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Operator: Thank you for standing by, and welcome to the Coronado Global Resources Full Year Results Presentation. [Operator Instructions] I would like to now hand the conference over to Douglas Thompson, Managing Director and CEO. Douglas, please go ahead. Douglas Thompson: Thank you, Andrew, and good morning, and thank you, everybody, for joining us for our full year results presentation. I'm Douglas Thompson, Managing Director and CEO, and I'm joined by our Group CFO, Barrie Van Der Merwe. Today, we'll take you through our performance, the transition journey that is underway across our portfolio and how these actions position us for a strong 2026. We'll also highlight the delivered projects, our liquidity improvements, and we'll talk about our guidance. But before we start, please note the important normal notices that need to be provided at these meetings. Today's presentation includes summary information, references to U.S. GAAP and non-GAAP measures and forward-looking statements subject to risks and uncertainties. We encourage investors to review the filings and the reconciliations provided in the appendix. 2025 was a year of execution. We advanced our strategy and delivered record production in the second half of the year, reduced our costs materially and completed key growth projects that set the company up for the future. Coronado is a leading global producer and has a full range of metallurgical coal products. Our portfolio of long-life assets provides leverage to high-growth steel markets, particularly India, supported by a diversified customer base across 5 continents. In 2025, we delivered major projects on time and on budget and materially improved our liquidity and reset our Stanwell arrangements to support long-term stability and cash generation. Coronado was founded in 2011, when our Chairman and major shareholder, EMG, set out to build a high-quality metallurgical coal company by targeting long-life, low-cost assets in low-risk jurisdictions. Their investment framework focused on product quality, operational efficiencies and inherent expansion potential. The reserve expansion at Curragh SRA and then Mammoth and Buchanan expansion projects are aligned to the strategy and have been delivered at far better than industry competitive capital intensity per tonne, adding significantly to the life of the portfolio since inception and enabling lower cost. All assets have repaid the original acquisition costs, and we've continued to focus on high-return capital allocation. Importantly to note is that, the returns provided $1.5 billion of dividend to shareholders. Margin expansion in 2026 is underpinned by the Mammoth Underground and the Buchanan expansion. The combined steady-state cost benefit is expected to be approximately $300 million per annum from these. With a total investment of $255 million, the weighted average payback is around 9 months for these projects. These already demonstrated returns clearly validate the strength of our investment decisions and the fact that the projects were delivered on time and on budget, and with exceptional payback underscores these projects and the team's performance. Beyond the delivered projects, we have an attractive pipeline across the Mammoth phases and Buchanan's CHPP capacity expansion and plus Curragh's Extensions with concept and -- from concept to execution pathways and disciplined capital. These projects comprise expansions and life extensions of our operations and are generally low capital intensity and expect to provide very quick paybacks. While we have a clear and attractive pipeline of growth, our near-term focus remains firmly on strengthening our liquidity, deleveraging through disciplined cash generation this year. Turning to Mammoth 2. This is a project that is in pre-execution phase, an underground bord and pillar expansion targeting first coal in 2028, with capital investment around $150 million and a payback roughly of 2 years. Costs are expected to be in the second quartile, which will further average down the group's overall cost. And the execution of Mammoth 2 mirrors the successful execution of Mammoth Phase 1 further south in the mine. We can also highlight that the coal quality remains strong and that the degas program is progressing well, showing encouraging signs of productivity while effectively managing coal seam gases. Since 2022, we have executed the One Curragh Plan and the U.S. Uplift Program, driving productivity gains and structural cost out. The average mining cost per tonne has decreased significantly and saleable production reached new heights in the second half of 2025. Operationally, we achieved approximately $100 million of cost savings from fleet reductions in 2024 and then a further $160 million of mining cost reductions in 2025. Dragline productivity has improved to be above 50% of total waste movements. And in the U.S., skip capacity increased by 45%, which has liberated our 2 longwall mines underground. Liquidity strengthened with a new covenant-light ABL, prepayment and critically, the Stanwell rebate is wavered in '26, which provides material uplift. I'll now hand over to Barrie to discuss our full year financial performance before we return to talk about guidance and some of our priorities for 2026. Barend Van Der Merwe: Thank you, Douglas, and good day, everyone. In FY '25, we realized material benefits from the dedicated work of our teams over the last couple of years. In particular, I'd like to thank and commend Douglas for the work he did with the team over the last couple of years to set Coronado up for the future. Douglas, you're leaving a lasting legacy at Coronado, and we'll miss you very much once you leave us in the coming months. On Slide 12, the chart on the left shows how the momentum of the improvements built up over the course of last year and our production cost per tonne and CapEx changed half-on-half. At Curragh, we delivered material cost reductions and improved mining productivity, predictability and capacity with the bottleneck now shifting to the processing plants. The mine's inherent financial risk also reduced materially. The new Stanwell arrangement significantly lowers the cost base by removing the rebate and underpins financial sustainability in low liquidity periods through a coal prepayment facility. Curragh is highly leveraged to the coal price and is well set to capitalize on a rising coal price environment, while the Stanwell arrangement provides downside protection when price and cash levels come down. As Douglas said earlier, Buchanan is a quality, high-returning asset. The operation self-funded the recent expansion project and generated $74 million of EBITDA at a 15% margin in a very weak FY '25 market. With the debottlenecking of the materials handling system complete and a new longwall configuration ensuring mining continuity, Buchan is well set to capitalize on improved market conditions and generate cash in 2026. The completion of the expansion projects, together with the other operational improvements over the last couple of years, now firmly place our operations in the second cost quartile. Even in ramp-up phase and a lower gold price environment, the expansions generated $15 million of incremental operating mine cash flow before downstream costs and royalties. In FY '26, the CapEx spend is reducing materially and return to the normal sustaining CapEx range of around $150 million required for our installed capacity following the expansions. Across the business, ongoing cost management and discipline remain an important priority, with attention concentrated on the few major cost categories that drive the majority of our spend. We have been strengthening our commercial team, especially at Curragh, where contractors execute most of the mining and represent the largest portion of our spend. We're also in the market for the retendering of some of our mining service contracts with a view of improving our cost position. Turning to Slide 13 now to look at how our cash flows will be different in FY '26 when compared to FY '25. As I said earlier, being highly leveraged to the coal price and having the Stanwell protection when prices fall sets us up very well to capitalize on higher prices in FY '26. Compared to FY '25, without any price increase, there's up to $400 million of additional cash inflows. These are structural sustainable inflows that's driven by the reset of the Stanwell arrangement, our successful expansion projects and transformation work by Douglas and the team over the last couple of years. The rebate forgiveness in FY '26 will be for a full year, while the deferral of FY '25 was only for part of the year. And the prepayment from Stanwell can be higher than last year. This can add up to $150 million compared to FY '25. As we said many times, following the expansions, CapEx will be about $85 million lower. The expansions will add about $300 million at mine level, a $285 million increase on FY '25. We then have to pay royalties on the incremental revenue from the expansions, incur a bit of variable downstream processing and logistic costs for the additional volumes from the expansions. And then following FY '25, where there was a large focus on cash conservation, we have to spend some more money on sustaining mine development at Buchanan and Curragh. All up, all of these elements of cost will be about an additional $120 million as shown on the chart. So those are the structural sustainable increases. If you then turn to the bottom of the chart and look at the impact price can have on cash flows. at about $220 per tonne, which is about consensus compared to the $188 per tonne that we achieved as a PLV index in 2025, cash flow uplift from this is about $350 million. So the price impacts almost as much as the structural benefits that we have. Of this, about $0.30 of every dollar will have to be paid to the Queensland government as a royalty as we're now getting to that AUD 230 per tonne price threshold where the royalty steps up from 20% to 30%. At $250 per tonne PLV, that uplift increases to $700 million. And at that price level, the royalty will jump up to $0.40 of every dollar as a state royalty. Last thing to mention, if you think about our cash flows is that we do incur Curragh's operating cost in AUD and a $0.01 FX change over the course of the full year is about a $15 million cash flow impact. So at a high level, $0.01 FX for a year is about $1 per tonne on the group's cost. I'll now turn to Slide 14 for a brief overview of our position with Stanwell. As we said before, Curragh is critical to Queensland's energy system and economy, providing about 10% to 15% of the state's electricity as a baseload fuel source. Curragh's continued operation, therefore, remains a strategic priority for Queensland and the reset of Stanwell arrangement reflects this essential role. While the new arrangement provides permanent financial relief in the form of ceasing the export rebate that would have ended early 2027, it provides material coal prepayment facilities when the cash balance is below $250 million, having the cash flow effect of supplying thermal coal to Stanwell market prices. And the cash balance is above $250 million, Stanwell continues to be entitled to legacy discounts. And when the cash balance is above $300 million, Coronado provides free coal until such time as the previously provided prepayments are either repaid or the cash balance drops back below $300 million. Amounts prepaid remains contingent on the cash balance until the end of the company's life. The return for the liquidity support, Stanwell has rights to coal for longer and more nomination flexibility. The new arrangement includes the provision of an asset-based lending facility by Stanwell, who is now alongside our high-yield note holders, a major senior lender to Coronado and is thus even more aligned to our continued sustainability than before. The structure directly underpins Curragh's long-term viability, providing liquidity protection aligned with the cyclicality of the met coal market and our working capital needs. On Slide 15, we'll now discuss liquidity and the capital structure. As I said at the quarterly production report, no working capital levers were pulled at December 2025, and we have the full $173 million of cash available in the business. On top of this, we have approximately $100 million of other liquidity levers that could accelerate cash flow by 6 to 8 weeks providing adequate liquidity to manage working capital requirements through the planned low production March quarter. As of yesterday, our cash balance was almost the same as the cash balance at year-end. We would also expect our cash position in the March 2026 quarter to benefit from an index price that was about $15 per tonne higher in the December 2025 quarter than the September 2025 quarter. As and when credit ratings improve, we may be able to start clawing back some $70 million of cash from backing guarantees that became a requirement during FY '25. We continue to have no near-term debt maturities, and there are no maintenance covenants in the notes. The Stanwell ABL, endorsed by the Queensland government includes no EBITDA covenants until 2028. further supporting flexibility and availability of the facility. Once the EBITDA covenant kicks in, they are more favorable than market governs requiring gearing to be below 80%, while the market is usually around 30% and interest cover of 2x. Importantly, the notes traded up meaningfully, moving from 63% low in May 2025 to about 95% in February 2026, evidencing the material improvement in our credit quality. Pleasingly, the Financial Provisioning Scheme has also confirmed no requirement for us to provide surety, which was, in our view, the logical conclusion considering the extent of Stanwell, government-owned corporations financial support of Coronado and the requirement for Coronado to provide surety would have contradicted the support of stance from the rest of the state. It's important to note that the financial statements that we put out today are prepared on a going concern basis. There are not any substantial doubt about going concern as was the case and as was disclosed in the last couple of sets of quarterly financial statements. This is the result of the culmination of all the work the team had done over the last couple of months to improve our operations and financial position materially. On Slide 16, we will look at how we are thinking about balancing financial risk and returns going forward. As Douglas said earlier, since the IPO in 2018, we have returned approximately USD 1.5 billion to shareholders in dividends. That's a significant return of capital. The current exchange rate, this approximates AUD 2.1 billion, and it is testament to the quality of our asset portfolio. Following a period of optimization and expansion capital in a rising coal market, we are well set to generate cash. Having gone through a difficult financial period during which net debt peaked at $530 million, it brought liquidity to the forefront of our thinking, and that does take an important position in our capital allocation framework. Our first capital priority will therefore be to maintain adequate liquidity, which we estimate will be around $300 million, and it aligns well with the latest Stanwell transaction, which requires us to repay prepayments with free coal when cash exceeds $300 million. This repayment of Stanwell, together with cash built up on the balance sheet, reduces the net debt position and results in deleveraging of the balance sheet. By building some cash and deleveraging, we also reduced the company's financial risk profile and move enterprise value from the debt to the equity side of the ledger. This drives the share price higher. When available liquidity is around $400 million, funds can be allocated to some of the low capital intensity expansion and life extension projects that Douglas spoke about earlier. Note that both the amount and the tenure of the available liquidity will play a role in decision-making. These thresholds are not hard and fast and always under the Board's discretion depending on the business circumstances and market conditions. But serves as a broader rule of thumb on what can be expected in terms of our thinking on financial risk management and capital allocation. Debt reduction will continue to be achieved through building cash against gross debt, a strategy that simultaneously improves liquidity and drive deleveraging and refinancing will either be done at maturity of facilities or company circumstances and market conditions provide a window of opportunity to do so. Following a tough FY '25, we are well set for a much better FY '26. I'll now hand you back to Douglas to talk through priorities and the 2026 guidance. Thank you. Douglas Thompson: If we go to Slide 17. In 2025, priorities focused on completing our expansions, improving reliability and positioning the business for the 2026 uplift that Barrie has described. And guidance frames a path to lower costs and stronger margins. For 2026, salable production guidance is 16 million to 17 million tonnes and mine cash cost per salable tonne produced is $88 to $96 a tonne and our capital expenditure is between $150 million and $175 million. This range reflects the uplift from Mammoth Underground and Buchanan Expansion, but is offset by about 2 million tonnes from the Logan reductions. Our 2026 framework delivers increased volumes at lower incremental cost, lower capital after the expansions, further optimization at Curragh and a liquidity structure that provides downside protection. We expect materially improved profitability and cash, and we have the optionality to progress Mammoth 2 when appropriate within the business. We've built a team who have the capacity and the resilience to deliver the 2026 plan and beyond that. And with that, I'll hand over to Andrew, and we'll take your questions. Operator: Thank you, Douglas. [Operator Instructions] The first question comes from Daniel Roden from Jefferies. Daniel Roden: I just want a really quick one for me, just on Mammoth. You noted the restart on the 18th of February. I guess with the '26 guidance, you're still assuming a full 2 million tonne run rate from that in '26. So I just wanted to clarify just that guidance take into account the period that Mammoth has been out of production for at the start of the year? And does that imply a stronger, I guess, higher than normal utilization average run rate for the rest of the year to make up that 2 million tonne guidance for 2026? Douglas Thompson: Daniel, it does consider the unfortunate incident that we had at Mammoth at the beginning of the year. The impact is probably 1 month production. So it's 1/4 of the impact as we did report the team and the regulator worked very constructively together, and we found a way to bring the mine back into operations for business continuity and the ramp-up has progressed well to normal operations there. So that's the way in which we've taken that into the guidance. Likewise, with the severe weather with the cyclone that came through Curragh at the beginning of the year, we've considered that as well in our guidance consideration. So guidance reflects the operating performance of the business, as I think was demonstrated in the last probably 7 months of last year of $1 million a month reliably out of Curragh. Buchanan's ramp-up really in that December month showed what that system can do. So it considers that. And then it also considers the impact of those 2 events and then the volumes that we've taken up. Now remember, Logan has run for the first quarter of this year. We've issued WARN. So that production is in the guidance, and we've got contracts that we have to meet obligations on. So that is in the forecast as well. So it's got all those factors considered. Daniel Roden: Yes. Awesome. And just on -- maybe a quick comment on, I guess, Phase 2 and 3. So I appreciate the details in, I guess, the pipeline of projects that you've got between Mammoth, Buchanan and Curragh. But just, I guess, on the Phase 2 and 3 specifically, how should we be thinking about, I guess, Curragh as a complex? You're obviously bringing in Phase 2 apps like with the degassing at the moment. It feels like that's kind of -- hasn't been board approved yet, but it appears like that's probably likely to happen. Do we think about Curragh as a complex as kind of decreasing open pit volumes and that's kind of being offset by bringing in these Phase 2 and 3 Mammoth kind of expansions? Or I guess, how do we think about the open pit volumes kind of being offset by those underground tonnes coming into the profile? Douglas Thompson: In very broad strokes, you've defined it correctly. If you think of the life of the Curragh complex over the next 15 to 20 years, we've now spent the money, the effort to set it up again to be a productive dragline operation. So it's got 4 draglines. We've invested in the strike length and the pit geometry that now draglines move 50% of the waste. And that will continue on, particularly in the Northern mine where those would run long term as highly productive dragline mines, so large volume will come out of that. But as the stripping ratio gets deeper as all of the Bowen Basin, building the capability to be an underground miner and a successful underground miner as we've leveraged over the U.S. positions the business well to exploit the resource. And with Mammoth Phase 1 getting approved, we got Phase 2 and actually Phase 3 of that project approved that extends the life of Curragh. So underground, bord and pillar will be part of the long-term future of the operations. It averages down the cost. and it takes care of some of the stripping ratios at disadvantages that the older mines in the Bowen Basin will start facing. And that really sets us up well. We did take a BFS to the Board in December that was approved. But obviously, we'll only build that mine when it makes sense in the rest of the context of Curragh and will solve the market. As Barrie described quite carefully, our near-term focus is to deleverage with the cash generation we see in the near term. And then we'll make the right decisions with Board guidance on what we do. But Mammoth Phase 2 will be the near-term focus. And then Mammoth Phase 3. There's a twinkle in my eye with the research the team has done. There's potentially another underground mine in the South, but that will be much further down the line. So forming a large portion. So to be precise in answering your question, over time, the open cuts will play an integral base to the operations, but the undergrounds will provide you great flexibility and will start augmenting and replacing open cut higher costs. And the business will pivot this year from -- particularly now that we reset the Stanwell arrangements to focus on margin instead of incremental tonnes. We've got a great opportunity now at Curragh to drive for margin tonnes in the mining engineering and the way the business gets set up, which will provide a lot more flexibility in market cycles. Daniel Roden: Yes. And just a quick follow-up, and you kind of touched on it and I'll hand over after. But I guess on thinking about the Phase 2, I guess, approval, how do you think about gating that against your liquidity constraints and I guess, covenants with Stanwell? Like are they going to be a supportive backer if you are, if I name this because you're going to have that CapEx in calendar year -- end of '26, calendar year '27. What's the liquidity profile for that to support $150 million investment into that expansion? And how do you judge that against Stanwell's kind of, I guess, conditionality? Douglas Thompson: Well, Barrie, you go. Barend Van Der Merwe: I mean, Daniel, I think that's where we try to give a bit of color on that capital allocation framework at the back, which I mean it's a bit conceptual, but I think it aligns well with Stanwell's call it, thinking on the business too. So when we put together this reset transaction with Stanwell, that $300 million liquidity or cash at bank level was defined as a place where they feel fairly comfortable with our sustainability, we feel fairly comfortable and that kind of anything above that then triggers us actually repaying them whatever they've prepaid to us. And so that's a bit of a watermark in terms of liquidity. As we say in that framework, I think when you get to total liquidity of adequate tenure, so it can't just be kind of short-term liquidity that gets to like a $400 million level, with a good outlook for the business. I think there'd be a comfort level to allocate capital towards something like this. Alternatively, the other option would be to try and find financing for something like Mammoth 2 on its own strength and see whether you can actually finance that separately as a project, if possible. So that's kind of the things we consider when we look at that investment and the timing of the Board approving it. Operator: And your next question comes from Glyn Lawcock from Barrenjoey. Glyn Lawcock: Just wanted to try and understand, Barrie, your comments. I think you said cash is still the same yesterday as it was at 31 December, which is great. Does that incorporate -- have you had any prepayments from Stanwell so far this year then? Because I'm just -- you're on about a 1 quarter lag. So I'm just wondering if you didn't have the Stanwell prepayments, could you still be cash flow positive this quarter? Barend Van Der Merwe: Yes, yes, absolutely. I mean we -- so we've had a small bit of concessional support from Stanwell, but it's single-digit millions because it was only for January. And then obviously, didn't have the rebate for Jan. And so call it all up the Stanwell support year-to-date is probably USD 15 million. So even without that, we would have been in fairly good shape as we sit now. Glyn Lawcock: Okay. Cool. So that prepayment of $100 million though on Slide 13, that is the prepayment that you think you would get if your cash stays below the $200 million mark. Is that's what the $100 million is? So you may not actually get the $100 million if you generate the cash and you move back up through $200 million, then you don't get any more. Is that right? Barend Van Der Merwe: Correct. Yes. So that's the $170 million. So when you look at that graph, $170 million is the maximum prepayment if our liquidity stays below $200 million. And then the $100 million is the rebate forgiveness, Glyn. But your understanding is correct. If we stay below $200 million, then we can earn a $170 million prepayment during the year. That happens, tests every month, the cash balance. Glyn Lawcock: Yes. But given your step-up in cash, once the price comes through in the second quarter, you should be able to maintain well above the $200 million, I would have thought. Barend Van Der Merwe: Correct. Correct. So then between $200 million and $250 million, you get half of that prepayment. And then kind of above $250 million, you get nothing. above $300 million cash, you start repaying it. That's the beauty of the arrangement. It kind of as you can afford it, you repay it, but as you need the cash, you get it. Glyn Lawcock: Yes. Okay. So a small amount of cash burn, but as you say, you've only got $15 million in from Stanwell, so that's about it for the quarter so far. Just an update on Logan. If you -- it looks like you will have made a decision already that it's not in your guidance other than 0.5 million tonnes. Is that correct? And is there still a chance that you could get pricing that sees it stay open? Or is it almost your expectation to fair to complete that it does shut? Douglas Thompson: No. Glyn, the framework in the U.S. requires that you provide WARN and you've made a decision, which we have done, which gives our work for 60 days that we work through it with them in that period will be mining sufficient to honor our current contracted obligations. Some of it carry over from '25 pricing mechanism. But we are working on alternate sales and looking for options. So at this stage, we wanted to make the market aware of it. This is where we're up to. And then if opportunities do present themselves, we'll clearly exploit it. You know it better than most. I read your stuff, but you've seen the U.S. market structurally change. It's now forecasting a 4% reduction this year and potentially another 4% next year, but particularly around tariffs. We've seen product that traditionally from some of those very large longwalls that have spent a lot of capital in recent years go offshore and large volumes have pivoted back onshore and crowded out the market for that high-vol A and B type product. And our decision-making with the Board is strategically to ensure that the business is set up for high-quality margin and liquidity. But if the opportunity presents, we will find the right place to position it. The way in which we're working through the idle, just to be precise in my answer is to create that flexibility. Across the 4 underground mines, there is opportunity that we could keep some of them going in service Logan contracts, but we're not considering that at the moment. Glyn Lawcock: Okay. So the guidance at the moment only has 0.5 million tonnes in for Logan pretty much? Douglas Thompson: Yes, around about a little bit less than that. Glyn Lawcock: Bit less. Okay. And then just a final one, maybe, Barrie, just obviously, CapEx sticks down to that $150 million to $175 million. In the absence of any growth spend like Mammoth 2, is that now the steady state for the business is running just a Buchanan and Curragh mindset? Barend Van Der Merwe: Yes. I think for the new installed capacity, Glyn, you'd look at that around $150 million level. It can be up and down a bit year-on-year. But I think if you go with $150 million, you're pretty safe. Operator: And your next question comes from Rob Stein from Macquarie. Robert Stein: Just on that Slide 13, just looking at the business obviously looks set for a bit of an inflection point at $220 and just noting the management changes, is this to signal, I guess, a change that we've been through quite a tough period and now we're setting up the business to a new perspective, new growth perspective. Cost out has obviously been a focus. But if I look at the projects on offer, it looks like there is a bit of a future there for the business. Can you sort of talk about, I guess, the management change out in that context? Douglas Thompson: Look, probably the first to say I want to say this key is I've signaled that I I'm moving on to other opportunities. This business has got a great future. You don't find many resources like Curragh and Buchanan where you fully permitted long life, you've put the capital in and now you can draw great return on it. The infrastructure built at both these mines by previous owners and then what we've built upon sets them up for long-term great life. And you can't be hindered. You don't have to go and get a third party's approval to do anything over a long term, which is great when you've got an Indian market that has been buying both products for 40 years and is constantly asking us for more. Every time we speak about Mammoth 2, we have offtake clients wanting to know how they can secure that. The business has been through a difficult period. The original strategy was buy the right assets, loosely hold them. We went on a strategy of investing in the business and setting it up for the future that the Board supported over the last couple of years. And in some ways, fixing the ills of the past, where you've got full draglines at Curragh, but the mine was totally boxed in by cell mining and made those highly unproductive, draglines are only moving 37% of the waste at a low point when we bought the assets. So it needed investment in a technical fix, which has been done. And the slide clearly demonstrate that, yes, we have historically peered over the fence and bought assets at the right time, and I think that may come back into the strategy. But at the near term, it's to show that what we have, we can make a lot more of, and we've demonstrated the discipline in the business of on time, on budget, well thought through, well-engineered projects and low capital and very quick payback that beats any multiple we can look at buying other assets at the moment. So people who are invested in this business can really go on a good journey with what's already there and the team can make more of. The management change, first talking to Jeff, Jeff has had a fantastic career of 50-odd years -- he's built other people's careers. I joke about it and so does Gerry, our founder saying, Jeff knows where resources are that other people want to still discover with the knowledge he has. But it's time for him to transition into retirement, and he's flagged that we're respecting that and enabling him. But he won't be leaving straight away. It will be a smooth transition into retirement. So that's very healthy and good for him and his family. For me, personally, I joined the business 4 years ago as Chief Operating Officer because I could see the potential in the business. And I was fortunate enough that the Board offered me the role of CEO. And I put a plan in place to the team that could drive productivity and drive the cost out and get the ever spiraling costs in the business that were just going up to get down, and we won the confidence to show that we had a way to get the cost down in the second cost quartile. It wouldn't be driven by cutting the bones of the business away, but we're actually investing in the business and driving productivity, and we invested in productivity initiatives. And I'm very proud, particularly last year under the team under trying circumstances, kept on focusing on that plan and have delivered that plan. And that same team stays in this business and will carry the business forward. Leadership change is natural. People add to things and then it's time for them to step out of the way and let other people take it forward. And that's the personal timing for me now. I feel like I've done the job. I made commitments to the Board. Those commitments have been honored by me, by the team. And I will allow somebody else to take it forward into the next journey of the business. But that core business that delivered this plan are the same people that can take the business going forward. So the leadership change should have minimal impact on that at all. Robert Stein: That's good context because it does appear that you've been through the trough and it's now looking to come out the other side and you're not going to enjoy the fruits of the labor. So thank you for providing that context. In terms of, I guess, the capital intensity of that plan on Page 7 -- or sorry, Slide 7 of the presentation, the growth CapEx is pretty well outlined. The life extension CapEx, is that included in the sort of $150 million rate that Glyn asked about before? Douglas Thompson: No, it's not. The focus for '26 really is sustaining capital. There's a little bit in there for degas, for Mammoth 2 and like some study work, but very little of it sustaining capital. Our focus this year, we've agreed with the Board and the team is we've just finished the Curragh major shutdown that went very successfully. That's going to enable additional throughput hours and yield out of that plant. So the step-up is now enabled in that plant. So the focus in the near term is going to be cash generation, deleveraging. And then when the market is right, we will look at then investing in the business again through Mammoth 2 and the Buchanan Plant Expansion. Robert Stein: Sorry, maybe -- I mis asked the question. But if I think about Curragh Extension, Mammoth Phase 3, Curragh Extension 2, Curragh Extension 3, their life extension projects, which normally would be in a sort of a sustaining footprint, given the sort of $150 million rate per annum quoted before, can we expect the $150 million to include those life extension projects? Or is that incremental CapEx that we're going to have to forecast across sort of '28, '29, '30 for those projects going forward? Douglas Thompson: Some of it will be incremental additional capital that you'll have to forecast. For example, if you're going to be building Mammoth it's buying additional fleet. So we'll buy 2 more continuous miners when that one comes online, another fan develop the drives of the portals. In further life expenditures, when we talk about some of the open pit extensions, there will be some box cut work that will not sit in that sustaining capital definition. At the right time, when those projects get greenlighted, we'll give more color on them. Operator: And your next question comes from Nathan Martin from The Benchmark Company. Nathan Martin: Douglas, I know you're going to be around to support the transition, but I want to take the opportunity to wish you the best of luck in your future endeavors. You guys talked previously about the recent wet weather in Queensland. How should we think about the impact from the severe cold and snow and ice in the U.S. on first quarter operations and all of these weather headwinds considered in full year guidance? Douglas Thompson: Nathan, thank you. So the team over time have been very experienced, unfortunately, in Queensland in the last years, maybe 5 years with unpredictable weather and our cyclical and seasonal weather pattern planning. So we do take the 10-year weather average and then we break it down into a 5- and a 4-year pattern, and then we build in seasonal impacts in weather in the U.S. and in Australia, but it's been more impactful in Australia over the last couple of years with some of the significant events that have come through like the cyclone at the beginning of the year -- you just don't plan for those, but you take them over an average. So there might be a short-term impact. But then over time, your system can cope with it. To the team's credit, they managed the impact of the cyclone incredibly well at Curragh, very shortly thereafter, we were back up into -- in operations and running. I think like anybody in the Bowen Basin, there's a lot of water in pit at the moment because releases of site are fairly restricted. So the team are managing that, but we've got input dams, out of put dams and pumping systems to manage. We're all watching the weather system that is up north in Queensland, the low pressure that's moving across the country pretty closely at the moment. I think that would potentially have impact if as much rain falls in the Bowen Basin as forecasted with everybody having large volumes of water to, to manage already and been pretty saturated. But the system is equipped and pretty mature for that. The freeze in the United States at the moment, our operations in the Appalachians are underground. They're very experienced with that. We've had no significant impacts with the freeze this year-to-date in our operations, except for logistics. Rail providers have offered short-term force majeures where they've had coal freeze in carriages. Quite a few of the ports that get used on that side of the country don't have at port offload points. So the coal comes into port in carriage and it gets directly offloaded in a coal loader into ship. Some of the coal is frozen in carriage on way and to protect the coal loaders, they have stopped loading it. So there's been a backlog at port that's flowing back into the operations. That is now behind us at a short-term impact and coal is flowing back out again out of West Virginia. Nathan Martin: Appreciate that color, Douglas. And then maybe just taking a step back and related, how should we think about the cadence of shipments as the year progresses? Obviously, we just touched on the weather, but also with the contracts -- remaining contracts at Logan expected to be filled, when will those wrap up? Just trying to get a sense of the cadence of shipments. Douglas Thompson: Logan is some carryover contract and pricing from '25. So we will honor those probably through the first 6 months of the year. Most of those clients want that product all delivered in that period of time. There's some that goes into Canada that might trickle on through later into the year, but predominantly, that will be closed out in the first 6 months. The rest of it has got some seasonality in what happens with wet weather and boats being able to come off anchor and go to port into Queensland. So there has been a bit of a backlog going into port post cyclone, but most of that generally gets worked through pretty quickly. So you'll see probably quarter 2, quarter 3 out of Queensland, there will be a spike in shipments and then into quarter 4 preparing for the wet weather season that shipments will come off again. That's generally how the pattern happens. And our clients are asking for a very similar profile this year to what we've seen in the past. Nathan Martin: Okay. Great. And then just maybe one final. Your full year mining cash cost per tonne guidance, $88 to $96 a tonne. What PLV price range are you guys assuming there? Barend Van Der Merwe: Just to clarify that, Nathan, you say -- so that's the cost guidance. How does the PLV relate to the cost guidance? Nathan Martin: Are there any variable costs, Barrie, tied to that range? Obviously, the Queensland royalties, I guess, hit up at the top. Just curious so. Barend Van Der Merwe: Okay. Okay. So that's mining cash costs. So the royalties actually fall outside of that. So the pricing wouldn't have bearing on the cost behavior, Nathan. It's just mine cash cost that we've got in that number. Nathan Martin: Okay. Got it. So I kind of answered my question. Then maybe just to the extent you can break it out, Barrie, I mean, what kind of mining cash cost per tonne assumptions are you guys incorporating for Curragh versus the U.S. business to get to that range? Barend Van Der Merwe: Yes. I mean when you look at that cash cost, there's a couple of moving parts that you have to consider in there. There's FX, as I highlighted in the conversation in Australia is important. So we had kind of a $0.64 FX rate in FY '25. If you look at where the Australian dollar is trading currently, it's about $0.71. So there's something to consider there. And we've considered about the $0.68 average for the year. So FX will play into it. And then -- last year, we were still ramping up the Mammoth project. So there were some preproduction costs that we capitalize that won't recur that kind of comes into the cost equation. As I said, when I spoke about cash as well, we do need to put a bit of money back into Curragh and Buchanan for development. So that's gone in. That's kind of a USD 50 million number across the 2 complexes. A big slice of cost that comes out is Logan. So we've assumed, as Douglas said earlier in our guidance that Logan will be there for kind of Q1, maybe a bit longer. So you need to take the Logan box cost out of it and then add a bit of variable cost for the volume. And so that's kind of the moving parts when you look at it on a year-on-year basis, those are the things that kind of drive it. And then as is usual, and as I said in the first part of the presentation, we are running hard at managing costs across the business, but especially at Curragh, we've done a lot of work with the commercial team. We're recontracting some of that. And we'd expect the work we're doing on savings and improving commercial discipline to offset some of the inflationary pressures that we're seeing. So without kind of putting specific numbers to that, when you bridge the cost from 2025 to 2026, those are the big moving parts that you need to kind of traverse to get from 2025 to then that 88% to 96% that we're guiding. Operator: [Operator Instructions] And the next question is from Fintan Collins from UBS. Fintan Collins: Just a quick question on Logan. How do we think about its position in the portfolio going forward? Do we think it could attract strategic value from a U.S. operator with greater economies of scale? And in such a case, would the Board consider the monetization of the asset to accelerate deleveraging conversations being had in this respect? And I'll follow up with the second. Douglas Thompson: All of the points you raised above are on the table at the moment and will be taken to the Board in due course for consideration. At the moment, the focus was on where is the market at, what can we mine to honor our contracts, let's do the right thing by our people and inform them of the decision-making and fortunate the market has brought us to. But we are exploring all the options above, but no decisions have been made at this stage. Fintan Collins: Okay. And just on those leadership changes, could you provide a bit more context around the decision and timing? And how should we think about strategic continuity? And what's the current time line for recruiting a new CEO? Douglas Thompson: Strategic continuity as the plan that we've delivered to the Board and this management team is a very tight team. So it's a plan that's collectively owned. So the fact that Jeff and I are stepping away from the business shouldn't impact the strategic direction of the business at all and the -- what we've laid out at this stage. The other help in it that we try to flag as well is at the moment, there is no conflict. But with the style of business we are and the way in which I like to operate is if a conflict does arise, particularly focusing on myself now, I'll make the Board aware of that straight away and then the Board will decide if they need me to step out of the way. And to catch that, we've got our founder Chairman, Gerry, who is obviously across everything in the business, who can step in at very short notice if required and keep continuity going. And likewise, the management team are rock solid will keep continuity going if that eventuates. So stability while we're going through this transition is key to us. And ideally, I'm around and I see it through. Recruiting, we always focus on succession planning and development within the business and then externally as well. So we haven't found ourselves flat-footed in this regard as well. But that needs to run a due process and be done well. And those things don't take 5 minutes, but they don't take a lot of time either. You can work through them very efficiently. And I'd say, fortunately, this is quite an attractive role. So we should be able to come back in due course and give everybody comfort that we've got the right people leading the business going forward. Operator: That concludes the question-and-answer section of today's call. I'll now hand back to Douglas for closing remarks. Douglas Thompson: I'd just like to say thank you to everybody for joining the call today. Hopefully, you can see that over time, we've had a plan. This is a business that has been very disciplined, engineering-led and executed a plan with steely focus on getting the long-term outcomes. And those long-term outcomes, the fruit is starting to show itself within the business, and there's clearly immense upside within the resources, but then also the people within the business. So thank you. And then if you do have any further questions, Chantelle is generally far more eloquent than Barrie and I in answering your questions. So please turn to her, and she'll help you with any further questions you do have and the rest of her team. Thank you. Operator: That concludes today's call. You may now disconnect.
