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Richard Stewart: Good morning, ladies and gentlemen. Welcome. I think it's a real pleasure to have you with us today as we present our operating and financial results for 2025. So thank you very much for joining us today. I think just in terms of the agenda that we've got, I will start off with a few high-level of salient points. Then we'll move into the Performance Excellence, which will be presented by a number of the team. We'll then move into growth and just touch briefly on the resources, the mineral resources and reserves that we've recently published. Charl will take us through the financial performance and Ken to touch on how we're interpreting these very volatile markets we're seeing and a little bit of the outlook in that regard before I wrap up with the way forward. I think there are several forward-looking statements in the document. So would urge you please to just take note of the safe harbor statement. Thank you. I think when we reflect on December 1, 2025, I think certainly during the latter half of the year, it was at a time of significant change at Sibanye, we, of course, have the leadership transition. And with that, we also undertook a refresh of our strategy. This was something that we presented to the market at the end of January. But for anybody who was not able to make that, if I could try and summarize our strategic refresh in one word, it would be simplification. Specifically, what we're really focusing on in the short term is around maximizing and driving our operating margins. We're doing that through a keen focus on operational excellence and simplifying the operating model that we have and then further simplification through our portfolio such that we're focusing on the highest return assets, of course, cash generative assets and ensuring an appropriate management focus in that regard. This is all coupled with a very disciplined capital allocation framework which we shared as being roughly 1/3 towards shareholder returns, 1/3 towards reducing our gross debt and 1/3 towards growth. And again, Charl will unpack that in a little bit more detail. And in terms of growth, we certainly see the best value at the moment for us in terms of returns as being internal in terms of the resource value that we have. We have a significant resource base, particularly in South Africa, our PGM operations and organic growth will be our immediate focus. But we did also share a value creation framework that we have put together that will help us assess any external growth opportunities moving forward. In addition to the strategic refresh, I think there were some quite key decisions that we needed to make towards the end of last year, especially amongst several of our operations. One of the big ones was the start-up of the Keliber lithium project in Finland. That is a greenfield project that we have built and given the volatility in the lithium market, we had to make a decision how best to proceed with that project. And I think very pleasingly, towards the end of last year, together with our partners, Finnish Minerals Group came to a way forward, which really considers a staged ramp-up of the Keliber project. And we'll share a bit more of those details with you in the presentation, but it really is an approach that mitigates some of the risk of the market while allowing us a lot of strategic optionality around the project. And we will unpack that for you in the coming slides. The second big decision we had to make was around Kloof. We did share with the market that early on in the year, due to increased risk of seismicity have what we deem to be an unacceptable safety risk, we ceased mining of quite a few of the deeper level areas at Kloof. And this had a material impact not only on the output from the Kloof operations but also the future of that operation. Towards the end of last year, we did make a decision that Kloof would continue to operate on a year-by-year basis, assessing the profitability each year as we proceed. So very dependent on sustained higher gold prices. And then there were several priority projects that we have been evaluating during the year, and we're making -- we'll be making financial investment decisions on -- during the course of this year. There was also some overhangs from previous or legacy issues. We had to address the Appian court case. We came to a settlement there in November, ultimately a settlement payment of $215 million. And then we also had the South African gold wage negotiations that had been continuing from about the middle of the year I think credit to the team, we successfully settled that also towards the end of the year. And again, credit to all stakeholders, I think a very good outcome considering the environment we're currently operating in. But I share this because I guess it was a rather busy, a transformational and actually quite a noisy second half of the year with lots of decisions being made in terms of how we will continue going forward. And that has also reflected in our finances, which are complex. And again, I do say, a lot of noise. But hopefully, certainly the way I feel, and hopefully, you can see that what this has done is simplified our operations going forward. It's already simplified where our focus needs to be and I think it's set up a solid operational base, which we have launched into 2026. And then I look forward to that simplification also starting to feature in the financial numbers but as you ultimately simplify the total portfolio. I think looking at our operational output, safety and I'll unpack safety in a bit more detail in the coming slide, but very pleased with the continuous improvements that we've seen in many of our indicators both lagging and leading indicators. We have seen some of our best numbers ever, which is pleasing in terms of the progress that we've made over the years, but our focus on eliminating fatals remains our absolute priority as a company. I think I have to give full credit to many of our operational teams. As I said, this was a busy period it was a very volatile period in the markets. And yet our operational teams delivered solidly across most of our business. All of our operations came in largely within guidance, recognizing we did have to revise guidance at the gold operations because of the Kloof decision I mentioned earlier. But coming within guidance or better than guidance across the board was very pleasing and full credit to our teams in that regard. We also made some great strides on our sustainability strategy across many aspects, including water, including the social investments in South Africa. But one that really is a bit of a standout is our positioning with regards to our renewable energy where I think we really are now positioned as a leader in renewable energy in South African mining. And certainly, that is not only going to have a material impact on our carbon footprint going forward and our ability to provide responsible metals but also significant commercial benefit. Just during the year-to-date on a small portion of the projects we've commissioned, we've already achieved close to ZAR 100 million worth of savings and avoided over 300,000 tonnes of carbon dioxide. And we see that going up to close to ZAR 1 billion worth of savings over the coming years. Like I mentioned, I think with much of the decisions and complexity we had in the business over the second half of the year, that does reflect in our numbers. But looking through those numbers, I guess, sort of really through to the core financials I think what we really see is stability, a real turnaround. And I think a solid base of which to build into 2026. We achieved the highest EBITDA that we have in 3 years at just under ZAR 38 billion or just over $2 billion and to see a headline earnings per share up by just under 300%. I think is very pleasing, particularly given that most of that just came during the second half of the year. Our balance sheet remains strong. Our total net debt to adjusted EBITDA has declined to below 0.6x, so very comfortably within covenant limits. But as we shared during our strategy renewed focus on gross debt to ensure stability through a cycle is where our focus will be going forward. But overall, with a good operational output, with the strong financial stability and underpinned. I think as a company and the Board, the Board is very comfortable to declare a dividend of ZAR 131 cents per share. That equates to roughly a 2% dividend yield. And again, I think, reflecting largely just the earnings over the second half of the year. And that dividend declaration is at the top end of our dividend policy. So very glad to be back into dividend-paying territory. I think as we look at performance excellence, we did share at the end of January during our strategic update that our strategy is based on 4 pillars. Simplification, I've mentioned already, simplification of our -- of how we operate, driving accountability, simplification of our portfolio, getting our focus on capital allocation in the right place. And the second pillar was performance excellence. Performance excellence is really -- covers a holistic improvement. And within there, we have safe production. We have the operational excellence, which I think will be well understood by many. Resource optimization, how best we can extract our resources, maximizing long-term economic value and of course, embedding sustainability in the way we operate. And for us, sustainability is really about people, the planet and prosperity for both. I will specifically touch today on safe production and then hand over to the 2 COOs, Richard and Charles to look at operational excellence and Melanie in sustainability. So I think touching on on-site production. As I mentioned earlier, it's been extremely pleasing to see the trend that we have seen since 2021, in particular, in our raised 2021 because that's the time when we started our fatal elimination strategy. Since then, we've seen over 40% reduction in serious injuries. And the reason we look at serious injuries that is very often associated with high energy incidents. So high energy incidents that could result in either fatal incidents or certainly life-changing incidents. I think we've also seen a very similar pleasing decline in terms of the high potential incidents that we measure. Some of those are associated with injury somewhat. But it certainly gives us a good data point to understand whether or not we are decreasing risk within our operations. And whether we look at our own history, whether we benchmark ourselves against peers who have similar underground neuro tabular labor-intensive operations generally, across the board, I think we've seen a significant reduction in risk in our operations and that is a trend we'd like to see continue. And we continue to benchmark ourselves against ICMM and peers, many of whom, of course, operate in very different environments. I think what's always tough talking about the safety trends is as pleasing as it is to look in the rearview mirror and I understand that we're doing the right things to reduce risk. As a management team, we also recognize that, that is unfortunately very cold comfort to family and friends of colleagues who we have lost on our