment with WPP Media and WPP Production will ensure that creative ideas are instantly adaptable and executable across the whole customer funnel. While agency brands remain, WPP Creative will have a more competitive cost base from a simpler, more unified operating model and greater shared infrastructure. I'm excited that WPP Creative will double down on our agency brands and arm them with the capability they need to make them more modern and more united than ever before. And we're already seeing the power of bringing together our portfolio in recent successes securing, for example, the creative mandate for Kenvue, the parent company to well-known brands like Listerine LSTERIN, Sudafed, BAN-AD and more, a strength also recognized by our client there. Next, I'd like to spend a few minutes talking about enterprise solutions. Because today, every global business needs a partner that can help them build, run and evolve their core platforms and systems in a world where AI is part of everyday operations. Businesses are being forced to rethink how they establish competitive advantage and the potential to reinvent workflows has never been greater. For some of our clients, the need is clear and well articulated. For others, the need is completely unarticulated. They know there's a better way, but they don't know what it looks like. To partner most effectively with our clients on their AI transformation, we are elevating our existing enterprise solutions capability into a new externally facing operated unit called WPP Enterprise Solutions, led by Jeff Geheb. Enterprise Solutions provides a complete enterprise transformation offer for clients that spans consulting, content, customer experience, commerce, CRM and platforms. We have a unique ability to fuse these capabilities with media intelligence and world-class creativity to build an AI-powered marketing operation end-to-end for our clients. WPP Enterprise Solutions benefits from multiple routes to market, including via our agency brands and both direct and partner-led go-to-markets as well. These multiple routes to market maximize our coverage and enhance our ability to cross-sell, capture white space, TAM growth opportunity within our installed client base and will drive more direct and partner-influenced revenue. The enterprise transformation market is huge. It's worth $230 billion and projected to grow cumulatively 7% over the next 3 years. Although our share of that market today is small, the opportunity is really significant. And actually, we already have really solid foundations to build on. Today, our Enterprise Solutions business employs around 10,000 people and generates around $1.8 billion of revenue. It's about 13% of our overall group net revenue. This business has quietly built a book of exceptional clients and has already earned notable industry recognition from Gartner, Forrester and IDC. In many ways, as I like to say, Enterprise Solutions is the hidden gem within WPP that we will now elevate to become the crown jewel. And if you ask our clients at Ford, it's already the crown jewel. We have a partnership with Ford that started with J. Walter Thompson 80 years ago, and we've continued supporting them with cross-functional teams as their needs have evolved. Let's hear directly from Ford. [Presentation] Cindy Rose Quackenbush: Great. Okay. So we have talked about how we're going to deliver superior growth for our clients by reorienting around an integrated proposition that brings together media creative, production enterprise solutions, all powered by WPP Open. Now I want to talk about the organizational changes that we're going to make to become a simpler, more integrated company because these are key enablers for our strategy. And as I mentioned earlier, we haven't been waiting for today's update to change how we engage with clients. We know that when we show up as the new WPP, as the best of WPP, we win. But to build on our current momentum and make it sustainable, we need to radically simplify our organization really to unlock true client centricity. So to do that, WPP will no longer be a holding company. We will no longer be a shopping basket full of stand-alone businesses, hundreds of stand-alone businesses. We're going to move to a single company model. with 4 operating units across 4 regions with incentives that closely align to the overall performance of WPP. Being a single company with a simpler structure and common incentives are critical enablers of our strategy. As part of these structural changes, we'll also further simplify corporate functions, particularly in finance and people to reduce duplication, increase our use of shared services and redesign our processes, leveraging AI and Agenta capabilities. Alongside these structural changes, we're also focused on significantly strengthening our execution, both in terms of client service delivery and new business growth. At the heart of WPP's relationship with our largest clients are our global client leaders, our GCLs -- and our GCLs are already masters of creating value. But our existing operating model and our incentives and our internal processes have not always afforded them the agility needed to deliver seamless client-centric services that unlock new avenues for growth. I'm sure my GCLs in the room would agree. But we're transforming our approach. We're going to empower our GCLs with the authority and the resources to function as true leaders for their client portfolios, exercising strategic leadership rather than merely orchestrating a bunch of activities. This is going to include greater control over client P&Ls and the authority to make the best strategic decisions supported by streamlined internal processes designed to eliminate organizational friction and provide access to the right resource at the right time. We're also establishing a new team of client solution architects. This team will apply deep industry expertise to develop winning growth strategies for clients and then architect tailored solutions to deliver on those strategies, unifying technology, media data, all of our marketing capabilities to really drive successful execution. And finally, we're establishing more integrated growth operations, creating a stronger network of growth talent across WPP with a shared hunger to win. These changes will enable us to build on our current momentum, all of our recent wins as we strengthen our new business engine and champion a stronger winning mindset. And speaking of winning mindset, the next core priority for us, perhaps the most important of all, is to embed a high-performance culture to attract and retain the world's best talent, grounded in collaboration, client obsession, humility, accountability and a hunger to win. I know from experience that culture can be the biggest differentiator and competitive advantage of them all. Talented people choose to join companies and stay at companies that have strong cultures where they can thrive in their careers and be their authentic selves. I also know that changing culture takes time and persistence, and it's about both winning hearts and minds. I think winning hearts is about inspiring people with a new mission that feels fresh and relevant and clear. It's also about creating an environment that feels safe and inclusive, where creativity, where intelligent risk-taking are valued, where failure is treated as a path to learning and continuous improvement is celebrated. Now winning minds is about getting the basics right. So that's about clear communication and active listening to people, investments in learning and development. We've got to ensure that our people are building new capabilities with a focus on AI so they can deliver what our clients need from us. It's about common incentives across the company that just unlock collaboration and frictionless resource sharing. It's about performance management and feedback to allow us to build that culture of accountability and greater talent mobility and career progression opportunities. But what I really want is for people to have a world-class employee experience and feel proud to be on a winning team and proud to be part of WPP. Now the final pillar of our Elevate28 execution plan is about creating firm financial foundations for the future. And that's about creating capacity to invest in growth and building a WPP that's fully optimized to deliver for our clients. I'm going to hand over to Joanne now to step through the financial aspects of our plan. Joanne? Joanne Wilson: So thank you, Cindy. And okay, let me share the financial framework, which underpins our Elevate28 8 plan, including our approach to capital allocation. Elevate28 8 is first and foremost about getting WPP back to growth, and our financial priorities underpin that. In the near term, our focus will be on stabilizing the business, and that means improving our net new business performance and our client retention. As I mentioned earlier, net sales like-for-like is a lagging indicator, and that will take time to recover as we cycle through historic client losses. Now as we progress through the 3 years of our plan and we deliver strongly against the core growth building blocks, which I will talk to in a later slide, we anticipate a return to taking our fair share of the market. And in some areas and over time, we will seek to outperform the market. And to support this, we will unlock GBP 500 million of gross annual cost savings between now and 2028, enabling a reallocation of investment towards our growth drivers. And this will, in turn, support a rebuild of margins. And finally, we are setting out to make WPP a simpler and more focused business reducing the perimeter of the group and then still doing strengthening the balance sheet and providing a greater degree of financial flexibility. As you've heard today, we are already implementing many parts of our plan. However, it will take time to deliver and to realize the full benefits in our operational and in our financial outcomes. As Cindy indicated, we see delivery across 3 phases. In 2026, we will stabilize the operational performance of the business, leveraging the improved competitiveness of our media and our data proposition and our production consolidation. We will action our cost saving plans, and we will prioritize investment into the parts of our business, which represent the largest growth opportunities. In parallel, we will take a more proactive approach to our portfolio, unlocking embedded value and operating with a tighter and a more focused perimeter. This will require focused execution and a rigorous reallocation of resources to support our growth plans. Now as a lagging indicator, we expect organic growth to remain subdued in 2026, and we also anticipate margins to remain below historic levels as we reinvest savings to support growth. Alongside this, we expect an elevated average leverage ratio. From 2027, we expect to start to see a progressive ramp-up of the benefits from both our operating model changes and the investments we are making to enhance our new go-to-market, our integrated proposition and from scaling capabilities, including our full service enterprise solutions and production. It is our ambition for the group to return to growth during 2027 for margins to start to rebuild and for our leverage to start to come down. And from 2028, our plan assumes a significantly improved operational performance characterized by accelerating growth and improving margin and strong cash conversion. While we are not providing specific medium-term guidance today, rest assured, we are relentlessly focused on immediate stabilization and disciplined execution of the building blocks to return WPP to growth. And let me spend some time on those building blocks of growth, which we are, of course, aligning our investment priorities against. And I'll start with media. Now the market for Media Services is around $40 billion and is forecast to grow at a 4% CAGR from '24 to '28. And within this, commerce and retail media is a high-growth market, expected to deliver a CAGR of 23%. As you heard from Brian, we have been busy transforming our media and our data proposition and improving our execution. And this not only supports our ambition to improve new business and retention across our media business, but it will also enable us to deliver that improved integrated proposition for our clients with media at the heart. And our recent win with JLR is a great example of that. Now taking back our fair share of the media market is the most significant growth opportunity for WPP at a group level, and it's a core tenet of Elevate28. Now the second area is our next-generation production offer. Now while the overall production market is seeing muted growth, we are seizing the opportunity to take share, internalizing third-party production spend by our agencies, which is estimated at hundreds of millions over the course of Elevate28. We have also identified significant incremental opportunities from new ways of originating creative work, leveraging GenAI and BFX pipelines, which enable us to build next-generation studio capability and make much more of our client work directly. High-velocity content production is a great example of this, which despite being a relatively small proportion of the overall production market today is forecast to grow at a CAGR of 38% over the next 3 years. As the largest production agency globally and with our investment in dedicated capabilities, including content studios, we are well placed to take more than our fair share of this opportunity. We are working with a number of our large clients already in these areas, and we've leveraged innovative content opportunities in some of our recent new business wins. And finally, scaling our enterprise solutions proposition. The enterprise solutions market, as we define it, is forecast to deliver a CAGR of 7%. We play in this space already, but as part of a fragmented offering, existing within agency silos and as such, our current share of the market is low single digit. Now scaling our enterprise solutions across all of our creative brands as well as establishing it as a distinct pillar and investing in direct go-to-market capability, we believe will enable us to significantly grow our market share over the course of Elevate28. The strength of our capability in this area has been recognized by Forrester, amongst others. And with many recent client wins, we are confident we will see an improving growth trajectory. For 2026, the focus will be on consolidating these capabilities under one leader, establishing a strong direct go-to-market team and leveraging partnership opportunities such as the one announced this week with Adobe. Now cumulatively, these opportunities represent a significant white space gross revenue opportunity estimated at up to $900 million over the term of Elevate28 8. And delivering against our growth priorities will, of course, require investment, which will be self-funded from our cost initiatives. Our shift to a new operating model will yield significant efficiencies, building on what we have already done. Since 2024, we have removed GBP 300 million of gross cost savings and our Elevate28 operational plan unlocks a further GBP 500 million of gross annualized cost savings by 2028. Now we expect the associated cash restructuring costs to be around GBP 400 million and for those to be incurred across '26 and '27. It's important to emphasize that our cost actions are targeted at improving our execution and supporting our growth priorities as much as they are about simply removing costs from our business, and they will come from 3 key areas. The first area is that shift to a new operating model. It will drive a more simplified, more integrated way of working. It will enable us to scale our capabilities across the organization and support a stronger and a more effective client proposition. We will consolidate leadership at a global, at regional and at market levels, providing clear roles and responsibilities for our people. We will optimize spans and layers. We will remove duplication across our creative assets, driving a more aligned model, enabling a more effective cross-selling and providing a more holistic view of client success and outcomes. The second bucket focuses on structural cost savings. And as a result of our new operating model, we will deduplicate corporate functions, particularly across our finance and our people teams. We'll further leverage our shared service centers and create centers of excellence. This will set us up to unlock more scaled productivity savings from greater automation and the use of AI across our corporate functions. And the third bucket will come from rationalization opportunities. We will deliver savings from our real estate footprint and from across our long tail of markets and agency operations. In 2026, we expect to realize at least GBP 100 million of in-year P&L savings and GBP 250 million of annualized savings. The estimated restructuring costs associated with these savings in 2026 is around GBP 190 million. Now these targeted actions will improve our execution as well as enable a reallocation of investment into the highest growth opportunities across our business, supporting a rebuild of our margins over time. We will prioritize investment across 3 key areas. Firstly, we are bolstering the main engines of the Elevate28 plan, which you've heard about today. We are directing investments specifically into media and commerce into high-velocity production and enterprise solutions to ensure we capture demand in those high-growth areas. This will include investment in commerce and influencer and analytics talent and in content studios. Second, we are investing to upgrade our go-to-market approach with a focus on our client needs and our new business capabilities. Alongside this, we will rebuild our incentive pool, and we have redesigned our incentive model to align it to our new operating model and with the aim of disincentivizing the past siloed way of working. Third, we are sustaining our commitment to WPP open to data and to AI. To give you a sense of scale, in 2025, we invested more than GBP 300 million in this area, and we will protect this investment to ensure continued enhancements to our technology platform and our AI capability. In 2026, we are expecting to reinvest all of the in-year savings from the cost initiatives into the first 2 priorities, and this is reflected in our margin guidance for the year. Now these investments will be made in a disciplined manner, and we will fully leverage our more integrated approach to benefit from scaled capabilities and a rigorous prioritization in the areas that will drive the highest growth opportunities and returns for WPP. And let me move on to talk about our portfolio review. In recent months, we have conducted this review aimed at assessing opportunities to unlock embedded value and refocus our perimeter. Now this review has covered all assets that we own, whether an operating unit or a minority investment. We've evaluated how each strengthen our proposition and fit our future integrated offer. While we have many great assets within our portfolio, it may not be optimal for us to remain owners either in whole or in part of some of those in the future, and we've applied that best owner assessment to identify the assets where value is potentially maximized outside the group alongside a plan for continuing to rationalize noncore passive investments. Now this has also been an exercise in determining the areas we want to prioritize investment in and being rigorously disciplined in our allocation of capital. And of course, underpinning this is a disciplined approach to M&A with a focus on organic execution in the near term. With the review now complete, we are moving directly to action. And while we don't have specific transactions to announce today, the work is underway, and we will update you in due course. And that leads me to our approach to capital allocation, which is framed across 3 clear priorities. First, we are committed to our investment-grade balance sheet. This is our foundation. Our primary focus here is retaining strong liquidity, reducing our gross debt and improving our leverage ratios over time. As shared earlier, Fitch Ratings has assigned WPP, a BBB rating with a stable outlook, further solidifying our investment-grade balance sheet. Our second priority is funding organic growth. As you heard, we are prioritizing investment in the highest growth and the highest returning areas of the business. And crucially, we are funding this through our cost initiatives I shared today with a strict focus on scaling capabilities that support growth across the entire group rather than in silos. And third, we will share the proceeds of growth. We aim to balance consistent, sustainable shareholder returns over the medium term with inorganic investment. Reflecting this, the Board have proposed a full year dividend of 15p for 2025. We will apply a focused approach to M&A, deploying capital only when an acquisition is clearly more efficient than building that capability internally. And beyond that and as appropriate, any excess capital will be returned to shareholders. And finally, for me, a brief note on how we -- how our reporting is going to evolve to reflect this new structure. Now the current structure is shown here, and our ultimate objective is for our financial reporting to map directly onto our new organizational model. For segmental reporting purposes, the 4 operating units, which are the engines of our business will be included in an enlarged global integrated agencies reportable segment, which will now include public relations and our design agencies. For regional reporting, results will be broken down by North America, EMEA, Latin America and APAC. And over time, we want to give you better visibility into the engines of our business. And therefore, within global integrated agencies, we will provide specific disclosures on net revenue and organic growth for our key capabilities, media, production, creative and enterprise solutions. So that's all for me, and I will hand you back to Cindy to wrap up. Cindy Rose Quackenbush: Amazing. Thank you, Joanne. Home stretch folks. So before we conclude and open up to questions, I just want to spend a minute on how my team and I will hold ourselves accountable and measure success. As Joanne mentioned, our primary focus is to return our business to growth. Organic growth is our most important success metric and getting back to consistent organic growth is our North Star as a management team. But as you know, organic growth is a lag indicator and will take us some time to deliver. So beyond the lag indicators, you can see on the right-hand side of the slide behind me, we've also included on the left a few leading indicators and success metrics that my team and I have as part of our own scorecard. -- that will provide tangible evidence along the way that the actions we're taking are working. I won't read them to you, but you can see there are things like new business wins, client retention, cost savings, asset disposals. These are the types of lead indicators we'll be rigorously managing, and we're confident that these will drive the outcomes that matter the most over time, consistent organic growth, supported by a solid financial foundation. I also want to reassure you that we're not going to just simply disappear and report back on KPIs in a year's time. We really want you to see the execution of the strategy in real time. We want to invite more frequent engagement with our investor community. So over the coming months, we'll be hosting a series of deep dive webinars to take you further under the hood of our key growth engines, specifically in the areas of media, next-gen production and enterprise solutions. So I know we've shared a lot of information with you today, and thank you for listening. But I have to say our mission has never been clearer to be the trusted growth partner to the world's leading brands in the era of AI. Elevate28 is a bold plan for a simpler, more integrated WPP. We will stabilize the business, return to organic growth, create capacity to invest and deliver attractive returns for our shareholders. And we'll do that by delivering growth for our clients by being a simpler, more integrated company by leveraging our agentic marketing platform, WPP Open for competitive advantage and creating firm financial foundations for the future. I am very confident that WPP has a bright future ahead. This is a WPP that is fit for the future and built to win. Now we're going to draw this strategy update to a close. We're going to invite questions from the audience for me, Joanne, Brian or any members of the senior leadership team. And I want to thank you. Thank you very much. Thomas Singlehurst: Thank you very much, Cindy. My name is Tom Singlehurst. I head up Investor Relations for WPP. We're going to go to questions. We'll -- before we dive in, a couple of quick parish notices. For those in the room, we're going to bring a mic to you. So if you can just be patient. If you could state your name and which firm you represent, that would be fantastic. And to make sure we've got enough time for everyone, it would be hugely appreciated if you could ration yourself to maybe 2 questions and a follow-up. [Operator Instructions] But let's start with questions in the room. Laura, maybe start with you. Laura Metayer: Laura Metayer from Morgan Stanley. Three questions today, please. First question on differentiation and competitive advantage. I'm curious, what do you think is the single differentiation of WPP. Obviously, we've heard from peers need to like have an integrated offering, a focus on data, driving leading with AI. So I'm just wondering what do you think is the single differentiating factor of WPP. Second question is when you talked about the JLR win, you said you pitched it as an outcome-based revenue model. Do you mind providing a little bit more details here, like any KPIs that -- and if you can also say maybe like telling us a little bit more generally, like how you think the revenue model will evolve and what sort of KPIs will be used to measure performance? And then lastly, on the Enterprise Solutions business, could you give us an example of a typical project of WPP here and how it differs from leading IT services consultants because obviously, it's part of an agency. Cindy Rose Quackenbush: Sure. Thank you for your questions, Laura. They're great. I'll have a go at the first one and then maybe invite Johnny Horny to talk about JLR. He led the pitch and maybe Jeff Geheb to give an example of an enterprise solution engagement, if that's okay. So I think Brian was incredibly articulate on this. I tried to paint a picture of WPP Open as a very different proposition, right? And it's -- because it's integrated, it's not a point solution. It transforms the entire end-to-end marketing workflow. It's powered by Open Intelligence, which is our foundational data layer. And we've integrated InfoSum's distributed data collaboration capabilities, which means it's built for the future of marketing, not the past. And that is an incredible competitive advantage. Like we have all the ingredients we need to win. And what we really needed to do is pull it all together into an integrated proposition and then power it with this incredible platform that we have. And frankly, when clients see that, they see the power of it and its ability to drive growth without compromising on data ownership. We win in head-to-head competition. That's what you're seeing happen. But I don't know, Brian, do you -- is there anything you want to add? Brian Lesser: I think one of the things I said was that every client is different. And there is no one approach to driving business results for clients. We've built a platform in WPP Open that is flexible that includes our own proprietary technology, but also partners effectively with other companies. So we're always ready for what's next. And we built a data model that similarly doesn't rely on a static data asset that is a legacy CRM solution. Instead, it relies on the ability to connect any and all data sources so that we can be more intelligent and more dynamic in understanding consumer behavior and driving those business results for our clients. So it's different for every client. But as Cindy said, it's really an integrated approach across all parts of our business grounded in that data and technology strategy. Cindy Rose Quackenbush: Thank you. I would just add, we are still contracting with JLR. So there's a limit to what we can share. But Johnny, why don't you say a few words? Johnny Horny: Yes, sure. Yes. Thanks for mentioning that. We haven't officially been appointed by JLR. We pitched throughout last year, went into a period of exclusivity with them through January, and we're now contracting and hoping that by March will be live. But at the core of our pitch to your question, I guess, what's our secret sauce? I think our secret sauce is where you put everything you've seen this morning together. So starting with Open Intelligence to be able to build cohorts and understand audiences in a way that doesn't require us to do simply old-fashioned ID matching, but to keep the data where it is, keep it safe and secure and then put that into a team that we're going to build with JLR, where we and they are all together on the open platform end-to-end. And it's the end-to-end integrated nature of this offer that I think then allows us to make what I think are becoming genuinely competitive offers when it comes to outcomes. So those outcomes aren't do you like the agency you work with, those outcomes are, are we selling more product? And will we get paid on being able to sell more product by being able to build their brands and measurably show that there's greater levels of desire for their products and the crown jewels of brands that they've got. So we haven't finished contracting, but those are the defining and that pitch was against all the major holding companies. I think those are going to be the integrated propositions that will see us win JLR and hopefully many more JLRs pulling these ingredients together. Cindy Rose Quackenbush: Thanks, Johnny. Joanne Wilson: Can I just build on that because Laura, I think stepping back a little bit, your question is around what happens with a time and materials model with AI. And the story is really moving on. Hopefully, you picked it up today. Our clients are using us and it's for the industry really. They need brand safety. They need to know that they have got cultural nuances. They have the best creative and strategy talent, working with them on their