Operator: Good afternoon. Thank you for standing by. Welcome to Allison's Fourth Quarter 2025 Earnings Conference Call. My name is Paul, and I will be your conference call operator today. [Operator Instructions]. After prepared remarks, Allison executives will conduct a question-and-answer session and conference call participants will be given instructions at that time. As a reminder, this conference call is being recorded. [Operator Instructions] I would now like to turn the conference call over to Jackie Bolles, Executive Director of Treasury and Investor Relations. Please go ahead, Jackie. Jacalyn Bolles: Thank you, Paul. Good afternoon, and thank you for joining us for our Fourth Quarter 2025 Earnings Conference Call. With me this afternoon are Dave Graziosi, our Chair, President and Chief Executive Officer; Scott Mell, our Chief Financial Officer and Treasurer; Fred Bohley, Allison's Chief Operating Officer; and Allison Transmission business unit leader and Craig Price, Allison Off-Highway business unit leader. As a reminder, this conference call, webcast and this afternoon's presentation are available on the Investor Relations section of allisontransmission.com. A replay of this call will be available through March 9. As noted on Slide 2 of the presentation, many of our remarks today contain forward-looking statements based on current expectations. These forward-looking statements are subject to known and unknown risks including those set forth in our annual report on Form 10-K for the year ended December 31, 2024, and quarterly report on Form 10-Q for the quarter ended September 30, 2025. Should one or more of these risks or uncertainties materialize or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those that we express today. In addition, as noted on Slide 3 of the presentation, some of our remarks today contain non-GAAP financial measures as defined by the SEC. You can find reconciliations of the non-GAAP financial measures to the most comparable GAAP measures attached as an appendix to the presentation and to our fourth quarter 2025 earnings press release. Today's call is set to end at 5:45 p.m. Eastern Time. In order to maximize participation opportunities on the call, we'll take just one question from each analyst. Please turn to Slide 4 of the presentation for the call agenda. During today's call, Dave Graziosi will reaffirm strategic opportunities presented by the acquisition of Dana's Off-Highway business and introduce Craig Price, Allison Off-Highways President. Following remarks from Craig, Dave will present the Allison go-forward business unit reporting structure prior to reviewing highlights from Allison Transmission's full year 2025 results. Fred Bohley will then review recent announcements across our business. Scott Mell will end the prepared remarks with a review of Allison's Transmission's Fourth Quarter 2025 financial performance and Allison's full year 2026 guidance prior to commencing the Q&A. Now I'll turn the call over to Dave. David Graziosi: Thank you, Jackie. Good afternoon, and thank you for joining us. In January, we announced the completion of our acquisition of the Off-Highway Drive & Motion Systems business of Dana Incorporated. I would like to welcome our new colleagues around the world. We are excited to bring these two world-class businesses together with 14,000 employees operating in 25 countries, creating a truly global leader in the end markets we serve. In late January, we welcomed our new colleagues and celebrated our combined company through nearly 50 events across our global sites. I want to thank everyone who participated in these events marking our first opportunity to come together as one Allison team. The sense of unity across our sites was clear and encouraging. Together, we begin this journey with a substantially expanded market reach, a much broader portfolio of high-quality and reliable products, creating a platform that will continue to deliver strong financial performance from both organic and inorganic growth. Our talented colleagues are dedicated to helping support our customers and their end users as they continue to respond to the global megatrends shaping the modern industrial world. On Slide 5 of the presentation, we outline attributes strengthening our position as a premier industrial company. As a combined company, Allison will leverage an expanded global footprint for more local-for-local production with increased proximity to customers and markets providing advantages in meeting both commercial and government customers requirements. Allison will also utilize our global technology centers for local development with realization of cost synergies through combined engineering, research and development. We believe that complementary technical knowledge within the combined business in areas such as software and controls, fully- integrated commercial duty propulsion solutions and electrification will accelerate product innovation and progress on key engineering capabilities and initiatives. We will continue our long history of engineering expertise, delivering products known for quality, reliability and durability across diverse drivetrain components and work solutions. With greater purchasing scale as well as vertical integration opportunities and manufacturing in best-cost countries, Allison expects opportunities for synergy realization and cost reduction initiatives within our operations. Finally, while our focus over the last two months post close has been on successful combination and integration of our businesses, our teams are working diligently on synergy capture and growth initiatives. In this transformational moment in Allison's history, we are confident in our ability to combine the two businesses while realizing annual run rate synergies, maintaining our focus on solid financial performance and continued growth as a premier industrial company. With regards to our reporting structure, as described in the press release announcing the acquisition close, the combined company will be comprised of two business units Allison Transmission and Allison Off-Highway Drive and Motion System. Allison Transmission will be led by Fred Bohley and Allison Off-Highway Drive and Motion Systems will be led by Craig Price, both hold the title of President and Business Unit Leader reporting to me. Fred will continue to serve as Allison's Chief Operating Officer. Craig, if you'd like to say a few words? Craig Price: Thank you, Dave. Good afternoon, everyone. I'm honored to step into the role of Off-Highway President and excited to be part of this pivotal moment in Allison's history. With the close of the acquisition, we are entering a new chapter focused on sustainable growth, disciplined execution and long-term value creation. From my earliest conversations with Allison's leadership team, it was clear that our businesses share a strong alignment around innovation, operational excellence and delivering meaningful value to customers and shareholders. This combination brings together highly complementary strengths. The Off-Highway business contributes deep end markets expertise, a proven track record and a highly capable, engaged team. Together, we are positioned to leverage enhanced scale, resources and global platforms to accelerate growth opportunities. As we move forward, our priorities are clear, seamless integration whilst maintaining disciplined execution. We are confident in our ability to implement our plans and look forward to updating you on our progress in the quarters ahead. Dave? David Graziosi: Thank you, Craig. Moving on to Allison Transmission's Full Year 2025 performance highlights. Before I begin, please note that these 2025 results do not reflect the financial results of the Off-Highway business we acquired from Dana on January 1. The year began with strong momentum. However, as the year progressed, our performance was negatively impacted by broader macroeconomic factors, including global trade policies, uncertainties and sluggish economic growth in most of the regions in which we operate. Despite these external headwinds, we remain disciplined, focusing on cost control and execution. Although full year revenue was down 7% year-over-year, we increased full year adjusted EBITDA margin by 140 basis points year-over-year to 37.5%, with recent events, providing improved clarity on the timing and impact of tariffs and emissions regulations, we are beginning to see early signs of demand improvements within our largest end market, North America On-Highway, and a rebound from the trough in the third quarter of 2025. We entered 2026 confident in our ability to navigate ongoing uncertainty. In addition, we are pleased with the ongoing performance of our defense end market, which for the year increased revenue by 26% to $267 million. We have now achieved our $100 million incremental annual revenue objective for this end market and remain focused on further growth opportunities given substantial increases in global defense spending commitments. Throughout the year, we are also satisfied our capital allocation priorities. For the full year, we repurchased $328 million of common stock, representing 4% of outstanding shares. We also increased our quarterly dividend in the first quarter of 2025 to $0.27 per share. The ability to complete an acquisition while simultaneously returning capital to shareholders underscores the strength of our balance sheet and the resilience of our cash flow. We remain focused on maintaining our shareholder-aligned capital allocation priorities as we progress with the integration of the Allison Off-Highway business segment. In summary, although 2025 was challenging, we exited the year with reaffirmed confidence in our business, and we look forward to the future as we enter a new chapter in Allison's over 110-year history. Now I'll pass it over to Fred to review recent announcements across our business. Fred? G. Bohley: Thank you, Dave. Good afternoon, everyone. In early December, we outlined our expanding footprint and investment in India with strategic initiatives spanning multiple sectors. Starting with defense. We recently signed a memorandum of understanding with Armoured Vehicles Nigam Limited, a government-owned defense manufacturer. The multiphase agreement marks a significant step towards establishing a maintenance repair and overhaul center in India to service current and future Allison cross-drive transmission programs. This partnership aligns with India's broader defense modernization and localization efforts, including the ongoing future Infantry Combat Vehicle program utilizing our 3040 MX cross-drive transmission. In the Indian mining sector, Allison's industry-leading value proposition continues to drive business expansion by contributing to the nation's infrastructure development and resource extraction efficiency. End users are expanding their fleets of wide-body dump trucks equipped with our 4800 Series fully-automatic transmissions, citing the consistent reliability and performance of Allison products in challenging environments. The integration of local production and global sales is underscored by Allison's strategic position within India's export hub. Daimler India commercial vehicles has begun shipments of Allison's 3000 Series fully-automatic transmissions integrated into FUSO's medium-duty trucks exported South Africa. These developments are supported by Allison's capital investments in the region. The company's state of art facility expansion in Chennai announced in late 2024 is operational and will ramp to full capacity in 2027. In addition, we are excited for the opportunities presented by our expanded footprint and presence in India with four manufacturing plants and around 4,000 employees joining Allison from the Off-Highway Drive and Motion System team. Our strategic investments not only reinforce Allison's ability to meet increasing demand across global markets, but it also solidifies the company's role as a key partner in India's industrial growth. With more local for local production and partnership with OEMs supporting the Made in India framework. Allison's opportunities are expanded and our competitive advantages are strengthened. Thank you, and I'll now turn the call over to Scott for a recap of Allison Transmission's Fourth Quarter 2025 financial performance and the introduction of Allison's 2026 guidance. Scott Mell: Thank you, Fred. Please turn to Slide 6 of the presentation for the Q4 2025 performance summary. Year-over-year net sales of $737 million were down 7% from the same period in 2024. In the outside North American On-Highway end market, we achieved record fourth quarter revenue leading to record full year revenue of $507 million. In the defense end market, we continue to execute on our growth initiatives with fourth quarter net sales of $73 million up 7% year-over-year. Although fourth quarter net sales were down year-over-year in our North America On-Highway end market, the sequential improvement of 10% from the trough in the third quarter demonstrates the positive impact that improved clarity has had on end user purchasing decisions. Net income for the quarter was $99 million, a decrease of $76 million from $175 million for the same period in 2024. This year-over-year decrease in net income reflects two meaningful onetime items. First, we recorded a $29 million impairment related to our investment in electrification. Second, we incurred approximately $26 million of expenses related to the Dana Off-Highway business acquisition. When adjusting net income for the impairment loss and the acquisition-related expenses, our fourth quarter net income was $141 million, with diluted earnings per share of $1.68. Despite a net sales decrease of 7% year-over-year, adjusted EBITDA margin increased over 200 basis points to 36% for the fourth quarter. Net cash provided by operating activities for the quarter was $243 million, an increase of $32 million from the same period in 2024. The increase was principally driven by lower cash income taxes, reduced engineering R&D spending and lower operating working capital funding requirements, which more than offset lower gross profit and $17 million of payments for acquisition-related expenses. Our cash generation remains a key strength of our business with adjusted free cash flow of $169 million in the fourth quarter. We continue to maintain solid operating cash flow, reflecting in the resilience of our operations and disciplined cost management. We expect to continue to generate substantial and sustainable free cash flow as a combined business with our robust cash generation, ensuring our capital allocation priorities remain intact. We will continue to invest in our businesses to drive long-term growth and innovation with accelerated debt reduction, which will allow us to reach our leverage targets in the near term. We have already started to pay down debt incurred for the Off-Highway acquisition, and we'll continue to provide updates as we progress. Importantly, Allison remains fully committed to returning capital to shareholders through ongoing share repurchases and consistent dividend payments, reinforcing our disciplined approach to creating long-term value. A detailed overview of Allison Transmission's net sales by end market and Q4 2025 financial performance can be found on Slides 7, 8 and 9 of the presentation. Please turn to Slide 10 of the presentation for Allison's 2026 guidance. Before I cover our 2026 guidance, I want to highlight that starting with our Q1 2026 10-Q, we will be providing two segment reporting, one for the Allison Transmission business unit, which will, for the most part, reflect the historical Allison transmissions business and one for the Allison Off-Highway Drive and Motion Systems business unit, which will reflect the business acquired from Dana. In addition, we will report financial results for the Allison Group, which will include primarily functional costs that support both business segments. We will provide additional details on this reporting structure as we move forward. For the full year 2026, we are providing the following guidance: Consolidated net sales in the range of $5.575 billion to $5.925 billion. This includes net sales for the Allison Transmission segment in the range of $3.025 billion to $3.175 billion, and net sales for the Allison Off-Highway Drive and Motion Systems segment in the range of $2.550 billion to $2.750 billion. Consolidated net income in the range of $600 million to $750 million, subject to the completion of purchase price accounting associated with the acquisition of the Allison Off-Highway segment. Our net income guidance for 2026 includes approximately $70 million of onetime pretax expenses associated with the separation, integration and restructuring of the Allison Off-Highway segment. Even with these onetime costs, we expect the Allison Off-Highway acquisition to be accretive to net income and earnings per share in 2026. Further, we expect consolidated adjusted EBITDA in the range of $1.365 billion to $1.515 billion. At the midpoint, this implies a 25% adjusted EBITDA margin. Our adjusted EBITDA margin guidance assumes continued softness in the North America On-Highway end market, particularly for medium-duty trucks with no meaningful recovery model for Class 8 vocational trucks. Also, key Allison Off-Highway end markets are expected to remain at or near trough. As previously communicated, we expect to capture approximately $120 million of annual run rate synergies over the next few years. Once the full synergy capture is realized and we see moderate improvements in end market conditions, we expect consolidated adjusted EBITDA margins in the range of 27% to 29%. For our 2026 cash flow guidance, we anticipate consolidated net cash provided by operating activities in the range of $970 million to $1.100 billion. Consolidated capital expenditures in the range of $295 million to $315 million, including onetime separation and integration CapEx of approximately $45 million and consolidated adjusted free cash flow in the range of $655 million to $805 million. Please note that our consolidated net cash provided by operating activities guidance includes approximately $55 million of onetime cash outlays associated with our acquisition of the Off-Highway Drive and Motion Systems business unit. In addition to our financial guidance, Slides 11 and 12 in the presentation provide commentary on our 2026 outlook for the Allison Transmission and Allison Off-Highway end markets, respectively. This concludes our prepared remarks. Paul, please open the call for questions. Operator: [Operator Instructions] Our first question is from Rob Wertheimer with Melius Research. Robert Wertheimer: Could you talk just briefly about what your pricing expectations are for 2026, what your rate of inflation is and just kind of what you embedded in the ever-changing tariff situation? And just for clarity, when you do disclose the segment data, you were doing EBITDA by segment or operating income by segment? And any comments on kind of the core legacy business, whether profits are up or down in your embedded guide? G. Bohley: You want take the first piece and maybe I'll chime in towards the end. Scott Mell: Yes. Yes, I'll take the first question, which I think started with pricing and led into tariffs. So I think as we've talked about before, given our LTA negotiations over the last few years, we expect to continue to see meaningful year-over-year pricing. And I think we've also said it certainly may not be at the rate that we've seen in the last few years. I think somewhere between 250 and 400 basis points of pricing is probably directionally where we'll end up. I think us like others are facing substantial inflationary pressure across not only people cost, but material costs or otherwise, I would point you to sort of what you're seeing in inflationary forward indicators is what we're experiencing. And then obviously, on the tariffs, I haven't been online today, so I'm not sure where we're at, but I think we expect to recover a meaningful amount of our tariff on a year-over-year basis through pricing actions that we've taken. But it certainly will be a net drag on margins on a year-over-year basis. I think that answered the beginning of the question, Fred. G. Bohley: In I guess I would say, to Scott's comments relative to pricing were for the Allison Transmission business unit. We'll obviously be combining looking at pricing in total. And to his point, we do have customers we put on LTAs, and we do expect better than traditional pricing that we've done in the past of 50 to 100 basis points. And then the other question really was on level reporting, Scott, down to... Scott Mell: Yes. So I think the expectation is that you'll see from net sales down through an operating profit level with enough detail around depreciation and amortization that you can get to an EBITDA number. So there'll probably be some cash flow metrics as well. But I think you'll certainly have enough detail as we report the first queue here to be able to distinguish between the two business segments. Operator: Our next question is from Tim Thein with Raymond James . Timothy Thein: Thank you. And congrats on getting all this work done and behind you. Just on the -- I recognize that there's always challenges in fixing to a midpoint. But just if we did that, if you think about the kind of the midpoint EBITDA estimate of $1.4 billion, if we assume it's probably not the right assumption, but if we assume that the Allison business is flat year-over-year despite growing on the top line, that would imply that the Off-Highway business is doing something like 11%, 12% EBITDA margin on, call it, around at 2.6 in revenues. Is that -- are there things we should think about? Is that, I don't know, some onetime items going through there? Or maybe just help us there in terms of the implied EBITDA of the acquired business. Scott Mell: Well, this is Scott. Thank you for the question. I think as you try to do your math there, I would encourage you to keep in mind that while we're going to have sales growth on the top line as we start to look at the end markets, in particular, the Class 8 straight, we are going to have a substantially different mix than we had in 2025. And as Fred mentioned or Dave mentioned on the call, 2025, the first quarter into the second quarter was stronger in the North America On-Highway end market, and we're as I mentioned in our call, we're not expecting a meaningful improvement, and we're modeling it or we're looking at it closer to kind of where it was in the second half of last year. So that will impact the margin outlook for the traditional Allison Transmission business. G. Bohley: And then we still have to work out . Timothy Thein: Your North America Highway forecast is assuming kind of run rate where you exited the year. Is that right, Scott? G. Bohley: I'll take that, Tim. This is Fred. Yes, I mean we were -- what we're seeing and what we said in our prepared remarks is, is very, very soft conditions relative to. And we have not modeled any meaningful recovery in Class 8 straight. So to Scott's point, on a year-over-year basis, that would be negative from a mix standpoint, because the first half was very, very robust from a Class 8 straight truck. And then really getting down into each segment's margins at this point is challenging, because there's still a lot of work being done here relative to how corporate costs are going to be allocated and that work still yet to be done in the first quarter and will be represented in the results that we posted up in May. Operator: Our next question is from Ian Zaffino with Oppenheimer & Co. Ian Zaffino: I wanted to drill down on the acquisition. I guess you've been operating it for a couple of months now. How should we think about synergies? I think you initially outlined, I think, $120 million or $125 million. How do you feel about it now? And then what amount of that is actually in guidance? And how do we think about kind of the cadence of that? David Graziosi: Ian, I appreciate the question. It's Dave. So in terms of the synergies back to the prepared comments and what we actually talked about when we announced the acquisition, that $120 million run rate of synergies a few years out, that's exactly where we sit today. The team and I say that both Allison Transmission and the Off-Highway segment are very engaged right now at a functional level, analyzing what you would expect. So I believe you were kind in two months with the company if you actually think about just closing and getting the teams organized. It's been a very busy 40 to 50 days. But despite that, I give the team a tremendous amount of credit and really digging in on the synergies work that was outlined. As you would expect, from our perspective, operations, procurement, engineering and some SG&A are really the focus areas for our team. So we're certainly excited about that when you think about the global footprint that we now enjoy, especially in the context of some of these trade policy developments that are out there. And frankly, I think the team is very engaged in analyzing some broader opportunities there. I would also offer -- we really have scratched the surface in terms of other synergies as well. So as the year progresses here, we'll be providing some level of update -- to answer the last part of your question, we have not assumed any synergies in the 2026 guide at this point. So Scott's comments, I think it's important when you look at the reoccurring business guidance that's being provided is really the -- I think, the go forward in terms of setting expectations where we are, but there's a tremendous amount of work that the global team is undertaking this year, as you could imagine from some of the investments that we announced. Operator: Our next question is from Jerry Revich with Wells Fargo Securities. Jerry Revich: Congratulations on the closing. I want to ask, Fred, as we think about the margin profile for the legacy Allison business going forward, are the 40% EBITDA margins that we saw the business hit in 2018, 2019, are those feasible in this coming cycle, the way you see the business setting up? Can you just give us an update on if we think we can go back to those margin levels? And then, Craig, just a follow-up on the last question. Would you mind just sharing your maybe top two or three priorities for the business over the next 12 months? G. Bohley: Jerry, this is Fred. So clearly, you look at the performance we had in 2025, revenue down 7% and EBITDA margin up 140 basis points with a significant amount of cost pressures relative to tariffs, to the extent that you get a lift in the top line and we've made investments such that we are bringing on additional capacity. We're growing the business outside North America, record revenue outside North America in 2025, again, with some choppy end markets. The opportunities that we have relative to the combined footprint that Dave talked about and ability to just leverage and optimize a much larger global footprint. The fact that our products are very well received. Our largest obviously driver in North American On-Highway is Class 8 straight truck share last year was up 1%. So we've been able to pass on price. We've been able to actually increase share. So we have a significant value proposition. So I certainly would not rule out returning to those peak margins, 40%. I think what needs to be understood is we are making peak earnings on everything we send out the door. So we saw significant cost increases, and we haven't been able to price at $2 for every dollar of cost increase. Obviously, margins compressed on a percentage basis, but absolute margins on what we sell has never been higher. And the team is very focused on getting after costs, best in quality and continue to grow in -- outside North America. So again, that doesn't always come with, with the same margins initially. Sometimes there's an element of penetration pricing. But the short of it is putting it all together, I think 40% is achievable. But from our standpoint, it is what's the dollar amount of EBITDA we make? And ultimately, how much of that can we convert to cash. I mean that's truly what the team is focused on. David Graziosi: And Jerry, it's Dave, to your question for Craig. The good news is his top three priorities are the same as everybody else in Allison, which is meeting customer commitments, seamless integration in combination, which is a tremendous amount of work this year and execution. As Fred mentioned, we're right back into it here, many of the end markets that we're dealing with are at or coming off trough levels. There'll be a fair bit of work continuing to be highly aligned with our customers around return of volume, managing the supply release, et cetera, and so forth. So a lot of work there to be done this year. But again, it's really back to meeting customer commitments, the separation integration work, most importantly, just execution across the board. Operator: Our next question is from Tami Zakaria with JPMorgan. Tami Zakaria: I wanted to clarify two things. The first one on Off-Highway Drive and Motion segment guide. That guidance, the midpoint, how much is Dana Off-Highway growing like-for-like year-over-year embedded in that guide? David Graziosi: Tami, it's Dave. If you look at it and again, like-for-like, understanding the 2025 results are not out there on a, I would say, an apples-to-apples basis for what we, as Allison, have as Allison Off-Highway now, but I would put it in -- on a year-over-year basis, mid-plus single-digit rate on a year-over-year basis at top line. Tami Zakaria: Understood. That's helpful. And then the second question, I hear the 25% EBITDA margin guide for the year, how should we model the seasonality between the 4 quarters and related to that, how should gross margin be throughout the year versus the high 40 that you ended with last year? David Graziosi: Tami, it's Dave. Let me take the first part of that and then Scott can chime in. In terms of seasonality, it's interesting when you look at the way our guide is built this year, it's really not, I would say, very uneven quarter-to-quarter at this point, just given the nature of the two segments we now have. So if you broadly looking at sales first half, second half, very similar on a total Allison basis. So as you know, historically, Allison's had some level of seasonality in the fourth quarter, the last few years have changed that dynamic a bit -- so -- and I would say, generally speaking, as you think about the year from an overall pace perspective as we sit today, relatively level. So -- and Scott, on the margins. Scott Mell: Yes. I mean working toward the annual midpoint of 25%. I don't think you're going to see, to Dave's point, substantial swings in margins just given some of the, the nature of the sales, which are going to be even over the course of the year. So I wouldn't build in any substantial changes in margins, although I would say we -- as we get to the second half of the year, on the transmission side, we're cautiously