operations. And tragedy, during 2025, we did experience 6 fatal incidents across our operations. And in this regard, I would really like to extend our heartfelt condolences on behalf of the management team and the Board to the family and the friends of [ Alberto ] Xavier, [ Onkazi ] Jozana, [ Fonso ] Matsolo, [ Brian ] Hanson, [ Asituey ] Ramaila and Klaas [Onkosana. ] Eliminating fatal incidents is absolutely our #1 priority as a Board, as a management team and as a company. Our focus moving forward into 2026 remains on how we can more effectively embed our fatal elimination strategy. The strategy fundamentally hangs on 3 pillars of critical controls, what we call critical management routines or effectively management practices, and then life-saving behaviors. So those are the 3 key pillars that will mitigate risk within our operations. The focus for 2026 is how we can enhance compliance in this regard but most importantly, enhancing it through a transformation of culture, which will also drive behavior. I think what we have seen historically within the mining industry is that compliance has driven through force, through instruction and we recognize the opportunity to change that culture and to drive compliance through a culture of accountability and a culture of care. And through that, we truly believe we will eliminate fatal incidents from our operations. Thank you very much. And with that, I will hand over to Richard Cox to take us through the South African operations. Over to you, Richard. Thank you. Richard Cox: Thanks, Rich. Hello, everyone. As Chief Operating Officer of our South African operations, my focus is on delivering performance excellence through safe production, operational efficiency and holistic improvement, our strategy insures, we consistently improve delivery across our portfolio. So let's take a look into our 2025 results for the South African business. Turning to our SA PGM operations. we've maintained consistent delivery, meeting or exceeding guidance each year since 2017. More specifically, for 2025, total 4E PGM production reached 1.8 million ounces including attributable production from Mimosa at 117,000 ounces and third-party purchase of concentrate at 73,000 ounces and all aggregated aligning with our 1.75 billion to 1.85 million ounce guidance and stable year-on-year. Since the Lonmin acquisition in 2019, production has remained steady between 1.73 million and 1.83 million ounces annually, reflecting our operational resilience and ongoing progress towards the second quartile of the industry cost curve. Breaking it down, underground production increased 2% to over 1.6 million ounces supported by improvements at Rustenburg's mechanized Bathopele shaft and more stable output compared to 2024s disruptions at Siphumelele and Kroondal operations. In Marikana, output was affected by safety-related stoppages at the high-performing safety shaft, but this was partially offset by K4's ramp-up where production rose 41% to almost 100,000 ounces, contributing to Marikana's improved cost position. Surface production was lower by 29% at 108,000 ounces influenced by higher first quarter rainfall and the commencement to transition feed resources, such as Rustenburg's Waterval West TSF and Marikana's ETD1 to ETD2 tailings facilities. We are evaluating long-term service opportunities at Rustenburg to support the sustainability of the surface business. Purchase of concentrate volumes were reduced by 24%, in line with contractual terms. We remain focused on cost discipline Operating costs increased by just 7.3% in absolute terms. All-in sustaining costs rose 10% to just over ZAR 24,000 per 40 ounce and that was within our ZAR 23,500 to ZAR 24,500 an ounce targets hosted by byproduct credits of ZAR 11.1 billion. Now these credits were enhanced by stronger ruthenium and iridium contributions, helping offset the 261% increase in royalties to ZAR 765 million from higher prices and a 12% rise in sustaining capital to ZAR 2.9 billion for key mining equipment and precious metal refinery infrastructure. Project capital was lower by 16% at ZAR 675 million, which was below guidance due to completed Rustenburg initiatives and deferred Marikana expenditures. Total CapEx came in at ZAR 5.9 billion, under our ZAR 6.5 billion estimate. So this foundation we are creating enables us to capitalize on stronger PGM prices. The 2025 average 4E basket price increased 28% to over ZAR 31,000 per ounce, driving adjusted EBITDA up 125% to ZAR 16.7 billion. Early 2026 prices have risen 43% to over 44,000 per ounce as shown in the chart, following an even higher and brief January adjustment. With supported fundamentals, we anticipate potential for additional earnings and cash flow improvements in 2026. We continue investing through the cycle in low risk, low capital intensive projects with quick paybacks, all supporting stable, high-performing operations with optionality to extend our portfolio. Overall, our SA PGM operations are very well positioned to benefit long term and also from the current market upside. This slide illustrates our advancement on the PGM cost curve and based upon end December 2025 data and highlights our positioning relative to peers. Starting on the right, Marikana's total cost, including CapEx has been influenced by K4's project buildup phase. But as K4 approaches steady state, we're seeing a shift towards lower costs. This combined Rustenburg and Kroondal position has moved slightly higher due to the Kroondal transition to toll treatment which does introduce processing costs, however, enhances profitability through improved revenue and margins. While we are actually below the 50th percentile now, and our low capital intensity brownfields projects are poised to further strengthen competitiveness against peers spots 4E and 6E, which includes base metal basket prices are positioned well above our costs, underscoring our leverage in the prevailing market. And so our progression from the fourth to the second quarter reflects the value of our strategic investments in building long-term sustainable advantage in this business. Now to our gold operations. These mature assets are highly geared to gold prices and continue to generate strong cash flows in the current supportive price environment. Total production, including DRDGOLD was lower by 10% at 19.7 tonnes. Underground production reduced by 8%, primarily due to operational challenges at our Kloof operations, including seismicity and infrastructure constraints, while surface production was down 16% influenced by lower yields as we transitioned from higher grade to lower-grade tailings and low-grade third-party sources. A 39% increase in the gold price received helped mitigate this impact. The all-in sustaining cost increased 15% to ZAR 1.4 million per kilogram, with 14% lower gold sold. At our Kloof operations, persistent challenges, including a shaft incident at our [ Manana 7 ] shaft in May of '25 infrastructure age showing in ventilation pass and ore pass systems, logistics constraints and seismic risk in high-grade isolated blocks of ground or IBGs, resulted in production lower by 31% year-on-year at 3,374 kilograms. This prompted the rebasing of the plan and a life of mine adjustments to 1 year. Safety remains our #1 priority. We did relocate a number of Kloof teams from higher-risk IBGs to Driefontein operations. And subsequently, post a comprehensive review process, removed those areas of Kloof operations from a long-term plan to align with our risk tolerance. As said, the sustained rise in the rand gold price over the period boosted adjusted EBITDA of 115% to ZAR 12.5 billion, representing 33% of group EBITDA and surpassing 2020's record. Excluding DRDGOLD, EBITDA increased 111% to ZAR 6.1 billion on average price of ZAR 1.8 million per kilogram. For the whole gold business, we are pleased to have concluded a 3-year wage agreement with labor, and that provides a degree of cost certainty moving forward. There is a lot of work underway in reporting our strategic transitioning of the SA gold business, and this effort is to ensure long-term sustainability. Our investment in the DRDGOLD is a prime example, providing long-life, high-margin surface gold exposure that is cash generative. We are also focusing on our higher-margin shallow gold mining business with Burnstone's feasibility study underway and final investment decision being targeted for the first half of 2026. As you see in image, the Burnstone project exemplifies this strategic shift. We are also focusing on high-margin shallow gold mining, where we have added over 1 million ounces in reserves at Cooke surface, Burnstone, attributable DRD and Beatrix operations. Turning to the charts. The gearing and all-in sustaining cost margin chart illustrates how price rising prices are opening up expanding margins. The average gold price received planning steadily against controlled all-in sustaining costs. The adjusted free cash flow bar chart highlights the magnitude and rapid cash flow turnaround moving from negative in 2024 to positive and significant in 2025. Looking forward, our core operations will continue to drive performance excellence and we're excited about the prospects in our current portfolio. For 2026, the outlook is positive. Spot prices are up 9% year-to-date to over ZAR 2.5 million per kilogram and 20% above second half 2025 levels. all boding well for another successful year with potential earnings and cash flow growth. I'll now hand over to Charles. Charles Carter: Thank you, Richard. The U.S. PGM operations have had a solid year with production of 284,000 3E ounces and an all-in sustaining cost of $1,203 an ounce beating our guidance, combined with a strongly improving safety performance into year-end. The significant downsizing in late 2024, while turning around the cash bleed at the time in the context of depressed prices also sow the seeds of improved mining productivities and cost efficiencies that we have built on through the year under review. Certainly, with improved PGM prices later in the year, we returned to profitability. And when you overlay Section 45x benefits, you have a competent outcome. During this period of getting our operating performance right, albeit at lower volumes, the team led by Kevin Robertson has also done a significant amount of work on setting up the Montana operations for long-term success. You have seen in the earlier global cost curve that we are now sitting in the middle of the pack and have been for 2 consecutive quarters. But our drive towards $1,000 an ounce is aimed at being a lowest quartile PGM producer on a sustainable basis through price cycles. In the Montana operations, we have a legacy of semi-mechanized mining with narrow headings and small stopes using a range of small equipment such as 2-yard LHDs and CMAC bolting, which ultimately constrains you with lower tonnes per cycle and a higher cost per ounce, notwithstanding the fact that our miners are incredibly good at what they do and bring significant skills and experience to the process. Through last year, we trialed mechanized bolting with success, and we are not right now rolling out a significant transformation program, which will see amongst many changes the stepwise introduction of mechanized equipment, a progressive increase in heading size in advance with associated workforce and supervisory upskilling and a shift from legacy captive stoping to task mining. The benefits of these changes really start bearing fruit in 2027 because we have a phased introduction of new equipment and changes to where practices running in parallel with our established approach. Where this takes us in the next 18 months is a fully mechanized and scaled operation with higher productivities and lower costs, improved safety and wellness benefits and a business that we believe will be resilient through price cycles. We are starting these change interventions at Stillwater East and then moving to East Boulder. And once we know that we can deliver around $1,000 an ounce, we will consider bringing back toward a west, although this will require infrastructure upgrades and a range of capital spend, which means that we have that decision point further down the road and it will neatly based on an extensive feasibility study. If I turn to the U.S.