brands to really differentiate. And also that they've got the access to the best talent. And navigating through what is an incredibly and ever more complex ecosystem is incredibly challenging for CMOs. It's getting tougher and tougher. And that's what they're paying us for. It's no longer they're paying for us to create 5 ads. In fact, we can create 1,000 ads, but it's how do you get those ads into the right audiences. And that's really what they're paying for, which is really enabling this output-based pricing, it's outcome-based pricing, and it's also shifting more to tech fees and licensing fees as well. So this will be an evolution, but we're making lots of progress in this area. Unknown Executive: To answer your question about enterprise solution scaling. So let's just stay with automotive. This could be JLR. It's certainly true with Ford. So when you begin to solve a marketing problem around content transformation or a customer experience challenge for marketing and you start with the CMO, you quickly evolve that conversation and realize that's an enterprise problem you're solving. Content doesn't live in marketing. It lives as an asset of the entire company. Customer experience lives as an asset of service, brand of product development. And so the nature of our work usually begins with the marketer and then it expands further and further and further. And soon, we're in rooms with IT leaders, procurement leaders, service leaders. And instead of using their silos to define how we work, we're pulling them together. And with AI, that's collapsing at an even more increased rate of change. So AI platforms right now are -- they're collapsing the buying patterns with IT buyers used to buy a platform, implement it for years and then draw the business in. Nowadays, there's a really fast iteration cycle. So we're finding ourselves in rooms now starting with marketing, but really extends to all the stakeholder groups. Thomas Singlehurst: Can we go to Nico. Nicolas Langlet: Nicolas Langlet from BNP Paribas. I've got 3 questions. The first one on the existing business with clients. which was definitely a weak part in the 2025 performance. Can you tell us a bit more about what happened? Is it related to scope reduction, pricing pressure? Or can you give us more detail about that? And what are the concrete actions you have already implemented to stabilize the business with the existing clients? The second question on WPP Open Pro. Can you give us an update regarding the rollout, the first feedback and what sort of opportunity you see in the mid- to long term? And finally, of the GBP 500 million gross cost reduction, have you included any benefit from generative AI tools in that GBP 500 million? And if you can share that? And of the GBP 500 million, how much do you plan to reinvest in the business? Cindy Rose Quackenbush: Yes, why don't you take the first? Joanne Wilson: Okay. So look, Nico, it's absolutely the right question. If you look at our performance in 2025, we talked about a drag from net new business of about 150 basis points. So that points to just under 400 basis points from the underlying business. And the majority of the cuts that we saw really came from the creative part of our business. And as I said in my prepared remarks, it was really an overview, and we did see significant spending cuts, particularly from the start of Q2. Look, we can point to different reasons for it, but there was an awful lot of uncertainty, and we saw heightened volatility across clients. We've talked about the polarization. Many clients, we saw very strong growth during the year, but others cut significantly and at very short notice as well. And effective, we tend to have more project-based spend in our business. And of course, that's often the first places that get cut when we see that volatility. And I would also just add that as you heard from Brian today, Brian and the team have been incredibly busy in the last 18 months really setting up our competitive proposition for the future, redesigning how we deliver for clients. And that undoubtedly has had some disruption in the business and the underlying business. And we've been very deliberate in Elevate28 that Brian and the team have done a lot of the heavy lift and their focus is now on execution. So it sort of brings you on to the second part, what are we doing about it. So if you think about that for media. And then with the creative part of the business, we are building an incredible powerhouse within WPP Creative. We did get in our own way a lot of the time in the past with our silos. WPP Creative will enable scaled capabilities across all of our agencies. WPP Open as well will enable our creative teams to work in a standardized way, and that's everything from big large clients to smaller clients. So it will improve what we're delivering, and that will help both with our larger clients and that tail of clients where we've seen more reductions in spend. And I think that's really important with creative. Sometimes we get very focused on the headline cost saving, but it really is about creating a more agile organization with fewer silos. And just on the GBP 500 million of growth savings and how much we're going to reinvest. I talked about the in-year savings in '26 being GBP 100 million annualized savings will be GBP 250 million. All of that we're going to reinvest in 2026. I talked about this priority to stabilize and invest in the growth drivers, we will do that. Look, it's too early to say how much of the remainder we will invest, but I would assume that we will invest as much as we need of that to support our growth ambitions. Cindy Rose Quackenbush: I'm happy to say a few words about WPP Open Pro. It's early days, right? We only launched a few months ago. But what we did was basically productize or SaaS-ified certain capabilities from within the WPP Open platform. And we did it to target the mid-market SMB kind of end of the client segment. The clients that would largely look to self-service that kind of capability. I'm very encouraged actually. We've got a number of deals with clients. We've got a very healthy pipeline against this, albeit it's small in absolute terms. I think the interesting learning from my perspective is our top 100 clients, say, are looking at WPP Open Pro as a way to software enable the long tail of markets that they service. So rather than having full teams on the ground, you can start to see a world where they can software enable their long tail. And that's kind of interesting. Thomas Singlehurst: Perfect. Maybe we can go to Adrien. Adrien de Saint Hilaire: Cindy, this is Adrien from Bank of America. So I've got maybe 2 questions maybe for Brian and maybe one for you, Cindy. John, I know we're talking this afternoon. So I'll leave the financial questions maybe for later. But maybe, Brian, on -- you talked about all the business wins in Q4 and Q1 and well done on that. Can you tell us like what was the factor or what were the factors behind those wins? And how much of a factor price was behind those wins? And then secondly, I know we've talked about this before, but you put data at the core of your strategy. But how do you solve for the fact that you don't really have, as far as I know, at least a proprietary identity graph compared to competitors? And maybe more for Cindy. So today, we heard a lot about the opportunities. Sorry to come back on the risk. How much like revenue attrition would you expect in maybe in creative because of AI deflation around the revenue per head, for example, how much would you anticipate for the next couple of years? Brian Lesser: Adrien, in terms of the new business wins, everything that I showed in terms of our proposition contributed to those wins. And without going client by client, what I said about every client being different applies to how we pitch business and then how we ultimately service business. So whether that was winning JLR or NCL or the various other wins, each one of those solutions was different. And the great thing about our platform is it allows that and it enables us to go in and do things differently for clients. So selling cars is different than selling cruises is different than various other clients that we have. So I think that contributed to it. The way that we're structured also helps quite a bit. So we're not going into these pitches as Mindshare or Wavemaker or one of our other agencies, we're going to these pitches as WPP media. And increasingly, we're going into these pitches as WPP. So we get a lot of help from our colleagues at VML and Ogilvy and AKQA and from WPP production. And the clients see that, and they know that while we're pitching one thing, we're going to offer a full breadth of services over time. All these pitches are competitive, so price is always a factor, but that wasn't a defining factor in any of these pitches. We have a proprietary identity asset. One of the things that you have to understand is that identity is pretty ubiquitous in the market. So there are lots of companies that provide identity solutions. And it's really an old-fashioned notion of what we need to do to join up disparate data points. So we also have an identity asset called MerLink. We see every adult in the United States and we use that. We also use other partners like Experian when we want to augment that. And because we have a solution that allows us to access any identity asset, it's really not a problem for us. Having identity is such a small part of what you have to do to understand consumer behavior. What we do have is InfoSum, which allows us to connect to hundreds of other data sources. And instead of those being household addresses or e-mail addresses, these are what are people consuming on TikTok? How are they interacting with creators on YouTube. Those signals are much more important than having a traditional identity asset, which again, is a legacy system and fairly ubiquitous and accessible in the market. Cindy Rose Quackenbush: Yes. I would just build -- thanks for your question, Adrien. I would just build on what Brian said. I mean, I've never met a client that doesn't want more for less. That's not a new dynamic. We operate in a very highly competitive market and price pressure is a constant feature, right? But I would say that we probably accept on some level some downward pricing pressure from AI productivity, if you will. But what we're doing here is creating an organization that can cross-sell more effectively to address the white space within our installed client base and be more effective at converting new business. If you take our top 25 clients, for example, we probably capture at best 1/3 of addressable spend. When we unlock this collaboration and cross-sell opportunity for WPP, we have massive opportunity to offset and grow in those areas. Thomas Singlehurst: Why don't you pass it on to Steve, given he's right next to you. Steven Craig Liechti: Steve Liechti from Deutsche Numis. Just on the -- some numbers, sorry. You said 5% to 6% gross hit from losses. Can you quantify the '25 and '26 to date wins to kind of give us some idea of a net number to work off as we stand today? So that's the first question. Second, Brian, in the new setup and the new kind of pitch that you're doing to clients, where you haven't won, why was that? I know things is different, but it would just be useful to hear some insights there. And you also said you had some more work to do as well in your comments. I just wonder from my perspective, how much is the pitch that you're going with the clients now absolutely the right pitch? And what more is there that you do have to do? Brian Lesser: It's a very dynamic business. So it's very rare that the right pitch today is the right pitch a week from now or a month from now. So when I say we have more work to do, it's that we're on a constant quest to meet the needs of our clients in a rapidly evolving world, and that's never going to change. Structurally, we're set up to win, and we have been winning. From a data and technology standpoint, I feel great about where we are. We have the building blocks in place to evolve, not just win today, but evolve as the market evolves. So I feel great about that. In terms of why we didn't win, I say all the time to the team, you can be the best in a pitch, you can be the best on the day and you can still lose a pitch. And there are lots of factors that go into it. Sometimes it's price. Sometimes we don't feel comfortable with where a prospect is taking us in terms of commercial negotiations. Sometimes it's an affinity for one of our competitors between a CMO that knows a certain team. So there are lots of different factors that go into it. And we're not going to win every pitch, but we need to go into every pitch with the right solution for clients. And then I feel great about getting our fair share and actually exceeding our fair share and starting to win back the market share that we've lost. Joanne Wilson: Thanks for the question, Steve. I'm always hesitant at this time of the year to give a net new business because there's a whole year to play for, there's a pipeline, et cetera. But let me share some of the data that we've already shared and you'll be able to kind of broadly figure it out. And then I'll just give you some context around the pipeline. So last year, we said that our gross wins were 300 to 400 basis points of drag, and then we ended up at the top end of that. And we said that the net new business impact was about 150 basis points for 2025. Really encouraging, the gross win impact for 2026 exceeds and that gross win impact in 2025, and that really reflects in recent months, the new business, the better business performance that we've seen, and that's really encouraging. 2025 was a much lower activity year for new business. What we have seen in recent months is the pipeline activity building up again, which is also encouraging. And I would also often get asked, what's defensive and what's offensive? And it's very interesting when you look at the pipeline and the opportunities, it's less black and white than that. It's oftentimes you're defending some scope, but you also have an opportunity to win more. And so it's getting much more nuanced. But as I said, encouraged by the activity, the pickup in the pipeline and of course, the momentum that we've seen in recent months. Thomas Singlehurst: Perfect. I'm just going to do a couple of questions from the webcast, and then I will get back to the room. First one is on the broader strategic shift at WPP to become a more holistic partner to solve challenges for clients. Does this increasingly take WPP into competition with different competitors? And how well do you think you are positioned to win against them? Cindy Rose Quackenbush: Yes, that's for me, right? Look, I think we have all the ingredients we need to win. Like we have, as I said, amazing talent, incredible capabilities, fantastic technology and technology partnerships. We have scale. We have the trust of our clients, which is super important. What we need to do now is pull it all together into an integrated proposition and lead with our agentic marketing platform. And when we do that, I think what you're seeing is we're pretty hard to beat for clients that are ready for that. Like all of our clients are on a journey. Some are really at the very beginning, some are way down the line and most are somewhere in between. But when you see the power of that, turn up in your office and the growth that we can deliver, again, without compromising on data ownership, it's a very strong proposition. So I feel very confident that we're going to be in a great position to deliver this on a repeatable sustained basis. Thomas Singlehurst: Perfect. And one more from the webcast before coming back to the room. It's on a very important topic, which is leverage. So I presume for Joanne. A question here about clarifying the leverage framework. You previously guided to a net leverage target of 1.5 to 1.75x. Has this target been withdrawn? And how do you manage the process with the rating agencies regarding an investment-grade rating? Joanne Wilson: Okay. What we've clearly shared today in our capital allocation framework is our commitment to an investment grade balance sheet and that feels more relevant as we progress through Elevate28 plan feels more relevant than the historic range that we had and we are very committed to that investment-grade balance sheet. And I think, as I said in my remarks, and that's reinforced with the Fitch rating. I want to spend a bit of time on leverage as well. Leverage is really driven by, obviously, EBITDA and net debt. And our net debt -- our average net debt through '25 has actually come down slightly. And so our elevated leverage as a result of that lower EBITDA. And hopefully, as you've heard today, and we presented a plan that is going to get us back to growth. And obviously, with that, we'll follow improved margin, profitability, improved cash generation and we'll help that out. We also talked about the importance of reducing our gross debt. We talked about the role that the portfolio review will play on that. And over the course of Elevate28 we expect our leverage to come down. We do have liquidity at the end of the year of GBP 4.4 billion. Our maturity profile is 5.8 years. We recently refinanced our bond, et cetera. So we're in a very strong position. In terms of the rating agencies, I mean, many of them are here today. And we have a very strong relationship with the rating agencies. We engage with the rating agencies, we listen to what's important from their perspective. And like all stakeholders, we take that into consideration as we ensure that we're making the right decisions and taking the right actions to ultimately deliver long-term returns for all of those stakeholders. Thomas Singlehurst: Let's come back to the room. Can we go to Julien at the back. Sorry, yes, when you get the microphone back. Sorry. Julien Roch: Julien Roch with Barclays. Looking at Page 41, you have a production CAGR over '24, '28 of minus 1% for the industry. I thought it was a growing part of agency services. So why the decline for the industry? And what can WP production can grow at? That's my first question. Then on organic, accelerate organic growth in 2028, previous CEO had a 3% plus organic guidance. So if everything goes according to plan, what's your cruising altitude? What is your ambition? And then lastly, moving from holding company to a single company, does that mean one P&L per country? Or will you still have separate P&L for the new 4 entities? Or will you still have separate P&L per agencies? Cindy Rose Quackenbush: Sorry, Joanne, I think you're on. Joanne Wilson: I might need to repeat your second question, but let me answer the first and the third first, and we can come back to that. Yes, look, on production, and I shared this in my remarks -- prepared remarks that there's subdued growth in production overall. That's not the way to look at what production can mean for our business and how that can contribute to our growth. Hundreds and hundreds of millions of dollars that our clients spend and their production today goes outside of WPP. It goes to a variety of third-party providers. And hopefully, as you saw today as well, production is being completely revolutionized and transformed by AI. We talked about particular parts of production, high-velocity production, which is growing at 38%. That's a very small part of the production market today, but it is a huge opportunity. And as the largest agency globally and with the investment that we're making in content studios and with our team, we're incredibly well placed to take advantage of that. And also with the WPP production consolidation, we are much fit for purpose to really internalize a lot of that client spend, which we can, in an integrated proposition, make it more efficient for our clients. So it's really, really a win-win and our clients are getting the very best of production capability in the market and that AI investment as well. In terms of the P&Ls, so how we will operate and maybe I'll start with WPP Creative and then look at it overall. So the WPP Creative will run on P&Ls. The regional and market models will mirror media. And in certain markets as well, actually, those media and creative and production operations and teams will be even more integrated. But we will have one P&L for WPP Creative for the markets. For the agencies, we will still measure them on their revenues and their contributions, but that will not be the lead P&L. And then across the other 4 areas, of course, they will each have their P&Ls that will roll up to WPP overall. I think the most important thing is as we talk today about the incentives, we have redesigned our incentive model so that it's much more aligned -- everybody is much more aligned on a WPP outcome, and we struck that balance right where it's still incentives that people can really influence as well. So a much simpler P&L structure even if I did. Cindy Rose Quackenbush: Just to build on that because I'm trying to see what's behind your question. Please don't underestimate the enormity of the change that we're making. We're moving from hundreds of stand-alone operating companies to 4 operating units across 4 regions. And this common incentive that is linked to WPP's overall performance is going to change behavior in very dramatic ways. It's going to take all the friction out of the organization. It's going to make us much more client obsessed. It's going to enable us to put the right resource in front of the right client at the right time. So I just wanted to say -- please don't underestimate what's involved in making these changes that we're proposing. Joanne Wilson: And then, Julien, I think your second question was around our ambition on organic growth, if that's right. Julien Roch: That's right. Joanne Wilson: And I said we weren't going to give specific medium-term targets, and that was quite intentional. We talked about the 3 phases. The job that we have to do as a management team in '26 is to stabilize the business, continue to build on that new business momentum and improve our client retention. And that will get us back to growth at some point during 2027, and then we will accelerate from there. So I'm intentionally not putting a number on it, but you can -- that will give you a sense of what we're expecting in terms of the trajectory. Julien Roch: No, I understand that you don't want to give us like a '28 numbers, but it's more -- actually, it's probably more a question for Cindy, right, is what's your ambition in terms of growth rate in 5 years, in 10 years? What would you consider a success for WPP is achieving the previous target of 3% or you actually have more ambition than that? -- without giving us a year or whatever, but what's the... Cindy Rose Quackenbush: I'd like to get to the end of Elevate28 capturing our fair share of the market and then go beyond. But look, we're -- in the short term, I'm absolutely focused on delivering growth for clients, building on our market momentum and stabilizing our performance. And that will remain our short-term focus. Thomas Singlehurst: Can we go with Annick? Annick Maas: Annick Maas from Bernstein. And first question is, as a company which is employing 100,000 people in a world where change is becoming more and more -- it's accelerating basically, how can you stay nimble and keep up with this pace? Or what are the challenges here? The second one is on AI, and this is probably for and it's more conceptually. I guess AI is leading to staff efficiencies in terms of absolute numbers of stuff, but you also have an unprecedented industry structure with one less players. So how do you think conceptually about number of staff and absolute and staff cost inflation in the next years? And then you spoke about the rationalization of the portfolio. I suspect you speak with a few players. Who are these potential buyers? Cindy Rose Quackenbush: Good. Well, look, I'll say in terms of staying nimble, like that's a continuous process, right? We invest in skilling and building new capabilities in our employees on a continuous basis. We have creative technology apprenticeships. We have all kinds of formal AI coaching and training that we put our people through. But I think it also -- it's about also staying close to our partners. We have what we call forward deployed engineers. So we take resources from our technology partners. We put them into our organization. We train them on our platform. And then we send them into clients to co-innovate on new solutions. So I think just being in and around this environment creates a very, as I said, very AI native mindset where we can just continuously build these capabilities. These aren't capabilities you build through formal online training. You have to get your hands on it and actually put it to work for clients. And that's -- that's really how we're staying nimble and in front of things. But do you want to take the question on... Joanne Wilson: Yes. And exactly through the questions, I think. Nico, I think it was you asked me about AI efficiencies and I didn't answer. Look, as we look at the business going forward, undoubtedly, if nothing else changed, we can do more with less. So we can do a lot more with a lot fewer people, but it's never just as simple as that. What we're able to do now for our clients is before we might have created 5 ads and we were managing that. Now it might be 1,000 ads and they're very different how those ads need to be used to target audiences and drive returns. That's requiring different skills and different talent in the organization. Now some of that, we are upskilling our people, some of that we're bringing new talent into the organization. And if you think about the plan that we shared today, we will be reallocating talent around the business. So yes, we will be delivering cost savings. And in people -- in a business where most of our cost savings are people, that will mean a reduction of certain heads, but we will be reinvesting back into talent, different types of talent, commerce talent, influencer talent, much more analytics talent. We already have that at scale today, but really, those are the areas that we will be investing in and with that will come a different profile. In terms of how we measure it, the most important metric will be revenue per head, and that will reflect also our ambition to grow and do more with people, decouple our revenue model from our FTEs. And that's really all around our client delivery. In the back office, there's an opportunity, and we're already doing it in pockets. How do we leverage open, how do we leverage AI to drive productivity savings in our back office. And with the plans over Elevate28, we will do much more of that, much more at scale and on a standardized level. Just in terms of the question, is there AI productivity you asked built into the GBP 500 million. There is on the back office side. But on the front office, the way we think about it is we are creating productivity efficiencies in how we do things, but we're reinvesting that back into delivering even more value, even more outcomes for our clients. And then that feeds into the evolution of our commercial model as well. So that's all built into our plans. But we don't pull out and say we're going to deliver productivity savings from that delivery. We think about it much more holistic. There was a third... Thomas Singlehurst: Portfolio. Joanne Wilson: The buyers. Well, look, as I -- as we shared and particularly in the people business, incredibly sensitive, and we don't -- we're not at a point where we're ready to share externally. What is important is that we've seen an opportunity where we have embedded value of great assets that we have, and that will give us greater degree of financial flexibility and enable us to target our capital allocation more. And for some of these assets, there are many buyers, some of them are attractive assets. Thomas Singlehurst: We go with Ciaran. Ciaran Donnelly: A couple left for me. Joanne, maybe just on your comments on 2027. Can you clarify how we should understand the comments of growth during 2027? Should we think about that as implying a positive exit rate on like-for-likes rather than necessarily positive like-for-like growth for FY '27 in total? And then maybe, Cindy, could you just give us a bit more color on the new incentives? I guess, how do you kind of balance it between individual remit and kind of growth targets? And I guess, just in terms of what they look like versus the legacy incentive structures, how different are they? And then just finally, I mean, on the legacy structures, do they roll off over a period of time? Or what is that phasing period between the new structures and the old structures going at? Joanne Wilson: Very quick answer to your first, it's the latter. So it's during 2027. So you should think about it as a positive exit rate rather than for 2027 as a whole. Cindy Rose Quackenbush: So on the incentives, basically, if you're sitting in an operating unit, your incentives are 50% tied to your operating unit and 50% tied to WPP. If you're in WPP as part of a corporate function, you're 100% WPP. If you're a GCL, you're paid on your client growth. It's that simple. And it's dramatically different from where we are today, where if you're in an agency, you're paid on your agency results primarily. So that is very, very different. And that's why I think it's going to unlock very different behavior, much different collaboration. In the past, our agencies competed with each other. That was the model. Today, when we go into a pitch, we cast the right resource for the right client at the right time and -- it enables that. It enables a much more client-centric approach to the business. Just to add, we're implementing that in 2026. Thomas Singlehurst: I got a couple of people in the wings. I'm going to start with Anna, I think, at the back, and then we'll come to you, sir. Anna Patrice: Anna Patrice from Berenberg. A couple of questions from my side. So you were talking about the evolving remuneration part from time and material to project-based. So maybe how it has evolved in the past over the last couple of years? Like what's the share of time and material overall? And where do you see that going into the future? And what could be the impact on your profitability? That's the first question. The second question on the capital allocation, you were also referring to M&A. So just quickly, maybe what are you looking for? What are the things that are still kind of white spots for you that you would like to enforce within the overall WPP? Joanne Wilson: Shall I