optimistic that we'll start to see some improvement in medium-duty demand potentially. So that might be a driver in the second half of the year. Operator: Our next question is from Angel Castillo with Morgan Stanley. Angel Castillo Malpica: Just I was hoping you could unpack the end market guidance in a little bit more detail. I guess, I'm a little bit surprised just the assumptions around no-recovery Class 8 trucks. And I think you mentioned, assuming off-highway remains kind of at or near drop just when I think about versus what we're hearing from either other OEMs on the truck side or even on construction or ag side, it seems like there's a little bit more kind of upbeat sentiment that there could be a little bit more recovery or improvement at least in the second half? And I think you mentioned various soft conditions, I think, in the vocational market. So just to your impact a little bit more, like, to what degree is that you're seeing something in kind of the latest order books that seems to suggest a little bit more cautiousness is warranted versus maybe just being early in the year versus what other people are seeing. G. Bohley: Angel, this is Fred. I'll take on the Allison Transmission portion, and then Dave will go through the Allison Off-Highway. Start with our largest end market, North America On-Highway, again, we are seeing very, very soft medium-duty activity. A lot of that's driven by the large lease rental players. They have really not reentered the market. Class 8 straight is, I would call it, steady and there's still a decent amount of uncertainty as to whether there's going to be a prebuy in the second half of the year. We have not modeled in that pre-buy. So really, when you look at it on a year-over-year basis with the strength we had in the first half, certainly, unit volumes for us are down. Now that's being offset by continued momentum in defense primarily outside North America and non-U.S. government sales volume going to Hanwha, out of Korea with their [indiscernible], the Poland Borsuk, the Turkey Korkut, so programs that we've talked about that are -- have been announced, but are now generating revenue. So we definitely expect defense to continue to accelerate. And a decent portion of that we have in the plan as well is going in that direction. Outside North America, again, record in 2025, but we expect continued growth. And we're seeing some strength in vocational truck in Europe, wheel defense. As Dave mentioned, Japan was really dealing with Australian vehicle regulations, was a little soft last year. Some of that volume was pulled into 2024. So we had that in our favor, and that's a market that in certain classes, we have over 60% share. China, forward momentum on the wide body mining dump business, vocational haul, [ fired crane ], South America, we penetrated school buses. We're seeing success in vocational truck. So walk through the end markets outside North America, since up, but in you get lower volume assumptions in North America on-highway. With that, Dave, do you want to comment Off-Highway. David Graziosi: Angel, it's Dave. So just on Off-Highway, just to level set, if you think about five end markets for off-highway that we list in the call presentation. The largest of those is construction and material handling, that's the right behind that would be service parts, specialty and other and then agriculture and then obviously, in industrial mining. So I think to your comments in terms of what some of our customers are saying in terms of relevant to those individual end markets. I would offer as we think about starting with construction material handling, although construction markets, you're seeing, I would say, a steady level in terms of civil engineering and some of the infrastructure work that's going on. The fact is residential is still relatively weak, as we know, given its rate sensitivity. If you think about the material handling side, again, very much subject to what's been going on in the trade space. As we mentioned earlier, I would certainly provide some backdrop to that by saying the team, I believe, overall, the guidance that we're providing on this call for 2026, we're taking a prudent approach. So I would say the same thing, frankly, when you start thinking about agriculture. A lot of moving pieces there. As you know, if you look through the public comments from customers, there's many assumptions that are going into that at this point. There's bifurcation in terms of equipment sizing, where the market is, where inventory levels are. Commodity price is certainly a bit challenged right now for a number of reasons. There's some assumptions that some are making around farm subsidies, et cetera, that drive that market as well, but margins are still very challenged for farming overall. So the team has taken that into account. Beyond that, industrial, they certainly expect to benefit from some of these larger projects that are tied to industrial output and manufacturing. And finally, mining we have some assumptions there around just giving commodity prices for things we find most or at least relevant to our Off-Highway business being gold, copper, rare minerals, et cetera. We are certainly assuming some growth there, directional with what you've heard from some. But again, that's a bit of a first half, second half story as well in terms of overall approach or expectations for the year. Operator: Our next question is from Luke Junk with Baird. Luke Junk: Just hoping we could maybe discuss pricing in the Off-Highway business that you acquired both in the near term, I would assume there's probably some tariff impacts and recovery in the business this year, but also be curious just to get your bigger picture thoughts on aspirations for pricing in that business longer term as well. David Graziosi: Luke, I appreciate the question there. So I would say for 2026, as we've done with the Allison Transmission business, as we've discussed the team's approach certainly is to mitigate the tariffs. So that's incorporated into some of the top line changes you see from '26 versus '25. I would say, overall, for the Off-Highway business in totality, price relatively neutral year-over-year with the exception of some of the tariff activity that I mentioned. The approach, as you know, for Allison is to sell our products based on value. I think the off-highway team certainly is aligned with that approach, historically I think some of that, frankly, in terms of our expectations are really tied to overall market conditions. As you know, as we mentioned, relatively trough levels almost across the board. So we would expect commensurate with those market conditions improving some improvement in terms of overall price. But as we again entered the year, top priority being meeting these customer commitments. We're obviously staying close to overall volume expectations and developments. Operator: Our next question is from Kyle Menges with Citigroup. Kyle Menges: I was hoping we could revisit the cost synergies. It sounded like that there were no cost synergies embedded in your guidance. I just wanted to clarify that. And then just would love to hear what cost synergies you're targeting for the first 12 months and how to think about the magnitude of impact that could potentially drive . David Graziosi: Kyle, it's Dave. So on the synergies, again, very confident in the $120 million annual run rate that we've talked about. There's a tremendous amount of work amongst the global team -- you can imagine the scope of that undertaking just given the amount of facilities, different products, et cetera. So we're taking as best we can, a very thoughtful, measured approach by functions, whether it's operations, procurement, et cetera, is being very deliberate about stepping through that. That is wide answer or answer your question there in terms of 12-month assumption really aligns with our 2026 guide. The answer is we've not assumed any for that reason as we get, as I mentioned earlier, further into the year and certainly for 2027 guidance, we can provide a pretty fulsome update at that point. But I would tell you, just given the amount of activity that's being undertaken around separation that does involve a number of agreements, et cetera, there's a fairly high-level work that's involved there. So this is the same group of people doing many, many things right now. So we're going to do it right and make sure that we have the outcome that we're looking for, but there's certainly no doubt from the Allison team's perspective that we are committed to deliver those synergies. Operator: Thank you. That is all the time we have for questions today. I would now like to pass the floor back over to David Graziosi for any closing comments. David Graziosi: Thank you for your continued interest in Allison and for participating on today's call. Enjoy your evening. Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
Operator: Good afternoon, ladies and gentlemen, and welcome to the Ultra Clean Technologies Fourth Quarter 2025 Financial Results Conference Call. [Operator Instructions] This call is being recorded on Monday, February 23, 2026. I would now like to turn the conference over to Rhonda Bennetto, Investor Relations. Please go ahead. Rhonda Bennetto: Thank you, operator. Good afternoon, everyone, and thank you for joining us. With me today are James Xiao, CEO; Sheri Savage, CFO; and Cheryl Knepfler, VP Marketing. James will begin with some prepared remarks about the industry and highlight some of the opportunities ahead for UCT. Sheri will follow with the financial review, and then we'll open up the call for questions. Today's call contains forward-looking statements that are subject to risks and uncertainties. For more information, please refer to the Risk Factors section in our SEC filings. All forward-looking statements are based on estimates, projections and assumptions as of today, and we assume no obligation to update them after this call. Discussion of our financial results will be presented on a non-GAAP basis. A reconciliation of GAAP to non-GAAP can be found in today's press release posted on our website. And with that, I would like to turn the call over to James. James, please go ahead. James Xiao: Thank you, Rhonda, and good afternoon, everyone, and thank you for joining us. This is my first sole earnings call as CEO. And as I approach nearly 6 months in a row, I remain very energized by the opportunity ahead of us. We have spent significant time across our global sites, meeting with employees, customers and partners and have developed an even deeper conviction in the strength of our team, our strategic position and have refined our long-term growth strategy and vision, which I now call UCT 3.0. I want to thank our employees worldwide for their focus, resilience and commitment to operational execution during this transition. Their dedication to our customers and to continuous innovation and improvement is fundamental to our performance, and it positions us well as we enter a new phase of AI technology-driven industrial growth where speed, scale and execution will become defining advantages for long-term winners like UCT. As you have heard recently from our customers and their customers, we're no longer preparing for a semiconductor recovery. We're entering a structural expansion of wafer fab equipment driven by AI infrastructure and physical AI demand. The long-term outlook for the semiconductor market remains very strong. Industry projections now suggest the market could reach $1 trillion in annual revenue of semiconductors by 2027, possibly earlier, which is significantly ahead of prior expectations. What we are witnessing is not a normal cyclical upturn. It is an AI technology inflection. The center of gravity has shifted from consumer electronics to AI infrastructure, physical AI, autonomous driving and other AI applications. The evolving AI road map from generative AI to physical and agentic AI and ultimately, artificial general intelligence, or AGI, is driving greater end customer confidence and accelerating investment in AI infrastructure. Stakeholders across the AI ecosystem are investing to support growing AI end market demand. Rising device complexity is accelerating wafer fab equipment spending as leading edge fabs deploy new materials like molybdenum and new structures such as gate-all-around and high-bandwidth memory. These technologies require tight integrated solutions across deposition and removal with increased dep edge CapEx intensity, which provide a tremendous growth opportunity for UCT. All these market drivers should lead to a multiyear WFE upturn once wafer fabs address their near-term clean room constraints. Our technology co-innovation is tightly aligned to our customers' road maps. We expect to see strength around etch and deposition, especially ALD and high-precision etch to support gate-all-around and backside power distribution logic transitions as well as high-bandwidth memory, advanced packaging and greater than 300-layer NAND in memory. This environment demands innovation velocity and operational agility. This is how UCT is positioned today and will continue to evolve to win and create a sustainable, profitable growth. This strategic transformation is what we call UCT 3.0. Ramp readiness is our top priority now. We have been preparing for this moment, and this is where UCT has a distinct competitive advantage. Over the past several months, we have been focused on our business to operate with greater responsiveness and sense of urgency, efficiency and accuracy. Leveraging our global talent and footprint, we're driving operational execution initiatives to ensure we grow as the partner of choice for engineering support, development and also the manufacturing support. Through facility optimizations over the last several years, we have the capacity in place now to support approximately $3 billion in revenue today with global utilization currently averaging 65%. Among our worldwide capacity, approximately 50% is currently in Asia with plans to increase to 60%, which is strategically aligned to support our key customers' global manufacturing footprint. As volumes ramp quarter-over-quarter, we will be focused on improving operating leverage and generating meaningful margin expansion. While we expect 2026 demand to be second half weighted and increase into 2027, customers are encouraging us to position capacity ahead of that inflection. Our largest customers are providing extended visibility, enabling us to align capacity and service infrastructure in advance of increased order activity. In parallel, we have identified and addressed product-specific supply chain and manufacturing constraints to ensure the readiness for a step function increase in orders. For UCT to support our long-term goal of a $4 billion annual run rate, only modest incremental clean room investment will be required. We do not expect infrastructure-related capacity to be a limiting factor during this cycle, provided we continue to build and retain the skilled workforce required and leverage automation and lean capabilities to scale capacity efficiently. Having well-planned extra capacity entering a technology inflection of this magnitude is a strategic competitive advantage. This allows us to support customer road maps while capturing pull-in and drop-in opportunities and responding rapidly to urgent need and frequent changes that others may struggle to support. In addition to our ramp readiness initiatives, we're also accelerating the design to production cycle, expanding our participation in high-value new product introductions at the leading edge nodes and strengthening strategic technology integration with our customers. A key enabler of this is our expanded MPX strategy, which is comprised of new product introduction, new product development and new product transition. Together, they will position UCT to co-innovate earlier, ramp faster and manufacturing closer to customers, driving speed, responsiveness and supply chain resilience at scale. Another important focus area is on digital transformation. By upgrading our systems, processes and data infrastructure with AI compatible solutions, we are further improving operational visibility, shorten cycle times, enhancing productivity and enabling a faster response time to our customers. These digital initiatives set a solid foundation for our multiyear digital transformation drive towards AI-enabled IT infrastructure and business processes to enhance operational agility and continuously improve productivity. In closing, we remain focused on reaching our long-term $4 billion revenue target expanding margins over time and delivering durable shareholder value as a strategic co-innovator and manufacturing partner throughout the next cycle of technology inflection. We will now turn the call over to Sheri, who will summarize our first quarter results and update you with our first quarter guidance. I look forward to your questions following the financial summary. Thank you. Sheri Brumm: Thanks, James, and good afternoon, everyone. Thanks for joining us. In today's discussion, I will be referring to non-GAAP numbers only. As James mentioned, we are entering a structural expansion of wafer fab equipment spend, driven by AI infrastructure and physical AI demand. I'll now review our fourth quarter and full year results as well as provide our first quarter guidance. For the fourth quarter, total revenue came in at $506.6 million compared to $510 million in the prior quarter. Revenue from products was $442.4 million compared to $445 million last quarter. Services revenue came in at $64.2 million in Q4 compared to $65 million in Q3. For the full year, total revenue was $2.1 billion, roughly flat with 2024 revenue. Due to facility optimization initiatives over the last several years, we have the capacity in place now to support approximately $3 billion in revenue and are currently averaging 65% utilization. We believe that in order for UCT to support a $4 billion annual run rate, only modest incremental clean room investment will be required. We remain focused on aligning workforce capacity with demand while leveraging automation and lean disciplines to drive efficient and scalable growth. Total gross margin for the fourth quarter was 16.1% compared to 17% last quarter. Products gross margin was 14.1% compared to 15.1% in Q3 and services was 29.7% compared to 30% last quarter. Gross margin was impacted in Q4 due to a shift in product mix. Total gross margin for 2025 was 16.5% compared to 17.5% in the prior year. Margins continue to be influenced by fluctuations in volume, mix, manufacturing region and related tariffs as well as material and transportation costs, so there will be variances quarter-to-quarter. As production levels increase sequentially, we expect improved operating leverage and meaningful margin expansion. Operating expenses for the quarter was $56.6 million compared to $57.7 million in Q3. As a percentage of revenue, operating expenses were 11.2% versus 11.3% last quarter. For the year, operating expense as a percentage of revenue was 11.2% compared to 10.6% in the prior year. Total operating margin for the quarter came in at 4.9% compared to 5.7% last quarter. Margin from our Products division was 3.9% compared to 4.9% and services margin was 12.4% compared to 11.1% in the prior quarter. For the full year, operating margin was 5.3% compared to 6.9% in the prior year. Fourth quarter tax rate came in at 21%, consistent with our expectations. Our mix of earnings between higher and lower tax jurisdictions can cause our rate to fluctuate throughout the year. For 2026, we expect our tax rate to stay in the low 20% range. Based on 45.8 million shares outstanding, earnings per share for the quarter were $0.22 on net income of $10 million compared to $0.28 on net income of $12.9 million in the prior quarter. For the full year, earnings per share was $1.05 on net income of $47.7 million compared to $1.44 on net income of $65.2 million in 2024. Turning to the balance sheet. Our cash and cash equivalents were $311.8 million compared to $314.1 million at the end of last quarter. Cash flow from operations was $8.1 million this quarter compared to breakeven last quarter, primarily due to working capital management. For the full year, cash flow from operations was $65.6 million compared to $65 million in the prior year. Looking ahead, we continue to see a strong structural backdrop for semiconductors with industry estimates now calling for annual revenue to approximately $1 trillion by 2027, possibly earlier. We continue to execute towards our longer-term $4 billion revenue goal with a focus on expanding margins and generating durable shareholder returns. For the first quarter of 2026, we project total revenue to be between $505 million and $545 million. We expect EPS in the range of $0.18 to $0.34. And with that, I'd like to turn the call over to operator for questions. Operator: [Operator Instructions] Your first question comes from the line of Charles Shi from Needham. Yu Shi: I want to start with your overall view on WFE. Back in January, I believe you talked about probably low to mid-teens WFE growth. I saw in your presentation, there's $125 billion to $135 billion projection in the deck, but not so sure about your base numbers. So can you give us a little bit better sense of what's your WFE forecast this year? And on a related question, the Q1 guidance looks like at least on a year-on-year basis, it's at the midpoint of the guidance is only up a little bit. So it looks like you maybe predict -- I mean, implying a very, very strong second half pickup. I wonder how the shape of the year could be. James Xiao: Charles, let me answer your questions, and I'll have Sheri chime in. So for -- as I explained to you in the Needham conference, a month ago, we see the forecast increase week by week. So right now, our view on the overall WFE is bigger than a month ago. So we're looking at 15% to 20% year-over-year growth. And in terms of your second question, yes, we do not see probably what you see the year-over-year quarter-over-quarter from our customers. But we have a big bump from Q3 to Q4. So if you take the average, the increased rate actually is kind of in line with our customers' growth rate. Yu Shi: James, maybe a quick clarification. You said a big bump. Basically, you are saying maybe the run rate -- for your revenue run rate, you see like September will be a very strong pickup from June, maybe from a strong pickup again from September to December. Is that what you were speaking to, yes. James Xiao: Yes. I think that you're right. So look forward, we definitely see a step function increase in the second half of '26. And that's where we see the over year, and we're very optimistic about the whole year growth. Yu Shi: Maybe may I ask a question about gross margin. So can you provide a little bit color March quarter, what's the implied gross margin expectation under your revenue and EPS assumptions? Brian Harding: Charles, this is Brian Harding. I'll cover the margin question for you. Just quickly, yes, we expect gross margins in Q1 to be roughly the same, maybe slightly up to Q4 and then sequentially up from there through the year. Operator: Your next question comes from the line of Krish Sankar from TD Cowen. Sreekrishnan Sankarnarayanan: James, I had 2 of them. One is, if WFE is going to grow 15% to 20%, is it fair to assume you could outgrow that WFE this year? And would your revenues grow sequentially every quarter? Or is it really more back half weighted that Q2 is going to be flattish? So just trying to figure out if you can outgrow WFE for Ultra Clean revenues. James Xiao: Yes. I think that what we look at is this year, we see really kind of a step function growth of the WFE. So we're very confident we will kind of in line with the WFE growth. And we also see that because we have a well-planned extra capacity that really can address $3 billion. So we'll capture more opportunities, leverage that extra capacity. So we're pretty confident we will be on par with WFE growth or even higher. Sreekrishnan Sankarnarayanan: And would it be sequentially growing? Or is it more really like Q3, Q4? James Xiao: I think that we will see another growth in Q2 already, but more step function in the second half. Sreekrishnan Sankarnarayanan: Got it. Got it. And then a quick follow-up. How much was China as a percentage of revenues last quarter? And how do you expect that to grow, especially given that the Chinese semi-cap customers seem to be doing pretty well? James Xiao: It's a great question. I think that as you have already heard from our customer, the WFE in China is flattish in 2026. I think because of the worldwide WFE is growing substantially, I think the percentage of the China WFE will be lower. For our business for the China OEMs, we see also kind of flattish forecast for 2026. So -- but overall, it's less than 7% of our overall revenue. So I would not put too much of the emphasis on this. Operator: Your next question is from the line of Edward Yang from Oppenheimer. Edward Yang: Just wanted to follow up on the gross margin assumption for the upcoming first quarter '26. I think Brian mentioned that you're expecting same or slightly up from third quarter. So just wondering what's driving that? Why aren't you seeing more operating leverage from that? And can you maybe talk a little bit more in detail about the mix issue that you saw in the fourth quarter? James Xiao: Yes, Ed, I think that I will answer that, and maybe Brian, you can chime in. So overall, I really see, as I said, we're running at 65% of the utilization rate today, and we see definitely the demand is growing quarter-by-quarter. So by the end of 2026, we definitely see a much higher utilization rate. That will naturally expand our margin profile. And also, we're keeping very disciplined operation cadence. So we will not grow the OpEx and IDL as the revenue growth. So that will also -- that discipline will also give us margin expansion opportunities and Brian, maybe you want to talk more on the model standpoint. Brian Harding: Yes, sure. Just looking at Q3 to Q4, first off, Ed, we -- in Q3, we did have a favorable product mix that didn't repeat again in Q4. And so -- and our margins do continue to fluctuate with volume and mix and manufacturing regions as well as tariffs and material transportation costs. A number of things impact our margins quarter-to-quarter. And going forward into Q1, I did say that we expect Q4 and Q1 to be roughly in line, maybe slightly better in Q1. But then as volumes come in, as James mentioned, in Q2, 3 and 4, we expect sequential margin expansion in a meaningful way. Edward Yang: Okay. And I mean, this is a tough question to answer, but obviously, a lot of excitement around what's happening in memory. And that's a business that in the prior peak was $900 million in revenue for you. It's down about $300 million from that peak. So I would imagine that would have some significant upside as well. So James, when you think about, I guess, this memory cycle, what's your feeling in terms of how much longer it could go in terms of the strength on the upside? And what are the sort of parameters we should be watching out for in terms of the slope of that up cycle and the duration of that up cycle? James Xiao: Ed, this is a great question. I think that you hear from our customers' customer, right? So some of them are mentioning that the shortage will last until 2028. And what we see that the -- all 3 of them, Micron, Samsung and SK, they are really investing on greenfield will they continue to convert existing fab to really kind of address immediate demand. So we really see this as a multiyear upturn for the memory segment. And also, if you look at the end market demand, HBM will compromise the nameplate capacity in the DRAM factories. So you almost need more WFE investment to compensate that focus on HBM capacity expansion while they still try to address the unbalanced demand and supply in the regular DRAM market. And also, I think that if you look at the NAND, you still see that upgrade from the [ 2xx to 3xx and 4xx.] So that will continue. You heard Lam is talking about that $40 billion over multiple years of NAND upgrade capacity and investment. And they also mentioned that they are going to modify that model, seeing the demand even for the eSSD, for example, right? So I think that overall, we really believe this is a multiyear growth for the NAND and customers are talking about for the AI-specific memory, they see a 22% CAGR or 2 to 3x CAGR compared to the regular memory market. Operator: Your last question comes from the line of Christian Frost from Craig-Hallum. Christian Schwab: So James, with the 65% utilization rate and your recent facility optimization over the last 1.5 years or 2 years, how should we be thinking about what utilization rate or what type of order visibility would be required to put in essence, the $1 billion worth of capacity that's available to you above and beyond the $3 billion you have today? How should we be thinking about that? James Xiao: Yes. I think that what we see today, Christian, is that week by week, we see a drop in forecast. So we're very optimistic from the run rate -- quarterly run rate standpoint, we'll fill that capacity very quickly, Especially, we're actually shifting our focus to Asian manufacturing. It's kind of in line with our customers' global manufacturing strategy. So very soon, you will see our Asian factory will fill completely, and that will eventually represent 60% of our global capacity and will match the customers' manufacturing footprint. So with the increasing utilization with heavy weighted Asian manufacturing, we'll see really the positive improvement on our margin profile. Christian Schwab: Great. And then on the margin profile, understanding utilization rates having an impact. But as your customers then begin to especially in memory, materially increase wafer starts per month, naturally, your services business, which is heavily influenced by wafer starts similar to what we saw in '20 and '21 when that mix of revenue was larger and a 29% gross margin, plus or minus naturally kind of drives gross margins there without any material increase in product gross margin. Am I thinking about that right? James Xiao: Yes, you're right. Yes. So I guess the question is what is the growth on the service business? So in that sense, we see double-digit growth in 2026. Again, it's also weighted in the second half on our leading-edge foundry logic customers ramp up their factories in U.S. We definitely see we're well positioned for that U.S. foundry logic ramp in addition to our current customer we're serving in U.S. Operator: There are no further questions at this time. I would now like to turn the call back to James Xiao for closing comments. Sir, please go ahead. James Xiao: Thank you for joining us today. This concludes our earnings call. I will have a follow-up with you guys at a private session. Talk to you later. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.