-based recycling business, 2025 has also been a busy year for us. We bedded down and integrated the Reldan acquisition and late year added the Metallix acquisition. Together with our Columbus AutoCAD recycling business, we believe that we have a compelling PGM and precious metals recycling platform that has low capital intensity and which can provide stable margins through price cycles. The team led by Grant Stuart is moving very quickly to integrate the management teams and optimize which feeds go to which site while leveraging a single sourcing and sales platform that now has very wide reach both in the Americas, but also into Asia and elsewhere. As investors and analysts will appreciate there is significant change underway in global metals recycling where we are seeing consolidation, vertical integration and indeed, some companies in various parts of the value chain going to the wall. Within the significant shifts underway, I think we are well positioned. We know what our value proposition is, the niches that we play in and which differentiates us against some of our very large competitors. And we now have the ability to organically grow an integrated recycling platform without needing to necessarily chase new acquisitions. Our Century zinc retreatment business in Australia has also had a very good year from a stellar safety performance through to increased production of 101 kilotonnes of payable metal and a 17% decrease in all-in sustaining costs to $1,920 a tonne, which exceeded guidance. This team is very ably led by Barry Harris, and I want to thank Robert Van Niekerk who was the executive lead through the last couple of years for a seamless handover. As you will be aware, the team has been working on 2 feasibility studies, [ FOS 1 ] and Mount Lyell. The Mount Lyell feasibility study is currently under assurance review and evaluation. We expect to have a close-out review in early May. The [ FOS 1 ] study is expected to be completed end of March with Assurance targeted to be completed at the end of May. Final decisions will be made within our disciplined capital allocation framework that Richard has spoken to. Given the remaining short life at Century, a pathway to new opportunities in Australia is important. And I'm looking forward to spending time with the team on the ground next week and working through the opportunity set. With that, let me hand over to Robert. Robert van Niekerk: Thank you, Charles, and hello, everybody. Sibanye Stillwater has a substantial life of mine and solid project base, focusing only on the precious metals. We've got 356 million ounces in the resource category, of which about 16% 58.2 million ounces has been converted into the mineral reserve category. SA PGM operations contributed about 50% of the resource base, 177 million ounces. And again, about 16% of that has been converted into reserves, 29.4 million ounces. If you look on the right-hand side of the slide, you can see that these reserves serve very, very significant operations. Some of the Rustenburg operations have in excess of 32 years life. The Marikana K4 project, for example, has a 45-year life of mine and the Marikana East 4 project has a 34-year life of mine. As Richard said earlier on our gold operations are mature. They are bid to the gold price, but I would likely -- they are very insignificant. We have a 43 million-ounce resource and a 9.4 million ounce reserve. The Beatrix operation in the free state is a solid operation. The Driefontein operation is a very solid operation. And our DRD operation is our world-class tailings retreatment operation. And we also have the Bernstein project, which is there still to become a very efficient, shallow, low-cost, 25-year life of mine operation. The second biggest category of our resource base is our U.S. operations. Here, we have 80.9 million ounces in resource, of which only 19.4 million ounces have been converted into reserves. Again, these assets are highly leveraged, they are high grade, they our quality assets. And again, if you look at the right-hand side of the slide, the Stillwater mine has a 26-year life of mine and the East Boulder mine has in excess of 30 years, actually 35 years life of mine. We'd also like to add that this year, we have included a maiden reserve for the Marikana East project in the SA PGM region. We have also included a maiden reserve for the Cooke TSF and I made a reserve for the Mount Lyell copper project in Tasmania, Australia. In closing, I'd like to leave everybody on the call with a message that next year, '26 and 2027, Sibanye Stillwater will be focusing on converting a large percentage of the abundant resources into reserves. With that, I'm going to hand over to Melanie. Thank you very much. Melanie Naidoo-Vermaak: Thank you, Robert. Good morning, good afternoon and good evening to all attendees. Our renewable energy program remains central to our journey towards carbon neutrality. Having set ourselves a target to reduce our emissions by 40% come 2030. And now with the conclusion of the new agreements with Etana and NOA, our renewable pipeline has expanded to 765 megawatts, delivering nearly the same capacity as a single Kusile unit and thus strengthening our energy security and accelerating progress towards carbon neutrality. Naturally, this positions us as the largest contracted private renewable energy offtake in South African mining. And with this portfolio and come 2028, it will supply more than half of our South African energy needs -- it will generate over ZAR 1 billion in annual savings and avoid 2.6 million tonnes of CO2 each year, a 41% reduction from our 2024 levels. At the same time, our operations, high water demand and presence in water stream catchments make strong water stewardship critical. Through disciplined management practices, and our investment in advanced water treatment plants, we've significantly reduced portable water reliance and increased resilience and also contributed to margins. 4 of our operations are now fully independent of municipal portable water with our gold assets at 94% independence. Importantly, though, the water liberated through these efforts is equivalent to the needs of a midsized city and an essential social contribution in a water scarce country that's currently grappling with water challenges. Our commitment to communities remains equally strong. And through the Marikana renewal process, we prioritized addressing the needs of affected families and rebuilding trust. And a key focus was closing the housing gap for families, not supported by the AMCU Trust. I'm pleased to share that we delivered the final 2 of 17 houses, honoring our commitments to the widows. As a business, we remain committed to shared value with all stakeholders as we earn trust where we operate. Thank you, and handing over to you, Charles. Charles Carter: Thanks, Melanie. At Keliber, we are looking forward to hosting a Market Day in a couple of months and then a deep dive on the operation. When you get there, you will see a really impressive build and the team on the ground led by Hannu Hautala has done an incredible job in completing the build program on schedule. and where changes to spend were related to revised permit requirements late in the process. This is Sibanye's first greenfields project build and it has been incredibly well executed. The financial investment decision for the refinery was made in November 2022. In October 2023, the scope change for the effluent treatment plant was approved along with authorization to begin construction of the concentrator. Mechanical completion has been achieved for all components of both the concentrator and refinery with the exception of the rotary kiln at the refinery. As you may be aware, mining activities were delayed due to postponing contract signing until the completion of the deep dive analysis in the second half of last year. Commissioning of the concentrator crusher, conveyance system, sorting plant and laboratory is scheduled to be completed ahead of plan. The phased approach is a direct outcome of the deep dive work conducted by the corporate technical team. The guidance is that we will produce at least 15,000 kilotonnes to 20,000 kilotonnes of spodumene this year either for direct sale or as a feed into the refinery, if approved late year and subject to market conditions. Let me unpack the stage approach in a little more detail. Stage 1, EUR 783 million is the initial capital and excludes any other preproduction SIB costs. 237 kilotonnes of stockpile is required by year-end and counter the limitation put in the Syvajarvi mining permit being kept at 540 kilotonnes. Stage 2, spodumene grade of greater than 5.1% is targeted to ensure a sellable product, which will not incur penalties or rejection from commercial counterparties. Stage 3 refinery startup decision is conventional in the market assessment at the time. If it's a pause, we will continue with spodumene in sales. Stage 4 focus on technical grade will allow the team to sort up processing issues before quality issues. The team will continue to incorporate lessons learned from other facilities. Stage 5 decision to proceed with ramp-up to produce battery grade lithium. It must be noted that the qualification process for battery grade may take 6 to 9 months, which means battery grade could be commercially available, likely at the earliest in 2028. On the operational overview, it's important to note that the feasibility profiles had a number of satellite ore bodies in as well. As far back as 2023, we have kicked off mining optimization studies, which resulted in extended life only out of the Syvajarvi and Rapasaari pits. We intend to kick off further work on the other pits as well as this year work on the [indiscernible], which is a new pit, which will lie close to Rapasaari. When you're on site, you'll see that we have a strong land position with further exploration options ahead of us at the right time. And given all the exploration juniors that have paid claims outside of our lease boundary, I have no doubt that the lithium story has legs in Northern Western Finland for a very long time to come. The spiking SIB in 2008 in the graph on the lower left is mainly driven by the waste stripping for the Rapasaari pit. The cost overview