take the first one? Cindy Rose Quackenbush: Yes. Joanne Wilson: So just in terms of that evolution, and it's -- that's the way you should think about it. This will be an evolution in our commercial model. And this is an evolution for the industry and for our clients as well. So there's 3 key areas that we look at. One is output-based pricing and where we see more and more of that is in our production business today. We then have performance or outcome based pricing. We've talked a little bit about that. I mean we've always had an element of that in our fee structures with clients, but that's becoming increasingly important, particularly as Brian had shared today how we can measure that outcome more. And the third element is just tech and labor fees as well. That can be through licensing fees, through bundles, through subscriptions, et cetera. And all 3 of those we have in our business today. So with many of our clients for parts of work that we do for them, we're working with our clients to understand what works best, what aligns structures. clients we have going much more major outcome and others, it's more of an evolution of it. So really that's the way to think about it. So -- but very, very much encouraged by the shift that we're seeing. And as we are more and more confident in what we can deliver for our clients, of course, that creates more stickiness with clients. We see a big opportunity to enlarge the scope of what we do for clients. And you asked specific on margin on a per unit basis, we often say, of course, if you just look at it and everything else is the same, it would be deflationary in revenue because we can produce units at a lower cost. But actually what's more important, what clients are paying a premium for is all of that brand safety, the culture strategic input that we're bringing and how we can drive more growth. We're able to do that in a much more efficient way. And so we're looking at this to be ultimately over time, margin enhancing for us. Cindy Rose Quackenbush: Yes. On your question on M&A, again, I would just repeat that Phase 1 of our plan, we are really deeply focused on stabilizing our performance, delivering growth for our clients and building on the current market momentum that we have. As we get into later stage and free up capacity to invest in growth, we certainly will. And I would -- I stand by the statement we have everything we need to win. But as we create capacity to invest, I'll be looking to enhance in those growth areas that we mentioned, media, data, commerce, social influencer and the growth areas. But that's not the short-term focus. Short-term focus is on stabilizing our performance. Thomas Singlehurst: Gentlemen over here has been by patient. Jérôme Bodin: Jerome Bodin from ODDO BHF. Two questions. The first one on the WPP creative. So just to make sure I have properly understood. Will the idea be to pitch from WPP creative or from at the network level? That's my first question. And then also still on WPP Creative. So I have understood that the idea is to improve the mobility in terms of talent between all the networks. So how do you plan to make the improvements from a pure HR perspective in terms of systems and HR architecture? I think it's not so easy. Second question on disposal. So I fully understood that you can't give any names, but could you maybe explain what could be the idea in terms of disposal? Will it be an asset disposal at 100%? Or could you partner with someone with a minority stake? And then linked to that, could we have an update on Kantar on the stake in Kantar, where you are? And what do you plan? Brian Lesser: What was the last question? Joanne Wilson: Kantar. Cindy Rose Quackenbush: John? You want to say a word on WPP Creative, our CEO of WPP Creative. John Seifert: You can see where it came from. Thank you. Yes, first of all, on WPP Trade, it's -- after being at some of these investor meetings in the past, it's nice not to come and talk about a big merger that we're going through in the creative agencies. I've done that before. We all know that game. We've got -- in the analysis we've done in the last 6 months, we've got really powerful agencies. We've done that work in these last 5 years. And I saw that just this week, the drum creative rankings, #1, Ogilvy, #2 VML. It's not a super power we want to walk away from. So that's thing number one. And so I'm really excited about the strategy of not merging things, but getting behind our agencies. So that's a precursor to your first question, which is -- we're not using WPP Creative as a brand or an agency. It's not an agency. It's an operating system lets those great agencies, those very creative agencies operate together because we have a couple of beliefs, and we heard this from our clients. Our clients love our agencies. They love the choice. They love the creativity, they love the diversity, but they found it hard to work with them and found that either the clients or our GCLs, our global client leaders had to do the navigation, and that was difficult. So we're doing what we think is the best of both worlds, build around these great agencies, highly recognized, very creative agencies that make it easier to navigate. So WPP Creative is simply a way to navigate. It's an operating system. It's not an agency with a very light layer of infrastructure between them to make that happen. And if we do that, we will grow better than we ever have before as WPP and as creative agency. So if we unite them in the right way, which we are, -- we have the second part of your question, which is the ability for talent to move around between those agencies or to team up for client assignments. That's something we haven't had as well as we should have in the past. So that mobility, the second part of your question is key, and that's one of the reasons for the group. If we do this, we can also put better capability across all our creative agencies. Cindy talked about enterprise solutions. Jeff talked about it. This will be different than other holding companies creative agency groups, if you will, because of the embedment of everything Jeff and Cindy talked about with Enterprise Solutions. So to your point, WP Creative is not an agency. It's an operating system lets the great agencies. The creative agencies of WPP be great individually and be great together; and two, it allows for talent mobility. Cindy Rose Quackenbush: Jerome, thanks for your question, and I hope you'll forgive me for not answering it. We're not going to name any assets or give any further guidance today. We've carried out a complete strategic review of our group. We've identified assets that we feel we're probably not the best owners for in the long term. We've started a formal process. And as soon as we have anything to report, we will. But thanks for the question. Joanne Wilson: And I'll just follow up with Kantar, which you asked specifically about. I mean, Kantar, obviously, they sold the media part of the business last year. And they now have 2 divisions, Numerator Worldpanel and Kantar Brands. And those 2 divisions, they've done a big lift in terms of those 2 setting them up to operate independently, and that will be completed in the next few months. Obviously, that gives more flexibility in terms of realizing value from that business for both ourselves and BN, and we're very aligned with BN on the time lines for that, but nothing really more to add. I mean I think just specifically to your question on could this look like minority sales? Yes, it could. So there may be some assets that we bring majority owners into as well. Thomas Singlehurst: And Richard. Richard Kramer: I will keep it to 2 questions. Richard Kramer from Arete Research. Cindy, you mentioned productizing WPP Open and Pro and for the mid-market in particular, do you see offerings like Meta, Andromeda and Google Pomelli as fundamentally competing with WPP? Or do you see them as somehow complementary? And my question for Brian, there's been a lot of recent discussion and disclosure around principal trading and rebates. How are you going to address this question of transparency going forward? And is this an opportunity in the market for you to take some more share? Cindy Rose Quackenbush: Thanks for your question, Richard. As I said, there's a lot of point solutions out there. Some are tied to specific platforms. I think when companies start to stack all these up, -- it becomes expensive, complex and you break the workflow. So I don't -- I think what we have is fundamentally different. It's an end-to-end platform. We are agnostic and independent in terms of how we invest our clients' media budgets. And we have relationships with all the major platforms anyway. So I think what's behind your question is, are we going to be disintermediated by the big tech players? I don't think it's that easy to just turn on a solution in a client environment and watch the magic happen. And this involves real transformation and our clients need help. As I suggested, their data is not always ready. Their people aren't always ready. Their systems aren't always ready. So I see a real opportunity in being that intelligent orchestration layer. I don't see -- we're not seeing a disintermediation dynamic play out in any way. Brian Lesser: In terms of principal Trading, building compelling performance-oriented products has always been a part of our business, Richard, as you know. In fact, WPP was really a pioneer in building products that drive value for clients. In many cases, those are part and parcel of the services that we provide our clients. And in other cases, it requires us to invest, invest in technology, invest in our trading partners, invest in sources of data and then pull all of that together on behalf of our clients to drive performance. In a lot of markets for a lot of different channels that we service, we do sell principal media products to our clients. And those products are actually built with our clients. And they are asking us for more, frankly. Both Cindy and Joanne touched on the fact that our clients, in many cases, are CMOs, CMOs are under tremendous pressure to prove the value of marketing and grow their business. And so in many cases, they come to us and they say, how can you help us navigate addressable television? How can you help us navigate social media or commerce or retail media. And with our clients, we design products where, in many cases, we have to invest in those products. So it's a part of our business, and it's a growing part of our business, and I continue -- I expect it to continue to grow over time. In terms of us taking share, I do think that we can take share through our investment in those products. Again, if you come back to our strategy with respect to technology, we're not trying to sell assets that we acquired for billions of dollars. We're trying to work with technology companies, data companies, media companies to connect these things to build products that drive better performance. So in many ways, we are more impartial, more objective in how we construct our principal-based media products, and therefore, they're more compelling to our clients, and I expect they'll buy more of them over time. Thomas Singlehurst: Now we promised to get you out by midday. I've got a couple of questions, 3 from the webcast, and then we'll draw a line under it. But first one for Joanne, once again on leverage and the balance sheet. Could you please let us know if you intend to refinance the September '26 bond out of cash or by issuing another bond? That was the first question. Joanne Wilson: That's easy. We've done that. We refinanced in December, our GBP 1 billion bond, which covers that September maturity and our next maturity after that isn't until May '27. Thomas Singlehurst: Perfect. Second question, we've had a couple of these, and so I'm synthesizing them, but it's -- for you, Cindy, it's about the transition from moving from the Board to being a CEO. Can you talk about the challenges and surprises during that process? Cindy Rose Quackenbush: Gosh, how long do we have? Well, look, I think on balance, it was a strategic advantage because I knew the team, I knew the business, I knew many of the clients. So I think I avoided the 6-month onboarding experience that perhaps an outsider would. And actually, I had -- as I said, I had a thesis even before I arrived in the role. And so I just think it was a strategic advantage and helped me get to where I wanted to get to faster and actually started making changes relatively quickly. So -- but there's always surprises along the way, right? We'll save that for another day. Thomas Singlehurst: Final question. A couple of people have mentioned the Enterprise Solutions capability, the fact that it's 13% of revenue, and that feels high. Where does it come from? Is it -- where are the assets based? And what's their genesis? It might be one for John and Jeff. Cindy Rose Quackenbush: Jeff, do you want to take it? Jeff Geheb: Sure. Cindy Rose Quackenbush: Okay. Go forward. Jeff Geheb: Yes. So the nature of where it came from is 10 years of acquiring companies, 10 years of building capability inside of our creative agencies inside of really every company inside of WPP to be relevant was expanding into new asks. So they were expanding into CRM. They were expanding into technology because their value proposition required them to do it. And so what it happened over the years is that we had distributed capability all over the company. And through the acquisitions, integrations, as John mentioned, specifically when VML and Wunderman Thompson came together, we began to pool all of these assets together, and we could bring them to clients in new ways that didn't require them to, I think Cindy said, shop. They could come together in a holistic offering. So where would you have found it? You would have found it in all the different P&Ls, all the different regions, all the different markets. And so really, what we're doing now is just we're bringing them together, and we're putting under a framework where not every company or a capability is competing on to itself. And so for the first time, you're going to find it seen outside of the context. This isn't a start-up. I mean we've been doing this for a while. We've been competing on this for a while, but you'll just find it under VML. You would find it in Ogilvy, you would find it distributed throughout the network. So that's where it came from. Cindy Rose Quackenbush: So we're strapping rocket boosters to... Jeff Geheb: Yes. That's right. Cindy Rose Quackenbush: WPP Enterprise Solutions. Good. Shall I wrap? Okay. Super. Look, I want to thank you all for joining us today. I mean I've met many of our shareholders individually over the past few months, and I'm genuinely always grateful for your insights and for your support. And thank you. I want to thank you from the bottom of my heart for your trust in us. And we really look forward to sharing our journey as we move forward. So thank you all for coming and for listening. Thank you.
Operator: Welcome to TP 2025 Annual Results Conference Call. [Operator Instructions]. Now I will hand the conference over to Thomas Mackenbrock, Deputy CEO. Please go ahead. Thomas Mackenbrock: Good evening, everybody, and welcome to our 2025 results presentation. And as you have probably seen, we have a lot of news to share. As always, with me in the room is Olivier Rigaudy, my dear colleague and CFO of the group. And we have a special guest today, Jorge Amar, our incoming new CEO for the group who will present and introduce himself later today. But let's first have a look at the agenda for today's call and what we will cover in the next 50, 60 minutes or so. First, I will give you an update on the key highlights of 2025, provide a strategy update of where we stand today with the implementation of our future forward plan and an outlook for the future. Olivier, as always, will cover in detail the financial results. And at the end, we have ample space for Q&A. Let's look at the key highlights, and let's focus first on the financial aspect and then talk about in a second step about some of the strategy and governance changes we're seeing. 2025 has been a turbulent year for the world and for our industry, but we as TP have delivered solid results. And as you have seen in our press release, we have met all our updated 2025 objectives. If you see on the group revenue, we are reporting again a bit over EUR 10 billion in net revenue, and we have grown on a like-for-like basis, excluding the hyperinflation effect of 1.3%. If you exclude that 1% on a reported basis, given the weak U.S. dollar minus 0.7%. It's particularly noteworthy, and we talked about this in our Q3, our H1 and our Q1 presentation that our Core Services are a stable growth momentum and a stable growth anchor for the group, with reported 2.7% like-for-like growth, which is remarkable in this environment, while at the same time, our Specialized Services division faced some unique challenges last year. On the profitability, again, we delivered our updated 2025 guidance. We have reported an EBITDA of almost EUR 1.5 billion, with a margin of 14.8%, excluding the currency effect, which means on a reported basis, 14.6% and this also translates into a very healthy net free cash flow. If you exclude the nonrecurrence of over EUR 900 million, and we had a record cash flow generation in the second half of the year with more than EUR 640 million. So we are quite proud about the results in 2025. And when we look at 2026, we provide the following guidance. For this year, we expect a growth rate again between 0% and 2%. But given how we started into the year and how we ended last year and given some of the uncertainty, in particular, in the core onshore market, the U.S. and Continental Europe, we anticipate for Q1 a revenue development, which will below the annual guidance. Secondly, and you will see later in detail some of the measures we are implementing. We also expect a stable EBITDA margin, which means 14.6% on a reported basis that assumes a dollar of $1.20. The net free cash flow generation is expected to be this year slightly below last year, given the strong euro. And so we see here a range between EUR 800 million and EUR 850 million excluding the nonrecurring items. In our proposal, we just had the Board meeting this afternoon to the annual shareholders assembly at the end of May is to increase the dividend from EUR 4.20 to EUR 4.50 per share. That's on the financial side. Let's take a look at some of the governance and strategy updates. So we are very happy sort of to announce the long-awaited process of our governance change. The Chairman Moulay Hafid, Daniel the founder and CEO and myself has recommended to the Board and the Board sort of followed that recommendation to appoint Jorge Amar, who is a very world-renowned AI expert and leader of McKinsey's global customer service practice, to be the new CEO of the group. He will start officially March 16. I've known Jorge for quite some time, and I'm very excited that he steps into this role. This also means naturally that Daniel, myself and Olivier will step down a day before. Daniel will also step down from the Board of Directors. And we also, at the same moment to really make sort of the governance renewal complete also co-opting to the Board for new members. One will be Jorge starting middle of March, sort of stepping into the role of Daniel. Myself, also, I will continue to support the group that is very close to my heart but then in a different role as a Board member and 2 very exciting new Board members who have been co-opted and are then up for the approval by the shareholders' assembly at the end of May, one lady from Qatar and one lady from South Africa, which I'll explain later her qualifications. So that's really, I think, quite exciting news. I have been many discussions over the last years, when will this happen? I do believe we have there the right team on the start, and I'm excited sort of to support this group in this new role and particularly Jorge in his new task. Then Future Forward. We launched this initiative last summer, you saw in Q3 a quick update. We are now in full swing and 2026 will be the first full year of implementation. We have really mobilized the organization with hundreds of different initiatives. And as I explained and hinted towards in our Q3 presentation, we are working strong on essentially 3 levers. We want to accelerate the growth. We want to drive efficiency also leveraging AI, and we want to transform the company and we are making sort of good steps on all 3 elements. And on the internal AI efficiency, we are starting a program as we speak that will drive efficiency savings for the group targeted to be over EUR 100 million in 2026. We have launched more than 500 AI projects last year and expected to scale further with our TP.ai strategy, and we are also happy to share that also under the new governance, we are launching a comprehensive strategic portfolio review of the group. So a lot to be discussed. Let's quickly look at the highlight numbers. I think no surprises here for the audience, of course, happy to answer more questions, but we see the strong Core Services that we saw throughout the year. There has been a little bit of weaker momentum in Q4 that we anticipated in our November presentation what for me particular positive is to see the momentum in the Americas. As you remember, it was a bit negative before, but we have seen an excellent development in India as well as Latin America. And given the strong momentum, we are reporting growth of 1.4% like-for-like in the Americas. In EMEA, again, very strong with close to 4% in 2025. We have seen great momentum in the U.K., South Africa, Egypt, APAC as well, sub-Saharan countries. So they're across the Board a very strong momentum, while also a bit subdued in Q4. Specialized Services, on the other hand, you know the challenges on the nonrenewable of the significant Visa contract and the market environment for our Specialized Services in the U.S. So from that perspective, minus -- a bit more than minus 9% like-for-like growth. If you adjust for the effect of the Visa services contract, we have as indicated and as expected, a slight positive like-for-like growth for Specialized Services. But important to note, yes, the momentum has been reduced but given all the measures we have taken last year, we have proven to maintain a strong profitability. There's only a slight decrease of this highly attractive business. Second comment, again, in times of uncertainty, having a broad client portfolio is key and giving our broad exposure to multiple different industries has been and will be a strength of TP. For 2025, we continue to see strong momentum in public sector, fast-moving consumer goods and strategically very important, the strong sector of financial services and insurance. This is really has been sort of supporting the growth last year, we saw a bit of lower activity, automotive and energy utilities last year. Also, the portfolio we talked about a lot, TP is not a company that stands still. Over the years, always have been able to develop new business lines and build out -- building on its capabilities, new services line, along with our articulated future forward plan. And you remember the presentations last year, we have seen strong growth momentum in AI data services, and we call this out for the first time. We have seen very strong high single-digit growth in sales, which is 7% of the group and which is a critical factor to provide Revenue as a Service for our clients. And also very strong momentum, double digit actually in our back office and BPO-related task, which is important to sort of have an end-to-end service chain for our clients. Trust and safety. As indicated, we saw some revenue decrease. There is some automation happen on our client side. And care overall, broadly in line with the overall Core Services growth, so also a healthy development but changing the way we operate for our clients. Now a quick update to our 2 new executive managers. Jorge Amar, as I said, very happy, I got to know him very closely really now for quite some time. He has been working with the group for quite some time. But Jorge, why don't you introduce yourself to the audience and to our investors. Jorge Amar: Thank you very much, Thomas, and thank you for the warm welcome into the group. Today is not the day to speak at length as I will officially become the group CEO starting March 16. But as a quick introduction, Jorge Amar, I was born in Argentina, but most of my professional career has been in the U.S. where I worked with some of the largest companies in topics around customer experience and service operations. And in particular, over the last few years on the topic of artificial intelligence. Not only from a technology perspective, but also how to think about consumer and employee adoption. So all these feels like the right combination of things that are leading me now to be very proud in joining the group. So again, more to come starting March 16, but very, very excited to join the group. Thomas Mackenbrock: So I think not just Jorge is excited, the entire group is excited. I think it will be a great addition for the company. And as he indicated, he brings 3 key components that are critical for the group; first, a deep understanding how AI works in enterprise environments which is absolutely critical for our journey ahead; secondly, he has a strong proximity to existing and potential clients of TP, understanding their needs, understanding their environment, having these relationships, which I think is super critical also for our path in the future; and thirdly, obviously, given his background, he has a strong analytical mind and sort of will shape the strategic path for TP in the years ahead. I can also -- he's not with us today, but also can only praise our new interim CFO, Benoît Gabelle, has been a Deputy CFO for TP for some years now. Before he was advising the group, he was a partner at EY, is an absolutely excellent person. We are very excited that he will sort of step up into this new role and will support Jorge from the financial side. Also, as I said, it's not just the executive management team, but also the Board has renewed and has co-opted today for new members, 3 of them immediately. Sheikha Hanadi bint Nasser Al Thani, a very renowned Qatari entrepreneur, investor and business leader. We are very excited that she brings her expertise, her network into the board realm for TP. She has strong expertise when it comes to investment and the investment in capital markets. Secondly, Ingrid Johnson, she's South African lady, also with a broad understanding about capital markets investment but also the banking insurance space where she led several companies. So quite excited for that sort of additional expertise on the Board as well. Jorge Amar will join middle of March. And as I said, I'm very dedicated to the group, and I'm excited to continue the journey with the group in this new role as well. Of course, all of these cooptations are subject to the shareholders' approval at the meeting at the end of May. Now let's look at the numbers, and Olivier will guide us through. Olivier Rigaudy: Thank you, Thomas. Good evening, everyone. I'm happy to present to you the 2025 figure. As mentioned by Thomas, I do believe that -- we do believe that we have delivered a very good year despite this global challenging business environment. As you can see here, you have the full P&L. But before commenting in detail, I just wanted to highlight 3 topics. The first one that was unexpected when the year started. The macro environment has been difficult all along the year and the growth at different market was probably lower than we expected. Secondly, we have the FX environment that was not really exactly what was supposed to be to happen. For you -- I remember that we start the year with a dollar that was at EUR 1.03 and finish it at EUR 1.17. So it has been a global wash all along the year, especially in the H2, we will come back in a minute to that. That was not exactly the plan. And lastly, the impact of the Trump administration policy on our major business of Specialized Services, I was thinking, of course, of LLS has also an expected impact on the growth that we were supposed to deliver this year. But beyond that, beyond -- despite that, we have been able to post a sales figure of EUR 10.2 billion, 1.3% like-for-like growth, excluding impair inflation. And EBITDA, which is above EUR 2 billion and EBIT before nonrecurring items close to EUR 1.5 billion, EUR 1.485 billion aiming to 14.6% growth rate -- sorry, to sales versus 15% last year. I'll come back to explain where I come from the difference. Finally, the net profit -- the operating profit is roughly equal to last year. We will see why. We have been able to reduce tax charge significantly, and our net profit is roughly the same than last year. As you can see, this is a 40 basis point difference in EBITDA margin, which -- of which 20% -- half of it is coming from the FX. Let's have a look to the figure of sales first. The first thing to tell is that, of course, when you start to have a look to the figure of last year, you start with 10 -- also EUR 10.3 billion and you have a currency effect of EUR 362 million, of which EUR 240 million came in the second part of the year. So you had a 50% increase of the negative impact in the second part of the year that was significant. So when you start to look at the precise figure the way they have been built, you have also, of course, a change in scope of consolidation which is a consolidation of ZP better together. You remember that we bought this company last year, and we consolidated early February 2025. And we are also a small company called Agents Only that came on board early July 2025. So you have a positive impact of scope of EUR 196 million covering the decrease of Specialized Service, EUR 132 million that was mentioned by Thomas a minute ago, of which most of it is coming from this U.K. contracts that we have not been able to renew last year. That has a big impact on our sales, EUR 140 million to be precise. And beyond that, the Core Service business -- the Core Service activity have been able to grow by close to 3%, 2.7%, which I believe is beyond the market figures that we will get in some weeks from now, showing that this group has been able to continue to deliver significant growth in different markets. It was mentioned by Thomas in U.K., in different sector, in public sector, in banking where we are able to match the demand of the client. Let's have a look to what happened specifically in this year. When you