Operator: Thank you for standing by, and welcome to the AMA Group HY '26 Results Briefing. [Operator Instructions] I would now like to hand the conference over to Ray Smith-Roberts, Group Managing Director. Please go ahead. Raymond Smith-Roberts: Good morning, everyone. Thank you for taking the time to join us for the presentation of the AMA Group FY '26 half year results. For those of you joining us via webcast, you should be able to view the presentation on your screen. If you're joining us via teleconference, you should have access to it via our investor presentation on the ASX platform or our company website. I'll begin today's presentation with a business update along with details of our portfolio and our business results. I will then hand over to our group CFO, Dom Romanelli, who will take you through the group financials. I'll then return a bit later to cover outlook. We'll be taking questions throughout the webcast facility today. You can submit these at any time during the presentation, and we will address them at the end. So if we get underway, let's begin on Slide 4, a bit about 1 half '26 overview. I'm pleased to report that AMA Group produced the first half result for FY '26 of pre-AASB 16 normalized EBITDA of $30.5 million. That's up almost 22% on the first half of FY '25 and continues our positive profit growth trajectory. In conjunction with our profit growth, our operating cash flow also improved by 16.2% for the corresponding reporting period. This solid results we have delivered for the first half is headlined by continued strong performance in the Capital SMART network, considerable improvement in the financial performance of our AMA Collision network and ACM Parts contributing a positive EBITDA to the group for the first time. We are a people business and have continued to focus on upskilling, growing and retaining our team always in a safe manner. Our LTIFR of 3.1 as at the 31st of December 2025 is down from 4.2 in the corresponding period. We've increased our team by 37 members and maintained our voluntary turnover at very good rates. So if we look at the headline of our businesses, Capital SMART achieved EBITDA of $24 million for 1 half '26, which is down from the $25.8 million in 1 half '25, but that is in line with our expectations. AMA Collision continued on its good progress in this optimization and capability improvement program with an $8.1 million EBITDA improvement in the first half of FY '26 compared to the first half of FY '25. With continuing focus in our disciplined approach, there is significant opportunity for further improvement to continue to drive improved financial performance. Wales performance was impacted by softer work provisions of large crash repair work and improved financial performance is expected in the second half of FY '26. The Specialist Businesses has seen significant improvement in financial performance in particular, within inside our Prestige network. In relation to ACM Parts, it continues to improve its financial performance as it implements continued operating improvement actions. Overall, group revenue of $524.1 million increased $29.6 million on the first half of FY '25. That's a 6% increase, with revenue from our core vehicle collision repair businesses, increasing 6.6% to $503.5 million. Normalized half 1 FY '26 pre-AASB 16 EBITDA of $30.5 million. This is up $5.5 million or 21.9% in the first half of FY '25. And our EBITDA margin has increased from 5% up to 5.8% in the first half of FY '26. Operating cash flow after the payment of lease costs was a positive $12.2 million, an improvement of $1.7 million or 16.2% on the first half of FY '25. Underlying financial performance, improvement in key strategic growth is expected to continue into the remainder of this year and beyond, and we'll cover that in more detail further later in outlook. Now if we move on to the specific slides on each business. Slide 5, Capital SMART. In the first half of FY '26, Capital SMART was in line with expectations. Capital SMART continues to deliver improved customer outcomes in conjunction with our key customers, Suncorp. Despite moderately lower volumes, particularly in Victoria, revenue increased as a result of higher severity and complexity of repairs. As previously indicated, 1 half '25 and second half '25 both included incentives, which have not been nor were they expected to be replicated in FY '26. This has impacted the EBITDA margin slightly, reducing it as expected. Continued cost control measures and productivity initiatives will preserve margins going forward. 3 new sites were opened in the first half of FY '26, one in South Australia, one in Newcastle in New South Wales and one in Tasmania. These are all locations where opportunity is strong and where our network is underrepresented. These will deliver incremental EBITDA as they ramp up in operations. We did close 1 site in New Zealand during the first half of this period. We have 2 further site expansions planned for this calendar year, one in Sydney and one in Adelaide, and hopefully, they'll both be up and running before the end of the calendar year, as I said. Overall, revenue increased $7.8 million to $245.9 million, an increase of 3.3% on the corresponding period. Normalized half 1 '26 pre-AASB 16 EBITDA of $24 million is down $1.8 million in the first half of '25. Capital SMART will pursue further optimization and growth. We're focusing on optimizing operations through in-sourcing, timely repairs and utilizing technology. We will continue to develop the workforce by attracting and training and mentoring high-performing people. And we will continue to invest in the nationwide network in both refurbishment of existing sites and new sites where key opportunity locations are aligned to our customer needs. And we'll continue to evolve and enhance our customer experience and convenience. If we move on to the Collision business, turning to Slide 6. The transformational change program within AMA Collision business continues with significantly improved financial performance as mentioned. Revenues increased $18.4 million to $194.1 million, an increase of 10.5%. And normalized EBITDA for 1 half '26 pre-AASB 16 of $6.1 million is up $8.1 million from 1 half FY '25. The operational optimization and key capability focus within the business continues to achieve results. This disciplined focus will continue for the remainder of this year and into next year with further upside from existing operations will be derived. Key insurance customer relationships continue to improve and strengthen. The business will continue to focus on network optimization, including investment in vehicle repair capacity, team capability and customer experience. This will include site rationalizations and site expansions where appropriate. In addition, we will seek strategic growth where opportunity capability and capacity are aligned. Overall, a very pleasing result in Collision. We turn to Slide 7 and the Wales heavy vehicle division. Wales heavy vehicle business was impacted by some softer work provisions in this last half. In the half 1 '26, it delivered a normalized pre-AASB 16 EBITDA of $3.8 million, down $1.6 million from 1 half FY '25. There has been a shift in work mix during this period with reduced claim volume and large-scale repairs being lower, impacting growth in some states. This is expected to persist in the short term but more large-scale repairs are expected to normalize over the next 12 months. Wales is well placed to take on more volume with capacity available as the volume returns with additional opportunities being explored with insurers, government, corporate and private fleet operators and insurance brokers. The business continues to strengthen its relationship with both market-leading insurers and smaller insurers and fleets who are seeking preferred repairs as well as continue to expand its service offering with different types of repairs, including machinery, motor homes and specialist equipment. We turn now to Slide 8, our Specialist division. AMA Prestige sites revenue and EBITDA were well ahead of the prior corresponding period. Its financial performance was improved on the back of improved productivity following a range of initiatives being implemented. The business will continue to focus on enhancing capability and strengthening key OEM and insurance relationships. The TechRight business volumes have increased in 1 half '26 compared to the prior corresponding period, which has led to improved financial performance. Development plans continue where appropriate. Our TrackRight Mechanical division, the financial performance was also ahead of last year and the prior corresponding period. Work on optimizing these sites in Queensland and Western Australia continues. If we move to Slide 9, ACM Parts. The ACM Parts business continues to improve with positive pre-AASB 16 normalized EBITDA of $0.7 million, up $1.4 million to the corresponding period. There was a strong uplift in financial performance as key initiatives relating to the reclaim and genuine parts businesses, and growth in the consumables business have yielded positive results. Network optimization or our warehouse capacity remains a key focus with a planned relocation of a site to a more fit-for-purpose facility currently underway. The business has seen a strong uplift in external revenues. This is attributed to a strong focus on operational quality and service performance along with a competitive offering given from improved sourcing. Procurement continues to be one of the business' biggest opportunities. With the business now self-sustaining and continuing to improve its performance through these operational efficiencies, we will continue to focus on the outcomes we can control and maximize value for our company. I will now hand you over to Dom to take you through the group financials. Domenic Romanelli: Thanks, Ray, and good morning, everyone. Slide 11 is a summary of the first half FY '26 financial performance. The financial performance is presented on a post-AASB 16 basis below EBITDA. However, we have included supplementary analysis on Slide 19, which provides a comparison of first half FY '26 results on a pre- and post-AASB 16 basis. As Ray has outlined, our first half FY '26 financial performance was a continued improvement on the first half of FY '25 with revenues up $29.6 million or 6% to $524.1 million and normalized pre-AASB EBITDA of $30.5 million, up $5.5 million, 22% up on the first half of FY '25. This reflected an EBITDA margin improvement from 5.0% to 5.8% for the first half of FY '26. If we look at purely at our core vehicle collision repair businesses, our EBITDA percentage margin grew from 5.4% to 5.9%. This uplift was largely driven by the continued operational performance of our AMA Collision, Specialist and ACM Parts businesses. Finance costs in total were down $1.5 million for the first half of FY '26 when compared to the corresponding first half period. Pleasingly, finance cost other reduced by $3.7 million for the first half year due to an improved cost of funding and debt levels following the refinancing of the group's senior debt in February 2025. This benefit was partially offset by an increase of $2.2 million in the finance cost of our leases, reflecting the increase in market rents and interest rates. Consistent with FY '25, there is no dividend declared for the first half of the '26 financial year and the increase in income tax expense reflects the uplift in earnings, particularly within the Capital SMART tax group, the nondeductible nature of our P&L expense relating to our executive share plan and prior period under provision adjustments that have been corrected. The normalizations we have called out for the first half of FY '26 relates to planned site closures within AMA Collision, which represents $0.8 million and the planned ACM warehouse relocation of $0.6 million. The normalization in the corresponding period of $3.5 million related to a legal settlement claim relating to an earn-out of an acquisition that took place in 2018. Turning to Slide 12 and the summary financial position. We ended the first half to 31 December 2025 with net debt of $20.7 million, a slight increase from the 30 June '25 balance of $17.7 million. Our balance sheet remains strong and provides the organization the capability to execute its capital expenditure program. The group continues to meet all its financial covenants and expects to operate within them for the next 12 months, and we also completed a 1 for 10 share consolidation during this period. Now to Slide 13. The group had positive operating cash flows of $12.2 million for the first half of FY '26 once the principal elements of lease payments are taken into account, which was an improvement of $1.7 million or 16.2% on the corresponding half year period. This was driven by the group's stronger EBITDA, continued improved cash management albeit we are now starting to pay income taxes, which we will continue to increase in the second half of the financial year and $2.5 million reduction in interest paid due to our improved cost of funding. The first half of the financial year saw capital expenditure payments of $15.3 million, an increase of $5.6 million on the corresponding half year period. This was primarily due to investment in greenfield sites and investment in replacement equipment and site expansions. The group has a healthy cash position at 31 December 2025. Turning to Slide 14. Normalized corporate costs were $2.2 million higher than in the corresponding half year period. This was predominantly due to a higher expense of $2 million relating to our executive share plan in this half year period compared to the corresponding half year period. This expense is of a noncash nature and is only deductible for income tax purposes if the shares ultimately vest. The normalization noted in the slide for the last year's half year period related to the legal settlement claim over the earn-out calculated on a 2018 acquisition. In addition, Slides 18 to 21 provide additional financial information that will assist with your analysis. I'll now hand back to Ray. Raymond Smith-Roberts: Thank you, Dom. If we now turn to Slide 16 and the outlook. AMA Group continues to progress on its journey to achieving a pre-AASB 16 EBITDA percentage of 10% within our core collision vehicle repair businesses. We've set a target of doing that in the next 3 to 4 years as a maximum, but I'm confident of doing it sooner. Capital SMART is expecting another strong result albeit slightly lower than FY '25. There will be some rationalization within the existing network, partially offset by a key focus on specialized and value-add activities and on further developing high-performing, highly capable teams. As mentioned earlier, we have opened 3 sites so far this financial year, where the network was underrepresented. The plan continues to be growth where demand and opportunity aligned with our key partners. AMA Collision continues through the transformational change program with further operational capability improvements being implemented. A strong runway of continuous improvement exists with continued execution. Wales is expected to have a better second half than our first half. The Specialist Businesses will see within the Prestige businesses continued improvement from operational parameters and focus. Our TrackRight and TechRight business will continue with the development and opportunity where capability and capacity are aligned, and we will continue to improve the ACM Parts performance maximizing value to the company. Overall, we continue to target 5,000 repairs a week as an average volume, which we are very confident of being able to do sustainably. Strategic growth in all core businesses will be pursued where opportunity, capability and capacity are aligned via greenfield, brownfield and acquisition where appropriate. We will continue to further develop our high-performing, high capability team and work with our people. And finally, we're maintaining our guidance for FY '26 financial year. We expect a normalized pre-AASB 16 EBITDA to be in the range of $70 million to $75 million. I will now address questions. Please note that you may submit your questions through the webcast facility. Operator: [Operator Instructions] The first phone question today comes from Chris Savage from Bell Potter. Chris Savage: Ray, probably one for you, firstly, just volume. You flagged at the AGM that there had been some weakness in September. and they continued into October. Can you talk us through how it transpires for the rest of the year? Raymond Smith-Roberts: Look, overall, Chris, there's no one answer to volume. We're a diversified group. There are -- we're continuing to see a changing landscape in what events looks like and severity and complexity looks like. But if we look at volume generally, it's improving. It's -- we had a -- there was a couple of months late last year, it was a bit under what we expected. We're certainly seeing overall volumes stronger than where we expected as well. So they've actually going the other way. So the volumes are sustained. We work in different areas in different divisions. If I had a volume concern, we're certainly seeing in our heavy business where overall larger collision works. The volumes themselves are holding up. It's a very -- it's a bit different because it's a higher rate write-off rate than what we've been seeing for a while. The volumes -- we're seeing some areas -- we are heavily footprint in Victoria. Victoria is a struggling state in a few areas. So we tend to feel it more than relative to the overall nation. Volumes in New South Wales and strong. Volumes in Queensland is strong. Volumes in Western Australia is strong. South Australia, Tasmania Canberra and strong in most areas of our network, we have more than enough volume. We have pockets of our network where we don't have enough volume. Chris Savage: Sure. So can you say what the repairs averaged in the first half per week? Raymond Smith-Roberts: In terms of volume? Chris Savage: Yes, you're targeting 5,000 repairs per week. I'm guessing that the number was below that in that one. Raymond Smith-Roberts: We achieved, I think, 4,772 was the average. And yes, 5,000 a week, again, over at a 52-week average is going to require weeks of 5,500. There are some weeks where based on calendar cycles and public holidays and times of year where it's just not possible. If I just completed a week last week 5,600. So the volumes, as I say, are strong at the moment, but they're trending in the right direction overall. As I say, we see a mix -- there's an average repair price mix changing based on severity and complexity. But volume isn't -- other than in Wales where it is probably seasonally or down where I expect it to normalize, everywhere else, we have pockets of volume where again, the network is overrepresented or there is a range of oversupply. But generally, volumes are fine. Chris Savage: Okay. And just your thinking on ACM Parts now going forward? Raymond Smith-Roberts: Look, at the moment, I'm just focusing on what we can control. First, the business is going well. I mean my thoughts around it. The better we get it, the more strategically important to us it is network our size having influence over our own parts supply. We'll always have strong relationships and heavy dependence on the dealer network and the OEM relationships, but there is a range of areas, especially as we move into the need for all of our new climate reporting and the area of recycled in those areas being right. It's becoming stronger. It's far less of a distraction, and we're actually continuing to get benefit out of it. If someone comes along and writes me a big check, we then we'll look at it. And for the time being, I'm focusing in what we can do, and it's working well. Operator: [Operator Instructions] The next phone question comes from Jared Gelsomino from Morgans. Jared Gelsomino: Just a quick one. Just interested in -- just on the volumes, how we're looking -- how have volumes started in this calendar year, just noting that you had a really strong third quarter last year and just trying to understand the third quarter or fourth quarter dynamic as we work through this half? Raymond Smith-Roberts: Volumes at the moment are very good, Jared. Actually, we're on track for February in smart to have our highest average per day volume that we've had all financial year. Volumes in Collision is strong, and volumes in Wales are improving. Volumes in Prestige are also holding quite steady and up around target. So right now -- but there's always a bit of a glitch at Christmas, where we have a range of where we don't operate, but we keep sites open or our ability to take vehicles open. We do a lot of drivable work, so you don't always get drive. We don't get either volume of drivable work over Christmas. But volume is built in January, continue to build in February. We're carrying a very good level of WIP at the moment. So the network is actually in very good shape from a WIP processing point of view. So I'm very happy with where volume at the moment how they're shaping up. Jared Gelsomino: Perfect. And maybe just a small one on CapEx. I mean, obviously, you stepped up in years putting that investment back into the network. Just interested in the outlook for CapEx and how it sort of balanced between new store openings as well as sort of the refurbs going through the rest of the network. Domenic Romanelli: Jared, we're still forecasting CapEx of $40 million for the financial year. And we believe with the EBITDA that we're guiding towards that we'll still end up with a positive free cash flow at the end of the financial year if we did $40 million, but we'll keep monitoring it. Ray and I have always got our eye on the CapEx and how it's progressing through the year, how our cash is progressing through the year, and we'll manage it accordingly, but we're comfortable still that $40 million forecast for the financial year. Raymond Smith-Roberts: Well, overall, Jared, things are happening a little bit slower right here. We've got 2 site expansions in SMART that are underway. We've got 2 site expansions in Collision that are underway. But I'm also doing some site rationalization, which unfortunately does take some capital, but it gets it right. So it is definitely at a slower rate. We're continuing to invest in our existing facilities where they need it. And there's still a little bit to do there. But again, it's all about increasing our capacity and our team's ability. Our continued throughput and our growth is not coming from new sites. It's coming from optimizing what we've got. In some areas, that does need some investment. If we look at it sort of very generally, it's going to be a bit slower, right, in the second half than it was in the first. Operator: Thank you. At this time, we're showing no further questions. I'll hand the conference back to Ray for any closing remarks. Raymond Smith-Roberts: I expected a few more than that but thank you. Look, I think overall, I know for some of you, you were hoping for a stronger first half result, but I'm actually very pleased with where we are and where we're going. We are in good shape. All of the hard work that we're continuing to do driving results. I know some of you will also be disappointed in the point I put on the 10% EBITDA and I put the 3 to 4x year there. I think keep that very much in mind. I've put that down as an absolute an annunciation point and I have no doubt, we're going to get there. The speed to it still remains the biggest challenge. If I look at it from a run rate or a bridge, I'm still very focused on the road to it. And I hope that while I'm working toward has been there -- being on a quarter basis, I think it's possible. We can be there at quarter 4 this year did not guarantee but definitely possible. I hope to be there for 2 quarters next year. And then the year after that, it's about doing enough in being able to be enough above it in quarter 3 and quarter 4 gives us very difficult to be there in quarter 1 and 2 given those times. So things are going in the right direction. I don't think that I've changed my view. I haven't. I'm trying to describe it in a slightly different way to give people comfort, but the bridge to it is still very clear. I can see there's another question come up there. Are we going to take that? Operator: Absolutely. From the webcast, Capital SMART has rolled out 3 new sites with 2 further planned. Is this keeping up with the previously flagged expansion? Are there new site rollouts representing any short-term drag on divisional earnings in SMART? Raymond Smith-Roberts: Yes. There's two parts to that. I mean, yes, it's -- I mean these aren't new sites we own that both of these are site expansion. So where we operate in Sydney, there's a site there that we're increasing the capacity where we operate in South Australia. We've already got 3 sites in South Australia, but we are pretty much doubling the capacity of one. So yes, they are part of the previous plan in terms of where we're going. And look, there is no doubt we've opened 3 new sites this year, and we had some start-up costs. We -- right now, we're carrying some costs in Sydney. That site will get operational. We were carrying cost in Tasmania, and we were carrying cost in Newcastle. All three of those now have moved into production and producing, and all three of them are actually a positive EBITDA. But during the last half, they actually reduced it, no doubt. And that's going to happen a little bit until we get Sydney up and running until we get -- we're not carrying cost in South Australia yet, but that will commence in about April. So there is going to be some cost drag, but we manage that very carefully. Operator: Thank you. Confirming that once again, we're showing no further questions. Raymond Smith-Roberts: All right, guys. Well, I look forward to there's probably some people will be catching up with one-to-one over the next few days. Thank you. As I say, we've got a lot to do. Pleased with where we are and pleased with where we're going. And if you're a shareholder, thank you for your support. If you think of becoming a shareholder, then I think it's a better time.
Melanie Jaye Leydin: Good morning, and welcome to LARK Distilling's Half Year FY '26 Results for the period ending 31 December 2025. Today, we have LARK CEO, Stuart Gregor; and CFO, Iain Short, presenting. There will be opportunity at the end of the presentation to ask questions. Please submit your questions in the function at the bottom of the screen. I will now pass to Stuart. Stuart Gregor: Thanks, Mel. Good morning, everyone. Thanks for joining us here for LARK's half year results. I'm personally quite honored and very thrilled to be presenting my first set of results as LARK's CEO 7 weeks into the job. In 2023, under the leadership of my predecessor CEO, Sash Sharma, LARK established 3 foundational strategic priorities that have served as the core pillars of our growth strategy. You can see them on the screen. They are building long-term brand value, international sales momentum and domestic leadership position and cash and capital discipline. As I now lead the ongoing refinement and evolution of the strategy, I'm confident that these 3 core pillars will remain unchanged, continuing to guide our ambitions to establish LARK as a preeminent force in New World Whisky. It is, by any measure, an exciting time for LARK. So some financial highlights. The first half of F '26 has started solidly with a significant amount of preparation going into our planned domestic and international brand relaunch in March and April 2026. Before we delve into the detail of these initiatives undertaken in the half and in each of our divisions, I'd like to touch on the financial highlights. Iain will provide a detailed overview a little later in the presentation. As an overview, we delivered net sales revenue of $8.7 million for the half, a 10% increase on the prior corresponding period. Within this, whisky net sales saw an 18% increase compared to the first half of FY '25. Gross profit for the half was $5.1 million, an increase of 2%. Gross margins were 58%. And while these were down due to the utilization of our higher cost acquired inventory, underlying margins remained stable at 63%. Again, Iain will detail the utilization of inventory and the fair value impact on our financial statements a little later. Our net operating cash outflows have improved by approximately $0.3 million or 10%. Improved net operating cash outflows reflected stronger underlying performance driven by stronger sales, moderated distilling through the commissioning of Pontville and increased interest income earned on cash balances. These improvements were partially offset by temporary timing impacts. Cash and capital discipline remains one of our key priorities, and we ended the half with $18.3 million of cash, providing flexibility to pursue our growth strategy as we move through this financial year and into the next. Operational execution. Operationally, we continue to execute on our strategic priorities. Our first is to establish LARK as a globally recognized and clearly differentiated luxury whisky. The LARK brand restage has been all but completed with a refreshed brand positioning, including new packaging and bottle size to elevate LARK as a leader in New World Whisky on the international stage. Operationally, much of the groundwork this half was preparing for the official LARK brand restage launch with coordinated trade and consumer launches. Initial shipments of the new 700 ml range were shipped to export partners in H1 with initial sales to domestic Australia and global travel retail to follow in H2 with incremental ranging and distribution secured for the launch across all channels. March 26 this year is the go-live date for our direct-to-consumer channels and our partners in the domestic and travel retail markets will begin selling the new look LARK from the back end of April this year. Importantly, the redevelopment of our long-term brand home in Pontville has now been finalized and the completed site development is showing encouraging improvements across safety, quality and efficiencies. The blending facility at Pontville is now operational with whisky marriages undertaken as part of the commissioning process, resulting in significant quality improvements to final products and efficiency and labor utilization. The finalization of the Pontville development sees the completion of a future-proofed single site operation and removal of production bottlenecks, enabling scaling to support growth. Pontville's annual distilling capacity is now circa 520,000 liters at strength of 43% alcohol by volume with a modular expansion that provides headroom for distilling volumes to increase as sales expand. LARK is looking to create repeatable, diversified revenue streams to support international sales momentum and domestic leadership. Renovations at Pontville and our Davey Street Hobart Cellar Door hospitality venues delivered increased capacity upgrades and enhanced ongoing brand and consumer experience. The Davey Street Cellar Door was reopened just prior to Christmas with a reopening event held only last week, which was a tremendous success and a leading member of the Tasmanian media called it a master class in how to do this style of event. We are winning over the Tasmanian media. E-commerce continued to play a pivotal role in our growth, and we continue to improve this channel operationally and support sales with specialty releases. Internationally, our momentum continued with a newly signed distribution agreement in Global Travel Retail as we look to expand into international airports in the second half of this financial year. And growth in our direct export business now sees us exporting to 10 Asian markets. Our third strategic priority is cash and capital discipline. And as mentioned in the previous slide, we improved net operating cash outflows, notwithstanding ongoing marketing investment. We remain well capitalized to execute on our growth strategy. And most importantly, we strongly believe that the continued execution across all 3 strategic pillars will drive long-term value for the business and shareholders alike. So some good news, positive momentum in net sales. This slide highlights the importance of the initiatives the team have undertaken over the past 3 years to drive growth across our 3 strategic pillars. LARK has continued to deliver improvements aligned to our strategic pillars, and there is no better reflection of this hard work than improving net sales. The actions we have taken have set the foundation for LARK's next stage of growth. The trajectory of net sales is especially encouraging when viewed against the challenging backdrop for the spirits market and consumer discretionary spending more broadly. LARK has sustained robust growth even as the category overall has faced a few headwinds. I'd like to call out that in quarter 3 F '25, LARK benefited from the initial release of the Seppeltsfield Rare Cask series with The Whisky Club, the world's biggest online whisky club. The comparable release for F '26 is scheduled for quarter 4. Nevertheless, we remain confident that the forthcoming official launch of the brand restage will lay a strong foundation to support long-term sales momentum. So building long-term value. Critically, the long anticipated resting of the LARK brand and portfolio has formed a cornerstone of our strategic vision. This initiative has given rise to an entirely refreshed portfolio, distinguished by innovative branding and a sophisticated new look and feel carefully crafted to resonate with the global luxury market. Beyond commercial repositioning, the brand's restage represents a powerful opportunity to elevate not only LARK, the Tasmanian and by extension, Australian whisky onto the world stage, showcasing our unique provenance and our unrivaled craftsmanship. The initial portfolio comprises 3 core expressions in 700 ml bottles, as you can see on the slide, a change that removes a long-standing barrier to international purchase and broadens accessibility. These initial launches will be supported by travel retail exclusives in addition to other product offerings being developed. The all-new visual identity has been created to ensure immediate cut through in a crowded category, while simultaneously celebrating the distinctive elements that define Tasmania. Our uncompromising climate, pristine waters and the creativity of our distillers converge to produce whiskys of genuine individuality and character. We are about to take some very distinctive only from Tasmanian whiskys to the world, rest assured. The brand restage will prove essential in unlocking the commercial potential of our whisky bank, which remains fundamental to driving the sustained future growth and sales momentum of the business. So here we are, we're underway. While we continue to invest in brand awareness in both Australia and overseas for the current range, a huge amount of work has been happening behind the scenes as we prepare for the coordinated launch of our new portfolio. I was up in Southeast Asia in just my third week in the job with Bill Lark and Chris Thomson, our Master Distiller, for launch events in both Singapore and Malaysia. The response to both markets was outstanding, and you can see some of the photos of some of the coverage we received on screen now. We've also shown the new range to key partners in Sydney already to unanimous acclaim. So the following slide continues to show how well our global reputation is rising. Ahead of the relaunch and rather, I must admit, exquisite timing, our Master Distiller, Chris Thomson was named as Master Distiller Blender of the Year for the Rest of the World at the World Whisky Awards just in January. This category celebrates excellence across more than 40 whisky-producing nations outside the traditional strongholds of Scotland, Ireland and the U.S. So the rest of the world includes whisky-producing powerhouses such as Japan. It's an incredible accolade for Chris, and congratulations to him and the distilling and blending team. News only got better later in that week when our founder and global ambassador, Bill Lark, was made a member of the Order of Australia and AM for his contribution to the Australian whisky industry. Bill is Australia's first modern era distiller to receive such national recognition, capping a legacy that includes him being the first Australian inducted into the World Whisky Hall of Fame back in 2015 and being the inaugural induct into the Australian Distilling Hall of Fame. Bill is an extraordinary legacy, and we are very proud to have him still working with us today in his role as global ambassador. Bill Lark remains a huge asset for our business. He's enormously popular amongst consumers and trade both at home and abroad, and we will continue to work closely with him in the years ahead. And importantly, as a sidebar, Bill absolutely loves the new whiskys and the new direction of the brand. International sales momentum and domestic leadership. Moving to Slide 13. Growing our presence internationally remains of critical importance for LARK. The half delivered export net sales of $1.3 million, an increase of $800,000 on the PCP, reflecting expanded distribution and improving depletion momentum across Asia as well as shipments of our new portfolio. The initial shipments of the new portfolio have been successfully delivered to 7 out of 10 key Asian markets ahead of the scheduled trade and consumer launch activities in the second half of this financial year. In China, the debut of Kurio, our entry-level blended malt whisky has generated impressive early momentum. Boyed by enthusiastic consumer reception in the first 3 months of sales in market, our expectation is the product will gain even further traction across this year and beyond. A key priority for us remains growing brand awareness