will be updated as we get new insights from our cost optimization and debottling studies. And certainly, the team is focused on improving this picture. Here, the further optimization work is focused primarily on the following work streams. Mining study work to optimize pick design pushbacks and stockpiling. We're targeting here a potential EUR 10 million to EUR 15 million savings and the mine to deliver a stockpile of 50 kilotonnes oil by 30th June, about 1 month of inventory. As I noted, 237-kilotonnes to be on stockpile to ensure stable production in 2027. The concentrator study is targeted in spodumene grade about 5.1% to optimize spodumene concentrate sales and boost refinery capacity. Metallurgical work on grade versus recovery is in progress. First grade recovery curves issued for mining production planning were also taking place. Cost reduction and efficiency optimization targeting the potential unit cost decrease of $1,000 per tonne of lithium hydroxide has a number of components. We're reviewing the procurement for more cost savings, developing a full digital twin of the value chain to further optimize, we're studying the personnel and staffing optimization opportunities, and we're reassessing the maintenance strategy and costs post ramped up. So there's a lot of further optimization work on the go, and I'm confident that we'll start to see gains from there in the next few months. Refinery debottlenecking study is targeting higher throughput potential and overall yield improvement also on the go. This is about increasing refining capacity by adding a magnetic separator and resolving process bottlenecks. We're looking to boost the yield 2% to 3% recovery in lithium from the effluent treatment stream, reducing ETP costs by reviewing current initiatives and working with other third parties to support refinery commissioning and ramp-up phases. With that, thank you, and let me hand over to Charl. Charl Keyter: Thank you, Charles. Good morning to all participants. It gives me great pleasure to share the financial results for the year ended 2025. If we start with the key highlights. Headline earnings per share for 2025 increased 281% to ZAR 244 cents per share. During the same period, adjusted EBITDA increased almost threefold from ZAR 13 billion to just under ZAR 38 billion, 189% increase. As a reminder, we have set a target of reducing gross debt by 50% from the current ZAR 2.2 billion level over the next 2 to 3 years. But through the cycle, net gearing target of below 1x net debt to EBITDA remains consistent with our financial policy and has served us well during periods of constrained commodity prices. If we look at our net debt to adjusted EBITDA at the end of 2025, it is down 1.77x at the end of 2024 to 0.59x at the end of 2025. As a reminder, the dividend declared for 2025, as you would have heard, is ZAR 131 cents per share or 2% yield. Turning to the income statement. The revenue increased by 16% and costs were down 8% However, as highlighted on the previous slide, this translated to an increase of almost 200% in adjusted EBITDA. Noteworthy items for 2025 include the following: the loss on financial instruments of ZAR 3.8 billion was mainly due to the impact of the protective gold hedges that amounted to ZAR 1.7 billion as well as a revaluation of the Burnstone debt. With the sharp increase in the long-term price of gold, the Burnstone debt is now expected to be fully repaid, and that meant that we had to increase this liability by ZAR 1.7 billion. Another big item that impacted this period. Impairments for the year at the U.S. PGM operations Keliber and Kloof amounted to ZAR 15.8 billion. The impairment at Kloof was due to the reduction in the life of mine due to the removal of isolated blocks of ground for safety reasons. The impairment at the U.S. PGM operations and Keliber were the result of changes in economic parameters such as long-term prices. This was partially offset by the reversal of impairments at Beatrix, Driefontein and Burnstone due to the increase in the long-term price of gold. The transaction cost includes the $215 million or ZAR 3.6 billion settlement of the Appian claim. If we look at the net other costs, that benefited from credits in 2024 that were once off and did not repeat in 2025. It is important to note that taxes and royalties of ZAR 4.3 billion increased in proportion to our profitability. As already mentioned, a full year dividend of ZAR 3.7 billion or at the top end of the range, 35% of normalized earnings will be paid compared to the last dividend that we paid in 2023. This represents an increase of 146% on an absolute basis. In 2025, we had significant nonroutine cash impacts that affected our financial results. These included the Appian payment and the gold hedges that was put in place in December 2024 to ensure the ongoing sustainability of our gold operations. The question that a lot of people will ask is what would your financial results have looked like in the absence of these nonroutine items? The short answer is that the money available for the 3 areas of distribution would have increased by ZAR 5.2 billion to approximately ZAR 14.6 billion, and each bucket would have been allocated ZAR 4.9 billion. However, in 2025 on a look-back basis, we did allocate more to growth as one. The revised allocation model was not in place. And two, we were finalizing the Keliber project. Importantly for 2026, our growth capital plan, excluding DRD is ZAR 3.7 billion compared to the ZAR 9.4 billion that we spent in 2025. The growth capital excludes Burnstone and other projects in study phase. And as we generate all cash and earn the right to allocate more to each bucket, these will be considered. Our debt maturities remain manageable due to a well constructed maturity profile. Gross debt was ZAR 39 billion and less the cash on hand of ZAR 17 billion equated to net debt of ZAR 22 billion. Liquidity headroom is strong at ZAR 40 billion or roughly 5.5 months of OpEx plus CapEx. The next priority on our debt profile will be the upcoming renewal and downsizing of our 2026 $675 million bond, and the target date for completion is before the end of half 1, 2026, and this will be subject to supportive markets. Thank you, ladies and gentlemen. I will now pass the baton to Kleantha that will discuss market performance. Thank you, Kleantha. Kleantha Pillay: Thanks, Charles, and good morning, everyone. Markets were characterized by tariff uncertainty and geopolitical tensions throughout 2025 and into 2026. And this has driven the precious metals rally. Gold spot prices brought the $4,500 mark during December, up 73% since the beginning of the year and driven again by geopolitics, wars and a weak U.S. dollar. Gold ETFs were up 25% year-on-year to 4,000 tonnes and Central Bank buying continued. The platinum price rally has been driven largely by tariff uncertainty and was exacerbated by primary supply disruptions during the first half of the year. 3E recycling volumes were up 9% year-on-year. However, this is still below the pre-COVID levels despite better prices attracting hoarded stock. The tariff uncertainty has resulted in significant platinum flows into both the U.S. and China. Over 600,000 ounces of platinum was imported into the U.S. in July compared with normal levels of around 200,000 ounces. Between July and October, 1 million ounces of above normal levels moved into the U.S. And overall, platinum imports were up over 50% year-on-year. NYMEX stocks quickly reached a peak of about 650,000 ounces in April and then dropped back to 280,000 ounces in July. This as reciprocal tariffs were delayed and then PGMs were on the list of goods not subject to tariffs. Stocks then jumped back to around 700,000 ounces in October. As the outcome of the Section 232 investigation was delayed due to the government shutdown. Since then, the outcome has been announced as negotiations not tariffs. So uncertainty still lingers. Imports of platinum into China also increased steadily during the first half of the year and then fell back in the second half as prices became too high. Investors and jewelry manufacturers switched into platinum as gold just became too expensive. Overall, platinum imports into China were up 7% year-on-year to 4.5 million ounces, supported by the launch of the platinum futures trading on the Guangzhou Futures Exchange in November. Large daily trading volumes north of 6 million ounces per day in December resulted in the GFEX having to implement restrictions on trading. Platinum demand and along with the palladium during 2025 was largely driven by investments and speculation rather than by fundamental industrial requirements. Over the near term, we continue to forecast deficits for both platinum and palladium while the rhodium market balance will remain first to balance. The recent rally in prices has set us a new higher base and the heightened focus on securing critical minerals will continue to drive regional supply chains and with it price differentiation. And now moving on to lithium. The appreciation in lithium prices due in quarter 4 was driven by China's anti-evolution drive and the camp down on primary supply in that country. As well as from better-than-anticipated demand from battery energy storage systems. China changed the feed-in tariff model for renewable energy mid-2025, unlocking demand for energy storage systems. Prices moved from a low $7,000 per tonne levels up to just over $16,000 per ton currently. Inventory levels remain low as [ Cattle's ] lepidolite mine has yet to start producing again, and winter supply from brine production is reduced. Looking out to 2029, battery energy storage system demand is expected to grow at a 23% CAGR while demand from battery electric vehicles will grow at a 9% CAGR. The market is expected to remain in surplus over the medium term and will start tightening from 2028 to 2029. New supply will need to be incentivized by higher prices. Looking forward to the rest of this year, we remain bullish on gold. We believe that PGM prices have reset at a higher base, but will continue to be volatile. And similarly, we believe that lithium prices will continue to be influenced by Chinese decision-making. We will, therefore, continue to focus on what is in our control, performance and delivery at our operations. I'll now hand back to Richard to conclude. Richard Stewart: Thanks very much, Kleantha. And then I guess, just heading into the last section to wrap up with. So I think just starting off with our guidance for 2026 and the outlook. Starting off with our South African PGM operations, I think a very slight decline in terms of our production guidance in line with the overall life of mine profile that many of you will be familiar with, but no significant changes across the South African PGM operations. guidance of the South African gold operations is slightly lower than what we achieved this year or during 2025 and that is driven largely by the reduction of output at the Kloof operations, as Richard touched on earlier. I think in terms of the U.S. PGMs, we do see a slight increase in terms of output at the underground operations that is coupled with the ongoing work towards reducing the overall unit costs down towards $1,000 per ounce and associated with that, we do see an