look the FX environment, things are clear. You have all our currency in which the group operates have been degraded versus last year. So it has an impact. Of course, the dollar, but not only the dollar, the Indian rupee, the Philippine pesos, Sterling, everywhere. So we are facing a situation where we have been able -- we have not been able to cover, of course, all the translation effect that has a final impact on our mix of margin. This is an adverse FX environment in 2025. That was effectively significantly higher than people who are waiting. If we look now to the result by, I would say, by sector or by zone and by activity. I would say -- I would -- I'll add 2 points. The first one is a strong EBITDA margin improvement that we have been able to do in Specialized Services in H2. You remember that in Q1, specifically, but also in H1, LLS has been hit by this Trump effect, if I may say. But the group has been able to react quickly and to adjust this cost quickly to match the global demand. So the demand is flat versus the volume is flat in Specialized Services, notably in LLS but we have been able to recover significantly the margin, and we have just a small negative effect for the full year that is going to be positive next year, again with LLS given the measures that has been taken all along the year 2025. When it comes to Core Service, there are 2 issues to be -- to have in mind. Of course, the FX impact, which is -- I just mentioned it very significant. And the group decided to put some money, some investment in AI and IT technology that has been, I would say, spend notably in holding, as we can see on this table to support the future growth that was absolutely needed for the future. So all in all, the result in margin are not dramatic if you look at it. They are much more -- they're positive. If you look what happened, you have versus last year, an impact of Specialized Services that is roughly neutral. Of course, we have lost 70 basis points with the TLScontact impact, notably the UKVI -- the U.K. contract, sorry. That has been covered by 2 things. One is the acquisition of ZP that came on time, and that has been made on time accordingly and also by the mix effect linked to the work that has been done all along the year with LLS to improve the margin. So all of that, meaning that the cost on the Specialized Services impact on the margin is neutral and has been -- and we have been able to swallow all the impact of the TLScontact that we lost. Beyond that, you have the 20 basis points that are linked to the FX roughly. And you have the 15 basis points, which are the costs related to AI, notably spend in holding, as I mentioned earlier on. So I do believe this delivery of EBITDA margin is really good and shows how the group has been able to adapt to this global environment, either in terms of demand for LLS or either in terms of adverse FX condition across the board. If we now move to the other part of the result, what we can say is that the amortization of intangible assets are flat versus last year and the nonrecurring items are a little bit better than last year. You remember that last year, we had a significant amount of money that was spent to deliver the synergy from Majorel. Of course, this year is significantly less. But we have been able to -- we have been obliged to get out of some country, of course, Russia, that was one of the actions that we did all along the year, but also 2 other countries like Guyana and Trinidad, where we wanted to get out. Besides that, we have been careful on the impairment of some assets, notably on PSG which is recruiting activity that we bought 4 years ago. And where we are really, I would say, cautious on the future market for 2026. And we thought it was clear, better to be cautious and to impair at least EUR 60 million -- EUR 67 million for this business. It doesn't that mean that the business is not good, but we are very, very careful here. I remind you that this impairment of goodwill has, of course, no impact on cash. So the operating profit is roughly flat, EUR 1.55 billion versus EUR 1.82 billion last year. And when you look what's happening on the final part of the P&L, we have been able to maintain our net financial charge at the same level despite the fact that we have an outstanding debt that was increased in the year. But of course, last year, you remember, we had a very, very positive hedge impact coming from the devaluation of the Egyptian pound that didn't happen again this year. The impact of this hedge was EUR 50 million that is not happening again. So besides that, we are flat in finance cost. What is interesting is that we have now finished -- mostly finished the integration of Majorel, and we have been able to reduce significantly the tax rate -- the accounting tax rate. The impact is EUR 56 million improvement in 2025 versus '24. And we are still more things to come and the full year effect of the decisions that we took and implement in 2024 and 2026. That's the reason why we believe that in 2026, our tax rate will be below 30%. Beyond that, very few things to tell that we are roughly at EUR 500 million at net profit level versus EUR 523 million last year. Remember, we impaired EUR 67 million from PSG, that has a big impact on the net profit. More interestingly, and it as was mentioned by Thomas a minute ago, is a strong free cash flow generation. You remember that was a question about our ability to deliver free cash flow for the full year following the performance of H1 that was hit by some one-offs that were, I would say, exceptional. We have been able to deliver the best cash flows that we ever had in the H2 -- in the second part of the year in 2025, EUR 642 million versus EUR 636 million for the following year -- for the previous year, sorry. We did that because we manage strongly the working capital management or strongly working capital as expected. But we did that without cutting in the CapEx. And that is absolutely key. We continue to invest reasonably, but clearly, in some place where the demand is rising, notably India, South Africa, where the market is asking for size and for volume. So we increased our CapEx to 2.4% sales -- to the sales this year. So at the end of the day, the free cash flow is at EUR 900 million, EUR 901 million. Keeping in mind that we have to pay, of course, remember that we have the French restructuring plan, voluntary restructuring plan that was partially paid in 2025 for EUR 25 million out of the EUR 31 million that are shown here. And of course, will continue to be paid in 2026. So as a whole, strong free cash flow generation, I know it was a concern about the market, but the company continued to deliver strong free cash flow, and will continue to deliver strong free cash flow. If we now move to the situation of the group in terms of balance sheet. As you can see, we have been able to stabilize the debt roughly at 2x -- below 2x net debt to EBITDA while returning to the shareholder 42% of the free cash flow through dividend and share buyback and continuing to invest in business. I just mentioned it a minute ago, but also acquiring ZP and establishing some AI partnerships that are going to be promised -- promise for the future. So all in all, we continue to have a strong balance sheet while continuing to develop the business. And when you look at the indebtness, there is no reason to be afraid. We are BBB rating -- Standards -- S&P. We are the -- we have launched -- I remember you that we launched early last year, a bond of EUR 500 million that has been easily covered by the market. And we have a debt that is, I would say, balanced between the financing source and by nature of rate. To be clear, the group has the ability to reach -- to have access to lately between EUR 3 billion and EUR 4 billion easily through commercial paper, through some medium-term bond or banking facility. So the average cost of the debt is below 4%. We have an average maturity, which is around 3 years and we are absolutely confident about the ability to continue to finance and support the business and the growth of the business in the future. That's what I wanted to tell you. I'm holding back to Thomas for the strategic part. Thomas Mackenbrock: Thanks, Olivier, and thank you also because this will be your last presentation to present in your results after 16 years with the company. So a big thank you on behalf, I think, of the entire Board, the entire organization for these wonderful sort of decisive action over the last 16 years. Olivier Rigaudy: Thank you. Thomas Mackenbrock: Let's look, and -- I'm in the interest of time, quickly as an update on Future Forward that you see where we stand and what will be continued. So as I said, the value creation office for Future Forward is in place, hundreds of initiatives activating. I brought for today's presentation, as promised last time, 4 examples, to give you a little bit of a flavor where do we stand and what is happening and to have a little bit more tangible view on these growth levers, transformation levers as well as efficiency levers. Internal AI, we talked about, we see 3 big levers on driving change in the organization, of course, leveraging AI in everything we do internally when it comes to recruiting, training, workforce management, supervisor quality, but all corporate function, if you will, and AI adoption allows us to reach another level of quality, but also efficiency. Hand-in-hand with this internal AI transformation goes the cost optimization addressing structural changes through delayering automation on our SG&A and our overhead parts as well as on our direct costs as well. There are many, many plans in place now that are being implemented and they allow us to drive the savings that you see below. And thirdly, that is part obviously of the new leadership role with Jorge to find a simplified organizational redesign and to choose some lever there to have a more agile, leaner organization. Overall, for all of these 3 levers, the current expectation is that this will be delivered above EUR 100 million run rate savings, and we expect a onetime cost this year, of course, on depending negotiation of some of the levers between EUR 70 million and EUR 90 million. These plans are already in action. If you look at our annual results, you see that in January, February, we have the first measures amount with a corresponding cost of EUR 56 million. So it is happening. It's being implemented, and it will be continued seamlessly also by Jorge in the future. So this is on track and in execution. Second one, transformation. All of you remember this chart what I presented in Q3 that we as TP, believe AI is not a piece of software that is being sold. It is an incremental part of our operating fabric to drive outcomes for our clients. This is true on the functional side, so industry agnostic, and we have made good progress on some of our functional solutions, as you see later, as well as of the industry solution side. You need to orchestrate like we do today with TOPS and BEST, the human dimension, you need to orchestrate the AI dimension as well that it really can unfold this ROI and impact for our enterprise clients because otherwise, it's just a nice demo, but not really something delivering value. For this, we have started, as you remember, at our Capital Markets Day, our Q3 presentation TPI fab, our foundational backbone, we've launched more than 500 AI projects this year, integrating what we have done in the past into our new solutions suite in really driving impact for our clients. The biggest impact because there we had a head start in the past is augmenting with AI, our existing human delivery engine. There, we have seen more than 270 projects last year of doing this human augmentation but we also started to see some traction on FAB Connect, which is basically orchestrating human and agentic AI; FAB Growth, enabling with AI revenue as a service for our client; and FAB Collect, agentic AI collection where we see a lot of potential. This is a journey that will basically carry on the next years ahead but the foundation is laid, we are continued to developing. And the examples are real. Wherever you look, whatever new proposal you have, whatever new win you have for a client, AI is part of our offering is attached and ingrained what we do today, whether this is for a leading health care insurance company in the U.S. where we build an AI-based tool that allows faster access to the knowledge base. We won a client last year in Asia, it's a large bank, where we integrated human customer support with agentic AI customers on board to manage high-volume cases. And at the same times, this orchestration between human AI and agentic AI was the winning case that the client entrusted their most treasured valuable resource, their clients to us with our FAB Connect solution. We have won a large telco company in Latin America, where we do agentic AI collection. So we can be earlier on in the building cycle, reach out with an agentic collection tool and then hand over in complex cases to a human. And this is an example, again, where is the value add for TP. We are knowing which AI technology is available in the market, depending on the situation, depending on the client need to plug it in our processes. But as we work with dozens of different telcos in different countries, we work on many different debt collection services. We have the data now how do you orchestrate the process to unfold the power of the AI. And we've seen great results after the implementation actually quite recently when I visited the client. And lastly, FAB Growth. 7% of our business today is sales. There, we are not a cost center, but a revenue engine for our clients, and it's obvious, but it's hard to implement how AI augments our humans to drive better sales for our clients. We have started working for many high-tech companies in that felt with really incredible success. And I see there's really a great momentum combining the human power of sales with the tools of AI. Maybe in the interest of time, just a quick sneak preview, and I'm sure you will see in the next years more from Jorge and the team. I really believe if you think about and sort of cut through all the noise in AI, finding the right recipe, how you orchestrate in a world where AI is ubiquitous, the human power with the AI power is key. It's not just about load balancing. This call is done by AI, this by a human. It's about understanding where hallucination happen, how do you design the data flow, where does AI play a role for better outcomes and maybe a human how do you manage this handover. We're investing quite a lot right now of building this tool, including in a responsible control center that can detect hallucination, accuracy problems, false answers, defines the right guardrails and really configures outcomes for the client. TP is not a company that is selling AI solution. We are a company that drives outcomes for our clients and managing the orchestration of an operating machine. And the operating machine has a human hand and an AI hand or AI leg and doing this orchestration in the right way is key in the future because our clients don't want to see a demo or buy a tool like in a software, they want to see an enterprise process managed with a measurable impact. And that's, I think, the role for TP, you will see more in the future, but it's on the move. It's being developed, it's being deployed in client places, and I think we're all around the table are quite excited about it. Then many of you asked what is happening? How -- can you show us more concrete examples for sales? I talked about it, 7% of the group, EUR 700 million in sales. We do B2B2C and B2B2B sales. Starting with high-tech clients. We invested last year and the team built it out to not just focus on high-tech block, fast-moving consumer goods, banking, telco with really some good traction. We've seen high single-digit growth last year. We expect nothing less this year from the team, and you see it's again, this blend of human talent with AI. And the same is true with data services for AI. We called it out now it's 2% of the group. I think we all wish it will be a higher number but we see double-digit growth with the team. It's a market that is growing. It has moved from general data labeling and notation based on general knowledge to way more specific needs, way more specific expertise for clients, really combining domain expertise on certain subject area experts and bring it again for enterprises to life and having enterprise solution for medical companies, for car companies, for banking companies and combining on our know-how is quite critical. We won their 5 new clients. And again, the expectation for this year is at least to continue the growth momentum we've seen in 2025. And with this, I think these 2 examples, it shows you how the portfolio of TP is changing over time. Last but not least, outlook. As you all know, the world is uncertain. Our market is uncertain. If you look at last year numbers, we expect a growth more or less in the same range, 0% to 2%. Based on how the year ended and started into the year, we expect Q1 to be a bit softer and to be below that guidance range. EBITDA margin with all the measures remained stable at 14.6%. Of course, assuming no major fluctuation on the FX side. Cash flow, again, EUR 800 million to EUR 850 million, excluding the nonrecurring cash-outs. This is due to if you look at this year's numbers, which is a bit higher, due to the stronger euro versus the dollar and dollar correlated currencies because if you think about India, Philippines, LatAm, the U.S., of course, where cash is generated and translated to euro, the amounts might be lower given the current FX environment and the AI efficiency program that I talked before. Overall, I would say TP is in a position of strength. We'll remain in a position of strength but needs to transform. Olivier, myself and I know also, Daniel, are quite excited about the future. We're stepping down, knowing the company in good sense with Jorge and are looking forward to any questions from the group. I think you have seen this. This is the proposal for the dividend. Of course, for our investors is important it's being up for approval. May 21 in the general assembly. It's an increase of 7%, if I remember well, to EUR 4.50 the share, which is an increase and in line, obviously, obviously, with the position of TP wherein -- and the midterm guidance, there's no change there. With this -- sorry, for that, open for Q&A, and I'm sure there are many. Operator: [Operator Instructions] The next question comes from Suhasini Varanasi from Goldman Sachs. Suhasini Varanasi: First of all, a lot of changes, just trying to make my way through all of that. But maybe 3 questions, just to keep it short. When we think about the guidance for 2026, especially on the top line, can you help us understand your assumptions in Core Services and Specialized Services here and the implications that you're seeing on margins as well? The second question is on the strategic portfolio review that you have announced. I see that you've taken a few impairments below the line in the last couple of years. Is that mainly in Specialized Services that you are directing with portfolio review? Or does it also encompass Core Services? And it's interesting to see some of the color that you have talked about on Fab deployment. And it's good to see the benefits as well. Is it possible to help us understand the impact on contracted revenues and profits, margins, et cetera, as a result of deploying all of these AI solutions? Thomas Mackenbrock: Okay. Let me start and then I hand over to Olivier for some of the impairment and financial topics. First one on FAB AI. If you look at the markets, Suhasini, I can -- I think it's too early to say what is the impact for the group. We are there in the beginning. It's part of the solutioning more and more. The question of, of course, how do you price some of these AI solution, how do you price some of the benefits. As we move forward, as we said in the past, there are some ideas to make this more tangible, but it's too early to tell what is the impact because we are also investing in the solution at the same time in terms of margin or not and in terms of pricing model in the future. But you see there is traction, there's interest from the client. Every new offer that we have has a Fab solution inside. And let's say, I would be positive to see in the next 9 months, some more traction granularity that provides you also some facts that you can put in the model what the impact might be. Strategic portfolio review, as also discussed in the past, of course, there's always the question on certain Specialized Services assets, but there is a clean sheet. Jorge Amar has the mandate for the Board to review the entire portfolio of the group. To be very clear, and as we put in the press release, including divestitures as well as including M&A. So both options are open. As I said here, he has a very strategic mind. I think many of our analysts has looked at the group, and he has a blank sheet from the Board also today to do a thorough review on the portfolio of the group. Guidance, 0% to 2%. What was the question? We see a weakness -- we don't -- as you know, we don't give a guidance for Specialized Services and Core. I think the story of 2 tails that we have seen in the past that the Core shows higher growth momentum than Specialized Service is also true for 2026. I think that's fair to say. We have invested, as you know, in business development and AI capabilities on our Core Services, and we do expect a successive increasing momentum on our Core Services throughout the year, but we don't give different guidance. Maybe on the impairment, Olivier? Olivier Rigaudy: On the impairment, so of course, we are going to continue to look at business plan for all the business. There is no, I would say, decision that has been made for 2026, as you can imagine. So we are going to look that very precisely. We will be very, very careful as we have always been in our business. But so far today, we have no specific reason to change what we have done in 2025. What we've done in 2025 was just to be on the safe side on PSG and to a lesser extent, on Health Advocate. That's it. It's not a big amount compared to the balance sheet of the group where we have EUR 4 billion of goodwill and EUR 2 billion of intangible assets. But we saw that in accordance with auditor, it was more careful to take this stance. Suhasini Varanasi: It was great working with you, Thomas and Olivier over the years. Wish you all the best for the future. Operator: The next question comes from Remi Grenu from Morgan Stanley. Remi Grenu: A few questions on my side as well. So the first one is on the organic growth guidance. Can you help us understand what you mean with a softer performance expected in Q1 based on any details on current trading discussion with clients? How should we expect that organic growth in Q1 versus the 0% to 2% for the full year? The second one is on your cost saving plan. So EUR 70 million to EUR 90 million of restructuring costs this year. But can you help us understand the net impact if we integrate the savings that you expect to generate as soon as 2026? And overall, a discussion on the payback that you expect on the EUR 70 million to EUR 90 million you're investing in restructuring? And the last one is probably a bit of a broader question, a lot to impact from the announcement tonight. So what do you think are the top priority for the group? Is it about first setting the right perimeter to do the divestment and potential M&A of delivering on the cost saving program, detailing the capital allocation, there's still a little bit of an uncertainty there? So just want to understand in your mind, what's the top priority in which order to understand when things are going to materialize? Thomas Mackenbrock: So I would start and hand over to Olivier, but I would ask for forgiveness that as we speak today, Jorge is still employed by McKinsey & Company. He will start with the group on March 16. We will be then available, myself and him, to go and talk to investors, obviously. But till then, he cannot speak for the group. And so I try to cover your question. First, guidance, yes, as we indicated in the press release, we expect based on the start of the year, we see, in particular, weakness in onshore markets. There is an increasing momentum for offshore and certain uncertainty with some clients to be below the guidance range, meaning below 0% for Q1. To be very clear, there's also the weakness with Specialized Services, but we expect for the group to be below 1% and then in continued and sustained improvement throughout the year to reach the guidance range. Second, on cost impact, we do -- I think we also stipulate this in the press release, of course, subject to negotiation with the employee representations subject to the implementation of some of our internal initiative measures, D&I deployment, et cetera. But we expect from the EUR 100 million plus savings this year, around EUR 50 million to materialize. And Olivier can give you more details what's the net effect will be for this year also on the cash side. But we expect from the EUR 100 million plus EUR 50 million to realize this year. And then you talked about capital allocation. I think also there, we had the discussion today in the Board. It is noted very well the request from our shareholders or for some shareholders who reached out to have an increased capital allocation by the group, and it will be considered going forward, obviously in strong collaboration with the management. And in terms of priorities, the good thing with TP, as you know, all of the things that you mentioned at the same time. So yes, of course, there is a strong focus on the existing business. There will be a strong focus on the transformation of the group. There will be, at the same time, that's why articulate a strong focus on the portfolio review. I do believe we act from a position of strength giving the situation we are in, but there is a moment of transformation for the group that is clear, and there will be not the luxury to focus only on one thing. Olivier? Olivier Rigaudy: Just to comment on the saving plan. Of course, the impact in 2026 will at best neutral. We have launched all these savings plan early this year, notably in domestic market in Europe. And we do believe that depending on what size at what speed this plan will be developing. We do believe that it will be neutral at best in 2026. And I'm sure you have noticed that we have announced flat margin in 2026 versus last -- versus 2025. That shows that we are reasonably confident that to deliver these savings. Of course, the main positive impact will be seen much more in '27 and onwards in 2026. All the job of the team today is just to make sure that we have no negative impact in 2026, which I believe we will be able to do. Thomas Mackenbrock: Next question, please. Operator: The next question comes from Karl Green from RBC. Karl Green: I appreciate Jorge can't speak on behalf of the company or anything to do with Teleperformance, but would it be possible for him to give any kind of broad view around the market potentially just in terms of how he potentially thinks about outsourcing unfolding organic consolidation in the market? That would be the first potential question. And then just in terms of more sort of technical questions. I think, Olivier, that you mentioned that the margin guidance does include an assumed negative impact from further U.S. dollar depreciation year-on-year. I just wondered if you could very simply just quantify roughly how many basis points of FX headwind are embedded in that flat margin guidance or stable margin guidance? And then a final, again, margin question would be just, again, you've indicated that you would expect the specialized services margin to improve further in '26. Any kind of quantification around that would be really helpful? Thomas Mackenbrock: Let's start with the market, Jorge. Jorge Amar: Excellent. I'll start with the market with just an overall expert view, not at all speaking on behalf of Teleperformance, as I mentioned before, and Thomas reiterated, I will be officially with the company starting March 16. But if I look at the market and what we are seeing today in terms of trends, there's definitely a component of the rise of the hybrid workforce. And this means just having AI and humans interacting together. Sometimes AI managing end-to-end interactions and many times AI augmenting the humans to deliver a better customer experience. So I would put that on the table as one big element that we're seeing because it informs some of the other implications. The second one that I see is, there are many companies out there right now offering their AI solutions. And some people talk about an AI bubble. Some people talk about like, hey, what is going to happen with all these companies. And I am confident that the companies that will win in that space will be the companies that have some sort of differentiation, not only from a technology perspective but also from a data perspective and the ability to integrate the solution vis-a-vis the humans. If we play forward the movie and we believe that in the doomsday scenario, customer care will become just a bunch of models that are owned by a software company. That is highly unlikely, and we would see then many companies returning to some sort of differentiation in their customer experience strategy that involves a combination of both AI and human. And I think that, that part is something that we will need to continue tracking and seeing how it unfolds. And then I think a little bit over your question was going is in this space, in this market, how do we see outsourcing versus moving more operations in-house? And look, right now, the market, the data that we have from external analysts is showing a slight increase in terms of outsourcing. We still believe roughly that 65%, 66% of the capacity is still in-house. So there is still ample space for growth when it comes to outsourcing. And I think that companies will be looking more and more for partners that can deliver not only on the geographic footprint but also on some of the technology solutions, the risk and compliance, the data security as they continue to do that. So that's hopefully as much as I can share right now, but a little bit on the perspective on the market. Olivier Rigaudy: Coming on the margin and the impact on dollar on 2026. I must confess it's a little more complex than the pure dollar because as mentioned by Thomas a minute ago, it's not only the dollar, it's dollar