and presence in export markets. Key activities during the half focused on reinforcing LARK's luxury brand position and strengthening alignment with trade and distribution partners ahead of the global relaunch. Key activities included LARK's presence at the Singapore Grand Prix within the Singapore Tourism Board suite, where VIP tastings were held across all 3 days, reinforcing LARK's luxury brand positioning with high-value consumers. Finally, distributor and trade partners were hosted in Hobart, deepening brand immersion and strengthening alignment ahead of our rollout into Southeast Asia. Moving to Slide 14 and Global Travel Retail. As most of you on this call know, global travel retail, which we call GTR is an exceptionally important part of building an international luxury brand, given consumer eyes and ability to showcase our product with the right consumer, and I'm very pleased with the progress. Brand awareness for both domestic and international travelers continued in the first half of the year. GTR net sales rose 17% to $1 million, supported by a strong focus on brand visibility across Australian airports. The channel observed strong sales in specialty releases with Christmas Cask and Lunar New Year 2026 products, driving incremental performance and depleting well across airport retailers. LARK significantly enhanced its brand visibility through a strategic upgrade at Sydney Airport in this half. The existing branded Wool Bay has been transformed into one of the largest whisky features in the store reinforcing a commanding presence within this vital international gateway. And from May, with our new restage product, our presence at SYD will grow only further. In December 2025, LARK was the #4 selling single malt whisky from all countries at Sydney Airport. Not only were we well ahead of all Australian whisky competitors, but ahead of all Japanese single malts. A new channel exclusive portfolio has been finalized and successfully presented to key Australian airport partners. The response has been overwhelmingly positive with widespread support secured ahead of the planned May 2026 launch. Notably, every customer has confirmed their commitment to stocking the full suite of core GTR releases. The GTR channel is expected to grow further afield following the signing of a distribution agreement in December with CoLab, the leading travel retail agency based in Singapore. The agreement will cover the Asia Pacific region, excluding Australia and New Zealand. The new relationship will look to build our airport coverage across the region with a new 700 ml portfolio from the second half of this financial year. Turning to Slide 15, Direct-to-consumer. LARK's internally managed channels performed well with direct-to-consumer net sales of $4.2 million, up 17% versus PCP, driven by continued momentum in e-commerce, which grew by 33%. Our e-commerce channel exhibited strong gifting demand with key products, including personalization. The Christmas campaign kicked off in October '25 with a limited release Christmas Cask achieving excellent sales. The subsequent introduction of Lunar New Year offerings in December brought the half year to a resounding close, supported by optimization of digital acquisition and conversion to include digital channels such as RedNote to support Chinese consumer engagement. Our e-commerce platform remains a cornerstone of growth, and we continue to refine and enhance this vital channel. We've developed a comprehensively restaged website with a new brand positioning ready to switch over with the launch of the new portfolio at the end of March 2026. To strengthen our footprint in priority European markets, we have entered into a strategic agreement with a European-based e-commerce and logistics specialist. This partnership leverages established infrastructure and internal e-commerce expertise, enabling local fulfillment and logistics from a dedicated European hub. Consumer sales through this channel is expected to commence in quarter 4 of this financial year, allowing LARK to expand its D2C presence across key regions, including the Netherlands, Denmark, Germany and Austria by seamlessly integrating with our existing e-commerce capabilities. We continue to assess our options for D2C as well as traditional retail across Europe and Great Britain. In the hospitality segment at our brand homes in Hobart, sales were modestly lower than the prior corresponding period, primarily due to the 3-month closure of our Hobart Cellar Door on Davey Street for significant renovations. The refreshed Cellar Door reopened in time for Christmas just December '22 as it happens, with final enhancements to the venues upper level completed just this month. We've observed strong performance across other venues, offsetting the closure of Davey Street. Pontville saw a 28% increase in distillery tours versus the prior corresponding period. Renovations of event spaces at Pontville were completed during the half in support of our existing Tasmanian tourism innovation grant. The revamped site sees additional space added to support increased booking and events to aid brand awareness. Domestic, will head to domestic B2B net sales. Business-to-business net sales were $2.3 million for the half, which was a reduction versus last year with the comparative period seeing the transition of our sales model to service domestic Australia. For part of the comparative period, LARK operated under a direct sales approach prior to transition to a distribution partnership with Spirits Platform, the company's domestic distributor to provide the opportunity for significantly greater commercial reach versus the prior model. In addition to this transition impact, domestic B2B sales performance was impacted by timing of shipments to Spirits Platform. Importantly, however, underlying trade performance for LARK whisky remains positive with depletion volumes, that is sales from the distributor to our trade customers, up 9% versus the previous period despite challenging market we're operating in. We're expecting ongoing momentum in H2 with incremental distribution of the new range secured. While the gin category remains subdued as reflected in volume declines of Forty Spotted Gin, the brand has, however, demonstrated notable resilience versus the wider category, especially within our national accounts. Considerable effort is now underway with Spirits Platform to support the forthcoming launch of the refreshed LARK portfolio in the second half of this financial year. This includes intensified marketing investment and commercial execution plans. With the Spirits Platform operating model now fully embedded, the streamlined route-to-market structure provides a robust foundation for the restage LARK range. Incremental shelf placement has already been secured for the new portfolio with products scheduled to appear in stores across both national accounts and independent outlets from April 2026. To our third strategic priority, cash and capital discipline. As mentioned earlier, LARK has a strong balance sheet and cash position to support its growth ambitions and support its strategic milestones. We will continue to be measured in our capital allocation to support growth plans through to our positive operating cash flow target during FY '27. From a future capital allocation policy, it is important to note our Pontville development has now been finalized with major capital projects now complete. We will continue to invest in current and new export markets, including international and GTR expansion. We will commercialize the full whisky bank, including utilization of acquired inventory in products like Kurio and LARK Fire Trail to support future growth. Finally, and very importantly, we have the capital in place to execute our growth strategy. I'll now hand over to Iain to talk us through Pontville Distillery and our whisky bank. Iain. Iain Short: Thanks, Stu. I'm on Slide 19. As Stu just mentioned, the redevelopment of Pontville is now complete. As we previously outlined, the distilling capacity on site has now increased to approximately 520,000 liters at 43% and a modular design allows for future expansion with modest additional CapEx when required, future-proofing our distilling operations. Automation and site improvements have removed production bottlenecks and enhanced safety, quality and efficiency, supporting lower future production costs and the new make spirit that the team is now producing is exceptional. Our whisky bank, 2.4 million liters is a strategic asset for the company, underpinning both near-term growth initiatives and the longer-term expansion by growing export markets. The current sales profile is now carefully aligned with forward sales plans, enabling the optimization of short-term distilling volumes to broadly match current sales. There's obviously been significant work over the last couple of years on portfolio development. In addition to the more obvious consumer-facing pack and brand positioning to drive sales growth, a key tenet of this work has been ensuring utilization and commercialization of the full whisky bank, including inventory acquired in the Pontville acquisition back in FY '22. This whisky has a higher book cost under acquisition accounting as it includes a fair value uplift in addition to underlying cost of production. Through our portfolio work, we are now able to commercialize the acquired inventory at scale through products like Kurio Blended Malt and LARK Fire Trail. The deployment of this acquired inventory generates a noncash impact on reported gross margins. This arises because the fair value uplift recognized under acquisition accounting flows through as an elevated cost of goods sold. And as we continue to utilize this inventory at scale, it will impact reported gross margin for future periods. That's why, as previously outlined, to provide greater clarity, we will disclose the impact of this together with the underlying margin excluding this accounting impact. I'll talk more to this in the next section. Moving on to the H1 financial highlights and the P&L slide on Slide 21. As Stu mentioned, net sales revenue grew by 10%. And within this, whisky net sales rose by 18% versus first half of FY '25. The increase in net sales driven by growth in D2C, Global Travel Retail and export distributor channels, partially offset by lower net sales from domestic B2B. Net sales growth is a higher rate than gross sales, including excise due to the relatively higher growth in export shipments, which are not liable for Australian excise. As Stu mentioned, the domestic B2B comparatives were impacted by a change to the sales model back in August 2024, with part of the comparative period reflecting previous direct sales model as well as shipment timing and one-off transition effects. As I outlined just before, the start of utilization of acquired inventory at scale saw a historical fair value uplift flow through COGS. This resulted in a reduction in gross profit by around $0.4 million and gross margins by around 5 percentage points versus the underlying production cost of the whisky. It's important to note that when removing the noncash accounting impact, underlying gross margins remained broadly stable at 63%. We continue to prepare for the new portfolio launch in the second half of this financial year. And despite increased investment in consumer and trade activities in the half, we were able to reduce marketing expenses to 23% of net sales, down from 27% in the first half of last year due to nonrecurring brand development spend in the comparative period. Expenses for share-based payments benefit from the reversal of previously recognized expense following the forfeiture of unvested performance rights and the P&L also benefited from government grant income of $0.6 million recognized in relation to the Pontville Distillery and Tourism operations. Turning to the balance sheet. Cash and cash equivalents were $18.3 million at 31st of December. Trade and other receivables rose to $1.1 million, with the increase driven by growth in export sales as well as timing in relation to R&D income receipts. Total inventory with a book value of $65.2 million provides strong asset backing to underpin our future growth, and this includes $48.6 million at cost of production and $16.6 million fair value uplift on acquired inventory from the Pontville acquisition in FY '22. Property, plant and equipment increased by $0.9 million versus June with $1.2 million invested in the Davey Street Hobart Cellar Door redevelopment, Pontville distillery and wider Pontville site development. All major projects are now complete with minimal spend remaining. Trade payables reduced to $1.9 million versus June '25 with the prior period elevated by purchase timing and a $0.6 million government grant reclassified to payables and subsequently repaid in July. Deferred tax asset remains prudently derecognized. Carryforward losses remain available, and we expect the DTA to be re-recognized in future periods when profits are expected to arise. Deferred government grants were down $0.6 million versus June with the income recognized in the P&L and full recognition criteria has now been met for the remaining $1.7 million balance, and this will be amortized to income over the useful life of the related assets. Importantly, LARK remains debt-free. Moving to the cash flow statement. We continue to focus on cash and capital discipline across the business. Cash outflows from operating activities improved by $0.3 million through stronger sales performance, moderated distilling through the Pontville commissioning and interest income with these improvements partially offset by temporary timing impacts. These timing impacts included a reduction in creditors from the elevated June balance and the timing of R&D incentive receipts with $0.5 million received in the prior year and the equivalent receipts expected in half 2. Investing cash flows included payments for property, plant and equipment related to the developments I just talked about, which are now commissioned and repayment of government grants related to the unutilized funding under the modern manufacturing initiative, which was repaid in July, as just mentioned. Investments in the prior period reflected the timing of term deposit maturities and consequently, net short-term investment activity on a full year basis last year amounted to 0. With that, I'll hand back to Stu. Stuart Gregor: Thanks, Iain. And turning to our growth priorities and perspectives for the second half. As we look to the future, we look to executing on our 3 strategic pillars to generate the long-term value for all shareholders. Our growth strategy focuses on this orchestrated rollout of the refreshed portfolio, designed to build momentum across key markets and channels while reinforcing our position as a global scalable luxury brand. In the second half of F '26, we will execute coordinated consumer and trade launches across all channels. Export trade launches commenced from January, enabling early international presence. The domestic Australian market will follow in March and April, capitalizing on heightened local anticipation and GTR activations will begin in May, aligning with peak travel seasons to capture high-value aspirational consumers. To support this ambitious expansion, marketing investment will remain substantially elevated with a deliberate shift in allocation toward consumer-facing activations and trade engagement. This focused approach will drive awareness and loyalty while amplifying the portfolio's premium appeal. Concurrently, we will continue the systematic rollout of our updated brand positioning and visual identity across all consumer touch points. These enhancements are crafted to strengthen our luxury credentials, ensuring a cohesive, sophisticated narrative that resonates globally and supports long-term scalability. International sales momentum and domestic leadership remains a core priority. We anticipate sustained growth even amid challenging market conditions propelled by rigorous operational discipline, the compelling introduction of the new portfolio and the strengthened brand positioning. Within Australia, initial B2B shipments of the refreshed portfolio are slated to commence in quarter 3 of F '26. And meanwhile, sales through the Whisky Club of the Rare Seppeltsfield series, which was seen in quarter 3 of F '25 is scheduled for quarter 4 of this year as stated earlier. And as Iain outlined, commercialization and scale of acquired inventory will continue to see a modest noncash impact to reported gross margins. On the cash and capital front, we maintain unwavering discipline. Operating cash flows will reflect the upfront weighting of marketing expenditure in the next year or so before turning positive in FY '27 as sales momentum accelerates. The Pontville commissioning process is now fully complete with distilling volumes adjusted to anticipated demand and sales trajectories. With major capital projects now concluded, we've secured the necessary resources to execute our growth agenda. Future capital allocation will remain sharply focused on brand-building initiatives and commercial expansion, ensuring we continue to invest strategically in the drivers of sustainable, premium and long-term growth. As I said at the top, it's an exciting time for LARK. And that, my friends, is it from me, and I'm happy to hand back to Mel, who can facilitate any questions you might have. Melanie Jaye Leydin: Thanks, Stu. Our first question is actually about yesterday's news. Would you be able to give us a little bit of an update on the CFO process and Paul's appointment? Stuart Gregor: Yes. So yesterday, we were thrilled to announce that Paul Bowker will be joining the business. He was one of the co-founders of the Brick Lane brewery, and he's been a former CFO of a listed business for about 6 years of LogiCamms called ASX-listed business. We're thrilled to get Paul whilst sad to lose Iain, who's sitting on my left. Paul is a lawyer by trade has a Masters in Finance. He's entrepreneurial in spirit, and he starts on Monday. So it's a good time for us. It's a good transition with him and Iain that will go through the entire month of March. And I hope we're good to go. We're very excited to get him on Board. And he -- from some of the notes I've got from the trade and from some of the people in the finance world, he's pretty well regarded. So we're thrilled to get him. Melanie Jaye Leydin: Great. Thanks, Stu. We might stick with you, Nick from Barrenjoey has asked, what are the key learnings from your time at 4 pillars that could apply to LARK? Stuart Gregor: I mean -- where to begin? I mean some of the key learnings are how we can build a brand globally. Not many people probably gave a gin brand from the Yarrow Valley much of a chance to become a globally recognized brand and a brand that is doing particularly well in the global travel retail as an example. So I think we can learn from that. I think what it does is it gives me confidence that the world wants to see some great products, some great spirits coming out of Australia. And we had -- I think we crafted a great story of 4 pillars. But what LARK has that even 4 pillars didn't have is we have the Genesis story. We have the story of leadership. We were the first to do it. We've built the best reputation amongst all Tasmanian whisky. So we have a huge competitive advantage against our Australian competitive set. And I think we're going to be able to take really New World Whiskys. These are very different, exciting, delicious whiskys that don't taste like we're trying to mimic Japanese styles or we're trying to mimic Scottish or Irish or American styles. These are very uniquely Australian and uniquely Tasmanian whiskys. I think the other thing I've learned is the whisky is more complicated than gin, but potentially more fun, but definitely more complicated. So I think we've learned a little bit a lot from 4 pillars. But I think we can also apply some of the things that we probably maybe didn't get entirely right with 4 pillars. So hopefully, we can get it better the second time around. Melanie Jaye Leydin: Great. Love to hear it. So the next question is, what does the product pyramid look like once reset fully? Which parts of the product pyramid are going offshore? And what price point is sustainable at scale? Stuart Gregor: Let's just talk about there are 3 core brands that start at what we're going to call AUD 170. There will be some differentiation in pricing across markets depending on local taxes and everything else. But I think that is a sustainable price for our entry-level whisky, which will be the Fire Trail. I think that, that might be -- I think that's a product that is competitive enough in pricing. It's high enough quality for us to, I think, be able to sell that across duty-free as well as into domestic and international trade. So by that, I mean, on-trade and off-trade. We will then have a product around $200, the Devil's Storm. I think one of the things to remember is that these are going to be about price parity to our current products, but you've got 40% more. So you're a 700 ml product rather than a 500 ml product, and we're trying to keep the prices about parallel. I think they are sustainable pricing. And I think that when we look at the market of luxury whisky, so I'm going to call that whisky is above USD 100 a bottle for a 700 ml bottle. That is the segment of the category that is in greatest growth globally. It's the real low-value products that are really suffering at the moment. And I think people have probably heard about some of those Jim Beam and some of the other products that are really suffering at that really commercial level where price -- just aggressive price discounting is happening everywhere. And I think it's going to be happening in Australia a little bit more as well. So I think that $170 to $200 and then the Ruby Abyss, which will be in our core, which is the Red Label, if we go back a few slides, will be in the sort of $380 to $400, and that will be very much our first of our sort of super luxury products. And I think that, that will become a bit of an iconic whisky without wanting to overuse a term that gets overused, I think really this will become something really quite special. There will be other products. There will be a dark LARK coming in. And again, that will be in that sort of AUD 200 price point. Again, a little bit -- once we work on travel retail, we'll be able to adjust those pricing without that enormous excise that we have to pay in Australia. So these whiskys will be price parity across the world. But I think we're -- I think price-wise, we're good. So that's the pyramid, if you understand those 3 products. And then there will be other exclusive products coming into the direct-to-consumer channel. There will be exclusive products coming into the global travel retail channel, and there might even be exclusive products going to the on-premise channel. But that's our pyramid is currently 3, but there'll be a few more coming in at prices. But we won't -- and then there'll be Kurio, which will be around $100 blended malt price point moving forward. I hope that answers your question. Thank you. Melanie Jaye Leydin: Great. Iain, we might switch to you. Lachlan from Moelis has asked, how much in cost savings are you expecting from the completion of the Pontville site redevelopment? Iain Short: Yes, all right. So the Pontville site development, as I explained earlier, there's a couple of sort of key elements of that. One is significant automation versus the very manual footprint that we had previously. So we will see obviously efficiencies come through that. And in particular, that will be when we scale. Obviously, as we do scale volumes, we don't need to put significant additional headcount on. So we will see efficiencies within that distilling production cost. We will also see one of the things that's quite often overlooked is that blending and the wider infrastructure that we -- that we've developed down at Pontville is massive for us because it actually allows us to scale. Previously, we were relying on third parties for blending, so additional costs, et cetera. So we should have efficiencies in that blending cost as well, which will help us in COGS in particular as we scale. But probably the critical bit is the development does allow us to scale in addition to that cost base. Melanie Jaye Leydin: Great. And we might just stick there because Nick also from Moelis has congratulated you on the results. And he's asking if you could share some insights on how management and the Board are thinking to the potential expansion of Pontville to that 800,000 liters. What do you need to see to make the decision to pursue the expansion? And given the modular design, would you look to increase capacity and stages? Iain Short: Yes. So I'll cover that one. So yes, it's a modular design. So that means that we can, in the future, expand the capacity with pretty minimal CapEx. Importantly, we have just increased the capacity to just over 0.5 million liters, which gives us pretty significant headroom versus where we are now. We've talked for the last little while about broadly matching distilling production levels with our current sales. So in round numbers, we can talk probably for this calendar year somewhere in the region of 100,000 liters of production, and we'll be looking to increase that production as we grow our sales volume. So where we are right now is round numbers, 100,000 liters. We've got headroom and capacity to get to 500,000 liters. And as we grow, we will be growing sales -- sorry, as we grow sales, we'll be growing distilling. So you can think of the whisky bank in volume terms as broadly staying about that 2.4 million, 2.5 million liters for the sort of short to medium term. So it gives us optionality for the future, but that's for another day, another year, we've got the capacity to grow with our current footprint. Stuart Gregor: I think if we get capacity of Pontville soon, we've gone pretty well. Things are going great. Melanie Jaye Leydin: Okay. We've got a few questions here on Asian markets. So firstly, what early data points can you see at the distributor level for depletions of initial shipments? And what are your expectations for the size of reorders in key export markets like China, Japan and Southeast Asia? Iain Short: I can start off. In terms of initial data points, very, very limited right now. The new shipments of the -- sorry, the shipments of the new portfolio sort of back end of the half, landing in around about Christmas time with the first markets to go being Singapore and Malaysia that Stu talked about just before and had those pictures on. So very, very early days. And maybe Stu can give a bit of color, but -- because I wasn't there, but the reception from the -- from our customers, i.e., our distributor partners, trade, consumers, media was pretty exceptional by all accounts. So in terms of what that means for depletions, it's too early to tell. We're sort of desperate to get that, but initial reaction and support from -- across our distributor base and across the trade has been fantastic. So we are pretty excited and optimistic for that depletion run rate and therefore, reorders. Stuart Gregor: Yes. I would think it's something that we might have a little bit more detail on the next half. We just don't have it's literally too early. I mean the stock -- when we did our promotional tour of basically KL in Singapore was the third week of January, and that stock was only -- had only recently arrived. What we do know is that we depleted most of the stock that was -- that came out of bond already in Malaysia. So that's a good start. It's a good high -- it's good high-end whisky trading Kuala Lumpur but very strong. Singapore was also good. We know that Kurio has gone well in China. But again, it's particularly hard time to get data out of the Asian markets with Chinese New Year and everything else. But we're hoping that in March, April, we'll start seeing some real numbers coming back. So we should have something a bit better to report in the second half, I would hope. Melanie Jaye Leydin: So wait for Q3? Stuart Gregor: I think 7 out of 10 of our markets in Asia have got or on the water with the new product. So some of that 3 or 4 of our markets in Asia are still working through the old product. For instance, I had dinner last without Fiji and agency, lovely little market there, little bit of progress going on there, but still selling the old product into the luxury market into Fiji. I'll get the new product significantly later in the year, I imagine. Melanie Jaye Leydin: And just sticking with that, in terms of feedback from Asia and how LARK stacks up versus traditional single malt, what other investments does LARK need to do to drive awareness and perception of the brand? Stuart Gregor: In short, a bit, quite a bit. But we are going to a market that loves its whisky, huge market. If we just talk about Asia for the time being that loves its whisky is whisky drinking significantly greater percentage of spirit drinkers drink whisky than, for instance, gin. But we are going with new products. We're going with products that taste a little bit different. I think that the taste profile, they're very rich, anxious, viscous, sweet, beautiful Tasmanian whiskys. They don't taste like Macallan, which is a clear market leader in many of the markets that I visited recently. They taste -- I think they're going to appeal as flavor forward rich whiskys. They don't have an age statement. So we have to educate a very big market in what that means and why that's better, why Australian whisky and Tasmanian whisky in particular, doesn't need to be matured for 15 years to taste as good as it does. So there's a lot to do. We have to educate. We have to have people on the ground in Singapore. We have to do it hand-to-hand combat at our level. It's not a big advertising campaign, for instance. It's getting individual bars, individual retailers, individual travel retail ambassadors and advocates to understand why this is such a great story and why this is such a great whisky. It will take -- it's going to be a really interesting and engaging time up there. I can't wait, and we're going to have 3 people on the ground in Singapore full time whose sole role is going to be selling that story and these whiskys to those markets. Melanie Jaye Leydin: Great. Iain, we might switch to you. Could you talk to how you think about gross margins for the next little while? You touched on it, but it looks like we should expect acquired inventory to continue to be sold through. I appreciate this is a noncash pass-through, but for how long might this be? Iain Short: Yes. Okay. So yes, as I mentioned, noncash impact. And just to give a bit of sort of quantum. So what we're talking about here is the inventory acquired during the Pontville transaction back in FY '22. That was a little under 480,000 liters. So round numbers just a little bit less than 20% of the whisky bank. And we've only just in this half started sort of selling out at scale. So reasonable size volumes of that acquired inventory as a proportion. At this point in time, Kurio and LARK Fire Trail are the current products, which allow us to really utilize the acquired inventory at scale. And obviously, the utilization depends on the, let's say, the trajectory of those products. And equally, the relative impact to gross margin depends on the relativity between those products and other products which are utilizing our own whisky. So quite difficult to pin an exact number because there's multiple variables, but probably how to sort of look at it, we've seen about a 5% impact to gross margin in this half, something similar for the next little while because it's not just acquired inventory selling. So it's going to be a relatively modest impact, that sort of 5-ish percent. And as it's just under 20% of the whisky bank, we'll deplete that as we grow, but it's probably there for the medium term. Melanie Jaye Leydin: Yes. Great. And I think probably importantly, we're going to keep reporting. Iain Short: Yes. Yes. Melanie Jaye Leydin: So could you also talk to what we should see as consumers with the brand restage activations domestically? Assuming there will be some differences in your strategies to sell through to the D2C and B2B audiences. Stuart Gregor: Yes. I mean you will see a whole new LARK coming to market. The question was what we as consumers should expect to see. So you'll expect to see a whole new product on the shelves, a whole new -- totally new brand. You'll see a new website, you'll see new digital advertising once we go into the larger retail partners. You'll see an increased presence at both Sydney -- not just, Sydney, Melbourne and Brisbane Airport primarily. You'll see a totally new -- you'll see some new positioning around the island is calling whiskys from the new world, those sorts of things. And you will start seeing -- I think you will see more increased presence on the back bars of the best bars in the domestic market. We're just talking about the domestic market. I think that's what the question was. One of our focuses is going to be making these whiskys much more available for people to taste in the higher-end on-premise market, whether that' Sydney, Melbourne, Brisbane, Adelaide, Perth. And then you'll hopefully see us in as much retail at the higher end as we possibly can. It is -- they're much brighter. They're much livelier. And I think they will have increased shelf presence. So we think that people will hopefully want to take them off the shelves more regularly. Melanie Jaye Leydin: Great. And maybe just talking about channels there, could you talk to what are the next steps in the GTR journey? Or is it all about sell-through volumes now? Stuart Gregor: I mean, look, the next step in the GTR journey, well, Sydney is a priority gateway for us. It's a priority gate. It's an important door globally for whisky brands. We just stick to whisky. Our relationship with Sydney and Heinemann is crucial, not to diminish Lotte, not to diminish Brisbane and Melbourne are very important gates as well, increasingly so in Brisbane in particular. You will see us having a whole new -- our new positioning will appear from May. We will have -- in Sydney, we will have a whole new area dedicated to LARK. We will have all the new brand there, new product there, new packaging there. We are taking -- it's an interesting world travel retail. You have ambassadors on the floor selling a product and that sort of stuff. So we'll be taking all of them down to Tasmania. I think what you'll see is an increased presence in all of the Australian airports. I would very much hope that we would have a relationship with at least 1 or 2 of the key Asian gates before the end of this financial year. We have begun conversations with some of the more important airports. There's no guess, no massive mystery around what those would be for us. We will hope to have some presence in some of those markets. We've had those first meetings in literally the last 3 to 4 weeks. And it is -- as you can imagine, these are very, very large businesses, and it takes a little while for them to range new Australian whisky. So I would -- I hope that answers your question. But I would think -- and from a domestic -- just from a domestic retail perspective, I hope you see us a lot -- across a lot more independents and major chains. And as I said, I hope one of the things I really want to prioritize is seeing us more in bars. So people can get that little taste of a nick of one of our LARK's and that's something I want to buy, whether it's next time I go to a retailer or next time I go overseas. So yes, we need to get -- we all call it liquid on lips, right? We need to get people tasting these new LARK's. And that's a priority for the business is to get as many people to taste these LARK's because one of the things we found is that a lot of people know of LARK and like the brand intuitively. But then when you ask, well, have you tasted LARK, they tend to go, no, I don't have that, but I like the brand. So we just need -- that's the level of conversion we need. We need to get everyone to say, I like it, I want to buy it and I want to taste it and drink it. Melanie Jaye Leydin: Great. That brings us to the end of the question. So Stu, I might pass to you for final comments. Stuart Gregor: Well, look, it's been a -- not in the like, it's been a well-win 7 weeks. We've got a new Chief Financial Officer. We've been up to Asia. Bill and Chris have won a couple of awards. So it certainly has been a -- it's definitely been an interesting 7 weeks. We've had a lot of fun. I think we only reopened the Tasmanian Cellar Door last Thursday officially with all the local dignitaries in Hobart down there. It's really exciting that the distillery looks fantastic. The new make that is coming out of the distillery is the best I think the business has ever made, and that's coming from Chris and Bill. So the spirit that's going to be coming through us LARK over the next 5, 10 years is going to be incredible spirit. The new products are getting an, incredibly unanimously positive reception. So I think they'll really hit the market. March 26 is our go-live date from our internal perspective. So I think this half is going to be a really interesting half. It's going to have all of the challenges that these businesses have. And then I think moving into next financial year, we should really start seeing -- I hope we build some momentum. I hope we get some impetus going. And I think it's an exciting time. And primarily these whiskys are fantastic. And this new restage is fantastic. So credit to Sash and the team and Iain who have been working on this for 3 years. So hopefully, I can come in and take credit for all of the hard work they've done. Melanie Jaye Leydin: Thanks, Stu. Stuart Gregor: Thank you, team. Thank you, everyone.