increase in some of the capital as we start making those investments. On the recycling, we have quoted our production guidance as a gold equivalent to ounces. So you'll see 400,000 to 420,000 ounces there. Please note that is gold equivalent, we produce a range of metals. But I think when looking at it on this basis, it does just demonstrate the significance of this business, almost 0.5 million equivalent gold ounces that we have built over the time of a, as we mentioned, low capital intensity, very low capital base. On Keliber, the guidance we are providing is we are anticipating producing spodumene concentrate as we ramp up the concentrate at this stage, whether or not that goes into refinery, of course, will be dependent on the decision that is made on the commissioning of the refinery. And in terms of total costs, we are guiding towards a total expenditure of about EUR 180 million to EUR 190 million. Just to unpack that briefly, approximately half of that, about EUR 90 million is the remaining project capital that was due to get spent predominantly in the first quarter and a little bit in quarter 2. So that is in line with the original project capital of EUR 780 million that we've shared with the market. And the balance is really the cost of the -- as we ramp up the overall operation. At Century zinc, this is likely to be the last full year of production on a Century zinc and again, largely in line with what was achieved during 2025. So just moving on to the strategy. I think as we outlined in my earlier slides, I think we've set a very solid base moving forward into 2026. The 4 key pillars that we have with regards to our strategy, being simplification, simplification of our operating model and our portfolio. Performance excellence, which I think you heard us touching on today and unpacking around safe production, operational excellence, optimizing our resources to maximize value and embedding sustainability in the way that we operate. Growth, which is initially focused on the value creation. We believe we can drive from our existing resources and therefore, unlocking organic value. And finally, a disciplined capital allocation model by bringing these 4 pillars together with the base that we've set in 2025, we are certainly confident that we can unlock significant value as we move forward into 2026, irrespective of the environment that we find ourselves operating in. I think just wrapping up with the overall strategy that we shared with the market at the end of January towards creating a future-focused metals business. In the short term, our strategy is very much focused on strengthening our business fundamentals. And this will be achieved through increasing our operating margins through our operational excellence simplifying our operating model and ultimately, simplifying our portfolio towards highest return assets and cash-generative assets. I think we're successful in this regard. We would be generating free cash through a disciplined capital allocation framework that looks at returning capital to shareholders, reducing our total gross debt and investing in the growth and sustainability of the business, particularly unlocking our inherent resource value. We certainly see that as ultimately continuing to build our business, building our production profile and continuing to build on our resource stewardship model across primary mining, secondary mining and recycling. So ladies and gentlemen, I think in conclusion, once again, thank you for joining us today. To try and sum up in 3 quick points. I think where we are sitting today as a business. I think we've had a solid operational output in 2025. And I think we're well positioned moving into 2026 to unlock the significant value that we have within our portfolio. I think we have seen a noisy set of financials. But looking through that, there is some real financial stability in the company. We've reduced our gearing significantly and certainly, at the current commodity prices that we are experiencing and the operational output that we are achieving, we look forward to some significant cash flow as we move forward. And then I think we finally have a resilience and a disciplined strategy. This is a strategy that is independent of the external environment and positions us for long-term themes which we see underpinning growth within the commodities market. So just in terms of way forward, as we did share with you at the end of January, we launched our strategy on the 29th of January. Today, we have shared our results. But as we move forward at the end of April, we will be looking to have a 2-day Capital Markets Day focused specifically on our international operations. That will be a webcast as well as an in-person visit in Finland to our Keliber operations, but we'll also cover both U.S. and recycling and Australian operations. And then towards the end of June, another 2-day Capital Markets Day in South Africa, specifically focused on our goals in PGM operations. So we look forward to engaging with you and getting those invitations out and thank you once again for joining us today. And of course, we're happy to take any questions you may have. Thank you very much, and over to you, James. James Wellsted: Thanks, Richard. Thanks, gentlemen. I've got a couple of questions here. I think we'll start with the Kloof questions. I'd say Keliber questions, sorry, missing my Ks up here. At Keliber, you note that initial value realization depends on producing and selling spodumene concentrate. It's a specified grade during the concentrator start-up. How do you assess the risk of achieving specification grade the early stages of ramp up? Can you give us some comfort around achieving these initial targets that's from Arnold Van Graan. Richard Stewart: I'll ask Ralph to come in and join me on some of the details. But just on a high level, let me make just unpack the sort of what we've spoken about the stage ramp-up and life mitigate risk. I think a lot of the work -- initially, the feasibility study for Keliber was, of course, based on mining all the way through to a final battery product. A lot of the work that we did in the second half of last year was around looking at these independent steps. So both the costs associated with them, the commercial liability associated with them and almost if you were to optimize, for example, just up to a spodumene concentrate what would that mean? What's come out of that work is essentially we are confident that we can look at this in different stages, that we can have an initial stage that in its own right is commercially viable. And of course, that gives us the option to remain at that point. But we are also aware of a lot of the work that's currently going on in the EU as well as Western economies generally things like Project Bolt, but also EU looking at sustainability and supply of critical minerals. And we think that this will have an impact on what the ultimate sort of pricing layout looks like in time to come. And that, of course, is a key aspect of how we look at the refinery and when and how we turn that on. So I'll let Ralph answer some of your more detailed questions. But I think just on a high level to note that, that was a lot of the work we have done and out of that, very confident that we can look at the project in different stages, each being commercially viable in their own rights. But Ralph, please feel free to add anything there. Ralph Lombard: [indiscernible] So just to give you confidence, we always visit the spodumene grade even during the feasibility. And we're quite confident we can push a grade in the high limits of more than 5% based on those test work. Also, the concentrator is very traditional technologies. So obviously, we test the recovery versus spodumene grade. So we're quite confident, and we're also confident in Syvajarvi, which is our first pit. It's quite high grade with the lithium oxide percentage of close to 1.1% and even more at certain stages which will also assist us in getting that higher grade. So from a Keliber perspective, we don't see any new risks because we are pushing a higher spodumene grade initially. Thanks. I hope that answers your question. James Wellsted: Thanks, Ralph. Second question is on impairment due to the longer-term lithium price forecast, stage start-up to preserve flexibility. Question is what long-term lithium price assumption underpins the revised recoverable amounts at Keliber and at what price level does the project fail to meet our hurdle rate? Richard Stewart: Let me maybe pick up on the hurdle rate question. And Charl, if I could ask you then to pick up just on the prices that we used for our impairments. So I think in terms of hurdle rates, let's put it this way. I think what you see in terms of the total project as we've shared with you, we currently have an all-in sustaining cost of about $12,000 odd per tonne. That is if we go all the way through to a battery grade. So we've always said we would obviously like to see prices I guess, well in excess of that in order to meet our internal hurdle rates. So looking at a region of 14,000 to 15,000 is where we'd want to see it sustainably at least going forward on that basis. I think importantly, of course, what we are assessing as part of this is also the opportunity on the earlier stage concentrate. And of course, that then is driven by volume in concentrate prices. I think critically, the long-term opportunity of this project is about supplying battery grade into the European ecosystems. We never built this ready just to us what you mean concentrate into more broader Chinese supply chains. So I think that's the opportunity that we've really got to this particular project. But Charl, would you like to pick up on the long-term price for the payment models? Charl Keyter: Thank you, Richard. So the average price that we've used over the life of the mine but obviously, I appreciate that the price falls up over the duration of the life of mine. The average price was just under USD 17,500 per tonne and that equates roughly to a long-term price of about USD 20,000 per tonne. James Wellsted: In a further question on what the remaining book value for Keliber is? Charl Keyter: Yes. So the remaining book value is ZAR 9 billion or just under EUR 460 million. James Wellsted: And Richard, for you, what are the next steps in the battery metal strategy? Richard Stewart: Thanks very much. I think as we shared at our Strategy Day, I think our long-term strategy as a company still remains to be able to supply metals that ultimately will support decarbonization and an energy transition. So that remains the long-term strategy. I think it's broader than perhaps just battery metals. But in the short term, our strategy is very much around optimizing the current portfolio. So as it stands today, we have our core operations of our South African gold, our South African PGMs, our U.S. PGMs, recycling and Keliber and that is where our focus will be and certainly our investment into our organic projects there. I think we will continue to assess the various projects, and that is where I did share with the market the growth framework that we've developed, which talks about the different metals we will look at in the jurisdictions we will consider. That will ultimately drive