linked -- currently linked to the dollar, including Indian rupee, Philippine pesos and the mix of this currency versus the previous year. So what is difficult today is to predict this mix. So today, we have not a huge impact on the dollar, on the guidance on the dollar and linked -- currency linked to dollar impact in 2026 margin. There is a limited impact depending, of course, of the mix that might change. So we will update you. Probably people will be after me will update you about that because it's too early to tell. On the margin on Specialized Service, what we can say is that I'm not waiting a big change versus 2025, except that we'll probably be better in Q1 versus last year. You remember that in Q1 last year, we have been, I must say, amazed by the impact of the reduction of the growth that we were waiting for. So now we are absolutely ready to do that. So we will be able to pass on this Q1 that was difficult last year in terms of margin. So probably a little bit better in margin in Specialized Service, everything equal, which is not going to happen, I'm sure. Thomas Mackenbrock: But maybe as a reference, as we also indicated in our press release and the presentation, the EBITDA margin or the stable EBITDA margin guidance assumes a EUR 1.20 dollar exchange rate. Olivier Rigaudy: What I would say is that, of course, there are uncertainties, and you understood that. But what I would draw as a lesson from 2025 is the ability of this group across the board across a different division, across a different country to adjust quickly. Of course, it's not -- it's easier in some geographies than in others. We have been able to adjust it of course, easily in U.S., easily in India, easily in Philippines. It's more complex in domestic European market than other markets. But what you have to keep in mind that decisions are taken quickly. They are made thoroughly quickly and implement quickly in the country, and I'm convinced that the company will continue to deliver such a reaction in case of issues or specific topic. This is something that I want to highlight because we have systems that enable us to detect quickly what's happening on the field and to react if needed, as quick as possible. Of course, there are limits to adjust, but the company is able to do so. Thomas Mackenbrock: Maybe one last quick question in the interest of time, if there's any. Operator: The next question comes from Nicole Manion from UBS. Nicole Manion: I do have a few, but I'll try to be quick. The first one is just on the revenue outlook actually. So sorry to kind of go back there. But given the Visa exit should be fully annualized at least for the most part and your comments about Q1 and the growth outlook in general, the implication there is probably that the LLS situation is still deteriorating. So any kind of detail on that you can give will be great. Secondly, just on Trust & Safety, which I think was 8% of group revenue this year. That's down from, I think, 10% in the presentation last year, which obviously is a bit of a significant drop year-over-year. I know we've all seen the headlines about some of the companies in that space maybe scaling back some of the services. But I wonder if you could maybe talk about whether it is that that's driving the step down in your numbers or whether it's AI disruption or anything else? And then finally, just a very quick one on the onetime costs. You've indicated EUR 70 million to EUR 90 million for '26. But then you've talked about EUR 56 million of costs so far from measures that were launched starting January. Is that correct to think about that EUR 56 million as sort of relative to that EUR 70 million to EUR 90 million guide? Because obviously, that's already quite a significant chunk of that budget. So it's quite front-end weighted, if that's the case. Thomas Mackenbrock: Okay. Let's get started. So yes, the announcement and as you see in our annual results of the EUR 56 million, all the announced social plans already today. So these are sort of earmarked in our annual results and is part of the EUR 70 million to EUR 90 million. On second question, Trust & Safety, we do see effects, as you rightly said, for some of our clients, and it's also linked to increased automation and NI improvements in that space. So as I indicated before, there is some automation happening with this we called out a bit now what is really data services in that category. Remember, it was split between other and Trust & Safety, but it is also automation that we see in the Trust & Safety space, and that's why it's reducing. On revenue development and LLS. So we don't call out, in particular, the development on LLS or revenue. But if you look in the news and the situation in the U.S., I think you have an idea that it was not such an easy start for LLS this year. Anything to add, Olivier? Olivier Rigaudy: No, no. But it's far from being a collapse. Just to be clear. Of course, what's happening on the political stuff doesn't help. On top of that, the weather did help as well, but we are not in a disaster mode far from it. I just wanted to mention it. Thomas Mackenbrock: I see there is one last question. Maybe we squeeze that in, even though we are a little bit over the time. Olivier Rigaudy: From Deutsche Bank. Operator: The next question comes from Ben Wild from Deutsche Bank. Ben Wild: I've got 2 questions, please. The first is on the guidance and particularly the gap between your adjusted EBIT and your FCF guide. So the guide obviously implies adjusted EBIT close to flat or modestly up before FX and your FCF guide implies free cash flow down 9% year-on-year. Can you help us understand what's going on in '26 that the results in that differential? Is there working capital reversal or any other one-off effect in '25 that reverses next year on the free cash flow? The second question, just very, very broadly, your valuation is implying an existential trajectory for the group over the midterm. I suppose, very simply, you talked about the investment opportunities and potential divestments. But more broadly, how do you think about the relative returns of deploying capital organically in the group through OpEx and CapEx, inorganically through M&A versus returning the significant cash that you generate to your shareholders? Thomas Mackenbrock: So I'll start with the second part and then hand over to Olivier. Olivier Rigaudy: No, there is nothing either in terms of working cap or CapEx or tax to be paid. I just wanted to say that we know that a significant part of our cash flow is coming from Americas. Of course, there is a lag between the EBIT and the cash items. So this is mostly the lag between the working cap that is balance sheet as of today that will be paid in 2026. So the same for the tax. But there is no specific impact we might say that we are careful as always and there is uncertainties that lead us to -- just to be on the safe side on top of that. Thomas Mackenbrock: And the question was on... Olivier Rigaudy: Valuation. Thomas Mackenbrock: So as we -- I think, at this point in time, with the new CEO coming in, I cannot say more than what we have written in the press release. The Board has acknowledged the request from shareholders also for an increased return, and we look into this. So at this point, I've asked for your understanding, I don't want to preempt any decisions being made by the new management on that front. Ben Wild: Olivier, if I may just quickly follow up on the FCF as a clarification point. Does the adjusted FCF include the nonrecurring restructuring costs that you've talked about in the release today or? Olivier Rigaudy: Yes, of course. Thomas Mackenbrock: And then I thank you also, everybody, for your attention and your interest. I'm sure there are more questions in the weeks ahead. We're looking forward to answer them. Again, welcome to the group, Jorge. It's a pleasure to have you on board, and thank you, Olivier, for all the time, and thank you for your interest and continued support of the company. Thank you very much. Olivier Rigaudy: Thank you to all. Thomas Mackenbrock: Thank you.
Operator: Welcome to the Opera Limited Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] Please be advised that today's call is being recorded. I would now like to turn the call over to your speaker today, Matt Wolfson, Head of Investor Relations. Please begin. Matthew Wolfson: Thank you for joining us. This morning, I am joined by our CEO, Song Lin; and our CFO, Frode Jacobsen. Before I hand over the call to Song Lin, I would like to remind you that some of the statements that we make today regarding our business, operations, and financial performance may be considered forward-looking. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties. Actual results could differ materially as a result of various factors, including those set forth in today's earnings press release and our most recent annual report on Form 20-F, filed with the SEC. We undertake no obligations to update any forward-looking statements. During this call, we will present both IFRS and non-IFRS financial measures. A reconciliation of IFRS to non-IFRS measures is included in today's earnings press release. The earnings press release and an accompanying investor presentation are available on our Investor Relations website at investor.opera.com. Our comments will be on year-over-year comparisons, unless we state otherwise. With that, let me turn the call over to our CEO, Song Lin, who will cover our fourth quarter operational highlights and strategy, and then Frode Jacobsen, who will discuss the details of our financials and expectations for the first quarter and full year. Song? Lin Song: Sure. Thank you, Matt, and good day, everyone. While we preannounced Q4 outperformance, we have been very much looking forward to today, and to tell you how great our actual results was, and even more importantly, how exciting our 2026 guidance is. Advertising revenue led by continued scaling of e-commerce came in with an unprecedented sequential increase of $19 million versus the third quarter, resulting in 25% year-over-year growth. Clearly, we are performing well for an increased number of advertiser partners, all running performance-based campaigns with us, and we have yet again shown our ability to leverage the seasonally strongest fourth quarter to cross a year of fast growth. In addition, our rapidly expanding monetization of user intent query revenue continued with 16% growth year-over-year. This was fueled by both healthy search revenue growth and a continuation of 200% plus year-over-year growth in non-search query revenue. The monetization of intent-based traffic beyond search is an exciting opportunity, contributing over $5 million of revenue in the quarter and will continue to be our fastest-growing revenue component in 2026. All in all, Q4 revenue growth was 22% against the toughest quarterly comparison of 2024, and 8% higher than the midpoint of guidance. Our resulting annual revenue growth was 28% in 2025, an acceleration from 21% growth in 2024. EBITDA also came in well above the high end of our guidance range and 7% higher than the midpoint. We continue to invest in both product marketing and the growth of advertiser relationships, while maintaining a healthy EBITDA margin and solid cash flow, which Frode will cover in more detail later. We have talked a lot about our positioning in the AI era over the past years, and the topic continues to deserve attention. Our job is to make the best browsers for demanding users. We are amazed at the quality of emerging AI services, as I'm sure many of you are too, and we do not consider these companies as our competitors, but rather current and potential future partners. Our focus is to create the best orchestration layer possible for end users to benefit from this rapidly expanding ecosystem. The best example is Google, which has delivered the world's best search experience for decades and is showcasing its technical abilities through the advancing Gemini models. Google has its own browser but has been our partner for 25 years as we deliver an integrated experience for the end user to benefit from these services in a feature-rich and advanced browser. And with the broadening ecosystem of services, the appeal of an independent browser only increases. And at the same time, the attention to the browser space results in more people contemplating which browser represents a better alternative. That sentiment should be shared by the new AI companies, which would prefer to reach their users via an independent Opera browser as opposed to a direct competitor's browser. That is a healthy basis for constructive relationships. Our strength is browser sophistication and a dedication to augment the web experience in ways the users will find familiar and useful. Most people don't want to change their browsing habits. Rather, they are looking to enhance it with a richer experience, enabled by AI and agentic capabilities of their choosing, but it all starts with browsing at its core. The browser itself is a gateway to your online journey, and it is a mistake to build a browser that is a little more than an AI terminal with browsing the web as an afterthought. This positioning is also what enables our financial profile. We do not need to put out massive capital into hardware nor enter a fierce competitive large language model arms race. Financially, this is a continuation of the profile we have consistently shown a healthy combination of growth, profitability and cash generation, and a relatively unique resulting ability to be both a growth company with no financial constraints to seize our potential, while also returning significant cash to our shareholders. While our performance and outlook are not fully reflected by the public market today, there is always a silver lining. And in this case, it is our ability to take advantage of this opportunity to create significant value for our shareholders by launching a major share buyback program. Frode will go into the specifics shortly. Moving on to operational highlights. 2025 was certainly another year of rapid innovation and built upon our modular technology and preference to tailor browsers to distinct audiences. We launched 2 new browsers, Opera Air; and the subscription-based Opera Neon, which became widely available in early December. While user demand for agentic browsers is not yet mainstream, Neon is a terrific product that solves multiple goals. It provides one of the most advanced browsers for AI demanding power users, potentially unlocking a new subscription-based revenue stream. And more importantly, it is a testing ground for new AI features that we can then introduce across our full suite of browsers. Our revamped flagship browser, Opera One entered 2025 in its second-generation R2, and most recently was refreshed to R3. In addition to greatly enhanced tab management and split screen views, R3 came with native integration of e-mail and calendar and our most advanced integrated AI assistant yet, Opera AI. Compared to earlier versions, Opera AI benefits from a 20% faster agentic-based engine and contextual responses that allow AI to understand the web page or an entire group of tabs. This enables it to give answers based on the browsing context while maintaining privacy and control in the hands of the user. As a result, the user benefits from more relevant, efficient persistency and direct task completion within the browsing experience, unlike a stand-alone chat. And on the back of expanding monetization opportunities, we are bringing Opera AI to all of our browsers. With business models evolving beyond subscription, Opera is exceptionally well positioned to benefit from these trends and take advantage of our successful history of query monetization. Opera GX, the browser for gamers, reached over 34 million MAUs in the fourth quarter, a 5% sequential increase and remains our highest ARPU product. As the official browser sponsor of the League of Legends World Championships, we saw our best weekend of user activations in the history of GX during the tournament. Our mobile browsers also contributed to healthy user base dynamics, with Europe continuing to stand out after iOS became a more level playing field, following the EU Digital Markets Act. All in all, we ended the year with 284 million MAUs, inclusive of 60 million users in Western markets that contribute the most to our strong ARPU trajectory. ARPU grew by 26% to $2.49 in the fourth quarter. This growth demonstrates our ability to gain users in key target markets despite new entrants from well-capitalized competitors. We continue to take advantage of our browser position to scale opportunities that are natural extensions. Opera Ads, the platform that initially optimized the relevance of ads to each individual Opera user has become a global player also on non-browser inventory as part of our audience extension. Learning from primary data signals, we more than doubled its pace of growth in 2025 versus 2024, with well-performing campaigns for our advertiser partners. Every second, we process 12 million ad queries, more than double the year ago period. We worked with over 300 advertisers in 2025, including 4 of the 5 largest e-commerce platforms. Within the top 50 advertisers, the average spend per advertiser grew by 56% in 2025. In terms of our total advertising reach, when taking into account the millions of users that access our content platform through OEM white-label solutions, and the reach of Opera Ads, it is over 0.5 billion MAUs and growing. This scale and growth positions Opera uniquely among the largest online platforms. Another native extension of our footprint is MiniPay, a stablecoin wallet that emerged as a feature inside our mini browser tailored to emerging market users and is now available as a dedicated app. Mini Pay continues to drive adoption in a stable core market with over 13 million activated wallets, an increase from 10 million in the third quarter. The accumulated number of transactions increased from 290 million last quarter to 390 million. MiniPay is the fastest-growing stablecoin wallet in Africa, appreciated for its technical ease and seamless integrations with a broad partner ecosystem, enabling simple and low to no-fee transactions. Most recently, we expanded support for USDT and Tether Gold, and are rolling out the MiniPay card to increase functionality and serve as an important offering, offering best-in-class FX rates. Building upon our success in Africa, our 2026 focus will be to invest in making MiniPay a more global platform. With that, I would like to turn the call over to our CFO, Frode Jacobsen, to discuss our financial results, guidance and capital allocation in greater detail. Frode? Frode Jacobsen: Thanks, Song. As Song Lin also opened, we have been looking forward to sharing our complete fourth quarter and full year results with growth well ahead of even recent expectations and above the guidance ranges on both revenue and adjusted EBITDA. While we always apply caution to guidance, exceeding the high end of our revenue range by over $12 million is a recent record. Relative to midpoint, revenue was 8% above guidance and adjusted EBITDA was 7% above guidance. We are also very pleased with the composition of our overperformance with healthy trajectories across both advertising and query revenue. Our e-commerce success translated into a record contribution from the holiday shopping season, and as importantly, demonstrated our ability to scale our partnerships further ahead of embarking on a new year. Our most mature revenue stream, search, is evolving and broadening with our ability to monetize users' intent as part of query revenue, whether it relates to reactive suggestions or advancing our intent-based traffic partnerships. In addition, AI unlocks query volume that was previously too complex for the search bar and represents a major improvement in the user experience, including well-tailored advertiser recommendations. Quarterly revenue totaled $177 million, 22% up year-over-year and well ahead of guidance. Looking at our quarterly cost components, we incurred about $1 million more cash compensation expense than expected, predominantly a result of increased bonus provisions and a weaker U.S. dollar. Cost of revenue items also scaled with the revenue overperformance, representing 37.4% of total revenue. Marketing costs and the sum of all other OpEx items pre-adjusted EBITDA came in according to expectations. In total, and largely as a function of revenue overperformance, costs were $11 million higher than implied in our midpoint guidance, though this was more than offset by the comparable $14 million increase in revenue, resulting in $3 million incremental adjusted EBITDA. Quarterly adjusted EBITDA came in at $42 million, a 23.6% margin and also outside the guidance range, as earlier stated. All in all, full year revenue came in at $615 million, growing 28%. Our initial guidance for 2025 was for growth of 17%, after which our steady cadence of overperformance added $52 million of revenue as the year progressed or 11 percentage points of growth. 2025 adjusted EBITDA came in at $143 million, a 23.2% margin. This too represented a solid increase of $7.5 million versus initial guidance, adding 7 percentage points to the expected growth rate for the year. With that, 2025 was our fifth consecutive year as a Rule of 40 company. A few words about gross margin. As we scale Opera Ads, which has a different gross margin profile compared to our all in all revenue streams, we see a greater cost of revenue component in our results. But the platform comes with no marketing cost and a limited OpEx base. As a result, our EBITDA margin was relatively stable even as we delivered 28% overall revenue growth. It's worth noting that the Opera Ads gross margin actually expanded in parallel with its scaling from 2024 to 2025, thanks to enhancements in our optimization algorithms, showing how both we and our advertisers benefit from our strong targeting capabilities. Operating cash flow was $40 million in the quarter or 96% of adjusted EBITDA, resulting in a full-year operating cash flow of $118 million or a relatively normalized 83% as expected. Free cash flow from operations, which also deducts capitalized equipment and development as well as payment of lease liabilities, was $35 million in the quarter and $98 million for the year, corresponding to 84% and 69% of adjusted EBITDA, respectively. As percentages of adjusted EBITDA, we believe these annual levels represent fair expectations for 2026 cash conversion as well, while we will continue to see quarterly fluctuations with seasonality, tax and bonus payments and other cyclical effects. Then turning to guidance. While we are very pleased with our performance last year, we are still early in our trajectory. As we embark on a new year, we are excited by both the quality and potential of our products, and our opportunities to continue growing our financial results. Starting with the current quarter, we guide Q1 revenue of $169 million to $172 million, representing 18% to 21% growth year-over-year. The guidance reflects the growth momentum experienced year-to-date, reducing the sequential effect following the seasonally strongest quarter. We are generating healthy margins and are guiding for adjusted EBITDA of $38 million to $40 million, a 22.9% margin at the midpoint, setting a solid foundation for the remainder of the year. For 2026 as a whole, we guide revenue of $720 million to $735 million, translating into growth of 17% to 20%. While we prefer to be prudent at such an early point in the year, we are humbled by how far we have come in these past few years and our opportunities ahead. We guide adjusted EBITDA of $167 million to $172 million, a 23.3% margin at the midpoint. We take pride in driving organic revenue growth at a healthy level of profitability. And while our guidance reflects an inclination to focus on building scale over expanding margins, it implies a slight tick up in profitability, with the 2025 margin level now representing the starting point of the range. In terms of costs, we then implicitly guide to a full year OpEx base pre-adjusted EBITDA of $558 million at the midpoint, of which $131.5 million in Q1. We expect cost of revenue items combined to represent about 38% of revenue for the year, starting somewhat below and ticking up as the year progresses. That represents a 2 percentage point gross margin headwind for the year, while Opera Ads in isolation is expected to continue its margin expansion. Economies of scale across the other OpEx items supports the combination of rapid growth combined with a cautious adjusted EBITDA margin expansion. Cash-based compensation expense is expected to grow with a percentage in the low teens with quarterly costs starting just below our Q4 2025 level and ticking up with annual salary adjustments as of April. Full year marketing cost is expected to grow by about 10% from the 2025 level with a relatively even distribution of the annual spend between the quarters. And all other OpEx items pre-adjusted EBITDA are expected to grow by about 15% for the year as a whole, starting just below the Q4 level and increasing quite linearly through the year. Finally, we are excited to launch our new buyback program today, which is of an unprecedented scale. In fact, the $300 million authorization exceeds all prior buybacks combined and represents over 25% of our market cap as of this morning. Our ability to do this on top of an already meaningful recurring dividend only highlights the attractiveness of our operating model and commitment to shareholder returns. Given our belief that our stock is trading at levels that do not reflect our continued success, we are taking advantage of our strong balance sheet and expanding cash generation to capture a compelling ROI opportunity for our shareholders. We will pace and structure the buyback program based on market conditions, and we will buy back shares from our majority shareholder at the same pace as we buy back shares in the public market, ensuring that our free float percentage remains unchanged while massively stepping up our return of cash to shareholders. All in all, we are very pleased and also proud of the results we have achieved, thanks to our highly driven team and our ability to expand monetization while enhancing the user experience. We look forward to keeping you posted as yet another year with much promise progresses. With that, I'll turn the call back to the operator for questions. Operator: [Operator Instructions] We'll take our first question from Ron Josey with Citi. Ronald Josey: I wanted to ask a little bit more about Western users, which grew about $2 million sequentially. And I think we had some positive commentary around greater competition in Europe. So just talk to us about the ability to continue to gain these users despite, call it, greater competition and everything else. So talk about Western users and the growth there as one. Then the next question is just on ads overall. With e-commerce growing 25% year-over-year, a lot of that from e-commerce specifically, you noted the top 50 advertisers grew 56%. Talk to us about the traction that you're seeing within e-commerce and how you position that going forward. Lin Song: Yes, I can answer this. No, I just saw that he mentioned you, Frode. But this is only -- I can try to answer, give a first step, and then Frode can also comment a bit afterwards. So yes, I mean, I think overall, we are quite happy with the user performance in Q4. I mean, actually, both for the total MAUs, I think it's a good number because, as we always mentioned in the past that where we are always like losing some feature phone users, but then we are always growing in where it counts: smartphone users and desktop users. And of course, a fair percentage of that is also Western users, which also showed up nicely in the Q4 stats. So very happy about it. I think -- essentially, I think it's an illustration of our focus, of our dedication, both for very attractive desktop offerings, but also -- maybe also to mention that we also see very nice growth on, say, mobile browsers, especially iOS browsers after the European Market Act. Then we also saw a lot of attraction, of course, a result of AI -- that as a result of AI, everybody actually see that it's actually possible to have a very good AI-powered browser experience also in iOS, and then that's why we also have a lot of interest with Opera for iOS, for instance. So overall, I think we saw a very good trend, and cautiously positive that the trend will continue, and then hopefully we will grow faster in the new year to come. So I think it's on that. Then, yes, like again, also maybe super quickly commenting on the ads, especially e-commerce. So yes, in general, e-commerce is our biggest category. It grows very nicely. That grows -- if you only look at e-commerce alone, it actually grow a lot faster than 25% apparently. And it's one of the strong powerhouse, I guess, to power the whole year-over-year growth. It's also very easy to calculate that despite of like nice growth on search and also others, the e-commerce, of course, overall grows faster. And that actually enabled us to have an overall yearly growth of 28%. So like again, very positive. But also maybe I like to mention that the whole e-commerce is a very big market. It's a very big TAM, right? Like the whole -- I would say it's -- in the world, it's probably likely to be $100 billion, depends on which number you use. And then even if just by a market share of where we should be, we still have at least $5 billion to $10 billion actually potential to grow. So we are very positive about it. I think it is also indicating the opportunity that brings us that in the past, most of those money probably go into, let's say, search engine because that's the only user intent, which people cares. But with the advancement of AI, people are now starting to see that there are actually many places that is possible to place user intent and browser is naturally also one of it. That's also why we have the chance to actually gain those, I would say, user intent revenues, both in what we call acquired revenue, but also in advertisements or performance based. And we feel that this have a very good opportunity to continue to power our growth in the next months or years to come. So very excited. Frode Jacobsen: Let me chime in briefly that the e-commerce, very successful part of the business. It continues growth rates and a 100% year-over-year rate, including in the key fourth quarter and scaled massively over the past couple of years. Then the Opera Ads platform, which is -- which also allows third-party publishers to take advantage of our targeting, saw an increase in the growth rate in 2025. The metric you mentioned about the biggest customers growing, I think that's a very good picture of the deepening of the relationship we have with them, as all our campaigns are performance-based. And when we do well, we get a bigger share of their marketing budgets. Operator: Our next question will come from Jim Callahan with Piper Sandler. James Callahan: Just a question on Neon. It's been a few months since being rolled out. Anything you can talk to on engagement or monetization there, so far? Lin Song: Yes. So again, it's Song Lin here. So I'll also try to comment a bit, right? So like again, as also mentioned in the scripts, very exciting about the launch of Neon. We just have it widely available in mid-December, so it's still quite early. But as also mentioned that I think what's been relevant is both the opening up of Neon as a potential community hub for AI power users. But also, I think the technology behind it, which actually allows us to use the most advanced orchestrations in ways and forms, which is not possible in the past. And then all of those features have also been able to allow us to move those into Opera AI, which are also launched across all the Opera products, which are very well received, which we believe is actually also part of the reason why we see the strong growth in Western market, because this is where this is mostly appealed to. But we also think that there's a good potential to have it to further grow in 2026. Then in terms of monetization, as I also mentioned a bit that it's, of course, partly already revealed by the nice growth in both query revenue, but also related advertisement revenue based on it. But even though it's not really showing up in Q4, because we only launched it in mid-December, there are potential, of course, of potential subscription revenue streams, which can help us move up further. James Callahan: Just follow-up on gross margin. So you're obviously, scaling the off-platform part of the business, but your incremental gross margin stepped up the past 2 quarters. Can you just talk about the sustainability of that trend, and like what steady-state gross margins look like if we keep scaling off-platform? Frode Jacobsen: I think the nice thing as we look into 2026, it's a good growth potential across the business. We are still guiding to Opera Ads platform, growing slightly faster than the totality and building in a bit of a couple of extra points on cost of revenue. But at the same time, given the P&L profile of running a platform, it's generating very healthy EBITDA contribution, which allows us to slightly tick up the EBITDA margin expectation for 2026. Operator: Our next question comes from Eric Sheridan with Goldman Sachs. Eric Sheridan: Maybe the first one, just following up on Jim's question about Neon. I want to understand how you view the landscape to potentially grow wider adoption? And what might be some of the key investments you need to make from either a branding perspective or a download perspective to sort of get more usage around Neon broadly as you look out over the next sort of 6 to 12 months? That would be the first one. Then in the slide deck or the investor presentation, you talked a little bit about the payments opportunity that sits in front of you. What do you see as some of the strategic investments that have to be made to capitalize on that payment opportunity? And how does it fit more broadly into your strategic imperatives? Lin Song: Yes, it's Song Lin. So I think I'll just try to make a stab, and then Frode can also comment a bit on growth, right? So again, very good question on Neon. So to us, I think it's about -- yes, it's actually a very interesting consideration. So I guess to us, at the end of the day, we are very unique in a position that because many other AI companies, they either have to rely on purely subscription. They don't really have a choice. And I think we are almost in a bit luxury situation that we are rather profitable on our free product, right, powered by advertisement and a few others. So for us, I think it's almost a bit of consideration and also balancing act that what features do we want to prioritize on get into Neon, which is a paid product, subscription base? Or do we think that makes more sense to have it in -- to make it generally available to everybody, right? Because that, in the end, of course, will also be able to allow or grow users faster and also help generating a very healthy advertisement revenues, which is, I guess, a bit challenge for some of the newer AI start-ups. So I would almost say that's almost a bit luxury situation, and that's also essentially why, for instance, at least in Q4, we have prioritized on also making sure that many of the functionalities moved into Opera AI because we can afford it, and it's also making more sense in that context. While I think our focus is more for those which are really for powerful users. For instance, Neon will allow very powerful orchestration of different AI models, you can choose Grok, you can choose OpenAI, you can choose many other models or even many Open Source ones. And then also will allow rather comprehensive task management to group all the tabs into different -- more like to group multiple tabs into a task, to be able to generate the context. And also, we actually also have very powerful Neon make tools, which are able to make many interesting utilities, mini apps or potentially even presentations. But naturally, those were always tailored to a very, I would say, a niche group of users to start with, among others, right? So we have a lot of thoughts. We have a lot of ideas. We have many functionalities. Some of them will go into Opera AI, which is more suitable perhaps for wider audience. But then some of it, I would almost say, at this point, we have some very exciting tools for utility or, let's say, efficiency tools, which we are aiming at Neon. And I think those will be very interesting for potential Neon users in the future, and those will be our target subscription base, while there's also many other browser-related utilities and functionalities that will focus more in Opera AI, which will more be freely available to general market. So it's a very big topic, very exciting times. And I think we only appreciate that we at least have many different choices to make, which is a very nice position to be in. Then super quickly on payments. So you might also recall that we actually have an investment of some other investments based on fiat currency, which is proven to be a very good success in the past. So I would almost say we have some experience of how to have very interesting payment infrastructure buildups on emerging markets, which we see opportunities. So I think MiniPay hereby is also a very good case that we believe by focusing on technology, in this case, Web3 and Stablecoin. And because of infrastructure, again, in this case, decentralized approach that noncustodial approach and decentralized that we are able to build up a technical infrastructure while utilizing our, I would say, orchestration both for partners across different countries and also end consumers, which as a consumer company, we are very good at to be able to link all those 3 different parts to have a very compelling value proposition and storage. So for now, I would say it has -- we have already proven in Africa. But this year, the focus is actually to move it to be a more platform play around the world, and also be able to link in those developed countries to developing countries as well. So I think those will be the area which we work. But again, we're actually working with closely with partners. For instance, we announced the cooperation with Tether earlier this year, which I think we in particularly called out that, that will also be focus not only in Africa, but also allow us to reach other parts of the world. And hopefully, we also have some other interesting announcements to come shortly, which continue to allow us to do more globally as a platform and technical infrastructure. So very exciting times. Operator: Our next question will come from Naved Khan with B. Riley Securities. Naved Khan: Two questions from me. One on the Opera GX user growth. What regions are you seeing this growth come from? And then also, I recall you launched Japan and Korea sometime early last year. How are those markets performing in terms of contributing to the user growth? So that's question one. Then secondly, can you just talk about maybe OPay and maybe potential IPO timing, if there is going to be one this year, what are your expectations there or your thoughts there? Lin Song: Yes. So like again, I think I'll try to talk about a bit on Opera GX, and then Frode can also talk a bit more on some other investments we have. Yes, so high level, I think Opera GX, so overall, I would almost say that at this stage, what we have already been proven is that gaming users itself are quite high up valuable users across the regions, right? So I think the nature of the fact that they are gaming users, typically on PC actually, and this is very nicely reflected in the different revenue and ARPU profiles as fairly high ARPU users regardless of the regions they are. So yes, consequentially, for us, its priority is actually to making sure that we serve all those users, both in one of the biggest market, for instance, U.S. is still the biggest market, but also in other markets like LatAm and a few other places, which we also see some very good interest. Then maybe also super quick comment that, yes, indeed, that we have also actually quite interesting developments in, I would say, East Asian market, which we previously have not spending time on. Like, for instance, League of Legends World Championship last year is actually in China, but also is also very influential in Korea and Japan. So the fact that our close relationships with Riot allow us actually to be able to do more in those markets. So we have actually some very exciting happenings, and also continuations in those markets in 2026 to come. Frode Jacobsen: I can comment on the OPay question. I think we're very excited about the performance of our -- OPay. In terms of an IPO, we see that they have hired very experienced public executives with the new CFO and CEO that the company recently announced. I think all signs point to the company -- a natural next step for the company being a public company, but nothing yet been confirmed on timing and specific expectations around it. Operator: [Operator Instructions] Our next question will come from Jonnathan Navarrete with TD Cowen. Jonnathan Navarrete: My questions are really on MiniPay. The first one is, could you walk us through the monetization path for MiniPay? And lastly, are there any read-throughs in terms of Stripe's potential acquisition of PayPal as it relates to MiniPay? Or are they just really two different platform assets? Frode Jacobsen: I can comment on the monetization first. So our priority with MiniPay is to build a scale and build a user base and create a product that has such low barriers to entry that stablecoins become sort of a viable accessible tool for people with the starting focus on emerging markets. Then as we've talked about, we're expanding sort of the functionality of it to include more payment opportunities, both domestically and internationally. And the way we monetize it for now is, broadly speaking, from the partner ecosystem, integrating partners into the product and promoting that, and sort of growing together with partners. Operator: Our next question will come from Mark Argento with Lake Street. Mark Argento: Congrats on the strong finish to the year. Just one quick one for me. Could you just remind us non-search query revenue was up almost 200%, small dollars, but what is that exactly? And how can you leverage that going forward? Frode Jacobsen: Yes, sure. I'll do that. It's starting to -- it's a very new revenue stream. So -- but it's becoming material. It exceeded $5 million in the quarter, up from $3 million in Q3 and growing very quickly. What it consists of is essentially when a user has an intent and we can address that intent by sending a search query to a search partner, but we can also provide direct references to partners, either as a part of the URL experience or in an AI test with Opera AI, for example, and promote partners directly that way, tailored to what the user is looking for. The reason we're excited about the revenue stream is that, sort of, as these types of potential dialogues expand so quickly, people use it more, we see a big step-up in our users taking advantage of Opera AI in the browsers. Being a native part of the browser and existing one level above websites has many advantages, including monetization potential, which we will then capture in, in query revenue. Operator: At this time, there are no further questions in the queue. So I'd like to turn the call back over to Song, for any additional or closing remarks. Lin Song: Sure. So yes, like again, thank you to everyone for joining us today. 2025 was an amazing year. We were able to ship new browsers and bring exciting features to our existing suite of browsers, and at the same time, deliver impressive financial results that exceeded our rising expectations throughout the year. So while we, of course, still have a lot of work ahead of us, I'm confident we can make 2026 even more successful. Have a good day, everyone. Operator: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.
Operator: Good day, ladies and gentlemen, and welcome to the Third Quarter 2026 Results Conference Call. [Operator Instructions] As a reminder, this call may be recorded. I would now like to turn the call over to Ryan Hanley. You may begin. Ryan Hanley: Thank you. Good morning, everyone. As mentioned, we'd like to welcome you to Major Drilling's Conference Call for the Third Quarter of Fiscal 2026. With me on the call today are Denis Larocque, President and CEO; and Ian Ross, CFO. Our results were released last night and can be found on our website at www.majordrilling.com. We also invite you to visit our website for further information. Before we get started, we'd like to caution you that during this conference call, we will be making forward-looking statements about future events or the future financial performance of the company. These statements are forward-looking in nature, and actual events or results may differ materially from those currently anticipated in such statements. I'll now turn the presentation over to Denis Larocque, President and CEO. Denis Larocque: Thank you, Ryan, and good morning, everyone, and thank you for joining us today to discuss our third quarter results. While the third quarter is typically the weakest of our fiscal year as customers pause operations for the holiday period, we began aggressively preparing for what is shaping up to be a very busy year. Over the last several weeks, many of our senior mining customers have released their exploration budgets with some pointing to increases of 30-plus percent, while others look to almost double their budgets when compared to last year. Meanwhile, the juniors remain well supported, having raised substantial capital for exploration in the second half of 2025 and continuing into 2026. In preparation for a much busier year, we leveraged our industry-leading balance sheet to ensure that we are as ready as possible, completing additional maintenance above and beyond what we would normally look to do in the quarter to maximize the availability of rigs and support equipment. We also proactively ordered additional supply to reduce the potential impact of any future supplier delays as demand for these items increases. Lastly, we retained and hired additional crews despite the slowdown in activity during the holiday season as the industry is already beginning to experience labor challenges in some regions. With larger exploration budgets and record high commodity prices, we experienced a busier start to the year with a much busier January when compared to last year. While the associated start-up and mobilization costs also had a negative impact on margins, our revenue increased by 15% compared to the same quarter last year, driven mostly by much higher activity levels in Canada and the U.S. With activity levels expected to continue to ramp up over the coming months as a result of significantly higher exploration budgets and a healthy financing market for juniors, we remain very optimistic heading into 2026. I'll discuss more of the outlook once Ian has taken us through the financials. Ian? Ian Ross: Thanks, Denis. Revenue for the third quarter was $184.6 million, up 14.9% from the same period last year, driven primarily by Canada and the U.S. and to a lesser extent, by further growth in Peru. This was partially offset by Australasia and the African region, which continued to be impacted by a slowdown of drilling operations with the company's largest customer in Indonesia, as discussed last quarter. The unfavorable foreign exchange translation impact on revenue when compared to the effective rates for the same period last year was approximately $1 million, while the impact on net earnings was minimal as expenditures in foreign jurisdictions tend to be in the same currency as revenue. The overall adjusted gross margin percentage, excluding depreciation, was 14.3% for the quarter compared to 19.5% for the same period last year. The decrease in margins was attributable to strategic steps taken to prepare for what is expected to be a much busier year, increased start-up and mobilization costs resulting from a busier January and the termination of underperforming contracts in South America to better position the region for improved profitability going forward. G&A costs of $21.6 million were flat when compared to the prior year period as annual wage adjustments were offset by reduced Explomin integration costs, which impacted results last year. The company generated EBITDA of $5.1 million in the quarter compared to $7.8 million in the prior year period, with a net loss of $10.8 million or $0.13 per share compared to a net loss of $9.1 million or $0.11 per share for the prior year period. Despite the seasonally slow quarter and additional preparation costs, the company increased its net cash position by over $25 million to $39.6 million at quarter end, while total available liquidity increased to $177.1 million. CapEx in the quarter totaled $10.3 million compared to $12.6 million in the same period last year, with the addition of 3 new drill rigs and support equipment. The company also ramped up its fleet optimization and modernization efforts in preparation for a busier year, which resulted in the disposal of 13 older, less efficient rigs, bringing the total rig count to 697 rigs at quarter end. The breakdown of our fleet utilization in the quarter is as follows: 306 specialized drills at 49% utilization, 158 conventional drills at 53% utilization, 233 underground drills at 55% utilization for a total of 697 drills at 52% utilization. As we previously noted, we define specialized work not necessarily by the use of a specialized drill, but by work requiring a higher degree of technical expertise, access to remote locations, stringent safety standards and other operational complexities. In the third quarter, specialized work accounted for 59% of our total revenue. We continue to see high levels of demand for our specialized services and expect this trend to continue as deposits become increasingly more challenging to find with discoveries continuing to be made in remote locations. Conventional drilling declined to 12% of revenue for the quarter, while underground drilling contributed 29% of total revenue, providing a stable base of work largely in operating mines. We continue to see the bulk of our revenue driven by seniors intermediates, representing 90% of revenue this quarter as they continue their elevated efforts to address depleting reserves. With financing activity beginning to increase, juniors group represent 10% of revenue in the quarter, an increase from the 8% recorded in the prior quarter and 6% in the same period last year. In terms of commodities, gold represented 39% of revenue in the quarter, while copper accounted for 32%. Iron ore continues to make meaningful contribution at 8%, aided by our Australian operations and demonstrating the diversity in the commodities for which we drill for around the world. Also of note in the third quarter was silver, which continued to represent 6% of revenue. With that overview of our financial results, I'll now turn the presentation back to Denis to discuss the outlook. Denis Larocque: Thanks, Ian. Looking ahead, having now completed a significant amount of prep work, we entered the fourth quarter of our fiscal year with a strong foundation in place to support many of our clients around the world with their larger exploration budgets and resource expansion goals. Aside from our well-maintained fleet of nearly 700 rigs, our optimal levels of inventory and our experienced crews, we also remain well supported by our industry-leading balance sheet as despite the additional preparation work, which was completed in the quarter, we still increased our net cash position by over $25 million. As activity levels ramp up through our fiscal fourth quarter and into fiscal 2027, we expect to gradually deploy additional rigs at incrementally higher pricing, driving steady revenue growth. While labor availability is expected to remain a near-term challenge and will continue to pressure margins, we anticipate that improving pricing will progressively offset these costs. As a result, margins are expected to improve over time, but at a slower pace than revenue growth. Overall, we remain very optimistic heading into 2026, given our level of preparedness combined with record high commodity prices, leading to significant increases in exploration budgets as well as significant increases in the amount of capital raised by junior mining companies. In closing, I'd like to invite any customers or investors that will be attending the PDAC conference in Toronto next week to visit our booth. With record high commodity prices and a strong mining market, we're looking forward to a busy and very productive conference. With that, we can open the call to questions. Operator? Operator: [Operator Instructions] And our first question comes from Gordon Lawson of Paradigm Capital. Gordon Lawson: Can you elaborate on some of the strategic initiatives you mentioned being implemented in North America? Just want some color on that. Denis Larocque: Yes. Well, I mean, basically, it's just on the hiring and the retention of people. Typically, the way it works in our industry when you get to Christmas, you don't know what's coming around after Christmas and you let people go home and then you call them back when you get to January. And this time around, we didn't run that chance. We held on to people during the Christmas break. And also, we also ramped up ahead of -- even as we entered the third quarter in November, we ramped up our efforts on training because we were anticipating 2026 to be busier. So therefore, we ramped up our recruitment, our training to make sure that we would be able to increase our labor force and be able to put more rigs to work in 2026. So -- and then on top of that, we spent -- we took more rigs out of the yard to basically get ready again, to make sure that we were ready for an uptick in activity. Gordon Lawson: Okay. That's great. Looking at South America, are you able to comment on revenue synergies from Explomin as well as your expectations on cost cutting in the region, specifically Peru? Denis Larocque: Yes. Explomin has been a great addition. But as a reminder, when we made this acquisition, we specifically pointed to the fact that it's a slightly different business model. It's more a volume play because it has more underground than our typical operation. So therefore, slightly lower margins by definition, but also lower CapEx or -- so therefore, the return on capital is similar to the rest of our operation, but just the mix or the revenue margin mix is a bit different. So it's been good for us. Now the region in general, we -- as we mentioned, we repositioned. We had a few contracts, not just in Peru, but in other areas as well where we terminated underperforming contracts and moved on rigs, and that had an impact on the performance of the region. So yes. Operator: And our next question comes from Donangelo Volpe of Beacon Securities. Donangelo Volpe: Just regarding the termination of the underperforming contracts in South America, just curious if new work has been sourced for these rigs or if some of these rigs were included in the disposal of those 13 older rigs you guys discussed? Denis Larocque: Yes. No, it didn't have any connection to disposal of rigs. That's basically globally. We -- when we do -- in the third quarter, typically, that's where we bring rigs back in the shop, and that's where we make decisions on if we should repair or basically dispose. So -- but on the contracts, basically, we did replace some of those contracts with better contracts. And so we expect to the performance of the region to improve in 2026. Donangelo Volpe: Okay. And then just moving over to CapEx. CapEx is currently trending a little bit below guidance. Just wondering if we should be expecting an uptick in CapEx for Q4? Ian Ross: Yes. There is some timing related to the lower CapEx in Q3, and we will see an uptick on the run rate we've had here going into Q4, but we will be below the $70 million guidance we had for fiscal '26. And then we're just entering the budget season right now internally, and we'll be giving guidance on our fiscal '27 CapEx amounts next quarter. Donangelo Volpe: Okay. And then final one for me. Just wanted to see if I can kind of quantify Canada, U.S. because it was phenomenal growth year-over-year. So just wondering how much of the year-over-year growth was due to kind of the extension of programs through January, making it a strong year-over-year comparison versus actually taking on new work? Denis Larocque: The extension was not too dissimilar to last year or in terms of -- really, we had contracts that started earlier in. And this is typical when we are in this environment where commodity prices are good and where mining companies are eager to get out in the field. In years where things are slow, they usually -- we're usually calling to get a start date and then things get pushed to February and then things drag. And this year, it was the opposite. It was customers calling saying, "Well, can you get there by this date?" And we want to get going because we got -- they've got a budget and they want to make sure that they're going to be able to get through all the work that they have to do. So there was -- it was more related to the January start-ups -- earlier start-ups really. Operator: [Operator Instructions] And our next question comes from Brett Kearney of American Rebirth Opportunity Partners. Brett Kearney: You guys have continued to stay ahead of the curve in terms of preparing for the industry upturn. Your actions this most recent quarter consistent with that. I guess any color you can provide based on your experience in past cycles in terms of what you're seeing in overall tightness in the industry, both rigs available to customers from the rig owners such as yourselves as well as your ability to procure additional rigs and support equipment in terms of lead times from your suppliers? Denis Larocque: Yes. It's already starting to get pretty tight on rigs. In fact, and this is particularly in Canada and U.S. When you talk to industry players, they're seeing it. In terms of the availability of rigs, it is I would say, probably taking a little bit longer, but still not necessarily a lot because there was still capacity. So it's not a rig issue. It's a people issue. And when I say things are getting tight, it's more on crews than rigs. We know competitors that basically are struggling even just to put additional rigs just because they don't have any crews. So it's more going to be a labor issue than a rig issue. So that's why I'm saying the orders of rig is not necessarily -- we're not seeing a lot more delays than usual on the rig side. But I'll tell you, though, having said that, the place where there's going to be bottlenecks will be the supplies. That's the raws and the supplies and consumables because what happens is that with more rigs going out in the field, everybody is ordering at the same time because most companies have been basically running on just in time and just having enough supplies to have the rigs running. So when you have a whole bunch of rigs going out, you have all these orders. And that's why we placed orders and we kept inventory higher because we've seen before in previous cycles where you have real bottlenecks because suppliers, basically, they don't have enough on the shelf to supply all these -- all that demand that comes in all at once. Brett Kearney: Very helpful. And Denis, with the incremental actions you've been taking, do you feel like labor is in okay-ish position now to meet the activity ramp-up you guys are expecting this year? Denis Larocque: Yes. No, we feel pretty good. It's still -- our teams are still working hard and it's still not easy, but we are in good shape at this point. Operator: And our next question comes from James Vail of Arcadia Advisors. James Vail: Just a very quick question. You suggest that margins were hurt by the incremental costs for future activity plus the cost to terminate the underperforming contracts. And can you put a number on those 2 so we can get an idea of what the real margin experience was in the quarter? Denis Larocque: I mean, when you look at last year, really, the margins -- if those things hadn't been in place, the margins would probably be similar to last year. Really, the difference in the margins between years are attributable to these items. James Vail: Okay. Thank you. We'll looking forward to what's next. Denis Larocque: Well, you've seen this in the previous cycle, right? So... James Vail: But it's been a long time coming. Denis Larocque: I agree. Operator: Thank you. I'm showing no further questions at this time. I'd like to turn it back to Denis Larocque for closing remarks. Denis Larocque: Well, thank you. And as I said, for those of you in town in Toronto next week, please stop by our booth. Our teams are going to be around and looking to an exciting week and an exciting year for sure with everything that's happening in the mining world. We thank you for attending today. Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.