Operator: Good day and thank you for standing by. Welcome to the Myriad Genetics Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Matt Scalo, Senior Vice President of Investor Relations. Please go ahead. Matthew Scalo: Good afternoon, and welcome to Myriad Genetics Fourth Quarter and Full Year 2025 Earnings Call. During the call, we will review the financial results we released today, and afterwards, we will host a Q&A session. Our earnings release was issued this afternoon on Form 8-K and can be found on our website at investor.myriad.com. I'm Matt Scalo, Senior Vice President of Investor Relations. On the call with me today are Sam Raha, our President and Chief Executive Officer; Ben Wheeler, our Chief Financial Officer; and Mark Verratti, our Chief Operating Officer. Also joining us for Q&A will be Brian Donnelly, our Chief Commercial Officer. This call can be heard live via webcast at investor.myriad.com, and a recording will be archived in the Investors section of our website, along with this slide presentation. Please note that some of the information presented today contains projections or other forward-looking statements regarding future events or the future financial performance of the company. These statements are based on management's current expectations, and the actual events or results may differ materially and adversely from these expectations for a variety of reasons. We refer you to the documents the company files from time to time with the SEC, specifically the company's annual report on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K. These documents identify important risk factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. I will now turn the call over to Sam. Samraat Raha: Thanks, Matt. Good afternoon, everyone, and thank you for joining us. As we head into the new year, I'm pleased with the progress we're making as the new Myriad to live up to our significant potential by focusing on high-growth market segments, advancing our plans for multiple timely product launches, including leveraging strategic partnerships and by executing with stepped-up urgency and strengthened execution rigor. I'm happy with how we ended 2025 with fourth quarter revenue of $210 million, coming in above the high end of the preannounced range we provided in January. When you exclude the headwind from UnitedHealthcare's decision on GeneSight, our business grew approximately 4% over Q4 of 2024. In terms of testing volume, we delivered 382,000 test results in the fourth quarter. Our financial results were supported by continued strong volume growth for MyRisk in oncology at 14% over the year ago quarter and MyRisk for unaffected at 11% over the year ago quarter. These results reflect our ongoing efforts to enhance the customer workflow, including EMR functionality. Mark will provide additional color in his section, but certainly, we continue to see positive demand for our MyRisk hereditary cancer test, and this supports our accelerated profitable growth journey ahead. I'm also pleased to call out the acceleration in Prolaris test volume growth in the fourth quarter, where the combination of actions over the last 2 quarters, including incremental investments in the commercial team focused on urologists have helped drive 12% test volume growth year-over-year. Fourth quarter prenatal volume declined year-over-year, primarily stemming from Q2 order management disruption. With this issue resolved, we are now in an active rebuild phase, reactivating accounts, expanding access and driving new customer wins. We expect these actions to support a return to positive growth in 2026. Moving to our mental health business. GeneSight volume grew 9% year-over-year and continued to accelerate from the first half of 2025 as our commercial organization maintained strong execution with new and existing customers. For the full year 2025, revenue was $824.5 million, and we delivered over 1.5 million test reports by serving over 55,000 health care providers. Turning now to profitability. In the fourth quarter, we reported strong adjusted gross margin of 70% and closely managed our discretionary spend as reflected in our adjusted OpEx line. Ultimately, we reported a healthy adjusted EBITDA of $14.3 million and adjusted EPS of $0.04. We're also making great progress on our cancer care continuum strategy to maintain leadership hereditary cancer testing while expanding into other attractive cancer testing applications. This includes launching the expanded MyRisk panel in Q4, which has been well received in the market. We're also sharing results from an increasing number of studies in Precise MRD with positive clinical data presented at major clinical conferences. And we're in final preparation mode to start commercial testing of Precise MRD for breast cancer for a select set of customers in what we call an Alpha launch starting next week. Overall, we're making good progress towards our goal of expanding our portfolio of differentiated testing solutions that provide actionable insights across the cancer care continuum. From a new product pipeline perspective, 2026 is shaping up to be a banner year. Throughout the year, there are a number of important catalysts that we will be tracking that supports this year's growth. But even more, these are leading indicators of key growth drivers for 2027 and beyond. We're making significant progress on a number of catalysts outlined in this slide. Our strong fourth quarter test volume growth for MyRisk reflects ongoing traction of our breast cancer risk assessment programs and the launch of our expanded MyRisk test. We plan to launch disease-specific panels for MyRisk in Q2 and expect our market activation programs and product extensions to support increased MyRisk growth. Building on Prolaris' strong fourth quarter performance, we're on track to launch our first AI-enhanced Prolaris prostate cancer test in Q2 that combines the power of molecular and AI analysis, and this is based on our partnership with PATHOMIQ. On Precise MRD, as I noted earlier, we're on track to commence commercial testing for select set of customers next week, and I'll provide additional color on the next slide. At JPMorgan Healthcare Conference in January, we reconfirmed that our first Precise MRD test will be for breast cancer and announced additional indications that will follow. We plan to submit for MolDX and expand commercial testing for early access customers for both renal and colorectal cancer in the second half of the year with commercial launch of breast, renal and colorectal planned for 2027. All of these Precise MRD tests have a growing body of clinical validation, some of which has been shared recently in venues, including presentations at the San Antonio Breast Cancer Symposium in December, ASCO GI Symposium in January, where a first look at Precise MRD data related to colorectal cancer was presented by collaborators from National Cancer Center Hospital East in Japan, showing how the ultrasensitive detection of Precise MRD can have additional benefits compared to first-gen MRD tests. And to round out the robust 2026 pipeline, we're on track to launch first gene multiple prenatal screen tests in the second half of this year. The timing of this launch dovetails nicely the deployment of a focused prenatal health sales team next quarter and the expected early results of the CONNECTOR study in the next few months. As we prepare to achieve the important milestone of commencing commercial testing for select set of customers with Precise MRD for breast cancer patients next week, I want to help frame expectations at this stage. This slide highlights our three objectives. First, we're looking to further showcase Precise MRD's clinical performance while continuing to build the body of real-world evidence. To date, data shows Precise MRD's high sensitivity and ability to detect disease down to 1 part per million. We believe our MRD platform can help guide clinical decision-making for patients in their journey in cancer care and has the ability to detect presence and recurrence meaningfully earlier than the standard of care with imaging and therefore, can positively impact patient outcomes. Second, nearly 85% of cancer care in the U.S. happens in the community. That's where Myriad has a strong established presence where we serve nearly 3,500 oncologists in 2025. We've seen strong interest from our community oncologist base to participate in the Alpha and early access stages of our commercial rollout. Clearly, this is an encouraging sign. But we also remain disciplined regarding the overall number of participating centers in these early stages of launch to ensure good customer experience and manage our profitability. We will look to expand the number of centers as we move through 2026. And the third objective is to track and learn from specific metrics appropriate for this early stage. After all, you get what you measure, and we'll look to provide an appropriate level of visibility into these metrics moving forward, starting with the Q1 earnings call. While we're excited and busy preparing for multiple launches this year, I want to reiterate that there is little to no contribution from these MRD tests in our 2026 revenue guidance. Going into 2026, we're taking a number of actions to accelerate growth. This includes our plan to invest over $35 million over the next few years to support a number of initiatives to accelerate organizational efficiency, agility and growth. These initiatives include strengthening our commercial capabilities, particularly in the cancer care continuum. Specifically, we're adding a meaningful number of sales and medical headcount ahead of multiple new product launches this year. Many of these new additions come from advanced diagnostics sector and bring strong domain knowledge and experience in molecular profiling and cancer diagnostics, along with relationships across the oncology health care community. In addition, we're strengthening the tools critical to our sales team while implementing a comprehensive plan to drive awareness, excitement and demand for our products. I attended our commercial kickoff meeting last month hosted by Brian Donnelly, our Chief Commercial Officer, and I can say our teams are energized and highly motivated to win in the market. Now let me hand it over to our COO, Mark Verratti. Mark? Mark Verratti: Thanks, Sam. Turning to fourth quarter oncology. Total oncology revenue was $84.7 million, growth of 2% over the fourth quarter of 2024. I would like to highlight our MyRisk test continues to gain share with fourth quarter 2025 year-over-year volume growth of 14% in the affected market and 11% in the unaffected market. Shifting to prostate cancer. Prolaris revenue growth in the fourth quarter accelerated to 16% year-over-year, up from 3% year-over-year revenue growth in our third quarter. Fourth quarter Prolaris revenue growth was driven by 12% volume growth, reflecting a continued improvement year-to-date. As mentioned on previous calls, we are investing in the commercial channel and other programs to grow and regain share in this market. Adding to what Sam mentioned in previous calls, Myriad is on track to be the only company that will offer AI, biomarker, germline and tumor profile testing when we launch our first AI-enabled Prolaris test in the second quarter of 2026. In January, we issued a press release outlining our MRD commercialization time lines and clinical evidence presented at recent clinical conferences. Our ultrasensitive Precise MRD test continues to demonstrate strong clinical value in these studies, which now includes data on colorectal cancer patients, where we saw 100% baseline ctDNA detection across all patients. Approximately 20% of samples were detected at levels in the ultrasensitive range that may have gone undetected on first-generation assays. This supports strong performance of Precise MRD. As Sam mentioned, we're excited to begin offering our ultrasensitive Precise MRD test next week. Initially, this launch will be limited to a number of oncology centers, ones we believe best reflect a variety of needs across the community oncology setting and breast cancer patient. This early launch provides the opportunity to engage these providers and incorporate their feedback about a host of topics, including the ease of use and overall utility and actionability of the test. As we move ahead, we'll plan to expand the number of centers in a controlled manner until full commercial launch. Now moving to our Women's Health business. In the fourth quarter, Women's Health delivered revenue of $88.5 million, an increase of 2% over prior year period. We're pleased to see another consecutive quarter of incremental growth in hereditary cancer testing in the unaffected market with revenue growth of 3% and volume growth of 11% year-over-year. This improving volume growth trend is particularly important as it reflects EMR-related workflow improvements put in place, such as the September integration of our MyGeneHistory assessment into Epic as a way to better identify patients that qualify for hereditary testing and improve the provider experience. So we continue to be optimistic about the potential for continued momentum. We also remain confident about our ongoing progress from breast cancer risk assessment programs that enable providers to rapidly identify patients who qualify for additional screening. We continue to see positive momentum at these sites and expect to make further investments in our commercial capabilities to accelerate this program through 2026 to fuel growth in MyRisk volume. As for prenatal testing in the fourth quarter, we saw a modest pullback in volume growth from previous quarters as we continue to work with accounts affected by friction created by the second quarter implementation of a new test ordering system. While we are optimistic on our ongoing engagement will win back share and drive overall growth in 2026, prenatal volume growth in the first quarter of 2026 will face a difficult year-over-year comparison, likely leading to a decline in year-over-year volume growth. As for our new multiple prenatal screen, FirstGene, last week, we published the analytical validation of FirstGene in clinical chemistry. FirstGene is an integrated solution for multiple pillars of prenatal testing, and our paper shows excellent accuracy and reliability for each pillar. We continue early access clinical testing with our CONNECTOR study seeing positive enrollment momentum, and we are pleased with our turnaround times, assay performance and early customer feedback. We are reaffirming our full commercial launch in the second half of 2026 and are investing appropriately ahead of this launch as FirstGene provides added insight and has the potential to expand the overall addressable prenatal testing market. Turning now to mental health. In the fourth quarter, the team generated GeneSight revenues of $36.6 million on volume growth of 9% year-over-year. We continue to drive expansion of the ordering provider base, achieving a record number of ordering clinicians to over 38,000 in the fourth quarter. This strong fourth quarter volume performance is worth highlighting as Myriad remains disciplined and focused on capital efficiency in this group. While quarterly revenue continues to be impacted by UnitedHealthcare's coverage policy change in January of 2025, we are proud of our clinical development and payer market teams for securing positive coverage policies across 12 payers for GeneSight in 2025 related to biomarker laws, including the California Medicaid program, Medi-Cal. In addition, we are seeing benefit from optimizing revenue cycle workflows to maximize reimbursement. I will now turn the call over to our CFO, Ben Wheeler. Ben Wheeler: Thanks, Mark. As Sam and Mark highlighted, we're seeing clear momentum from the operational and commercial progress made throughout 2025. Let me start with a recap of our fourth quarter growth drivers. We generated another quarter of strong test volume growth in hereditary cancer testing, achieving 9% year-over-year growth in the fourth quarter and 7% year-over-year growth for the full year 2025. This acceleration in the fourth quarter reflects continued double-digit growth in our unaffected market. Likewise, GeneSight finished the year with strong momentum, generating test volume growth of 9% year-over-year in the fourth quarter and 6% for the full year 2025. This progress reflects commercial discipline and effectiveness of the actions taken in early 2025 in response to UnitedHealthcare's coverage decision. The reacceleration in both unaffected hereditary cancer volumes and GeneSight volumes is a clear proof point that our commercial performance is strengthening and that the actions that we've taken to enhance focus, accountability and effectiveness are translating into tangible momentum. Moving to the consolidated financial results. For the fourth quarter, we reported revenue of $209.8 million, above the high end of the range pre-announced on January 12 and consistent with the year ago period. Overall, test volumes grew 2% year-over-year, while average revenue per test declined 2% year-over-year. The headwind in fourth quarter average revenue per test reflects the impact from UnitedHealthcare's policy change with respect to GeneSight coverage. Despite the average revenue per test headwind, underlying demand continues to be strong. Excluding UnitedHealthcare's net impact on GeneSight of $8.1 million, our underlying fourth quarter 2025 revenue growth rate was 4% year-over-year. We generated 70% gross margins in fourth quarter, in line with our third quarter, but down approximately 190 basis points year-over-year. This decline was driven by the revenue headwind I just mentioned that affected GeneSight average revenue per test. Fourth quarter adjusted operating expenses decreased by $7 million year-over-year, reflecting disciplined cost management and the timing of investment as resources were deliberately redirected towards commercial and R&D initiatives that will ramp and be reflected in first quarter spending. We remain committed to balancing strategic investment to support our long-term growth with continued progress toward improving profitability while ensuring capital is allocated to our highest impact priorities. Taking all of that into account, we generated adjusted EPS of $0.04 or $0.01 above the year ago period. Next, I'll speak to Myriad's profitability and liquidity. We generated $14.3 million of adjusted EBITDA and $17.9 million in adjusted operating cash flow in the fourth quarter. These results reflect the strength of our gross profit base, the operating leverage inherent in our business model and the meaningful earnings and cash flow potential of the business as we continue to execute. We also maintain a solid balance sheet with access to $225 million in capital. As a note, we intend to file a universal shelf registration to replace our existing shelf. We view maintaining an effective shelf registration as a prudent corporate housekeeping measure. Next, I'll address financial guidance. We're reaffirming our full year 2026 financial guidance, which we issued on January 12, including a revenue range of $860 million to $880 million, and adjusted gross margin range of between 68% and 69% as well as an adjusted EBITDA guidance range of between $37 million and $49 million. In order to support investor modeling for 2026 by quarter, we provided additional commentary in the earnings release, and I would like to highlight a few key points. First quarter revenue is expected to be between $200 million and $203 million, representing 2% to 4% growth over the year ago period. As happens in most years, first quarter average revenue per test tends to be lower than fourth quarter due to items such as the resetting of insurance deductibles. In addition, as Mark mentioned, prenatal volume and revenue are expected to face unfavorable year-over-year comparisons in the first quarter, leading to a year-over-year decline in this portfolio. We anticipate prenatal to demonstrate year-over-year progress likely beginning in Q2. Also consistent with recent years, revenue in the second half of the year is typically stronger than the first half. We expect this pattern to repeat to a similar degree in 2026. This outlook is supported by current business trends and anticipated improvement in prenatal portfolio and early contributions from recent commercial investments. As a result, we expect quarterly revenue to grow sequentially from first quarter through the remaining quarters of the year. I also want to make investors aware that beginning in first quarter, we plan to simplify how we present and discuss our business to better align with our refreshed strategy and how we're operating the company. Going forward, we'll organize our reporting around our strategic areas of focus with the first group being the cancer care continuum. This group will incorporate all hereditary cancer testing, including both affected and unaffected populations and all tumor profile testing. This will be followed by prenatal health, which will include our NIPS and Carrier Screen lines as well as SneakPeek. And lastly, we'll continue to report mental health as a distinct category. We are making these changes because it provides clear visibility into the core drivers of the business and better aligns our external reporting with how we operate and allocate resources to our strategic priorities. We're confident in our full year outlook and the team's execution as we enter 2026. Now let me turn the call back to Sam. Samraat Raha: Thanks, Ben. Let me conclude by saying this is an energizing time for the new Myriad. We are at an inflection point where we have the absolute clarity and conviction for our go-forward strategy with a particular focus on the cancer care continuum. We have a robust pipeline of new products and enhancements for attractive market opportunities, mostly developed internally but also complemented with ones enabled through strategic partnerships. Yes, we are the hereditary cancer company, but we are more than that. And many of these new products will strengthen our position across cancer care testing. Along with that, we're going to leverage our operational strengths for sample processing and reporting while expanding our commercial capabilities and customer reach. We have a stronger leadership team now, both from my direct staff and the next level with a needed blend of diagnostics, cancer and genomics domain knowledge combined with proven experience for delivering results. Along with all this, we're taking steps programmatically and culturally to strengthen execution excellence. Put it all together, we have the substance and confidence to positively impact an increasing number of patient lives and to accelerate profitable growth. I now pass the call over to Matt for Q&A. Matt? Matthew Scalo: Thanks, Sam. As a reminder, during today's call, we use certain non-GAAP financial measures. A reconciliation of the GAAP to non-GAAP financial results and a reconciliation of GAAP to non-GAAP financial guidance can be found in our earnings release and under the Investor Relations section of our website. Now we're ready to begin the Q&A session. [Operator Instructions] Operator, we're now ready for the Q&A portion of the call. Operator: And our first question comes from Puneet Souda of Leerink Partners. Puneet Souda: First one, maybe, Sam, just given the momentum or the recovery that you're focused on for the full year, do you -- I was trying to understand what gives you confidence that we can continue with this sort of high single-digit long-term growth rate that you had before and what you're projecting for the year, is that how should we think about sort of 2027? Can we -- or can we return back to that high single-digit growth rate? Let me just pause there, and I'll come back with another question follow-up. Samraat Raha: Yes, Puneet, thanks for the question. Well, first, let me start with 2026. And the drivers of our growth this year, again, it's a number of products that we have already launched coming into the year, be it the expanded MyRisk panel in Q4 of last year. It's improvement that we're seeing across the board, both in commercial and other parts of our organization and execution. So we're getting better at that. We are also -- as we get along the year, we're adding headcount to go along with new products that we're launching and so forth. So based on what we have, the recovery of the prenatal business that we anticipate that we've spoken to happening over the next several months and quarters, we feel confident being right there in our guidance range, right? That's what we feel for this year. Listen, when you look at 2027 and beyond, as I've said recently at the JPM conference in January, we believe that we have a number of levers in place. I'll again point you to the catalyst slide, which talks about a number of new products, right? We have 3 major launches this year, starting with Precise MRD for breast and other indications as well, AI-enabled Prolaris for prostate cancer as well as FirstGene, right? All of these things, I think, will be important that we're timely in our launch. But truly, these become even more growth drivers for 2027 and beyond. So I would summarize second part of your question and that we have confidence that as we exit this year going into '27, '28 that we will be on path for high single-digit to low double-digit sustained profitable growth. Puneet Souda: Got it. That's helpful. And then on the MRD launch, I appreciate the details you provided, but just wanted to get sort of how do you plan on holding back? I mean, is it certain indications just given the sort of the competitiveness of the market and competition in the market and also the fact that currently, the products are not reimbursed, but you're on a path towards that. So maybe just talk to us as to sort of how you plan to throttle it back and then accelerate sort of into the second half of the year and beyond? And then on prenatal, if I could just squeeze in, how should we think about the growth rate in the first quarter? I know it's down but just wanted to make sure if there's a finer point on that and then the recovery through the rest of the year. Samraat Raha: Yes. Let me take the MRD question, and then Ben, if you can answer the prenatal question here. Yes, from an MRD standpoint, we are excited again. As I said, it's next week, we're going live. We're going to start commercial testing, and it is for what we're calling our Alpha phase of the launch, select number. So we are being selective, Puneet. It is a little bit challenging in a good way that we've seen a lot of interest to have access to precise MRD, but I believe we can do it in a balanced way. I mean, again, in this phase, what we're looking for is input on the user experience all the way from ordering to the reporting, the number of repeat orders, the operational efficiency that we have and ultimately, the order volume that we have. And as we noted, our MolDX submission is planned for early H2, so you can call it Q3 for breast and then later in '26 for renal and colorectal cancer. So until we have submitted for MolDX, we're going to be a little bit more careful on the volume we take on. But we have a path. And listen, it will be something we will carefully consider as the year goes by of are there merits to increase the volume? What do we think on the timing of MolDX? So as we sit right now, we're pleased, particularly with the start of Alpha for Precise MRD and breast next week. Ben, over to you on prenatal. Ben Wheeler: Thanks, Sam. So as it relates to prenatal, Puneet, as a policy, we don't generally offer product level revenue guidance. But we did call out the prenatal Q1 growth and the unfavorable year-over-year comparison because we had noticed that the Street revenue models had a pretty wide range as it related to our prenatal product. And so we thought it was important to be able to make sure that folks understood that appropriately reflecting our expectation as it relates to the recovery in 2026 is really the only major change needed to get Q1 revenue in line with our updated revenue range of $200 million to $203 million. Operator: Our next question comes from Subbu Nambi of Guggenheim. Subhalaxmi Nambi: At JPM, you laid out an ambitious MRD launch road map, which you reiterated today. As you think about the puts and takes in that road map, where is there the most risk or the most factors out of your control that could delay your road map? And conversely, are there things that would go faster than what you planned? Samraat Raha: Yes. Thank you, Subbu, for the question. In fact, when we think about this year, one of the biggest challenges, if you will, and I think it could be a positive thing is exactly how many samples in advance of MolDX approval that -- for Precise MRD that we run. Some of the things that are, as you're asking, out of our complete control are just how long and how many cycles it might take MolDX to do the review, provide us input and ultimately for us to get approval. What we can control, and I think we've been doing a really nice job of is preparing the data and for the submission for the publication. I think I've shared before, we have more than 15 active studies in MRD underway. The MONITOR study is the one, which will inform and provide the publication for breast cancer MRD. And that is on track for us to be able to do that in Q3. Now the -- for the colorectal cancer submission to MolDX, that's tied. That's part of the pan-cancer study as part of the MONSTAR study that we're doing with our collaborators in Japan. We believe that's on track for the second half, which will be the submission to colorectal. Now in renal, the good news is we -- in September of last year, we already had a publication in Lancet for renal cell carcinoma. So those things on submissions, that's just to speak to kind of our level of confidence. We have, I think, a decent level of control. It's really about the MolDX timing. And as you know, Subbu, we'll kind of walk that road together, and we'll see how that goes. Subhalaxmi Nambi: One follow-up. Last week, you published a paper of performance data for FirstGene in a prospectively collected set of patient samples. You reiterated the timing for CONNECTOR study in second half of this year, which will be based on real-world samples. Is there any reason to expect the real-world data set to have meaningful difference in performance of the test and the prospectively collected samples? Samraat Raha: Thank you. Thank you for the great question. So first, yes, we were very pleased with the results, both on selectivity and sensitivity from about 500 samples that we noted in the press release last week. And we -- until the data is fully there from a broader set of CONNECTOR -- individuals who are enrolled in CONNECTOR, we can't conclusively say, but there is -- we see no reason to believe that the data shouldn't be as robust and compelling in terms of the performance for FirstGene. Operator: And our next question comes from Tycho Peterson of Jefferies. Tycho Peterson: A couple on margins. So if we look at HCT volumes in oncology, you grew 9%, revenue obviously only increased 3%. Maybe just talk about what specific ASP or payer mix dynamics are driving this gap? And how do we think about this kind of dynamic in '26 as you launch disease-specific panels? Ben Wheeler: So Tycho, this is Ben. Thanks for the question. Yes, as we talked about ASP in Q3, we talked about that kind of the launching point for Q4 and then moving forward into 2026, I think it's important for folks to take into account that we anticipate a modest headwind relative to ASP when we look at the portfolio in 2026 when you're thinking about what the year will look like. As you mentioned, from a payer mix standpoint, as we focus on selling the expanded panel and then also the MyRisk more broadly across our sales channels, we've talked about this before where we have about a 10% lighter ASP in the unaffected channel relative to the affected channel. And I think that we saw that headwind across the portfolio from an ASP standpoint when you look at 2025, really driven by the different mix of payers. Part of it was biopharma revenue that we talked about in -- excuse me, in Q3 with the new baseline moving forward. And then another part of it is you just see a shift in the different payer mix from one payer group from a Blue Cross Blue Shield group to another group or something along those lines. Tycho Peterson: Okay. And then on Precise, I appreciate the color on kind of the Alpha rollout. Maybe just talk a little bit about how you think about scaling up on the sales and commercial channel there. Obviously, more of a '27 driver overall. But just talk a little bit about how you're thinking about hiring for the various indications. Samraat Raha: Yes, sure. Maybe I'll start and then I'll allow Brian Donnelly, who's here with us to join in. I'll just say that the scale-up and the preparation for the launch has been underway for some time, and it includes training the existing team, making sure we're hiring people with the right profile, meaning understanding of molecular. And beyond just the sales team, it's also our medical folks, MSLs and a lot of that's already happening. But Brian, please? Brian Donnelly: Yes. Thanks, Sam. This is Brian. So just building on what Sam said, we're really focused on making sure we have the right level of reach and frequency to priority targets, which you won't be surprised to hear us say. So we're just taking a consistent view at the market, making sure that we are hiring the right level of folks in the right territories, and we're training them, which is a really important piece of the puzzle. We want to get them ready to go as quickly as possible to make an impact. Samraat Raha: And Tycho, I'll just add to that. We've mentioned -- I mentioned again earlier in my prepared remarks that we're spending over $35 million over the next couple of years. And a very big part of that is to augment our sales team. And those additions are underway as we speak. In fact, we had our commercial meeting kickoff just a couple of months ago, and there's a lot of new faces in the room. They're coming from places where they've done this already. So they're not just going to be learning on the job. Tycho Peterson: Okay. That's helpful. And then maybe just along those lines and lastly, just on the Alpha launch, can you just provide any more color? You talked a little bit about how you're thinking about number of tests you need to run, but maybe the customer profiles you're going to target. Samraat Raha: Sorry, I didn't know if you got cut off. Did you just say can I provide any more color? Is that what you said? Tycho Peterson: Yes. On the Alpha launch, I mean, you talked about a number of tests you may target, but in terms of... Samraat Raha: I'm going to go with that. Listen, we are... Operator: Ladies and gentlemen, please remain on the line, your conference will resume shortly. Samraat Raha: Yes. Apologies, Tycho. I got cut off. So I think what I was answering your question about Alpha is we're excited about the launch. We're starting off with a handful of community oncology centers. And by the end of the year, as we move into early access, we're going to broaden that into dozens of actual accounts. We have already done the training to prepare these sites. We have sample collection kits in their hands. So we're looking forward starting next week to activate fully and start receiving samples and can't share enough the excitement that we have to start. Operator: And our next question comes from Doug Schenkel of Wolfe. Douglas Schenkel: My first one is on Prolaris, where ostensibly, you picked up some momentum into year-end. As you noted in your prepared remarks, the recent volume was up low double digits was because of the favorable comparison. Can you delineate between how much of it was the comp versus improved rep productivity or any other dynamics that you think are worth calling out? That's my first question. On an unrelated topic, my other question is on prenatal momentum into year-end. Units were actually down, I think, 5,000 or so sequentially in the fourth quarter. I just want to see if there were any remaining order management dynamics. And if so, how is that contemplated into 2026 guidance? And beyond that, are there other things that are worth talking through like competitive dynamics, for example, that may have affected trends into year-end? Samraat Raha: Yes. Thank you, Doug, for the questions. Let me start with a question on Prolaris, and then I'll hand it off to the combination of Ben and Brian to talk about prenatal. Listen, there have been a number of activities that we've been working on over the last few quarters actually related to Prolaris. It includes the engagement we've had with KOLs; it includes the various programs we've been driving. It includes the expansion of our sales team into more -- serving more urologists. So all of those things are things that we think will endure. Now yes, did we potentially get a little bit of a compare benefit in Q4? That's possible. But as we look into 2027, we expect maybe not the 12% growth that we had within the quarter, but much stronger and actual growth throughout the year in 2026 than what we saw in 2025. So moving on to the prenatal question, Ben, let me hand it to you and Brian to answer that. Ben Wheeler: Sure. Thanks, Sam. And I was just going to make one comment relative to Prolaris urology, Doug. So as Sam mentioned, we've focused on that channel executing with the sales force, and that gives us confidence as we look at 2026. So like Sam said, we don't expect, or we didn't model out a 12% year-over-year growth going into '26. The guide did reflect some traction relative to the total annual growth rate that we saw in '25 moving into '26, and we're bullish about the opportunity ahead as we see the performance that we saw in Q4. Now transitioning over to prenatal. You're accurate in the view that volume declined in Q4. Typically, Q4 is often a challenging volume quarter period, all else equal, not simply saying that, that is the year that we had for prenatal in 2025. But when you look at the seasonal or the quarterly volumes from a prenatal standpoint, oftentimes, you'll see a softening in Q4. We did see softening in Q4. And as we mentioned in the prepared remarks and then also, as I briefly shared with Puneet, our expectation is that we'll see a decline in prenatal year-over-year in Q1 with recovery in Q2 and beyond. And there are several things that give us that confidence. Part of it is having a focused sales force as they focus on our prenatal bag and Brian can speak more to that. The early traction that we're seeing in conversations with GeneSight and FirstGene, excuse me, as providers will be interested and open to conversations as we work to win back share as well. So I do want to emphasize the fact that the guide does not include a sizable benefit from FirstGene, but we do believe that as we launch that product commercially, we'll have an opportunity to have conversations with docs that will give us some traction or leverage across the portfolio. Brian Donnelly: It's Brian. Just a couple of adds for that. So [Technical Difficulty] order management issue that we have been working to resolve throughout the year. What we have seen underneath that is accounts who are not impacted by our order management issue are growing at or above market, which is a good signal for the underlying health of the base. In the same period of time, we've been focused on adding new customers. Our sales team has been really focused on restoring the accounts where we lost volume. And if you go forward into this year, Sam mentioned earlier, we have our prenatal sales team that we're going to be expanding going into the second quarter, and we have the FirstGene launch. So I would just align fully with what Ben said, we do -- Q1 is going to be the beginning of this year for us. We're excited to get out into Q2 and into the back half of the year when we got our new -- our expanded team and our new product. Operator: And our next question comes from Andrew Cooper of