how we think about it. But as I say, our sort of immediate focus, our short-term strategy is very much on delivering from our core operations. James Wellsted: Thank you, Richard. Thank you for this wonderful presentation, well done IR team. Thank you. Can one expect this level of financial performance going forward, should the commodity prices hold? Richard, you can take that or Charl. Richard Stewart: Yes, happy to just take that more generally. I mean, I think as we mentioned on a high level, of course, I think the benefit of the prices that we saw coming through, gold, of course, we saw coming through throughout most of the year but the really big -- all of these prices ramped up towards the end of the year. PGMs really only started recovering in H2 with a significant ramp up in December. So of course, I think the type of financials that you've seen were based more on a back-ended portion of the year that delivered most of the value. But I think what we would look forward to prices remaining exactly the same. I think as I mentioned, we've had a noisy set of numbers and quite a few one-offs that we've had to deal with. So if anything under this environment, everything else the same, I would expect to see slightly improved financials with that noise out the window. But as Kleantha mentioned, the approach that we're adopting for the year ahead, I think we've got great tailwinds with the commodity prices. I think we see new bases being set, I think this market is being grown by a world that's scrambling to secure critical metal. So that's likely to remain. But it will be volatile. And certainly, that's the way we're positioning it and looking at our business for the year ahead. James Wellsted: Given the record gold prices, to what extent are the reserve reductions at Kloof, structural geotechnical constraints versus price-sensitive. Would a sustained higher gold price justify re-extending the mine life? Richard Stewart: James, let me take the first crack at that, and Rich, if you'd like to add anything. I mean I think critically, so of course, as has been noted, I think we do have slightly conservative prices that we use for reserves and the reason for that is we look to do our long-term mine planning and capital allocation based on what we still see as through cycle prices, ultimately, making capital decisions for really long durations. I do ever think Kloof is important to say that I don't think gold price was not a factor at all in terms of the decisions that we made. The decision to reduce Kloof was a safety decision, first and foremost. We did have some shafts that were coming to the end of their life. Anyway, that was part of the plan during the course of last year Kloof 7 shaft in particular, was planned to close. But then we lost volume due to safety and that decision, I think when we make a decision to stop mining areas because the safety, price is not a factor that gets considered in those decisions at all. So what we are looking at is Kloof for safety on operation that today is producing a lot less than it was obviously designed to. That means it's got a very high fixed cost base. And fundamentally, that means your unit cost goes up. According to the reserve price we use, i.e., through the cycle, we do not have long life reserves at Kloof, but we fully recognize that at these prices, Kloof remains profitable, and we can continue to mine it as long as the prices remain where they are. So we have put a year-to-year plan in place and we will continue to assess Kloof at those prices. And I think that brings significant benefits, as Rich mentioned, not only commercial and cash flow for the company but of course, also is a large employer. So we will keep Kloof going for as long as it is profitable and makes sense, but we won't be declaring or changing significantly the life of mine and reassessing capital at these numbers. James Wellsted: I guess a related question, but can you give us a sense of your gold operations, excluding DRDGOLD environmental liabilities? And how much of this is funded through environmental trust that, so I guess that's rehab. I'm trying to get a sense of the longer-term cash flow impact, should there be further closures or rationalization? Richard Stewart: Charl can I perhaps ask you to pick that up or Rich? Richard Cox: Happy to pick that up. Thanks for the question. So we do have a liability over the gold operations of ZAR 5.4 billion and of the ZAR 5.4 billion, ZAR 4.7 billion is funded and the balance then is with guarantees. Richard Stewart: Charl, anything you'd like to add to that or... Charl Keyter: No, Rich full cover. Thank you. James Wellsted: Thank you. Well, I've got a question for you, Charl, actually. So I'm going back onto you. How should we model the benefits of Section 45 ex credits in '26 and '27 in particular, and how this relates to cash flows. And then related to that is when are we expecting to receive the credits from 2023 and 2024's cash. And is the higher CapEx -- okay, that's a separate question. It's just a Section 45 ex. Charl Keyter: Yes. So in terms of 45 ex, the '23 and '24 payment should -- sorry, the '23 and '24 credits, we are expecting that in 2026. And then thereafter, we expect it to flow in the year following the claim. So the '25 claim to flow at the back end of '26 and some early '26 towards the back end of '27, give or take a few months. James Wellsted: Just on when do we expect in '23 and '24? Charl Keyter: Yes. So '23 and '24 claims we expect in 2026 due to the large amounts, and this being fairly new. And those amounts are subject to examination as it's referred to in the U.S. or as we refer to an audit. But again, we are working closely with our tax advisers, and we are continuously following up. James Wellsted: A question on the higher CapEx at SA PGMs in 2026. Due to some deferral spend in 2025, is it because of that? Or what other factors? Richard Stewart: Thanks, James. So I'll ask Rich to pick that up. I don't think it's so much a deferral in 2025, but we do have an increase in SIB around some specific projects. But Rich, perhaps I can hand over to you, please to pick that up. Richard Cox: Thanks, Rich. So there is a little bit of extra venture within our precious metal refinery as well as some trackless mining machinery. But largely year-on-year, it's the same except for those extra pickups in trackless mobile machinery and in the precious metal refinery. James Wellsted: So the related question to that. I'm not sure if it is relevant. But is capital spent on ore reserve development what type of development is funded from this CapEx and what type of development have funded from working operating costs? And in terms of the Kopaneng deeps project, Will it be a similar layout in arrangement to Siphumelele mechanized section and which words shaft would be used to transport mainland materials? Richard Stewart: Perhaps we'll ask Rich just to pick up on Kopaneng and Charl on the capital. Charl Keyter: Okay. So in terms of ore reserve development, it is effectively underground development work that's undertaken to open up access and prepare the cave mineral reserves for mining in the future production periods. But I have to specify here that the amount that gets capitalized is specifically in the off-rig development to open up those ore blocks. The reef plane or on-reef development is expensed in the period that it's incurred. I hope that answers it. James Wellsted: Position on the Kopaneng deeps layouts, et cetera. Richard Cox: I'll take that, James. So Kopaneng is a concept study at the moment. It's a very attractive downdip extension. So the strike is over 5 kilometers. And that has been the challenge of how to gain access, so a very good question. So initially, we will gain access on one of the flanks through a down-dip extension of the Bambanani asset. And then Khomanani offers a very attractive into the ore body. However, Khomanani 2 shaft doesn't have a rock pass. So we have to look at other down dip extensions and then possibly even a down dip development of a decline from Khomanani as well. So man and material probably through Khomanani and Bambanani in initial phases. But I think in the long term, there are other more attractive options for bigger volumes. We will be doing a pre-feasibility study in 2026 to sharpen up those carryforward options. James Wellsted: Question for Kleantha. How will the GFEX impact prices this year? Should there be physical delivery for May and June? Kleantha Pillay: Thanks for that question. Look, I think essentially, we're going to see heightened metal flows into China at least up until settlement date. So we've got a good price underpin their for platinum. And I think we're also going to see East rates moving up a little bit as we get closer to that date. Once that settlement date is reached essentially, you're going to have a very nice cleverly made platinum stockpile in China. And I think post that, you will get some price correction. But yes, that is the nature of investment demand, unfortunately. So I think we will see some underpin, and then we'll see a bit of correction post that settlement date. James Wellsted: Turning to the U.S. now. In the U.S. PGM operations, repositioning now for optimize, for currently -- sorry -- basically, the question is are we repositioning for current 2E PGM prices? Or is there further downside risk if prices soften? Richard Stewart: Thanks, James. So I'll pick that up initially. I think as we have shared and as trials unpacked, our objective in the U.S. is ultimately to get our cost base down closer to $1,000 per ounce. And again, the reason for that target is that because that's where we see sort of through cycle I guess, being a low point, and therefore, that operation being able to wash its own face sustainably for significant option to the optionality to the upside in terms of palladium prices. So we -- I think in terms of have we positioned it for the current palladium prices, I think right now, our objective, we restructured that operation 2 or 3 years ago to position it for the downturn that we saw. And our focus right now is on achieving those cost levels. Once we've achieved those then we will be able to assess the operations going forward and understand what a new base could look like. As Charles mentioned, we do have the opportunity to relook at Stillwater West in time. But today, that's not currently part of the focus. The focus will be on East Boulder and Stillwater West, so largely in line with the current production levels. James Wellsted: Thanks, Richard. Questions on streams and hedging. Could you give us an update on the streaming deals? I guess that the details of streaming deals and then unpack your hedging book for us, ounces per year and at what price. Richard Stewart: Thanks, James. So let me maybe take the streaming question. And Charl, if you could then follow on with some of the hedge questions. So I think in terms of the stream, we fundamentally have 2 streams within the company at the moment. One is at the Stillwater operations. That stream largely considers a palladium stream of about 4.5% and most of the gold that comes out of that operation. So that -- and that is a sort of evergreen stream. I think it does step down at some point to 2.5%, but that's still quite