Operator: Greetings, and welcome to the Where Food Comes From 2025 Year-End Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jay Pfeiffer, Investor Relations. Thank you. You may begin. Jay Pfeiffer: Good morning, and welcome to the Where Food Comes From 2025 Fourth Quarter and Full Year Earnings Call. Joining me on the call today are CEO, John Saunders; President, Leann Saunders; and Chief Financial Officer, Dannette Henning. During this call, we'll make forward-looking statements based on current expectations, estimates and projections that are subject to risk. Statements about financial performance, growth strategy, customers, business opportunities, market acceptance of our products and services and potential acquisitions are forward-looking statements. Listeners should not place undue reliance on these statements as there are many factors that could cause actual results to differ materially from our forward-looking statements. We encourage you to review our publicly filed documents as well as our news releases and website for more information. I'll now turn the call over to John Saunders. John Saunders: Hello, and thank you for joining the call today. This morning, we announced 2025 financial results that included total revenue of $24.9 million and net income of $1.5 million or $0.30 per share. Once again, the steady growth we're achieving in new customer wins and non-beef-related revenue streams was offset by the impact smaller herd sizes and tariffs are having on our beef-related verification activity. Fourth quarter revenue was particularly impacted by the unexpected closing of a packing plant that has been an important contributor to our NHTC Natural and EU export certification programs. That closing had a significant impact on our prior internal projections management and the Board used to formulate discretionary bonuses for the year. Accordingly, executive management determined to return their bonus compensation to the company. As a result, the income statement in our first quarter 10-Q will benefit from a reduction to compensation expense in the selling, general and administrative category. As we've been discussing on our earnings call over the past couple of years, herd sizes have been steadily shrinking due to drought, increasing production costs and other factors. And today, the U.S. cattle supply is at a 70-year low. The shrinking supply in turn, has led to record beef high prices. And in this environment, some ranchers have opted to reduce their investment in certain verifications that we provide, and this is impacting both our verification and tag sales. There are indications that the herd contradiction phase of the cattle cycle is at or near a bottom and the industry should begin rebuilding the cattle supply over the next couple of years. In preparation for this recovery, we have been expanding our services portfolio with new certifications and working on other protein programs that we believe will position us for accelerated growth as the recovery gains momentum. I want to highlight a few of these initiatives to give you an idea of why we remain confident in the future of Where Food Comes From as both a growth company and as the food verification industry leader. Last month, we announced the launch of RaiseWell Certified, an innovative new standard for animal care verified natural raising practices and transparent fully traceable supply chains. The program is designed for brands, high-end retailers and food service operators that want to differentiate their products on integrity, quality and certified production practices. RaiseWell requires animals to be responsibly raised at every stage of life with rigorous animal care requirements, no antibiotics or added hormones and verified as a source of origin, all with the aim of creating traceability throughout supply chains that retailers and consumers can trust. We are rolling out RaiseWell in stages beginning with beef and expanding over time to poultry, eggs, dairy and pork. We followed up that news last week with an announcement that Whole Foods Market became the first major retailer to adopt the RaiseWell program. Whole Foods is widely recognized as a pioneer in advancing farm animal welfare, so its adoption of RaiseWell is an important endorsement for the program that we believe will lead to adoption by other leading retailers as time goes on. RaiseWell Certified seamlessly integrates with our CARE Certified standard, giving producers and retailers the option to bundle claims and create a unified audit-ready package that can include pasture raised, outdoor access, grass-fed and other verified livestock raising attributes. Another promising initiative on the beef side of things is a new collaboration with global automotive leather supplier, Pangea. In concert with Walmart and Prime Pursuits to introduce CARE Certified's sustainable leather to U.S. automotive brands, this first-of-its-kind program entitled Transparency in Motion leverages data-driven verifiable practices to confirm exactly how its materials are raised, cared for and processed, making Pangea the first leather provider in North America to achieve traceability at this level. By becoming CARE Certified, ranchers can not only enhance the value of their herds, but also connect with consumers who increasingly prioritize sustainable practices and ethical sourcing. I want to touch on one other beef-centric initiative that we continue to advance slowly but surely, and that involves animal disease traceability. I'll remind you that the United States is the only major cattle-producing country that does not have a mandatory traceability program, so that is essential to managing and containing an animal disease outbreak. We have invested significant time and resources over the years to position ourselves as an integral player in what we believe is the inevitable adoption of a formal ADT program in the U.S. Our IMI Global unit is far and away the most experienced player in this space, having the technology, systems and procedures already in place and in practice that can quickly be brought to bear in a comprehensive national animal disease traceability program. We are now working closely with U.S. CattleTrace, a producer-led private industry database to strengthen cattle traceability and support a secure U.S. beef supply. Unlike traditional point-to-point traceability systems, U.S. CattleTrace enables contact tracing, allowing animal health officials to identify animals and locations that may have been exposed during disease event. This capability is critical for responding to highly contagious diseases such as foot and mouth disease. IMI Global serves as the administrator for U.S. CattleTrace. We provide the technical infrastructure and operational expertise needed to manage traceability securely while ensuring producers retain control, governance remains producer-driven and data privacy is protected. Together, we are engaging with U.S. government representatives and entities to explore ways to advance and formalize an ADT solution. The cattle industry is going through a period of disruption unlike any other in our lifetime. As discussed, this has presented challenges so far that we are navigating successfully. But at the same time, it is creating opportunities for us to leverage our positioning and know-how to play a lead role in reshaping the industry as it begins the rebuilding process. Hopefully, some of this will give you a feel for why we're so optimistic on the long-term prospects for our beef-related business. In the meantime, for our non-beef-related business lines continue to grow and prosper. For the past 10 years, we've been building out a highly diverse and dynamic solutions portfolio, adding new customers for new services, generating new revenue streams and reducing our reliance on the beef industry. Verifications for pork, dairy and egg operations all increased year-over-year, and our CARE Certified program continued to attract new customers in a variety of proteins. Similarly, certification activity for organic, non-GMO, gluten-free and upcycled all show gains. In addition, we continue to benefit from a unique ability to bundle services, a competitive advantage that saves our customers' time and money, contributes to revenue growth and at the same time, helps us strengthen our margins. Given the growth of our solutions portfolio and customer base and our optimism about our business overall prospects, we believe our shares remain an excellent value at these levels, and we expect to continue repurchasing stock in 2026. In 2025, we repurchased 183,016 shares, raising total share buybacks and private purchases since planned inception to 1,374,652 shares, totaling $15.2 million in value returned to shareholders. And with that, thank you again for joining the call today, and I'll open up the call to questions. Operator? Operator: [Operator Instructions] And it appears that there are no questions at this time. Therefore, I would like to turn the floor back to CEO, John Saunders, for closing remarks. John Saunders: Thank you all again for the time today, and we'll talk to you again in 3 months. Operator: And this concludes today's conference, and you may disconnect your lines at this time. Thank you, and have a great day.
Operator: Hello, and welcome to Liberty Media Corporation's 2025 Year-end Earnings Call. [Operator Instructions] As a reminder, this conference will be recorded February 26. I would now like to turn the call over to Hooper Stevens, Senior Vice President, Investor Relations. Please go ahead. Hooper Stevens: Thank you, Kevin. Thanks, everyone, for joining us today on Liberty Media's Fourth Quarter and Year-end 2025 Earnings Call. This call today includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent Form 10-K followed by Liberty Media with the SEC. These forward-looking statements speak only as of the date of this call and Liberty Media expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. On today's call, we will discuss certain non-GAAP financial measures for Liberty Media, including adjusted OIBDA, constant currency for MotoGP, the required definitions and reconciliations for Liberty Media can be found on Schedule 1 and MotoGP or Schedule 2 at the end of the earnings press release issued today, which is available on Liberty Media's IR website. Speaking on today's call, we have Liberty Media's President and CEO, Derek Chang; Liberty's Chief Accounting and Principal Financial Officer, Brian Wendling; Formula One's President and CEO, Stefano Domenicali; MotoGP CEO, Carmelo Ezpeleta and other members of management will be available for Q&A. With that, I'll hand the call over to Derek. Derek Chang: Morning. Thank you, Hooper. And before I start, I just want to welcome Hooper to our team. This is his first earnings call for Liberty. Many of you know, Hooper already, he has obviously been part in and around the Liberty Complex, but we are very, very happy to have him with us here. It has been an exceptionally productive and successful year for Liberty. We are energized by the slower progress we've built across our businesses and are focused on accelerating our momentum this year. We have delivered against each of the priorities we articulated last year, namely one to continue F1's growth trajectory; two, to augment our portfolio with the acquisition of MotoGP; and three, to execute the Liberty Live split-off. Following the split-off last December, we are now a premier global sports investment vehicle anchored by 2 world-class motor sport leagues and operating in an industry supported by strong secular growth tailwinds. Looking ahead to this year, operational excellence at MotoGP and F1, while remaining disciplined and opportunistic with our capital to drive value for our shareholders and across our portfolio. Turning now to our operating businesses. At MotoGP, we see tremendous upside over time and are in the early stages of unlocking that potential. We don't expect to see these investments bear fruit immediately, but are laying the necessary groundwork to drive this sport forward. Since closing the acquisition last July, we've continued building on our commercial functions. We hired key personnel across sales, public relations, social media strategy with more additions to come. We're focused on driving knowledge sharing between MotoGP and F1 and believe this can support long-term value over time. I just recently returned from our Partner Summit in Barcelona, where we clearly articulated our strategy to teams, promoters and partners across the ecosystem. The enthusiastic response was a very positive sign as we build share momentum with a strong collective commitment to the future of our sport. For Moto, our 3 key priorities are: first, we remain focused on strengthening MotoGP's foundation and expanding its global footprint. We recently announced we are moving our Australia race to Adelaide, marking our first modern era circuit in a city center and we are excited to return to Brazil this year after a 20-year hiatus and look forward to adding Buenos Aires to the calendar next year, strengthening our presence in major international cities. Second, we remain focused on elevating the Grand Prix experience into a must intend event at every circuit. We continue to further enhance our hospitality offerings and improve the on-site fan experience. Finally, this work underpins our efforts to unlock our brand value to scale the sponsorship roster. We remain disciplined in our approach to sponsorship and are prioritizing brand alignment with high-quality partners over near-term wins. Now turning to F1. F1 once again delivered an exceptional year with the sport firing on all cylinders across growth, engagement and commercial momentum. We renewed with multiple long-term existing partners, we signed several new marketing partners, including Standard Chartered, our official wealth management and banking sponsor. As you saw earlier this morning, we just announced our broadcast extension with beIN in the Pan Asia region. And earlier this week, we announced the extension of our ESPN partnership in Latin America. Our third year of the Las Vegas Grand Prix was a resounding success and our relationship with the Las Vegas community has never been stronger. Importantly, we finalized the new Concorde Agreement to cover the 5 years from 2026 which provides us with durable financial economics in all F1 constituencies and constituents a stable base to invest into the sport and drive long-term value creation and an even healthier ecosystem. And 2026 should be an exciting season on track with Cadillac and Audi joining the grid. The new brands, cars and engines should lead to an incredibly competitive racing season ahead. Stefano and Carmelo will both provide more updates on their businesses later in the call. We look forward to continuing to support their strategic vision. Now I'll turn it over to Brian for more on Liberty's financial results. Brian Wendling: Thank you, Derek, and good morning, everyone. At year-end, Liberty Media had cash and liquid investments of $1.1 billion, which includes $539 million of cash at F1 and $197 million of cash at MotoGP. Total Liberty Media principal amount of debt was $5 billion at year-end, which includes $3.4 billion of debt at F1, and $1.2 billion of debt at MotoGP, leaving $499 million at the corporate level. F1's $500 million revolver in MotoGP's EUR 100 million revolver are both undrawn. At year-end, F1 OpCo net leverage was 2.8x. This is down from 3.3 that we gave at 6/30 pro forma for the MotoGP acquisition. And MotoGP's net leverage was 4.7x at year-end, down from 5.6x at 9/30. We expect to continue delevering at MotoGP this year. Liberty Media's overall net leverage was 3.6x. Turning to the F1 business. I'll make some brief comments about the fourth quarter but focus on full year comparisons primarily. A reminder that every quarter in 2025 had incomparable race count and mix. 2026 will also have incomparable race count and mix except for the fourth quarter. Majority of the variability in Q4 year-over-year results is due to one more race being held in fourth quarter compared to the prior year period. Q4 '25 had 7 races compared to 6 races in Q4 '24, with Singapore being included in the current year period but not the prior year period. Note that we operated the same number of Paddock Clubs during the fourth quarter, given that the Singapore Paddock Club is operated by the local promoter. For the full year, the business performed exceptionally well. Revenue grew 14% and adjusted OIBDA grew 20%, driven by growth across all revenue streams. Sponsorship revenue continues to increase from new partners and underlying growth and contractual increases. Media Rights revenue grew due to underlying growth in contracts, continued growth in F1 TV and the onetime benefit of the F1 movie revenue that was recognized in the second quarter. Race promotion revenue increased due to underlying growth in contracts. Other revenue grew primarily driven by higher hospitality and growth in licensing and freight income. Higher hospitality revenue includes revenue from the Las Vegas Grand Prix, and also revenue generated at Grand Prix Plaza from its growing private events business and the various new activations we opened in May of last year. Touching briefly on the Las Vegas Grand Prix. As Derek mentioned, our third year operating the race was a success, and we saw improved financial performance year-over-year. We continue to see a material benefit accruing from LVGP to the broader F1 ecosystem across various revenue streams, especially sponsorship, hospitality and licensing. Vegas continues to serve as a very successful test bed for product expansion and is integral to the continued growth of our sport in the U.S. Adjusted OIBDA increased during the year, driven by the strong revenue growth discussed above, outpacing increased operating and SG&A expenses. Higher operating expenses included higher team payments, and increased expenses associated with servicing our revenue streams. The increase in SG&A and -- the SG&A expenses was due to higher personnel and marketing costs. Team payments as a percent of pre-team share adjusted OIBDA were 59.7% for the full year 2025, representing 185 basis points of leverage against 2024. Over the past 4 years, we've seen an average of roughly 200 basis points improvement in leverage each year, and we expect 2026 to be approximately in line with this average. After 2026, for the remainder of the term of the new Concorde Agreement out to 2030, we expect the payout percentage to remain relatively stable. A reminder that team payments are best analyzed on a full year basis due to quarterly fluctuations in team payments as a percent of adjusted OIBDA. Looking quickly at MotoGP's results. As a reminder here, we closed the MotoGP acquisition on July 3. Our financial results are presented on a pro forma basis as though the transaction occurred on January 1, 2024, and the trending schedule will be posted to our website after the 10-K is filed including results in U.S. GAAP for the full year '24 on a pro forma basis. The majority of MotoGP's revenue costs are euro denominated and as such, are subject to translational impacts from foreign exchange fluctuations. In the following discussion, I'll focus primarily on constant currency results. Similar to F1, I'll make a few comments about the fourth quarter, but we'll primarily focus on the full year. Year-over-year comparisons are impacted by the mix of races, and generally, MotoGP flyaway races carry higher costs, which includes freight, travel and higher earth fees. MotoGP held 5 races in the fourth quarter of both this year and the prior year. Revenue increased at MotoGP during the fourth quarter as increased race promotion fees due to the race mix and contractual uplifts were offset primarily by lower proportionate recognition of season-based income with revenue from 5 out of 22 races being recognized this year versus by about 20 races recognized last year. For the full year, MotoGP had 22 races compared to 20 and 2024. Revenue grew across all primary revenue streams, primarily due to the 2 additional races held and contractual fee increases. Media Rights revenue also increased due to growth in VideoPass subscription revenue and other revenue benefited from increased hospitality revenue, which saw 2 additional races and increased attendance, partially offset by a decrease in fees related to MotoE. Adjusted OIBDA grew for the year driven by the higher revenue, offset by growth in operating expenses. SG&A expenses were lower, primarily driven by recognizing less bad debt expense in 2025 compared to the prior year. Note that bad debt expense in '24 was primarily related to race cancellations from years prior to 2024. Looking briefly at Corporate and Other results for the year, revenue was $414 million. This includes Quint results up until the split off on December 15 and approximately $33 million of rental income related to Grand Prix Plaza. Corporate and other adjusted OIBDA was $5 million and includes Quint results up until split off, Grand Prix Plaza rental income and corporate expenses. As a reminder, Quint business is seasonal with the largest and most profitable events taking place in Q2 and Q4. Note that Quint intergroup revenue from MotoGP is eliminated in our consolidated results through the spin date. Going forward, Quint will no longer be reported in our operating results. F1 and MotoGP are in compliance with their debt covenants at quarter end. And with that, I will turn the call over to Stefano to discuss Formula One. Stefano Domenicali: Thanks, Brian. 2025 was a thrilling season as we celebrated the 75th anniversary of Formula One with standout performances across the grid. 9 drivers across 7 different teams reached the podium, including phenomenal performance from rookies like Isack Hadjar. Congratulations to Lando Norris for winning the Driver Championship and McLaren for winning the Constructors' Championship. 2026 is set up to be another captivating season as it represents the next generation in F1 incredible history with new cars, engine and regulations. All signs point to an exciting kickoff in Melbourne next week, which we know will sell after intensive precision testing in Spain and Bahrain. We look forward to welcoming Cadillac and Audi to the grid and for the return of Ford with Red Bull and Honda with Aston Martin. In December, we also successfully completed the signing of various elements of the new Concorde Agreement with all teams and the FIA. Engagement across our fan base continues to grow. We welcomed 6.75 million attendances last season, our largest combined attendance in history, up 4% relative to 2024. Australia, Silverstone, Mexico and Austin, each, respectively, welcome over 400,000 fans over races weekend, and we had 19 events sellout with 11 setting new attendances records. The Paddock Club serve 65,000 race day guests, up 10% on the prior year. Last season, many of our Paddock Clubs sold out, and we increased revenue 20% per race on average. Robust demand continues for 2026 with record preseason sales and in partnership with our promoters, we are increasing capacity at certain races while looking to keep enhancing our guest experience. For example, at our Austin Grand Prix, the promoter is currently constructing the new facility at Turn 1, which will host a new Paddock Club space to accommodate more guests. Our promoters also have plans to upgrade the Paddock Club space in Mexico and introduce a new Gordon Ramsay experience in the Paddock in Shanghai, just to name a few developments. We continue to see strong engagement and reach across viewership and our digital and social platforms. Cumulative viewership is up across our broadcast and digital platforms. Global Live TV viewership across all session was up plus 21% year-over-year, showing increased appeal for our core product. F1 race weekends continue to broaden, with practice sessions showing strong increases in viewership. Screen popularity continues to increase with Sprint session viewership up to 10% year-over-year, and qualifying delivered the largest growth across all sessions with audiences up 23% year-over-year. For the Sprint races, we are currently in active discussions to expand the Sprint format up to 12 races in 2027 due to the high demand for promoters and fans. The Sprint format has also demonstrated the impressive performance across fan engagement. Our YouTube content generated 1.65 billion views, up 48% relative to 2024 and with YouTube highlights view, increasing 21% year-over-year. Passenger Princess reached 7.6 million total views, including 1.5 million views within the first week of release, highlights from the first 3 days of the preseason test in Bahrain reached over 8 million views on YouTube, which represents an increase of plus 64% compared with the Bahrain preseason testing session in 2025. And highlights from our first ever Barcelona shakedown reached nearly 17 million views on YouTube. We hope you will be tuning in for season 8 of Drive to Survive. For the fifth consecutive years, F1 continues to be the fastest growing sport on social media. We ended the year with 150 million social media followers, up nearly 20% year-over-year. Commercially, we had another strong year of renewals and new partnership. We have an active year of media rights negotiations, signing or renewing with broadcast partners across multiple territories, including the United States, Pan-Asia, Canada, Brazil, Latin America, Mexico, New Zealand, Japan and India. Apple is now our U.S. Media right partner, and we are excited by their vision, innovation and unmatched ability to reach and engage wider audiences through their platform and marketing scale. This was clearly demonstrated by the success of the full-time Oscar-nominated F1 movie last summer. Apple will be a key driver of our U.S. growth strategy, and we are excited to work with them to drive our next phase of growth in the years ahead. We see major brand alignment between Apple and F1 as this partnership brings together 2 global brands with a shared passion for innovation, excellence and entertainment. We also renew our extended contracts with 9 of our race promoters, including most recently with our promoter in Barcelona. The race will now be officially called the F1 Barcelona-Catalunya Grand Prix, and we rotate with our Belgium race year-by-year throughout 2032. And we will host a Grand Prix in 2028, 2030 and 2032, in addition to the race scheduled for this year. We are also excited to welcome back Portugal to the calendar under a 2-year deals starting in 2027. The third year of the Las Vegas Grand Prix was an outstanding success. Congratulations to the Vegas leadership team for delivering an exceptional race weekend that showcase the very best of Formula One. We sold out the weekend and welcome over 300,000 fans to Las Vegas, while setting up a number of new event sponsors. Content related to our race generated 1.8 billion impression over the weekend, and we are gearing up for another phenomenal race this year. Picking up on sponsorship, we closed out another strong year of growth and continue rising the momentum into 2026, having built out a good pipeline of discussions. We recently signed Standard Chartered as our official banking and wealth management partner in a new multiyear deal. Equally impressive is growth across our other revenue streams, including licensing and hospitality. Our legal partnership delivered great results in its first full year, generating over 27.5 billion impression across marketing activation. Pottery Barn Kids and Pottery Barn Teen continued sales momentum following the launch late last year. Our collaboration with KitKat is also thriving with the new F1 KitKat bars available in stores, driving enhanced retail visibility, and we are excited to roll out a new dimension of our partnership with Disney later this year. Following the successful launch of House44, our premium Paddock Club hospitality partnership with Lewis Hamilton and Soho House, it will expand from 5 to 9 races this year. Visitors to Grand Prix Plaza enjoyed 90,000 track rides at F1 drive last year, and we are excited to reopen Grand Prix Plaza to the public at the end of the January. We are also encouraged by the growth of F1 exhibition, which has sold 1.3 million tickets across all its exhibition and F1 Arcade, which recently opened in Atlanta and has 3 more new locations planned to open later this year. Track side retail sales grew over 30% last year, and F1 hub pop-up merchandise experience operating in Austin, Miami and Las Vegas. This hub saw strong foot traffic and retail sales, and it is planned to open hubs in more locations this year, monetizing untapped merchandising opportunity in key locations. 