Raymond James. Andrew Cooper: Maybe just a follow-up on that. I do want to drill in a little bit more on just how many customers are left that kind of are affected by this -- by the change at this point? Is it a few important ones? Is it kind of more widespread? I just would love a little bit of kind of color there. And then what other parts of the portfolio maybe need some updates to some of your systems? And at this point, how are you balancing those risks and thinking about it differently than you were before sort of this hiccup in prenatal? Samraat Raha: Maybe I take the second question first. Thank you for the questions, Andrew. And then Ben if you and Brian, if there's anything you want to say with the first question. We take it incredibly seriously, Andrew, and we took the opportunity when it happened in Q2 of last year to look through every ordering that we have and to really ensure that everything was intact, that we had no issues, no friction either in the test ordering system or in the reporting system. And what we really learned is as part of improving execution excellence, it's about a different level of rigor and testing that we'll do before we go live with something, right? This was a self-induced error that we had, which we shouldn't have, and we did, and we've taken care of it. But we have gone through all our other testing -- all of our -- excuse me, ordering systems, and we feel good about all of those continuing to work as they are without any issues. Ben Wheeler: So building on that, as Sam mentioned, we [Technical Difficulty] to win back the customers that encountered that challenge, we see some progress there, and I'll have Brian speak to that in just a moment. But I think it's important to recognize that as we have the opportunity to go back in there and reengage in conversations, being able to speak about a new product is an opportunity that opens that conversation or opens the door that we have not necessarily had the opportunity to leverage or open over the last couple of quarters. And so again, not to be too repetitious here, but that's one of the things that really gives us excitement about the ability to move forward and see year-over-year growth as we move in Q2 and beyond. Brian Donnelly: Yes. This is Brian. I don't have a lot to add to that other than as it relates to where we're at now, we have a really good handle on our current accounts. We understand their needs. They are adopting our portfolio. We feel really good about our current customers and our relationships with them. So we feel like we are stabilizing there. Andrew Cooper: Okay. Great. And then maybe if I can just sneak one more in. Just on GeneSight, you talked about the 12 payers and the biomarker bills that you added in '25. How should we think about the trend in ASP there for '26, knowing that you're past sort of the big headwind here that you've been facing for the last year or so? Ben Wheeler: Yes. So we've been really pleased to see the traction that's come as we've engaged in states with biomarker bills and the wins that we had in 2025. Those wins came across the year. And so there's going to be an annualized benefit to some of those that we didn't see in '25, but none of them in isolation are a sizable win. And so when we think about '26 from an ASP standpoint, again, across the portfolio, we're expecting a modest headwind. As it relates to GeneSight, we just think about it as being stable. Samraat Raha: Ben, let me just add to what you said. Sorry, Andrew, is that the good thing, well, if you will, we have a much more balanced portfolio, if you will, of payers now. Unlike what had happened with United, even if we were to lose another payer unless they were to be Medicare and there's no sign of that. We feel that's completely stable. We're in a much better place than we were [Technical Difficulty]. Operator: Our next question comes from Dan Brennan of TD Cowen. Daniel Brennan: Maybe just on hereditary cancer. Can you just walk through a little bit kind of what's assumed this year for volume growth? You had some nice growth this quarter. I think comps are a little easier. Just wondering how we might think about the volume growth in hereditary cancer going forward. Ben Wheeler: Yes. So Dan, when we think about '26, we think about high single-digit growth from a hereditary cancer portfolio perspective, and that's across both unaffected and affected. Obviously, exiting the year with the momentum that we had continues to add how bullish we are about that, but that's how we're thinking about it in '26. Daniel Brennan: Okay. Maybe just on pricing. I think you said you have a headwind on the whole portfolio. Can you just give a little bit more color on that? Like is there a specific dynamic in '26? Or just how do we think about that? Ben Wheeler: Yes, Dan, I wouldn't think about it as a specific dynamic per se for the portfolio. I would just think about it just generally as we experience price pressure in hereditary cancer, you think about the dynamics for GeneSight, net-net, we expect the portfolio to have a very modest decline, 1% to 2%. And so obviously, there's individual dynamics for different [Technical Difficulty] there in '25. We'll continue to engage with payers, and we're excited about the ASP that FirstGene can bring to the portfolio as a modest improvement for our existing prenatal portfolio. But just generally, when you think about the enterprise ASP, that's how we think about the modest headwind of 1% to 2%. Daniel Brennan: And maybe just one more, sneak one in. Just on MolDX and MRD, like -- so do you assume you get the coverage in the back half of the year and then you have some revenue contribution from that coverage in the model? Sorry if I missed that. Samraat Raha: No, Dan, we did not. We're not assuming that we would get coverage until sometime in 2027. So we're assuming really no revenue from MRD in our 2026 numbers. Operator: And our next question comes from Mason Carrico of Stephens. Mason Carrico: A lot has been asked. But on FirstGene, I guess, what do you view as the largest practical barrier to scaling adoption and revenue for that assay in 2027? I mean, is it clinical confidence? Is it workflow integrations, payer coverage, sales execution? I guess, which barrier do you feel the most confident that you can clear early, which do you think takes more time? Samraat Raha: Yes. Thank you for the question. I'm going to let Brian, if you don't mind. Brian Donnelly: Yes, sure. Thanks for the question. So with regard to FirstGene, for us, as you know, this is a new product. So it is really about getting the product in front of our providers, both our existing base as well as new customers we're interested in doing business with. And so it is going to be the traditional issue of getting folks aware of the product, making them ensuring they understand the product to a degree where they're willing to clinically adopt it and then pulling it through. There isn't like a particular issue here other than just really good execution, getting the product in front of customers and being there for them when they're ready to start using it with their patients. Samraat Raha: Brian, if I can just add to that, I think that we've been pleased with the early access period that we've had so far, both in terms of input we've received from customers that have been using it, from our own operational efficiency that we've seen in a very high yield and also though it's still relatively early from the reimbursement that we've gotten. So all those things you mentioned, we're not going in blind. We have a pretty good sense of it. The other thing is we want to have higher market share, and we intend to in the coming quarters and years. But from where we are, we see FirstGene, particularly this combined screen as an opportunity to expand the market, at least for us and to go gain new share, and that's something that is really, I think, important to our future. Mason Carrico: Got it. And then could you talk about the progress you've made in terms of cross-selling multiple assays across customers or really just growing wallet share. Are there any metrics you can provide to highlight how maybe an increasing percentage of your customers are ordering more than one test from the Myriad portfolio or any update there? Samraat Raha: We will likely share something along the lines as we get deeper into this year. But what I can say, we -- again, we have intentionally gone to focus sales organizations. Again, as we've mentioned, for prenatal health, we are kicking that off in Q2. So that's going to be even more of a focus now with Prequel, Foresight and FirstGene that will be coming. In oncology, I can give you an example on the urology channel, we are pleased that along with Prolaris, there are a number of customers, increasing number of customers who are also using MyRisk our hereditary cancer test because that is written into the ASCO guidelines for those who are in the course of being treated for prostate cancer. So fundamental, the great question to [Technical Difficulty] differentiated, and we really believe [Technical Difficulty] is our strong established relationships in community medicine as it relates to what we call the cancer care continuum because there, what we are finding we [Technical Difficulty] relevant tests in the course of treatment. So we fully expect, and the numbers are things we're going to track here between hereditary cancer, between our comprehensive genomic profiling tests, between MRD, there should be a growing connectivity and a benefit by being in an account serving it. So great question, and we'll look to share more of that in the coming quarters. Operator: And our next question comes from Bill Bonello of Craig-Hallum. William Bonello: I just want to circle back to your response to Tycho's question on the hereditary cancer ASP, and then I do have a follow-up to that. But -- so I totally understand the price differential between affected and unaffected. But obviously, the ASP was down in both of those groups this quarter. And so -- and then later, you made some comments about the pricing headwinds and pressure. I guess I'm trying to understand, is that really simply payer mix difference? Or are you seeing your contracted rates for MyRisk going down from where they had been? Ben Wheeler: Yes, Bill, I appreciate the question. So the short answer is no. We are not seeing contracted rates going down. We're not experiencing pressure in that regard as we have conversations with payers. Really, as we think about ASP, as I mentioned, Q3 is a reflection of the mix that we expected going forward. We saw that be consistent in Q4, and that's the way that I would think about it into '26, use Q3, Q4 as the ASP baseline, recognizing that in Q1 with deductible resets, there's going to be ASP pressure across the portfolio that will then generally recover through the remaining 3 quarters of the year. William Bonello: Okay. And when you say mix, not necessarily mix between affected and unaffected but mix like payer mix. Ben Wheeler: That's correct. When you think about volumes coming from a particular payer versus a different payer versus patient portion. William Bonello: Yes. Are you guys still there? Brian Donnelly: We're here. Yes. Can you hear us, Bill? William Bonello: Yes, you've been kind of breaking up, might -- probably just my phone. So the follow-up is just you talked about a change in the way that you're going to show the numbers, which sounds like it will maybe make it easier for all of us. I'm just curious if that change is reflecting any underlying change in your go-to-market strategy for the various businesses. I mean you've talked about the focused prenatal team. Will there be changes in who is actually selling for instance, MyRisk into the unaffected market? Or will current salespeople have essentially the same bag they've had all along? Samraat Raha: It's a great question, Bill. Yes, we are making changes. So again, a quick summary. In October, we shared that we made a number of changes organizationally. We went away from what we used to call the business unit structure with women's health, oncology and so forth. And to cut to the chase, yes, now we have determined through our strategy focused channels, meaning now those folks that are in prenatal that we're going live with this coming quarter, they're selling prenatal products. Again, that's Prequel, Foresight and FirstGene, and they will not be carrying the unaffected -- excuse me, they will not be carrying MyRisk, if you will, to serve the unaffected population. Likewise, we have said that there can be more, we believe, more traction by having a team that is really focused on serving hereditary cancer [Technical Difficulty] that supported a number of marketing initiatives to drive awareness, drive market activation, both directly what we're doing and through partners and through other channels we're driving. So it is a very intentional way [Technical Difficulty] more efficiency and growth and eligibility through the reach and frequency that we intend to execute on. Operator: /> And our next question comes from Lu Li of UBS. Lu Li: I guess my first question on the MRD. I think you mentioned that you're planning to kind of like disclose some of like early-stage metrics. I wonder if you guys have like internal targets for like, for example, like per center utilization, like how do you measure success for those metrics? Samraat Raha: Yes. No, great question, Lu. Appreciate it. Yes. So among other things, the 4 things that we will be looking at is user experience for those that are part of the Alpha. And when we say user experience, it's all the way from how their perception on ordering, on the turnaround time, on the quality of the results, the reporting, how easy it is to interpret and take action from it. So that's one category. Repeat orders, I think that one is pretty obvious. It's important that we see oncologists, health care systems, the same ones continuing to order for multiple patients. and order volume, though we're not disclosing that, we are looking to see that we are able to achieve a certain number of volume of orders here within our Alpha time period, if you will. And then operational efficiency, that's -- those are the other things that will ensure that we're able to scale and prepare to scale more that includes our internal yield turnaround time, our targeted COGS and other elements. So those are the metrics that we'll be tracking. Lu Li: Got it. One question for Ben. I think the guide talking about the EBITDA margin going to be like near breakeven in Q1. I wonder, can you comment on the pacing of that? And anything else that you wanted to flag just in terms of like the Q1? Is it just like the prenatal volume headwinds or anything else that you want to flag? Ben Wheeler: Sure. So yes, we've touched base on the expectation that that's going to be down year-over-year. Also, when we look at historical operating expenses from Q4 to Q1, Q1, we have some outflows just because of the regular cadence of meetings and compensation adjustments and the like. And so the combination of deductible resets at the start of the year, the impact of prenatal year-over-year decline and then a modest step-up in OpEx starting in Q1 and persisting through the year is what impacts the profitability in Q1. Now I will say when we think about the full year, it's important to remember that we look back across the last couple of years [Technical Difficulty] stronger than H1 revenue. I just talked about the impact of a step-up in operating expenses that we will titrate as we see some traction with some of our commercial initiatives. But we issued guidance on January 12 as it relates to adjusted EBITDA, and we're still very confident in that level. Operator: This concludes our question-and-answer session. I'd now like to turn it back to Matt Scalo for closing remarks. Matthew Scalo: Thanks, [ Didi ]. This concludes our earnings call. A replay will be available [Technical Difficulty] for 1 week. Thanks again, everyone, for joining us this afternoon, and have a good day. Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.
Operator: Thank you for standing by, and welcome to the PGG Wrightson Limited Half Year Results Call. [Operator Instructions] I would now like to hand the conference over to Mr. Stephen Guerin, Chief Executive Officer. Please go ahead. Stephen Guerin: Thank you, Amy. [Foreign Language] Good morning, and welcome to the PGG Wrightson's results briefing for the 6 months ended 31 December 2025. My name is Stephen Guerin, Chief Executive Officer, and I'm pleased to provide you an overview today of our interim results for the 2026 financial year. Joining me on the call are Peter Scott, our CFO; and Julian Daly, General Manager of Corporate Affairs, who is also our Company Secretary. Today, I'll summarize a high level of our financial results and trading performance and will comment on our thoughts on the year ahead. There will be time for questions at the end of my commentary, and I welcome you -- receiving those from you. A more detailed commentary on our half year results are available in our half year report, which we released to the NZX online today. I will present -- not present all of the content outlined in our release, but will summarize key matters so that we can provide -- move on to the more questions and answer time at the end of this call. Turning to the financial performance. Operating EBITDA of $45.7 million was up $4.4 million or 11% on the prior corresponding period. Operating revenue of $619.4 million was up $49.1 million or 9%. Net profit after tax of $17.3 million was up $1.3 million or 8.6 -- sorry, 8% up. Just repeat that again, net profit after tax of $17.3 million was up $1.3 million or 8%. An interim dividend of $0.045 per share was declared today. We have reaffirmed our forecast for FY '26 full year operating EBITDA guidance of around $64 million. PGW delivered improved performance on the 6 months of the financial year, reflecting both strong operating execution and generally supportive market environment. The first half of the year was characterized by favorable commodity prices across a number of key segments for PGW customers. Dairy pricing remains supportive, providing confidence in cash flow stability. Red meat markets were particularly strong, driven by tight global supply and resilient offshore demand. Improved on-farm profitability translated into demand for PGW's livestock services, pasture renewal, agronomy and animal health products. All prices also improved during the period. Positive export pricing for kiwifruit and apples resulted in good demand for PGW's products and advisory services. By contrast, the viticulture and arable sectors have experienced weaker demand. The buoyant rural real estate market has contributed positively during the period, reflecting increased confidence across the rural property sector generally. Against this backdrop, PGW delivered improved performance across several key areas of the business. PGW invested in strategic initiatives designed to strengthen its market position and enhance customer value. Investments during the period include the acquisition of the animal health manufacturer of Nexan Group and the launch of PGW's Blue Ag agricultural product range. Turning specifically to the individual business units. Our Retail & Water business, which incorporates Rural Supplies, Fruitfed Supplies, Water and Agritrade saw operating EBITDA of $41.8 million, up $2.3 million or 6%. And revenue was $528.6 million, up $38.3 million or 8% on the prior corresponding period. PGW acquired the lease of the Geelan Family Research Station in Hastings, our long-standing commitment to research and development. The 2.8 hectare site provides our team with a dedicated hub for horticulture and agricultural product trials. This strengthens PGW's technical capability and innovation product development pipeline. PGW acquired the Nexan Group, owner of the Nexan and VetMed Animal Health brands. This acquisition strengthened our position by bringing this trusted New Zealand made product range in-house. This business is trading well, and we're already seeing the benefits of a well aligned to our strategic fit. Another key initiative was Blue Ag, our private label for AgChem range, which was launched and has been through its first trading season. The new portfolio of rich and active ingredients improves supply chain resilience, provides price point control and offers customers greater choice. Turning to our Agency businesses. Our Agency businesses include livestock, wool and real estate. The Agency Group delivered an operating EBITDA of $8.7 million for the first 6 months of the 2026 financial year, an increase of $1.8 million or 27% compared to the same prior period. Revenue was $89.8 million, up $10.7 million or 14% compared to the prior period. Cattle continue to be in high demand, supported by firm beef schedules, which encouraged increased trading activity. [indiscernible] prices were significantly higher than last year and confidence in the dairy sector improved on the back of strong milk forecast and pricing. Demand for our GO-STOCK products continues to grow with a large number of new contracts being signed. [indiscernible] throughput was also strong across the network. Bidr, our online trading -- livestock trading platform made gains through the first half of FY '26, reinforced by sustained demand for online bidding and live streaming saleyards and on-farm auctions. Headage volumes with key partners remained ahead of the prior period as more livestock was transacted through supply chain relationships. Momentum has gathered across a strong wool market with prices maintaining the upward trajectory, providing a more positive outlook for growers. PGW Real Estate delivered a pleasing first half performance, supported by continued confidence and improved profitability in the rural sector. Turning to the all important cash flow. PGW recorded operating cash outflow of $49.9 million for the first 6 months of the financial year. This represented an $18.9 million higher outflow versus the prior comparative period of $31 million. The higher operating cash flow was a result of a seasonal increase in working capital over the spring trading period. Strong trading in our Retail and Water and Livestock businesses, together with higher livestock values resulted in higher net working capital movements, including GO-STOCK of $22.3 million versus the prior comparative period. Cash outflows from investing activities was $20.5 million, an increase of $15.2 million. This included $19.7 million acquisition of Nexan Group, along with fixed asset and intangible purchases of $2.3 million, partially offset by proceeds from fixed asset disposals of $1.5 million. Net interest-bearing debt was up $64 million from 31 December 2024 to be $170.7 million. The Board declared a fully imputed dividend of $0.045 per share, which will be paid on the 8th of April 2026 to shareholders on PGW's share registry at 5:00 p.m. on the 26th of March 2026. We've included an update on our sustainability progress in the half year report, including the introduction of further electric vehicles into PGW's fleet. I refer you to Page 16 of the half year report for full details in that regard. Looking ahead for the remainder of the financial year, the operating environment is expected to continue to be predominantly positive and presents big opportunities for PGW in the sector. Overall conditions across agriculture remain favorable with most parts of the sector performing well, supported by good demand and strong export pricing. The red meat market remains particularly source of strength, underpinned by constrained global supply. The positive outlook for dairy was reinforced last week by Fonterra raising the forecast milk price midpoint range from $9 to $9.50 per kilogram of milk solids. Wool has also shown renewed momentum with improving demand assisting greater price stability. These conditions increased positive returns and underpinned farmer confidence. Horticultural continues a moderately steady expansion led by kiwifruit and apple sectors. Viticulture and arable cropping remain the key exceptions with subdued demand and pricing. Confidence in the rural real estate market is expected to continue, supported by dairy profitability and lower interest rates. The broader economic indicators are looking more encouraging also. Together, these trends contribute positively to farmer incomes and reinforce an optimistic outlook for the rural sector moving forward. PGW is well placed to support its farmer and grower customers and to benefit from opportunities arising from the forecast export demand. While remaining mindful of the ongoing challenges, we are optimistic about the remainder of the financial year and remain on track to deliver our forecast 2026 full year operating EBITDA guidance of around $64 million. Grateful to the contribution of our nationwide team of specialists and their commitment to supporting our customers and rural communities and each other. I want to thank and acknowledge our shareholders for their continuous confidence in PGW as we work to deliver long-term value. Our half year report is available on the New Zealand Stock Exchange website under the PGW ticker and on PGW's website also. This concludes the formal part of our presentation. And Amy, I now welcome questions from participants. Thank you. Operator: [Operator Instructions] The first question comes from [ Paul Grant ], private investor. Unknown Attendee: Good to have a growing result there. I'm just wondering what the NPAT contribution was for Nexan, it cost about $20 million as an investment. So what -- maybe I should ask you, Peter, what was its contribution to NPAT? Peter Scott: Yes. Good question, Paul. If you go to Note 7 in the financial statements, you'll see the revenue and the NPAT, the NPAT contribution for the -- it was actually 5 months, so from the 1st of August through to the 31st of December, given we acquired on the 31st of July was $1.9 million. One thing to bear in mind, of course, is that Nexan -- most of the transactions are within intercompany, so they're eliminated from an accounting perspective, but the contribution was $1.9 million from an NPAT point of view. Stephen Guerin: Paul, Stephen here. Again, I may add a couple of additional comments. As I said, that was -- as Peter acknowledged that's for first 5 months. In terms of our business case for approval from our Board, the business is trading ahead of expectations in that regard, too. So thank you for the question. Operator: [Operator Instructions] There are no further questions at this time. I'll now hand back to Mr. Guerin for closing remarks. Stephen Guerin: Thank you, Amy. And I want to again acknowledge the support of our staff in producing the result. The market environment is conducive, but our team have to get out of bed every day of the week and across the country, and we really appreciate their efforts in supporting our investors and their confidence in PGW. So thank you again. We look forward to talking to you in August when we deliver our full year results, and we're focused on meeting our market guidance. And we thank you for your time today, and we really appreciate you making yourselves available for this call. Thank you, Amy. Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.
Operator: Good afternoon, everyone. Welcome to Forward Air's Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Mr. Tony Carreno, Senior Vice President of Treasury and Investor Relations. Please go ahead, sir. Tony Carreno: Thank you, operator, and good afternoon, everyone. Welcome to Forward Air's Fourth Quarter and Year-End 2025 Earnings Conference Call. With us this afternoon are Shawn Stewart, President and Chief Executive Officer; and Jamie Pierson, Chief Financial Officer. By now, you should have received the press release announcing Forward Air's fourth quarter 2025 results, which was also furnished to the SEC on Form 8-K. We have also furnished a slide presentation outlining fourth quarter 2025 earnings highlights and a business update. Both the press release and slide presentation for this call are accessible on the Investor Relations section of Forward Air's website at forwardair.com. Please be aware that certain statements in the company's earnings release announcement and on this conference call may be considered forward-looking statements. This includes statements which are based on expectations, intentions and projections regarding the company's future performance, anticipated events or trends and other matters that are not historical facts, including statements regarding our fiscal year 2026. These statements are not a guarantee of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For additional information concerning these risks and factors, please refer to our filings with the SEC and the press release and slide presentation relating to this earnings call. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this call. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law. During the call, there may also be a discussion of financial metrics that do not conform to U.S. generally accepted accounting principles or GAAP. Management uses non-GAAP measures internally to understand, manage and evaluate our business and make operating decisions. Definitions and reconciliations of these non-GAAP measures to their most directly comparable GAAP measures are included in today's press release and slide presentation. I will now turn the call over to Shawn. Shawn Stewart: Good afternoon, everyone, and thank you for joining us. I really appreciate your interest in Forward Air Corporation. There are 3 main topics that I would like to cover on today's call. First, I will provide an update on our strategic alternatives review process. Second, I will review some key achievements in 2025. Third, I will share some thoughts on our 2026 priorities before turning the call over to Jamie. Regarding the strategic review, we have continued to make progress since our last update in November and believe we are nearing the conclusion. As we have said from the onset, this has been an extremely comprehensive review in an incredibly difficult logistics environment and broader economic backdrop, which has contributed to the length of the process. When we have updates to share on the review, we will. Beyond that, we are going to remain focused on operating the company, preparing for the cycle to turn so we can take advantage of when it does and keep today's comments focused on the actual results. With that, let's turn to the second topic. For the full year 2025, we reported consolidated EBITDA, which is calculated pursuant to our credit agreement of $307 million compared to $311 million in 2024. As we mentioned last year, we expected the quality of our earnings to continue to improve as historical pro forma and synergy savings roll off, and that is exactly what has happened. To that point, adjusted EBITDA in 2025 improved $40 million year-over-year to $293 million compared to $253 million in 2024. I am proud of our team for holding serve and focusing on what we can control and delivering these results while actively transforming the company and in the face of a multiyear freight recession. We remain focused on the customer and use this time to completely rebuild the management team, consolidate duplicative real estate and reduce expenses to position the company to take advantage of the tailwinds in the industry when the broader market improves. Operationally, in 2025, we unified our U.S. domestic operations with the creation of our One Ground Network, aligning our business into a more cohesive, agile and scalable operating model. This initiative consolidated all U.S. domestic ground operations under a single leadership structure and integrated key service lines, line haul, pickup and delivery, truckload brokerage and expedited services into one streamlined organization. Importantly, our sales channels will continue to operate independently, delivering the outstanding solutions, service and customer relationships we always have. At the same time, our operations remain channel-agnostic, executing consistently across the platform and delivering best-in-class on-time performance and industry-leading claims results. In 2025, we also unveiled our new Latin America regional structure, marking a significant step in strengthening our global logistics network. This regional platform spans Mexico, Brazil, Peru, Colombia and Chile and is anchored by our international freight station in Miami. The Miami Gateway connects Latin America to global markets and enables us to deliver industry-leading import and export security, reliability and service to our customers. During the year, we completed the corrective pricing actions at the Expedited Freight segment and shed some unprofitable freight from our network as a result. Following these actions, the improvement in yield, along with aligning our cost structure with less volume in the network, this segment's full year reported EBITDA margin improved by 110 basis points from 9.8% in 2024 to 10.9% in 2025. As we move into 2026, we expect the volume declines to begin moderating as we lap the corrective pricing actions. In closing out my comments on 2025, -- in pursuit of continuing to enhance the transparency of our business, we provided detail on revenue by product, foreshadowing how we plan to go to market and transition away from reporting by legacy and legal reporting structure. During the year, we also provided insight to our revenue by region around the world. More to come as we work out the reporting nuances, but I'm extremely excited about this additional transparency. Moving to the third topic. As we enter 2026, our strategic focus remains on profitable long-term growth through the expansion of synergistic service offerings that enhance customer value and revenue quality. Our growth is contingent upon having the right team in place, including rounding out our leadership team. In late 2025, we added Fabio Mendunekas as the President of Latin America. Fabio brings over 30 years of experience in the business development and operations throughout Latin America and North America. Just last month, we added Joanna Zhu to the leadership team as our President of Asia Pacific. Joanna brings a wealth of knowledge and 34 years of experience to the company, including working with 2 of the world's largest logistics companies. And most recently, we announced that Lance Sons has joined the company as our new Chief Information Officer. With nearly 30 years of experience, Lance has held progressive leadership roles at a few of the largest tech-forward supply chain companies. I could not be more excited about the talent and industry experience Fabio, Joanna and Lance bring to the company. I am confident that they will drive growth and success across the global enterprise as we enter 2026. A priority in 2026 is to continue the progress in upgrading our tech stack as part of our broader transformation. A key component of this effort is the one ERP initiative, which will consolidate multiple financial systems into a single integrated platform. By bringing these systems together, we should achieve standardized reporting, consistent processes and a single source of financial data, driving greater efficiency and effectiveness across the company. The project is planned as a phased rollout with the first phase successfully completed earlier this month and the final phase to be completed by the end of this year. During the year, we also plan to consolidate a very decentralized global HRIS system across multiple countries into one worldwide system. This is a transformative step as we continue to rationalize our IT systems, improve the quality of our data and decision-making. By prioritizing customer service, strong leadership and careful cost management, we believe we are positioning the company for long-term success. As most of you are aware, we have made a great deal of progress and believe we are well positioned once the freight environment improves. We are optimistic about a recovery and are committed to building on the momentum of our transformation that we have created. With that, I will turn the call over to Jamie to go through the detailed results of the fourth quarter and full year 2025. Jamie Pierson: Thanks, Shawn, and good afternoon, everyone. For the fourth quarter of 2025, we reported another solid $75 million consolidated EBITDA quarter. Actually, to be very specific, it was a $77 million quarter, and that is compared to $72 million in the fourth quarter a year ago. As you heard from Shawn, for the full year, consolidated EBITDA was $307 million, which was in line with the $311 million for 2024. As usual, we have detailed the information used to reconcile the adjusted and consolidated EBITDA results on Slide 31 of the presentation. And before you ask, should I note that you will, in the fourth quarter, our operating expenses were negatively impacted by a $20 million charge for the impairment of software implementation costs. Being a noncash charge, as you would expect, the credit agreement allows us to add these costs back. Regarding consolidated EBITDA for the prior 3 quarters, we've adjusted the previously reported amounts by the actions we took in the fourth quarter to improve our cost structure. If you will remember, the credit agreement also allows us to add back pro forma savings from these actions to be included in our historical consolidated EBITDA and requires that we spread back in time to the period in which the expense would have been incurred. As such, we have appropriately adjusted the prior quarters to reflect the impacts of the cost savings. If you would, please reference Page 12 of the slide presentation issued today, and you will be able to see what we reported in the past and updated for the most recent cost out and pro forma actions. Turning to the segments. Expedited Freight fourth quarter reported EBITDA improved to $25 million compared to $18 million a year ago. We also saw a significant improvement in year-over-year margin, which increased by 350 basis points to 10.1% in the fourth quarter of '25 compared to 6.6% in the fourth quarter of '24. For the full year, despite a challenging freight environment and a decline in tonnage, we focused on charging the optimal price for freight moving through our network and actively managing expenses. As you heard from Shawn, this strategy to focus on what we can control contributed to an improvement in Expedited Freight's reported EBITDA margin of more than 100 basis points to 10.9% for the year compared to 9.8% in 2024. At the Omni Logistics segment, we continue to reach new heights. In the fourth quarter, this segment achieved the highest revenue, the highest reported EBITDA and the highest reported EBITDA margin, excluding the impairment of goodwill since the acquisition in January of '24. Reported EBITDA in the fourth quarter of '25 improved to $36 million compared to $32 million a year ago. The reported EBITDA margin for the fourth quarter 2025 improved to 10% compared to 9.8% in the fourth quarter of 2024. Looking at the Omni Logistics segment's full year results, reported EBITDA, again, excluding the impact of goodwill, almost doubled, increasing to $124 million in '25 compared to $67 million in 2024. Additionally, the margin increased significantly as well, increasing 360 basis points to 9.2% in 2025 compared to 5.6% in 2024. At Intermodal, the market, especially port activity remained challenging in the fourth quarter. Trade-related softness among several core customers, along with typical seasonality contributed to declining shipments and revenue per shipment compared to a year ago. In the fourth quarter, the Intermodal segment's reported EBITDA and margin were $7 million and 14.2%, respectively, compared to $10 million and 17.5% a year ago. On a full year basis, the Intermodal segment's 2025 reported EBITDA of $35 million was in line with the $37 million we reported in 2024. The margin remained stable as well with a 15.1% margin in 2025 compared to 16% in 2024. Turning to cash flow, cash and liquidity. Cash used by operating activities in the fourth quarter was $23 million, which was the exact same amount last year. For the full year of '25, we generated $44 million of cash from operating activities compared to consuming $69 million of cash used in operating activities last year, which is a $113 million year-over-year improvement. As for liquidity, we ended the year with $367 million comprised of $106 million in cash and $261 million in availability under the revolver. This compares to $105 million in cash and $382 million of liquidity at the end of '24. And as usual, I'd like to leave you with a few additional thoughts. The first of which is our very consistent performance in the midst of the current backdrop. On a consolidated basis, we have been bouncing around between $73 million to $79 million in consolidated EBITDA every single quarter of this year, which in turn leads to the continued strength of our liquidity position. When compared to our peers as a percent of total assets and as a percent of total LTM revenue, we are above the industry average on both metrics, ending the year with $367 million in liquidity and no meaningful maturities for almost 5 years gives us a ton of cushion and a ton of time to continue improving operations. As for my second point, given the current amount of excess capacity in the domestic ground network and the cost-out initiatives put in place last year, every single additional shipment added to the system should have a disproportionate positive contribution to the bottom line, and that has nothing to do with the increase in pricing that we're starting to see in the broader market. That is a long way of saying there is a significant amount of operating leverage in the domestic ground network. And the final point is the continued prioritization and maniacal focus on cash generation. As you heard earlier, cash provided by operations improved $113 million in '25 compared to '24. On Page 23 of the earnings presentation, you will see that on a non-GAAP basis, we generated $32 million in operating cash flow in the fourth quarter and $209 million for the full year of 2025. In closing, I would say for the continued and highly speculated industry recovery, I am not an economist nor am I a speculator. As we ended '25, I did not see any meaningful positive signs. That being said, since the end of the year, the recent spike in TL spot rates and the same [ unattended ] rejections do give me hope that we're reaching an inflection point. Before declaring victory, we're going to need to see sustained PMI above 50 and continued increase in spot rates and rejections. I will now pass the call back to Shawn for closing comments before Q&A. Shawn Stewart: Thank you, Jamie. In closing, we finished the year with momentum despite economic headwinds and a significant ongoing organizational transformation. Performing under these conditions underscore the resilience of our business and the strength of our team. I am incredibly proud of their unwavering commitment to our customers and their disciplined execution. Their ability to operate with precision while maintaining rigorous cost control has meaningfully strengthened our performance and enhanced our flexibility. This focus has not only delivered results in a challenging environment, but also positioned us well to capture opportunities as the market conditions improve. I am highly confident in the foundation we are building. We are entering the next phase of the business from a position of strength, well equipped to drive sustainable long-term growth and to continue delivering meaningful, measurable value to our shareholders. We believe we are well positioned to benefit as freight markets stabilize and recover. As we move into Q&A, we ask that the questions focus on the state of the industry and the business. Thank you in advance. I will now turn the call over to the operator to take questions. Operator? Operator: [Operator Instructions] We'll go first today to Bruce Chan with Stifel. J. Bruce Chan: Congrats on all the progress that you've seen so far. Maybe just to start here, it's been a while since we've had an up cycle, and you've obviously had a lot of change to the Expedited Freight segment since then. So -- maybe you can just remind us of how your model performs in a recovery scenario, especially if there's a big truckload supply element as you talked about, Jamie. Just trying to get a sense here of how we should be thinking about maybe gross margin squeeze in expedited and then in brokerage versus truckload and maybe where you're at in terms of third-party PC linehaul miles. Jamie Pierson: Bruce has about 5 questions in one sentence. So let me... Shawn Stewart: It's good to hear from you, Bruce. Jamie Pierson: Yes. Let me see if I can start from the top down. So in terms of how we perform in, I guess, a squeezed environment, I would say if you go back and look at the last probably 5, maybe going on 6 or 7 years, we outperformed the space given the flexibility of our operating model. And I say this because we are fixed in the terminal side and incredibly variable on the PT, which is one of your questions. So we can add capacity that being defined by drivers, tractors and trailers, probably faster than just about anybody in the space. So if I went back and looked at it on a quarterly, maybe even an annual basis, we might positively comp to the industry average EBITDA margin, but not by much. We don't. So -- but there is a time of volatility to where, at least on the ground side, we will probably outperform. Now that isn't the same thing about warehouse, which is probably pretty flat, air and ocean, which is given today's announcement, anybody's guess. But I think that given where we are right now at 10% EBITDA margins relative to the industry's 20%, I would suspect that we would make up a lot of that ground. That was a terrible witty in a lot of that ground. It was a double entendre. It was not intended. J. Bruce Chan: That's a good one. Okay. That's super helpful. And maybe for my, I guess, second or sixth question here. Omni, obviously performing a lot better than expected. Can you maybe just help us to get a sense of what an appropriate midterm margin should look like there and what seasonality should look like there? Shawn Stewart: Yes. So Bruce, as you know, it's a pretty diverse portfolio. So when you look at whether it be obviously ground feeding into the network or the contract logistics, air and ocean customs brokerage. So it's really our focused growth in all of those areas and really play into the advantages of that diversification so that when one is up or one is down, the other one is up, et cetera. So that's really what we've seen in the success of 2025 and what we really intend to continue to push through 2026 and beyond. We've got the right leadership with the right experience, with the right focus in each one of those areas moving forward. And the other complement, I would say, is, I call it synergy selling, but it's looking at customers that have a wallet share in one of those areas, but not in the others. And we have a very robust team focused on that wallet share across the product offerings to continue to have the organic growth and further diversifying customer portfolios across those offerings. So that's really what's happening here within the Omni area. J. Bruce Chan: Okay. But there's nothing in customs brokerage or bonded warehousing or something that should lead us to believe that you were over earning in this period or something like that? Shawn Stewart: No, not significantly. I mean, obviously, yes, duty drawback on the customs brokerage side is huge right now with all the tariff stuff, but it's not significant revenue streams. It's just an uptick. But no, nothing in particular to your point, other than just growth and organic growth across the portfolio of those customers. Jamie Pierson: Yes. If you look at the earnings presentation, Bruce, you'll see our margins in the Omni segment are pretty strong. So what Shawn said about growth, it couldn't be more spot on... Operator: We go next now to Stephanie Moore with Jefferies. Stephanie Benjamin Moore: I appreciate all the color and appreciate maybe the commentary you provided on the state of the underlying market as the year has progressed thus far. So maybe it would be helpful for -- if you could provide any additional commentary in terms of what your customers are saying, especially with this most recent ISM print inflecting positive for the first time in a long time. I mean customers actually founding more upbeat and any differentiation you can make amongst whether it's the LTL or Omni customers or the likes would also be helpful. Shawn Stewart: I think, Stephanie, from me, and I'll let Jamie chime in here. I think from our customers' experience with us, on a consistent basis has given them comfort whether you're talking about the legacy Forward Air freight forwarder 3PLs. We've been very consistent with them and very active and transparent with them. And then the consistency on the omni side of our solutioning and cross-functional service offerings over the last 2 years with all the changes we made. And to me, it's no differently than any of us when we are buying the service, we want to go to the best and very consistent, and that will keep us coming back for more. And that's really our recipe that's working for us. And so no real secret other than that. That's what we're seeing. Jamie Pierson: Yes. I'd say is, and I think I said it in my comments, looking at the ISM print and especially focus on new orders, I think everyone gets super excited about seeing the new orders pop. But if you look at it, I mean, there's been 3 months over the last 36 that it's been even marginally positive over 50. And the most recent print of obviously, doesn't make a trend. We're going to need to see a consistent trend, at least a report over 50 for at least 2, if not 3 or more months to see that, that's sustainable, and it's not an aberration in the actual results. Stephanie Benjamin Moore: Absolutely. I think that's helpful. And then maybe sticking with Omni, I think the performance, as you noted, and we could all see, has been very strong. Do you find that this is more so a function of your own kind of company-specific actions -- and/or do you think that you're seeing some green shoots within the underlying market? Maybe just any kind of parsing out of that there as well. And then my third question, just to throw it out there and then I'm done, I promise, would be, do you think you're starting to see any of the synergies of kind of offering the two services starting to form in 2026? Shawn Stewart: I wouldn't say any green shoots other than our commercial organization has been rebuilt by Eric Brandt. I would say we've got our swagger back. We've got a detailed focus. We know what we want to do and how we perform well, and we know what we're not, and we're not going to offer that -- those offerings. So we're staying really laser-focused on selling solutions that are in our wheelhouse -- and I would say we're really not offering the two. The two are really one. And although we have an indirect and a direct channel on the sales side, but operationally and what I mentioned in my openings around -- on ground, that is the legacy Forward network. Everything in ground on the omni side has rolled over into the legacy Forward side, if you will. And I don't even like to use the legacy this or legacy that. But for this call, we will. But we just talk about really focused on the customer experience with our assets and solutions holistically, but always respecting the sales channels and making sure we don't have conflicts. Operator: We'll go next now to Scott Group with Wolfe Research. Scott Group: So I know you don't want to say too much on the process. I just want to make sure we're getting the message right. I think last quarter, you said it's taking a while and there's maybe a churn of interested parties, maybe less interest from some and new interest from others, if I understand what you were trying to say last quarter. Maybe just an update on that. Are we still seeing that churn? Or is there some other reason why this is taking so long? Shawn Stewart: Yes, Scott, I can't say any more than I said. But we're -- I feel confident that we are coming to a conclusion here and more to come as that rounds itself out. Scott Group: I guess we're now -- Jamie, your comment, we're getting more optimistic since the year started. I guess we're about 2/3 of the way through Q1 now. Can you give us some update on sort of what you're seeing in the business? Like LTL tonnage, I think, was down 10%, 11% per day in Q4. What are you seeing in January, February? Jamie Pierson: Yes. Scott, we don't give guidance on that. And I always appreciate you asking at least there's one consistency amongst the calls. But what I would say is it's probably just normal seasonality. We're not going to comment on change in tonnage or price at this point in time. But if you just look over the last probably 2 years, it's probably not that much different in the first quarter than what you would have anticipated. Scott Group: Okay. Maybe I'll ask one more, maybe we can maybe get an answer here. Give us some puts and takes on cash flow for this year, how you think -- what's -- how should we think about CapEx? And then I think the leverage covenant starts to get a little bit tougher each quarter this year. Just any thoughts on where you think you'll end the year on -- or how you're thinking about progress on deleveraging this year? Jamie Pierson: Yes. So what's great about 2025, Scott, is we reached that inflection point. So if you look at the statement of cash flow when we filed the K, you're going to see that we spent about $166 million in interest, another $25 million plus or minus in financing leases and another is $27 million in CapEx. So once we reach that inflection point, every incremental dollar over that amount actually starts to fall straight to the bottom line in terms of cash. So we reached that point in '25. We generated -- I know it sounds like small, but it's not the fact that it's only $1 million in increase in cash from '24 to '25. It's the fact that we dug out one hell of a hole in '24 to actually accomplish that in '25. So we're going to continue to focus on improving or increasing sales while actually holding the operating leverage that the team has built over the last 18 months. Scott Group: So -- but similar in terms of CapEx and all that for this year? Jamie Pierson: Yes, we might have a little bit more in CapEx. But as a percent of revenue, I don't see it's going to be that demonstrably different than the past. Operator: We'll go next now to Harrison Bauer with Susquehanna. Harrison Bauer: You emphasized the importance of volume driving incremental margins this year in your expedited business. It sounds like you view volume as having a higher profit contribution rather than your price cost outlook for 2026. Can you maybe speak to the directional outlook, particularly within Expedited Freight for pricing this year as you begin to lap prior pricing actions? As weight per shipment improves, would you expect any mix-related pressure on net yields? Jamie Pierson: Again, Harrison, probably 3 different questions in there. But I think what you're getting at is incremental shipments and having a disproportionate positive contribution, if I'm following that correctly. Is that right? Harrison Bauer: Yes, you got it. And just generally, what pricing within that business, what you expect if you expect volumes to be the bigger contributor to incrementals? Jamie Pierson: Yes. Well, right now, we're focused more about increasing and improving the density of the network and the falling profitability margin that comes out of it. And I say that as everybody knows on this call, including you, that there is a trade-off between price and volume. And given the decrease in tonnage that we've seen over the last 1 or 2 years, we've created excess capacity within the ground network. And with all the cost-out actions, all the synergies, all the closings of the facilities and the headcount rationalization, we have created an incredibly strong model with operating leverage, whereby all else being equal, assuming price is the same, if you drop in one incremental shipment into the network, it is much more profitable than the previous shipment. So we've got probably -- it's hard to say because capacity is defined by the lowest common denominator of 4 or 5 different metrics, whether it be terminals, doors, drivers, tractors, trailers, but you add one more shipment on that trailer that's already dispatched. You've already incurred the cost for it, it's going to be much more accretive than the prior shipment, again, all else being equal. And obviously, if price takes off, then that's free margin for all intents and purposes. Shawn, anything to add to that? Harrison Bauer: And then maybe just a follow-up along the -- sticking with pricing. In Intermodal in your drayage business, can you maybe help us understand the driver behind the notable change in the revenue per shipment this quarter and that inflected negative pretty different from the recent trends that you had in that business? Jamie Pierson: Yes. This one is an easy one, Harrison. I think this is a simple supply and demand. The port volumes are down somewhere between 5% to 10%. And it's not like the ground or the LTL network. It's much more, I guess, volatile in terms of the supply falling off, which is to say that it's much more elastic pricing in intermodal than it is probably in the linehaul business. Shawn Stewart: I would say, Harrison, there's two major revenue streams there. We have quite a few storage depots in country. And so you have the dray move lesser to the intermodal over the rail and your other major revenue stream outside of just normal port drayage or rail drayage is the storage of the container in our depot yard. So it just depends on what that mix is per quarter. And I would say that also helped us with the slowdown of the port drayage in Q4. We had some decent revenues on the storage side. So that's what supports the margin as well. Operator: We'll take a follow-up question now from Bruce Chan at Stifel. J. Bruce Chan: Yes. I appreciate the follow-up, guys. Looking through the deck, I'm reminded that you have some nice data center exposure in contract logistics through one of the legacy Omni OpCos. Can you just maybe give us a sense of what that looks like as a percent of revenue and maybe what growth has looked like there recently? Shawn Stewart: I think one of the slides depicts the percentage... Jamie Pierson: Yes, it shows -- hold on one second, Bruce. If you look at Page 7, -- it breaks up what we're -- when Shawn said, hey, we're going to be cutting the scene in terms of our products. We've updated this slide to show the percentage of the revenue in terms of the total for the entire fiscal year of 2025. So you'll see that contract logistics is about 15%, but that's global. Shawn Stewart: But, Bruce, the major concentration is in North America and Asia Pacific. So that's the majority where of our contract logistics revenue come from. J. Bruce Chan: Okay. So fair to assume there's a good chunk of that data center and high-tech exposure in there? Shawn Stewart: Say it again, Bruce? J. Bruce Chan: So fair to assume that there's a good chunk of data center and high-tech exposure in there? Shawn Stewart: It's in there, but I wouldn't say it is a good portion of our business, obviously, but it's not the only thing in there. You're going to see textiles in there. You're going to see tech outside of data center. You're going to see some automotive. So it's -- I would say it's not just in that area. Jamie Pierson: Yes. And I know you haven't had a chance to read it yet, Bruce. But we've been talking about under that vertical being tech, data, medical and then kind of a complex, high-value end market. J. Bruce Chan: Okay. Great. And then what does the growth look like in that data center business? Has that been scaling with all the activity that we've been seeing in that space? Shawn Stewart: Yes, for sure. I mean we're scaling with it. There's a lot of players in the space, but we're there, and we're taking every wallet share we can grab. We're pretty good at it. And with the high-value, high-risk area of this business, going from our world-class warehouses on the contract logistics side into our trucks, into the clean rooms of the data centers, we're very good at the service, and we continue to gain momentum here. Operator: And gentlemen, it appears we have no further questions today. Mr. Stewart, I'd like to turn things back to you, sir, for any closing comments. Shawn Stewart: All right. Well, thank you so much, and we really appreciate your interest and your support of us. It was a great year, and we remain extremely confident in our strategy and look forward to updating you on our progress next quarter if something happens between then. So I appreciate the time today. And if you have any follow-up questions, please reach out to Tony, and we'll be in touch. Thank you. Have a great week. Operator: Thank you, gentlemen. Again, ladies and gentlemen, this concludes Forward Air's Fourth Quarter and Full Year 2025 Earnings Conference Call. Please disconnect your line at this time, and have a wonderful day. Goodbye.
Operator: Thank you for standing by, and welcome to the Tyro Payments Limited H1 FY '26 Results Call. [Operator Instructions] I would now like to hand the conference call over to Mr. Nigel Lee, Chief Executive Officer. Please go ahead. Martyn Adlam: Good morning, everybody, and thank you for joining today's call. My name is Martyn Adlam, and I head up Investor Relations for Tyro. I would like to acknowledge that I'm hosting this meeting in Sydney, on the land of the traditional owners, the Gadigal people. I pay my respects to elders, past and present. This morning, we released our FY '26 half year results. All of the documents included in today's presentation have been released through the ASX and are available on our Investor Center. This call is being recorded and transcribed and a replay will be available on our Investor center shortly. On today's call, you will hear from Chief Executive Officer, Nigel Lee; and from Emma Burke, our Chief Financial Officer. There will be time available for Q&A at the end of the presentation. I would now like to turn the call over to Nigel and ask the audience to turn to Slide 4. Nigel Lee: Thank you, Martyn. Good morning, everybody, and thank you all for joining today's call. My name is Nigel Lee, and I am the new CEO of Tyro. I'm really excited to be joining Tyro at this stage in its journey. I've spent much of my career in payments globally. And one thing that stands out is how often domestic champions outperform global players. And they win because they solve for local complexity better than anyone else. And I believe Tyro has exactly what is required to win in Australia. Tyro has built a large-scale integrated payments and banking proposition that's uniquely set up to solve the complex problems Australian businesses face. Today, we support over 76,000 merchants and process more than $43 billion in annual transaction volumes. That level of scale matters. It drives stronger economics and real optionality for merchants. And it's not just rent. We are increasingly becoming the primary financial partner for many merchants, not just their payments provider. And there is so much more that we can do. So why does this matter to you as shareholders? Scale and discipline translate into durable cash generation. And cash generation gives us the capacity to invest to drive the next phase of top line growth. Now before we go into specifics, I want to share what I see are the key takeaways from the first half results. Then I'll step you through the acquisition of Thriday. If you take away one thing from today's presentation, it should be that Tyro is focused on investing in the large growth opportunities that are in front of us. I'll break my summary down into 3 key points. First, on delivery. Product enhancements are driving better customer outcomes. We launched our new banking products to customers in September. And then in December, we announced the acquisition of Thriday. Together, these strengthen our offering and deepen the relationships that we have with merchants. Second, on performance. The top line was driven by growth in payments. After a couple of softer periods in volumes, it's encouraging to see them moving in the right direction. And we've also remained operationally disciplined, translating that into improved profitability and into cash generation. And finally, our focus on growth. We're investing to supercharge growth across multiple opportunities, and I will share more on how we do that later. But now I'd like to tell you about why we're excited about what our acquisition of Thriday will unlock for our customers. Thriday is a really valuable product enhancement for Tyro. At its core, the acquisition deepens Tyro's role as the domestic payments and banking champion for Australian SMEs. Business owners tell us what they want in very simple terms. They want to grow their revenue, they want to get paid for it, and they want to spend more time running their businesses so they can win. That idea is core to how we think about product and investment at Tyro. Tyro brings fast, reliable payments across in-store and e-commerce and integrated banking and lending. Thriday adds automated invoicing, expense management, budgeting, and tax tools, and it's designed to simplify financial management for small businesses. When you put those together, it means we can solve more of the day-to-day problems merchants face through one integrated proposition. And over time, that supports deeper engagement, higher retention, and stronger lifetime value. And it also brings teams that are highly innovative, fast-moving, and deeply customer focused. And that's exactly the mindset that we want to reinforce as we make bold investment decisions to build for the long-term. And one of the things that really stood out with Thriday is how much the customers love the product. We talked about being customer obsessed, but Thriday is an example of what that looks like in practice. Their customers are genuinely evangelical. You see that in the reviews, consistently high ratings, strong word of mouth, and customers actively recommending the products to others. And these aren't marketing lines. These are business owners describing real impact, saving time, reducing complexity, and making it much easier for them to run their businesses. That level of advocacy is powerful. It tells you the product is really solving problems. Our job is now to preserve and scale that customer obsession, and we'll combine it with Tyro's infrastructure, our reach, and our balance sheet and use it to help more Australian businesses succeed. I'll come back later to share more about the areas we're investing in for growth. But for now, I'd like to hand over to Emma for a brief business performance update. Emma Burke: Thank you, Nigel, and good morning to everyone joining the call. I'd like to start with our payments results. A year ago, we reported that total payment volumes were down almost 1% compared to the prior period. It's pleasing to see the momentum shift this half with strong results driven by improved underlying payment trends. Total payment volumes have increased by 4%. This was driven by a 5.6% growth in Tyro core payment volumes. Within Tyro core, growth was broadly consistent at 4% to 5% across the retail, hospitality, and service verticals. This is the result of a general improvement in consumer spending, lower churn, combined with higher levels of new business in FY '25, particularly larger merchants we onboarded who are now contributing more meaningfully. In health, we delivered another half of strong growth at 9.4% as we continue to focus on growing our share in specialist, allied health, and dental. At the end of the half, the government introduced increased bulk billing funding. This has put some pressure on volume growth across general practitioners, and we'll continue to closely monitor how they adapt to this over time. It doesn't, however, impact our outlook for growth in our key health sub-verticals, and we remain confident in the medium-term growth outlook for health. Turning to volumes for our Bendigo merchants. These fell by 10% this half, and we continue to work constructively with Bendigo to identify further opportunities to improve overall performance. In terms of the payment margin, we delivered a 0.8 basis points increase compared to half 1 FY '25, primarily driven by an improvement in scheme and interchange fees, and we have begun passing the benefit of these reduced fees to our customers. The combination of the volume increases, along with margin improvement has led to a 6% growth in our payments gross profit to $104.1 million. Turning now to banking and the continued evolution of our products to drive customer adoption. We were excited to launch our transaction account to new customers in September and it's been well received. The addition of the debit card and instant payments have made a big difference in how merchants can use the account day-to-day. This has helped drive a 38% increase in active users. We will make this functionality available to our existing merchants in the coming months. We also launched the Tyro Flexi loan, our merchant cash advance product to new customers in December. The end-to-end experience is more streamlined and early feedback shows that customers value the simplicity and flexibility it gives them to manage their cash flow and fund growth in their business. Loan originations grew by close to 20% compared to last year, and we also saw a higher average loan size. The continued momentum in our key banking metrics, including the growth in the number of merchants using banking alongside payments supported a 5.4% increase in our banking gross profit. And overall, we saw the net return on banking improve in the period from 11.7% to 12.2%, driven largely by an improvement in the profitability of the lending portfolio. Touching now on our continued focus on financial discipline. While gross profit grew by 5% in the period, operating expenses reduced by 2.9%. This led to our operating efficiency measure improving from 69% to 64%. Expenses will be higher in half 2 due to annual salary increases and the timing of project and marketing spend, along with AML-related compliance investment. Looking back, the progress over the past few years is significant. In FY '22, nearly every dollar of gross profit that we generated was being consumed by OpEx. In half 1 this year, less than 2/3 was. This sustained cost discipline has put Tyro in a fundamentally stronger position as we look forward to the next phase of growth. As we head into half 2 and beyond, we're in the fortunate position of having embedded operational discipline and the capacity to make more growth-focused investment decisions. Reflecting on our overall performance, half 1 was a very strong period in terms of profitability. EBITDA, our core measure of operating performance, increased by 19.8% to $39.5 million, representing an EBITDA margin of 33.6%. Statutory profit of $17.7 million was 72% higher than half 1 last year. And importantly, we generated $13.6 million of free cash flow in the period, 52% up on last year, further strengthening our already solid balance sheet. Tyro has over $140 million in available funds, which demonstrates the strength of our balance sheet alongside the financial capacity we have to deliver our next phase of growth, which Nigel will outline shortly. That capacity gives us flexibility. Organic growth will always be a priority, but we will continue to explore areas where we can accelerate our growth plans via M&A. The Thriday acquisition is an example of this. To close, I'd like to reiterate our guidance for the year. Our target is to deliver gross profit of between $230 million and $240 million and an EBITDA margin of between 28.5% and 30%. We are on track at the half year, and we remain confident on delivery for the full year, noting that there is increased investment in the second half, which will deliver an EBITDA margin within the guidance range. Thanks again for joining today's call, and I look forward to meeting with many of you in the coming weeks. Back to you, Nigel. Nigel Lee: Thank you, Emma. Now earlier, I shared what attracted me to Tyro, and I want to build on this with a view of how Tyro is positioned to win and where we're investing. First, the opportunity. Australia is a large and attractive market. Each year, more than $1 trillion in payments are made in-store or online. And Australia is the home to 2.7 million SMEs. And today, we serve just a fraction of those. So the opportunity ahead is significant. Second, we're operating a fully scaled omnichannel experience across payments, banking, and value-added services. The integration of these capabilities is a real differentiator. In payments, we combine in-store and e-commerce. In banking, we offer transaction accounts, savings products, and lending. And in value-added services, we're investing in tools that help merchants run their businesses better. These include financial management, loyalty, and in the future, others. Third, and this is where we're truly differentiated from our peers, is our local depth. Tyro is one of the most comprehensive integration ecosystems across our key verticals. We're integrated with over 450 point-of-sale providers and all the major PMS providers in health. And this gives us a deep understanding of how different industries operate. That depth is hard to replicate. And one thing that we hear from customers all the time is the importance of local sales and service support. Our teams are based here in Australia, and they're focused on serving businesses and owners with the responsiveness and expertise that they need. Finally, on this page, we start today from a position of strength. We already have nearly 80,000 merchants. We're profitable, operationally disciplined, and our balance sheet sets us up to fund investment growth. So what exactly are we currently focused on? I'll touch on 4 key areas. First, health. Health is an attractive sector with strong fundamentals and higher barriers to entry, and that plays to our strengths. We're already the market leader in GPs, and we will continue to expand in other areas, including specialists, allied health, dental, and some of the newer sub-verticals of aged care and pet. Second, banking. Integrated banking improves customer satisfaction and it increases lifetime value. Our new banking products also allow us to scale more efficiently. And looking ahead, we're exploring additional lending products that will help better serve larger merchants. And I believe that we can significantly increase the level of banking adoption across our merchants because we are focused on solving the real problems that they face day-to-day. Third, e-commerce. There's a structural shift towards online and omnichannel commerce in Australia, and it's a high-growth segment. We have the advantage of already being at scale in card present, and now we can capture the huge potential of adding e-com for our merchants as we invest in our platform capabilities and strengthen our go-to-market. And fourth, larger merchants. This is an opportunity to drive volume and unlock even more scale benefits. We're seeing increasing demand from large merchants and corporate groups for local expertise and a partner that can execute reliably. We delivered some key enterprise wins in FY '25, and we've continued momentum in FY '26 so far. Going forward, we'll keep scaling our enterprise sales and also our go-to-market capabilities. Across these areas, we're already active, but the opportunity is much bigger than where we are today. And that's what makes this an exciting moment in time for Tyro. And we'll do it by being innovative, by moving fast and by being obsessed with customer success. With that, I'd like to hand over for Q&A. Thank you for listening. Operator: [Operator Instructions] And our first question comes from Owen Humphries from Canaccord. Owen Humphries: Just go deeper on the guidance comment there, which is unchanged, $230 million to $240 million and the margin between 28.5% and 30%. Just simple math there implies doing the midpoint of GP and the midpoint of the EBITDA range puts it -- kind of puts EBITDA at around that kind of $29 million for the second half and a big step-up in cost from kind of $78 million to $87 million. Can you just talk us through what the cost growth expectations are given the exit run rates lower as we enter the second half versus the first PCP in the first half? Emma Burke: Thanks, Owen, for that question. When reflecting on costs for the second half, again, I want to reiterate that we're really focused on the right level of operating discipline when it comes to our spend. And what we saw -- we'll see in the second half is largely related to a number of timing investment opportunities. And so I touched on a couple of these during the speech, but probably one of the things is we have further investment in our AML compliance. You would know that there are changes in the legislation that are coming through, and there are costs this year as we set ourselves up for that. The other 2 areas is really around project spend and marketing from a go-to-market as we continue to set ourselves up for the longer-term opportunities and deliver growth going forward. Owen Humphries: Can you maybe quantify those 2 opportunities in dollar terms for the spend? Emma Burke: Could you please repeat that question? Owen Humphries: Could you maybe quantify those 2 initiatives? Because I guess what I'm trying to say is the OpEx in the second half is up $10 million is what the guidance statement is today versus the first half. And I just want to make sure that you're saying there's a $10 million additional OpEx in the second half versus the first half at the midpoint. Emma Burke: As I touched on, we also have some incremental costs in the second half driven by our salary increases that come in, in January of each year. So you'll see that flowing through as well. But there are a number of initiatives that we're focused on. But it's also our investment in marketing is more second half weighted, but there will definitely be a step-up in the absolute cost from an operating perspective in the second half. Owen Humphries: Just a quick one on churn. I know in the last kind of 18 months, churn has been reducing for you guys. Can you maybe talk through whether the -- you're seeing the churn now level out to a level that you're comfortable with? Or are you still kind of running above the long-term trend? Emma Burke: Yes, we have continued to see a positive trend in our TTV churn, and that's been part of the things that have supported our growth in this period. We're probably still not at historical average levels. But given what we're seeing and we've seen a definitely notably lower level in the first half of this year even than last year, we believe that it continues to set us up well for the future. I think the way we like to look at it is we're really more focused from a product perspective and giving merchants the tools that they need to solve more of their problems. And we believe that as we continue to do this from a banking, lending, financial management on top of our payments, that this also supports our ongoing customer retention. Operator: And at this time, I'm showing no additional questions, I'd like to turn the floor back over to Mr. Lee for closing remarks. Nigel Lee: Well, thanks, everybody, for taking the time to listen in. And Owen, thank you very much for your questions. I look forward to meeting you on over the next several weeks in order to talk more. We're very grateful for the team at Tyro for delivering the results we delivered. And we'd like to thank everybody for taking the time to listen to us today to talk about them. Thank you very much. Operator: That does conclude our conference for today. We thank you for participating. You may now disconnect your lines.
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