a bit out. So that's the one stream that we've got in place. The second stream that we have in place is on the South African PGM operations. That stream again considers all of the gold that is produced from those operations, which is about 1% of the total metal. And then if I recall, it's about 2.5% on platinum, which also steps down and that is there for the life of the current mine that does not include any extensions beyond that. So the platinum is limited to the current life of mine. Charl Keyter: Thanks, Rich. If we look at the gold hedges, so in December 2023, we entered into some hedging arrangements for our South African gold operations. These hedges were put in place to protect the downside, specifically around our legacy assets. They have -- all of the hedges have now been concluded at the end of December 2025. So there are no further gold hedges in place at the current moment. James Wellsted: Thanks, Charl. Charl, probably one for you again. What are the plans with the convertible bond due 2028, given that it is now in the money from Lorenzo Parisi... Charl Keyter: Yes. So we'll keep an eye on the convertible bond. It's got a 2028 maturity, but it's got a call option. So we can call it towards the end of the year. And we'll just monitor it carefully to see what we do in terms of the convertible bond. Based on current prices, it is in the conversion territory. But for now, the focus is on refinancing the 2026 $675 million bond, and we'll just carefully monitor the convertible bond going forward. James Wellsted: The value of that convertible bond on the balance sheet... Charl Keyter: That's $500 million. James Wellsted: In terms of simplification, Richard, might we think about the Finnish and possibly the Australian assets being potentially available for sale? Richard Stewart: Thanks very much. I think we've been sort of quite clear at the moment that the Keliber lithium project certainly forms part of our strategic priority assets. I think we see that as a very valuable asset. So I think the short answer to that is no. I think when we look at the Australian assets today, the new Century Zinc operations have been very successful. We remain very committed to those operations until the closure of those and then the completion of that particular project. In Australia, we have a couple of projects that are being assessed. We have the Mt Lyell project. I think as we mentioned, certainly, copper is a metal that we would be interested in if we could see value accretion in those opportunities. So Mt Lyell will currently be assessed, as Charl said, and understand whether or not that meets our hurdle rates and our overall capital investment criteria. And then we do have opportunities as well with the Phos 1 project to extend the New Century or to utilize the New Century infrastructure post mining of zinc. I think it would be a wonderful opportunity to see that infrastructure continue being used. Phosphate likely does not fit in with our sort of strategic focus going forward. So our priority would be to look at how we could maximize value, try and ensure the sustainability of that project going forward, but how we could get value from that unlikely to be a core investment thesis on the phosphate side from our side. James Wellsted: Thanks, Richard. Just some questions on renewable energy. Can you remind us what is feeding into the operations currently, volume, solar versus wind? Listen, I don't think we can give that breakdown right now, but we'll be able to get it. we got it. Okay. And what's in the pipeline? And when will it start feeding in? And then secondly, Sibanye Stillwater is advancing well on the clean energy front. What is the overall renewables ambition and what are the targeted deadlines? Richard Stewart: Thank you very much. Perhaps, Rob, if I could maybe ask you to pick up on some of those. Robert van Niekerk: Yes, Richard. I can talk to the renewable energy. At the moment, we've got Castle wind farm as well as the solar project, the Springbok Solar project, providing electricity into our operations. The Castle wind farm was commissioned in March. The Springbok Solar project was commissioned in September. And to date, they've generated 293 gigawatt hours. In 2026, we're going to have another 2 plants coming into play. They are both wind farms. It is Umsinde wind farm and the Witberg farm. And then by the end of '26, we'll be receiving more than 400 megawatts on an annual basis. This will exceed 700 megawatts in '27 and '28. So [ Les ], I hope that answers your question on the renewable energy. James Wellsted: Thanks, Rob. That's pretty comprehensive. Did you give the overall target. Sorry, I wasn't clear on that. Robert van Niekerk: Overall target is slightly about 700 megawatts, James. By the end of '28. James Wellsted: That's as big as the Castle unit. I think Melanie mentioned that. Pretty interesting. Let's get on to some of the SA PGM questions. What are the key drivers of the lower SA PGM volumes and the much higher costs? Richard Stewart: Thank you very much. Let me take that one. So I think the slight reduction in volume, our underground operations are, in fact, largely stable year-on-year. So we aren't seeing significant change there. Much of that downgrade of about 100,000 ounces comes from a combination of surface as well as some lower third-party assumptions on lower third-party [ pop Kloof ] processing material. So that's a predominant driver down. I think in terms of the costs, the operating cost base, I think, is actually pretty stable. We're seeing that coming in, in line with or, in fact, below inflation. The big increase is largely around, I think, as we mentioned a bit earlier, the sustaining capital, in particular, which is being driven by the new projects in our refinery, specifically our OPMs or other precious metals plants in our precious metals refinery as well as some upgrades to mechanized equipment. That's a really big driver on the cost side. James Wellsted: A question from Nkateko about production guidance being lower and then also a reduction. Is it the reduction related to third-party volume of own metal. I think Richard just answered that there's quite a big decline in the surface. And then we have got lower third-party metal. So I think that's pretty much been covered. A question on the Appian settlement, how it's been accounted for in the cash flow statement, Charl? Charl Keyter: Yes. Thank you. So the Appian settlement is in the cash flow from operating activities. So the number has been effectively paid or deducted in that number. So if you want to normalize cash flow from operating activities, excluding Appian, you have to add that back for the year 2025. James Wellsted: The cash flow table that we've got in the book, that would be under corporate audit. Charl Keyter: Correct. James Wellsted: Okay. Thank you. Question on uranium assets. When will there be a value unlock, Richard? Richard Stewart: Yes. Thanks very much. I mean I think we've got the 2 uranium sort of assets at the moment. The one is the old Beatrix 4 shaft or Beisa as it's known. That is an asset where we are still in the process of a transaction with a junior company, Neo Metals, who is looking to develop that asset, and we retain an equity exposure to it. That transaction is still in process. Unfortunately, still tied up with regulatory conditions and licensing that we're looking at there. But once that is closed, I think then we'll start seeing the opportunity to develop and get exposure to that project. The second big one is the Cooke Tailings project. That is the Cooke Tailings dam that is both a co-product gold and uranium opportunity. We have recently or in the process now of completing the feasibility study on that. It's going through assurance that will also be reviewed in the second quarter of this year towards a financial decision or looking at various ways that could potentially be taken forward. So that would be the second one. And again, during the next quarter, we would come up with a decision on how to move forward on that. So those are our 2 current exposures to uranium. James Wellsted: Thank you. I guess sticking on the growth theme, what accretive investment opportunities do we see in South Africa amid the strong gold and platinum group metal price environment and with Burnstone update. And then some questions on collaboration or other with DRDGOLD. Richard Stewart: Yes. Thanks very much. I think as mentioned, right now, our focus in terms of opportunities on our current resources. That's where we see best returns. I think any M&A in the gold space at this point in time is probably, I would suggest high risk depending on how you're looking at doing that, but given where the commodity cycle is, so that's not one we're looking at immediately. And again, on the PGM side, I think we've said we're very happy with our portfolio as we look forward to the commodity markets of PGMs and how we see that playing out. And we think we've got some of the best brownfield opportunities to develop. So that's where we see our best value coming through. In terms of further collaboration with DRDGOLD, been quite open in that regard. I think it's been an excellent collaboration. I think we've seen real value created for both companies. And certainly, as we look forward to the future, we are building -- continue to build a significant secondary mining business. We are doing a lot of surface mining and projects on our PGM side. We still have some gold opportunities in South Africa, and we'd like to see that business growing. So moving forward, I think we'd certainly be keen on more collaboration with DRDGOLD and see that as a long-term partnership and future with the company. James Wellsted: Yes. Just another angle on the DRDGOLD side. I guess from a gold bull or a gold bear's perspective, it's obviously worth about ZAR 25 billion now of 50% -- are we looking to dispose of the stake in time and what would trigger a sale? Or are we looking to buy -- increase our position in DRDGOLD in juice? Richard Stewart: We're definitely not looking for a sale, as I mentioned. I think that's -- we see a long-term opportunity to continue to grow with DRD and add a lot more value between our resources, their skills and the ability to grow together. So no, we're not looking to sell. I think in the long term, we would love to increase our stake in DRDGOLD but again, clearly now is not the time for that. I think we have different opportunities to invest capital now. But down the road, if that opportunity is right and we can do it in a value-accretive manner, certainly something we would consider. James Wellsted: And then I guess -- yes, another growth question, I guess, on copper for Sibanye, more copper exposure or not? Richard Stewart: Yes. I think as we shared in our framework that we'll use to assess external growth opportunities, copper was definitely a metal that I think we would like exposure to. But I think the critical question is less around what we want exposure to or not. The real question when we look at any form of growth is going to be, is it value accretive? So yes, copper is a metal we would look at. But if we're going to do it, it would have to be done in a value-accretive manner. And I dare say, where could we -- where do we