2026 brings continued focus on inspiring the next generation of F1 fans through our creative activation, partnership and collection appealing to all audiences across our fan bases. We are seeing incredible momentum across all phases of our business. Our sport has delivered exceptional growth, and we see significant upside ahead. The strategy work we are doing now will deliver lasting benefit to our partners, shareholders and our fans. In only a few years, we have achieved so much as a sport and as a business. But we have only begun to scratch the surface of what is possible and the potential for F1 is not being underestimated as we enter another exciting new chapter in our history. Avanti tutta, full speed ahead. And now I will turn the call to Carmelo to discuss MotoGP. Thank you. Carmelo Ezpeleta: Good morning, and thank you, Stefano. Liberty Media commitment and support of our strategic vision has been a strong ride out of the gate. We are encouraged by the collaborative approach and early progress we are seeing and we are working together to build a strong foundation to drive our sport forward. The 2025 seasons delivered the very best of our sport, through racing and dramatic story lines. We saw a standout performance across the grid with 13 riders on the podium across 10 teams. Congratulations to Marc Marquez on extraordinary come back and winning his seventh MotoGP World Championship. We welcomed a record 3.6 million attendees last season up 21% year-over-year and set attendance record at 9 different circuits. First-time attendees, representing 27% of our total attendance for season, up from 18% in 2024. The 2026 season is gearing up to be another thrilling season. We held our second season launch event in Kuala Lumpur with global attendance and video viewership year-over-year. Fans enjoy musical acts by global artists, including The Script, DJ PAWSA and DOLLA. The 2-day event culminated in a live launch show featuring show runs from teams and riders. We look forward to kicking off the season in Thailand this weekend. Our global fan base now measures 632 million fans, up to 12% from last year, and we continue to strengthen our brand. We recently launched our first event season marketing campaign. Why that's different? Which bring our evolved brand positioning to life and create brand consistency and amplification across all fan channels and touch points. We continue to invest in our fan insight platform to track brand awareness and engagement. This will support the long-term scaling of our commercial functions and enable more targeted and localized content initiatives. We added over 3 million social media followers in 2025 and ended the year with nearly 61 million followers across our own platform, including 4.5 million followers on TikTok, social engagement increases plus 61% and video views across our digital platform, excluding VideoPass, increased 20%. Fans consuming 1 million minutes on our YouTube content last season. Average household tuning into our broadcast grew 9% year-over-year. Satellite sprint races ratios continued to close the gap to Sunday's race coverage with average audience viewerships growing over 26% year-over-year for the Sprint. Subscribers to VideoPass, our direct-to-consumer video service, grew 5% from 2024. We recently extended our Sky Italia broadcast rights deal, and we have also renewed our Moto partnership through 2030. We also had an active year promotor of renewals, including the recent renewal of the Thai Grand Prix through 2031. We are excited to return to Brazil this year after 20 years, and welcome to the grid Brazilian MotoGP rookie, Diogo Moreira. Initial capacity in Brazil has already sold out, underscoring strong demand, alongside coverage from ESPN 41 will be the free-to-air broadcaster of the Brazilian Grand Prix Estrella Galicia 0,0 as title sponsor. Finally, last week, we announced the move of the Australian Grand Prix into Adelaide beginning 2027 under a new 6-year agreement. The landmark race will be the first MotoGP race to be held in a city center, and we are able to do so without compromising our safety standards. Adelaide is an ideal location, bringing MotoGP closer to its fans, and we are excited to put on a fantastic 3-day fan experience. We look forward to continuing to update the investor community on our progress. Now I will turn the call back over to Derek. Derek Chang: Thank you, Brian, Stefano and Carmelo. We appreciate your continued interest in Liberty Media. And with that, we'll open the call up for Q&A. Operator? Operator: [Operator Instructions] Our first question today is coming from Stephen Laszczyk from Goldman Sachs. Stephen Laszczyk: Maybe 2 on margin at F1, if I could. Brian, I appreciate the commentary on team payment in 2026. It sounds like the expectation for team payment operating leverage is for it to be in and around 200 basis points in 2026. So 59.7 going to 57.7 in 2026. Just wanted to confirm that thinking and then see if there were any upside or downside factors that you think investors should be mindful of as we track performance on that throughout the year? Brian Wendling: Yes. I'd point you to, we said that we added the word generally or primarily or approximately around the 200 basis points. So I wouldn't lock it in stone. As you know, we talked about before, there are different things that can impact the team payment percentage depending on where the profitability is coming from. But generally speaking, we would expect to see about 200 basis points of leverage related to the team payment piece in 2026. Stephen Laszczyk: Great. And then maybe just beyond the team payment operating leverage point this year and thinking longer term opportunities to grow margins at F1 over the next 3 to 5 years. What factors are still available to you to grow margins maybe outside of the team payment line item that could expand margins for the foreseeable future? Brian Wendling: Yes. Certainly, as we grow primary revenue streams, you would expect to see some leverage around those revenues. But we continue to invest in the business. And when you look at some of our other revenue streams, they certainly have costs associated with them. We've looked at growth in other costs of F1 revenue in the past. And you can certainly see partner servicing costs there as we grow our sponsorship revenue base, there's incremental Paddock Club obligations that are associated with that. So there is certainly costs associated with growing those revenues. But as we grow the primary revenue streams, we would hope to see some leverage there, but we're also going to balance that with continuing to invest in the business and try new things and try to grow the overall pie. Stefano Domenicali: Yes. And Brian, if I may say -- add something on that to complete the answer that Brian said, is that all the costs related are connected to the growth of the marginality because, of course, the more we are getting stronger, the more we need to serve what is important to activate. Therefore, that's our philosophy. And in all the revenue stream that we are bringing home, that's the approach. And if I may, also when we are talking about a deal that we have with promoters in the long term, we have the leverage to increase the possibility of investing through them to acquire more possibility to invest with other experience with Paddock Club extensions. This is one example, for example. But that's the philosophy is cost. It's always associated to an increase of marginality related to increase of our revenues. Operator: Our next question today is coming from Kutgun Maral from Evercore ISI. Kutgun Maral: Maybe following up and expanding on the margin discussion. I had a high-level question on the durability of your EBITDA growth, which was very strong in '25 and looks positioned to be healthy again in '26. Maybe taking a step back for a second. Since Liberty took over the growth algorithm has been fairly consistent and straightforward. You had rising popularity of the sport and brand combined with strong execution, monetizing revenue streams with a lot of untapped runway. In other words, there was comfort that regardless of the quarter or even year, there would be a lot of room to grow over the upcoming 3 to 5 years, and that vision has clearly played out. As you look out over the next 3 to 5 years now, though, how should we think about what sustains that attractive EBITDA growth profile as some areas either face tough comps or see new dynamics, whether it's lapping very strong sponsorship growth, managing the strategic balance and media rights, a race calendar that's already largely contracted or the new team payout structure? And finally, are there any underappreciated drivers or levers you'd point to that helps support growth from here? Derek Chang: Stefano, why don't you take this because you've obviously got the thoughts around the growth of the business more holistically. So I think that's a good place to start. Stefano Domenicali: Absolutely. Thanks, Kutgun. I mean let me start on one thing that I take the opportunity to thank, first of all, our shareholders, our team, the FIA, the teams and all the relevant stakeholders because we have left an incredible moment of our sport. I remember all the earnings calls since I was involved in that, every time was what's next, what's next, what's next. That's a mindset, it's not a guidance. So we have always proven to invest in our future because we do believe in the growth of our sport. And we do believe that in the future, there are so many new opportunities to keep running this rhythm because this is exactly what we are doing together. And the more is strong the ecosystem, the more we are able to catch new opportunities and all the driving force of our revenue streams. And that's why you see what has happened so far in the last couple of years not only in terms of turnover, but also in terms of EBITDA. And this will continue because we see, as we said so many opportunities to keep growing. And the fact we are stabilizing in certain ways, certain promoters deal will allow us to leverage, as I said before, other investments that will bring us other opportunity to return. We are able -- we were able to explore the possibility of engaging with new categories of our partners and largely, for example, if you look at the financial services, we were able to contract with other -- with multiple partners because we are identifying different categories. We are opening up the opportunity of digitalization so new opportunity. We are having licensing that is just starting a great momentum with the big deals that we have just even today announced for the bigger relationship with business and so on. So there is a lot of things that we're going to bring and to keep growing the sport business at all level. That's I definitely confirm. That's our mindset, our approach, we wake up in the morning with these things. We are in a competitive world, not only on the track that remains our focus for sure, but that's the aim of all of us doing this job to increase the return of our investors for sure. Derek Chang: Yes, I think that's right, Stefano. And look, I think what's -- what people need to appreciate also is just the strength of Stefano's team and the creativity there and sort of what they've been able to accomplish over the last several years in terms of revenue streams and categories that may not have been fully sort of appreciated in terms of what they could be. And if you look out now, what they've done, for instance, in the U.S., where can you take -- what other geographic markets are still out there that are large significant and potentially untapped. So we are constantly looking for those opportunities and ways to drive the business. I think the heart of it is what Stefano keeps pounding at, which is to help the sport, the engagement that the sport creates and all that sort of stuff is really the fundamental basis for this. Operator: Our next question today is coming from David Karnovsky from JPMorgan. David Karnovsky: Maybe just zeroing in on the prior question, but for sponsorship, really strong results this year, though arguably, that sets up a tough comp this year. So wanted to get your view on '26 growth? And how we should think about the follow through, not only from deals executed last year, but maybe kind of what's in the pipeline? Stefano Domenicali: I can answer on that, David, stay tuned. As we always shown, we are not -- and also, as Derek says, we are quite creative in finding new opportunities. You're going to see already this year some deals have lifted with new opportunity that we can offer new quality and new things that we want to offer. We don't have to forget one thing at the end of the day. Of course, now that the quantity is really, in a way, great, we need to focus on the quality of what we're bringing in. And this is really the thing that we are focusing because of course, we have a trajectory of new projects in the pipeline, but our focus is to keep the quality of the partner that now are trusting and following Formula One. Therefore, it's a trajectory that will continue. It's a trajectory that will enable us also in a competitive landscape to make some decision. And as we have in the field of promoters, we have the quality problem to have more often than -- more demand than offer. We are in the same spot also on the sponsorship side. So as I said, all the partners are happy. Our point is to create quality content for them, qualitative experience, qualitative value of what they're investing in Formula One. And that has been so far the case and will continue because, of course, the more we are able to succeed on it, we are able to attract even new ones approaching from other disciplines that is happening already, as you have seen, new partners to us. David Karnovsky: Okay. And then maybe just following up here. The press release had called out contribution from digital advertising. I think that's the first. Can you just clarify, is that inventory on the website apps or F1 TV? And what's the opportunity here? Stefano Domenicali: Well, the opportunity is quite important because now we are not only in the world of physical advertising, we have the digitalization that will enable us to use in all the different channel possibilities to put to the advertising but we have different platforms. We have the Podcast, we have YouTube. We have other social media opportunity, we will monetize in the future even stronger. Operator: Our next question today is coming from Bryan Kraft from Deutsche Bank. Bryan Kraft: I guess I'll ask the Vegas question. It seems like Vegas didn't generate really incremental revenue versus last year, but it did generate significant incremental EBITDA due to the cost side. So I just -- I guess I wanted to ask, is that a fair assessment? And what do you think the opportunity is in 2026 to grow Vegas, both in terms of top line and bottom line? Are there any key changes in how you'll approach the event or go to market with tickets this year versus in 2025? Derek Chang: Stefano, do you want to just talk about Vegas broadly? And then Brian and I can you talk about some of the more specifics? Stefano Domenicali: Sure. Sure, Derek. I mean, first of all, in a synthesis, or trying to be set at that point, it has been an incredible strong progress in what will deliver in the short term, even a big cash flow aim in that investment. I think that the key turning point of that has been our ticketing proposition. The fact that we have also a new different way of proposing the partner, the experience and the sales to them. But the most important one that will have a factor in the next couple of years is the new dynamic that we are creating with the community. And with the new things that we will announce in the due time, this will enable us to have an impact also on the P&L of this that is incredible, positive. And you will see soon that we want to make sure that this Grand Prix will keep being something incredible to be a sort of a spotlight of the year because the focus is to keeping that as a unique experience. And of course, you reduce the cost that is associated to the building up of this event in a new city like Vegas. And so therefore, the huge potential is definitely there. We have been very happy about the outcome of this year, and we're definitely going to be even more happy in the projects that we're going to do together in the next couple of years in front of us. Brian Wendling: Yes. And then specifically on the -- on Vegas results for 2026, we did see revenue growth. It's a little bit difficult with our various categories within Vegas because it doesn't all show up in race promotion. Where we really saw growth was we saw increased sponsorship revenues. We saw increased hospitality revenue associated with Vegas. And then also 2026 was a year of trying to achieve some greater cost savings. So we definitely saw some cost savings there. So pretty significant incremental profitability. It just doesn't show up in the race promotion line. It shows up in other spots. Bryan Kraft: If I could just ask, I mean, it sounds like based on Stefano's comments that you do see the opportunity to continue to grow Vegas from here though. Just to make sure I'm interpreting that correctly? Stefano Domenicali: Yes. Absolutely, yes. Sorry, I can't show the different numbers, yes. Derek Chang: Yes, very happy and excited about it. Operator: Next question today is coming from Peter Supino from Wolfe Research. Peter Supino: A question on capital allocation and your communication and then another one on media rights. So I actually start with the media rights. We were excited about your deal with Apple because we've long believed that the movement of important sports rights to streamers was a growth opportunity for the intellectual property owner. In your case, we've had investors go as far as to call your deal with Apple "a disaster" because of their perception that Apple means less distribution for F1 in an important growth market, the U.S. And so I wonder if you could comment on why in your prepared remarks today, you expressed so much confidence that Apple can expand awareness and engagement of F1? And then on the communications side, and I guess this ties to capital allocation, your stock in the last 6 months has become, at least from our perspective, mired in sort of a myopic discussion about team payments, margins and operating leverage, and it's ironic because Formula One is a growth company. And so I wondered if you could talk at all about ways in which your communications might help investors appreciate the duration and magnitude of your growth opportunities going forward? Derek Chang: Stefano, why don't you start on Apple? Stefano Domenicali: Yes. Thank you, Peter. I mean, first of all, I think that we are very, very happy about the deal with Apple for many reasons. And I think that it's important that the one that in our opinion, not so many, but anyway we respect that, of course, they don't understand the deal is because beyond that, there is a huge opportunity to increase the reach. There is an incredible opportunity for Apple to use all their channels, all their platform to promote our sport in a way that has never been done before. There will be the opportunity for the younger generation to be connected with the tool that is more logical for them to use in living the sport and our business. So I do believe that this will represent a big step opportunity to increase also our revenue streams, not only in terms of direct one, but also in terms of awareness in the American market that will enable us to convince also the one that are not believing on that, that is the right move. But on that, we are not even a single doubt. It's a great move. It's great things that will happen that will give a big boost to our performance in the American market. And that our community has not even a single doubt. Derek Chang: Yes. And I would add on that. I mean, look, everyone understands that the landscape has been changing for many years now. And the former sort of terminology around reach and things like that are a bit antiquated. And we see from an Apple standpoint is complete 100% dedication to F1. I saw Tim Cook and Eddy Cue at Super Bowl, and they've got the full weight of the organization behind it. And in that respect, it's not just sort of Apple TV, it's Apple music, Apple news, the Apple stores. So from a reach standpoint, there's many different ways that we will be able to reach and engage with our fans. I think the other thing that's interesting about Apple here, and we saw the news with the broadcasting races and IMAX theaters, right? And this sort of draws on my prior life in the pay television industry, like you wouldn't be able to do something like that necessarily with the traditional broadcaster because of a lot of restrictions that get put into traditional media deals, right? So Apple in that sense, and I think you'll see here in the near future, other announcements along those lines that will sort of bring more life into that. But I think there is that sort of ability to create new ground here, which we will do with Apple, are committed to do. I think the other thing that will be something to watch closely over the next 5 years is sort of what happens with the actual product. As we know, Apple is at its heart a tech company. We are a tech company. The broadcast is sort of very technical in nature, what you can actually do with that as a collective force will be interesting to watch over the next several years. I think on the second question, which was capital allocation. What we talked about at our investor conference was familiar themes, which clearly, we're in a deleveraging phase right now. Everyone understands that will sort of hit a point that we feel comfortable with respect to making additional investments. We've been pretty clear about our discipline in this respect and our desire to invest around sort of into the actual businesses themselves in and around those businesses, certainly, and then in similar sorts of asset classes where we've got great IP, low capital intensity and the ability for us to actually bring value either through insights we have, relationships we have, capital structures that we have, things like that, that will continue to allow us to have ourselves be a growth vehicle. Operator: Certainly. Our next question is coming from Joe Stauff from Susquehanna. Joseph Stauff: I wanted to ask, just following up on the number of changes in F1 this year, engine, regulatory and how that affects certainly competition in parity. I'm sure that's naturally the goal over the long term sort of drives interest in the sport. But just wondering the best way to think about how maybe some of this higher competition could affect the P&L in the near term, call it, 2026 versus next year? What are the near-term sort of impacts of how we think about the financial implications of that? Derek Chang: Stefano, why don't you talk about the changes and what you're seeing and all that sort of stuff and then we can get into what the implications are? Stefano Domenicali: Yes. Well, first of all, the implication -- let me start from one thing. The F1 has the duty to be always an innovator league sport, has been always -- that has been always the duty of our sport because by innovative, we can attract new investors. And the immediate effect of this regulation has attracted new manufacturers back into the sport. We have Audi, we have Ford, we have Honda, we have Cadillac that did come in because of this regulation. And if I may, before, of course, that has taken the second part of the financial, this would be an immediate effect on the financial because they will invest in our sport. They will invest in our initiatives. They will invest in all the ecosystem that would generate for them a sort of a platform to invest to let the brand be known by the customer. So that's a direct effect. On the other side, of course, there is a great interest, a great opportunity to showcase that the level of technology is always relevant to what is needed in the technological world. We have sustainable too. We have hybrid engine, and we've been always the first to believe on that. And we create excitement because the nature of the regulation will allow all the teams to develop this year car race the race. You're going to see a season where every race will be different, that will be, for sure, at the beginning bigger gaps that will be restricted because of the nature of the regulation. And therefore, as always, F1 understand when there is the need to move forward faster than the others, and that has been always our philosophy. And that will attract the interest not only of the one that I said to you before, but the new fans that through the new content that we are generating will connect to us and of course, by enable to be connected directly with them, we can even leverage the fact that we will offer something new to them. They're going to be a big push on the merchandising side of it. It's going to be big push also to our partner Quint to create new packages to promote to them. So this is the reason why we change the things for multiple reasons. Derek Chang: Yes. I mean just to follow on that. I don't think we sat here and said we're building a kind of incremental into the '26 business plan because of these changes. But that being said, as Stefano hit on quite clearly, these changes are going to drive continued interest and engagement in the sport. And hopefully, as he says bring in new participants, new fans and all the sort of accrued benefit that comes with that, that ultimately results in monetization. I think the other thing in parallel here that is happening this year, as you know, there are some big names that have come into the sport between Audi and Cadillac and Ford, Honda coming back. It's pretty significant in terms of someone like Cadillac spending on a Super Bowl ad and what they're doing to promote their team on the track. So this is all part of the evolution of what F1 is and Stefano and his team have done a fantastic job of cultivating relationships, cultivating these partnerships, building the sport into something that we do look at on a multiyear basis, not sort of how this is going to drive something in the next week or next month. And that's constantly what we're trying to do is built for the long term. Joseph Stauff: Understood. Maybe one just quick follow-up. Could you maybe just give us an update on the changes of the commercial team at Moto? And any other obviously changes that you're making, obviously, now that you own it for about 6 or 7 months and how to think about that? Derek Chang: Sure. This is Derek. I mean, as we stated, or Carmelo stated, we're in the process of sort of putting out our brand and executing behind it, really. And I think that part of that is what's happening at the track in the hospitality, and we're going to see some pretty dramatic improvements, I believe, over the course of this year, where we're putting these tracks -- our races, excuse me, as we're getting them closer to cities where we can benefit from all the infrastructure and the attendance and all of that sort of stuff, including, as we mentioned, in Adelaide, it's going to be right in the city center. And then how we go about sort of ultimately monetizing, commercializing that, we need the right team in place. And that's probably an area where we haven't had the sufficient sort of personnel there and we are building that. It's obviously not a heavy lift to sit there and hire folks up. So that's what we're in the process of doing. As we have stated previously, this will take some time in terms of the ultimate commercialization. We'll see some areas pick up sooner rather than later. But over -- if you look at F1 as a parallel, we're in our 10th year and you're still seeing some of these new revenue streams sort of being activated. So we continue to be even more sort of bullish on Moto even if the results don't necessarily show in the short term, it's clearly a long-term proposition for us, which is -- which -- and we like to invest in for that long term. So we're very excited. Operator: Our next question is coming from Ryan Gravett from UBS. Ryan Gravett: Just to follow up on the media rights topic. Now that you're through the latest round of renewals, not just in the U.S. but some markets in Latin America and Asia as well. Just curious what your key learnings were and how you think you're positioned for the next round of renewals in Europe over the coming years? Do you expect similar interest for digital players in those markets as well? Derek Chang: Stefano, do you want to start? Stefano Domenicali: Yes. Thank you. I mean, I think that our position with the media renewal, as you see, is quite dynamic. And I don't want to anticipate anything, but stay tuned in the next days, you will see something else coming up. The real point on that is the interest is very strong. The numbers are very strong. And the key focus on what we need to make sure we keep doing is understanding if we keep going because we are a worldwide market in the so-called traditional way of the delivering our sport to our credit broadcaster or in certain markets, there is an opportunity. As we did in U.S. to move into the streaming platform because each country is different. We have the incredible opportunity to be so strong worldwide, that we cannot have one single way of delivering our content in the same way and there are different time lines that we need to consider. So it's a bigger ecosystem. And I think that we have proven so far to make appropriate analysis before taking the final decision. So for sure, we want to be active and proactive in this world because the media right is not totally media right on the sports, the media rights are following other things in this moment. Therefore, I think that the reason why you see so many good news coming in is because we want to be proactive, and we feel that we are able to understand the evolution of the market, considering the difference that we have from area to area. But stay tuned because already next week going to be something new happening. Operator: Our final question today is coming from Ian Moore from Bernstein. Ian Moore: When we look at trailing motor results, I think everyone sees an opportunity to drive monetization, particularly sponsorship to where F1 kind of is today. But F1 itself seems to continue to overdeliver on sponsorship. So I guess, more generally, what do you guys kind of see as the right mature mix directionally of media rights, race promo, sponsorship for these businesses? And then, I guess, for motorsport businesses more broadly? Derek Chang: Yes. I think -- look, it's early, but I think along the same lines is probably not a bad place to end up. And it's going to be over time that some of this stuff happened. But I think you've already seen that we're announcing new races next year, which will lead to some uptick there. And -- but then the sponsorship side of things probably lags a little bit as we build the brand and reengage with the potential partners. But I do think that the ability for us to draft off of what F1 has done there and the Liberty name being able to sort of have credibility around what we're going to deliver with respect to Moto is something that we are excited about. Again, it will take some time, but we feel comfortable that that's going to happen. I'll just end by saying there's good receptivity in the market. This -- we had a partner someone, as I mentioned in Barcelona last week, a lot of good enthusiasm, a lot of good energy there. There's a lot of good enthusiasm in the investor base around teams. I can't tell you how many people have reached out expressing interest. So I think people see it. The other thing about Moto in comparison to maybe other sports right now of its size, which tend to be more emerging sports, Moto has a long, long history to draw on and many stories to tell as a result and an established fan base and established brand recognition. So we're starting from a place that's much different, and hopefully, it's something that we can accelerate here over time. Hooper Stevens: Thanks, everybody, for your participation in today's call. Apologies if we didn't get to your questions, we'll look forward to speaking with more of you offline. Thank you. Operator: Thank you. That does conclude today's teleconference webcast. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.