see our strengths and opportunities? I think there are some niche opportunities, where we could really create value from copper, and we will continue to look at those. But that will be the underlying driver is it value accretive and where do we think we can unlock value. James Wellsted: Thanks, Richard. And then a question on our chrome strategy, I guess, production and revenues. Does chrome now play a negligible role given the rise in PGM prices? Not. And I guess maybe just touch on the deal with Glencore. Richard Stewart: Thanks very much. No, Chrome is definitely not negligible to us. I think it's clearly a byproduct in that regard, but it's a very important byproduct for us, one we've given a lot of attention to over the last 5 years and continue to look at going forward. So of course, in different commodity cycles, the relative impact of chrome is important. I think we've seen over the years how chrome has gone from being about 2% of our revenue basket almost as high as 15% during downtimes. At the moment, it's probably sitting around 10% to 12%. So it's still a very material number. And of course, even though it's relative to PGMs, that number in our earnings and bottom line is material. So we will continue to focus on all value opportunities and chrome is certainly a very important one. I think critically, the transaction that we did with Glencore, what that really looked around, I guess, was 3 big opportunities. The first one was at our Marikana operations. Historically, that chrome was sold to Glencore under, I guess, onerous terms for us. And that prohibited the potential expansion of some of those resources. And I think in recognition with Glencore by opening up those resources, we can all benefit. And that was the first opportunity from that transaction. So that really unlocked some of the value from the new projects that we have announced as part of our strategy. I think the second benefit was by looking at our chrome operations across the board at Rustenburg and Marikana. We think there's some real synergies that can be derived there. And then we have substantial chrome in surface tailings, which, again, I think with our combined skills, we've got an opportunity to unlock that. So no, not at all. I think we will be -- we are already, I think, if I'm not mistaken, the third biggest chrome producer. And I think with this going forward, we'll be a substantial chrome producer. So that's absolutely part of the strategy going forward. James Wellsted: And just first estimate for gold from Burnstone. Richard Stewart: I think perhaps before then, I need to say our first step is really to get an investment decision from our Board. So that we would be going to in quarter 2 or towards the end of the first half. So let me just make that clear. We do still need to go through that process. I think first gold from Burnstone would come relatively quickly. But I think the thing with Burnstone is it is a long ramp-up period. So while you access the ore body quite quickly and can get first gold quite quickly, it's about a 4- to 5-year period before you reach steady state of about 120,000 to 130,000 ounces. So that's sort of what that profile looks like. But again, we'll unpack that in more detail at our Capital Markets Day sharing those profiles with you. James Wellsted: Thanks, Richard. There are a couple here that I'll just answer myself, I think, before we go to the call. Any further payments due for this Appian settlement? No. they're done. A question on surface sources and projected life for Rustenburg PGM surface tailings. Again, that's been subject to a study, and we'll come to the market with all of the detail later this year when we have our Capital Markets Day. So if you can hold on for that, we'll be able to give you all that sort of detail. And then a question from Steve Shepherd about development assay results are no longer included in the disclosure. One wonders how analysts are able to forecast future head grades and yields without this crucial information. We'll speak about that offline, Steve, I have my opinions. Can we go to the call, please? Operator: We have a question from Chris Nicholson of RMB Morgan Stanley. Christopher Nicholson: I've got a number of different questions, believe it or not, after all the ones you've been on the webcast. I'll just limit it to a couple. Just the first one, just on Burnstone, are you in a position where you could guide on what CapEx for that project should be? It looks like your group CapEx this year is ZAR 17 billion roughly. So I'm just kind of adding what we should add on top of that to get the 120,000 ounces. Otherwise, we can't really credit you with those yet. Second question is just on costs. I think you've done a good -- I think to understand what's happening in the gold and SA PGMs. But just in U.S. PGMs, I see CapEx is up. But even if you strip that out, it does look like the underlying unit cost is up. Is this just a case of a bit of catch-up in forward development? What's driving that? Clearly, you still want to move down towards $1,000 long-term target, but it's going up in the short term. And then final one, I think you've lost over it a bit, but just on Keliber, that extra EUR 100 million over and above the project CapEx this year, that just seems strange given the project is now finished. What actually is that? Is this a working capital build? Or is there a working capital build in addition to that? And if it is, can you actually capitalize all those ore stockpiles? Richard Stewart: Chris, thanks very much. Good to hear from you. Let me -- I'll take the Burnstone and the Keliber question and then ask Charl, if he can pick up on the U.S. cost in particular. So Chris, just on Burnstone, we haven't actually released a full capital number. So as soon as we've got that feasibility done, we'll do that. But what I can share with you is that the large project capital at Burnstone has already been spent. So when we turn that project off, the underground infrastructure is developed, most of the surface infrastructure is developed. The plant is largely done. So the capital that will really be required on Burnstone is essentially opening up that ore body. So it's development capital predominantly. So what we're really looking at is the cost from going from start-up to steady state. For those who are familiar, it's a Kimberly ore body, which means there's a lot of development required if you really want to set that mine up for the long term, and that's our intention. So it's not a big slug of capital that will come through. It's essentially opening up and development capital. So if you were going to think of a mine ramping up its ORD style capital that will be capitalized preproduction. So it's not big project CapEx, Chris, but we'll certainly look to give you the profiles on that as those studies are completed and made public. I think on Keliber, so let me just unpack that and so we can be absolutely clear on those numbers. So we always said -- or the project CapEx for Keliber was EUR 763 million. That number has not changed. The last portion of that number, i.e., the EUR 90 million that I quoted gets spent in 2026. So -- and that gets spent during the first quarter of -- first quarter and a little bit into the second quarter. So the total project capital remains at $763 million. It hasn't changed, and the last $90 million is being spent in Q1 and Q2 of this year. The balance to get us to the $180 million, so the balance, let's call it, of $90 million, that is effectively preproduction costs as we start up. A large amount of that will likely be capitalized as preproduction, but it's preproduction and sustaining capital type costs, Chris. So the project capital remains as is. We're just spending the last $90 million now, but it is part of that original $763 million and then the other $90 million preproduction. I hope that clarified it for you, Chris. Charl, do you want to pick up on the U.S.? Charl Keyter: I does, I does. Richard Stewart: Super thanks, Chris. Charl Keyter: Chris, on development, we do have quite an expanded development set of activities, particularly at East Boulder. We also have some incremental capital. So we're replacing the bridge at Stillwater East that runs between the East mine and the concentrator and mill. And that was capital we deferred in the last couple of years. We're now getting into it. And then we do have some mechanized bolters starting to come in. So there is that capital. And then we also have the initial spend on rock dump and tailings expansion at East Boulder as well. So all in, you've got -- you do have a sustaining cost number that is higher than you're probably expecting. But I think the underlying run rates that you're getting from the operators is what you can see going forward. And as I outlined in the presentation, you do have a mixed year of activity here. We've got steady-state performance and then we've got a big shift into the transformative work where you really start to see the benefits on a cost basis and a productivity basis probably at the tail end of the year and into next year. So those will start to be daylighted at Stillwater East late in the year, but they will only get into East Boulder next year. James Wellsted: Is there another question on the line... Christopher Nicholson: Can I just ask is $130 million a good stay in business CapEx level then for kind of 300,000 ounces at Stillwater. Is that what we should assume going forward? Richard Stewart: Chris, is that -- you're talking on the U.S. operations? Christopher Nicholson: On the U.S. operations, yes. Richard Stewart: Yes. That's correct, Chris, broadly in line with the guidance that we put out. That's right, yes. James Wellsted: We like you. We'll give you another go. Operator, is there another question? Operator: Yes, we have a question from Adrian Hammond of SBG Securities. Adrian Hammond: Just a question on your recycling guidance. I know you've now consolidated the ops. But if on my calculations, then Columbus volumes have materially decreased. Could you just unpack that for me? And then for another one on Kloof for Charl perhaps, just the closure liabilities, do they cover the pumping costs that you foresee there? I'm just thinking about the aquifers that Kloof sits on. I know you incur about ZAR 1 billion a year for Cooke pumping. Does the liability you've mentioned cover the pumping that's envisaged for Kloof? Richard Stewart: Adrian, good to hear from you. Listen, I'm going to ask Grant, I think he is on the line, just to pick up your question on the recycling breakdown. I don't believe there's been a significant drop-off at the Columbus facility, but let me ask Grant just to unpack that. Just in terms of Kloof, I'll ask Charl if he does want to come in with any numbers. But just high level, Adrian, I think where Kloof is very different to the Cooke operations. So that's ZAR 1 billion you just quoted now, which is the pumping across Cooke 1 to 4. That's very interconnected with other operations. So on the northern side, we have the Harmony shaft. And on the southern side, we obviously got South Deep. And that is why a lot of that pumping has had to remain while we develop stable systems to be able to ensure seal from the surrounding operations as part of a connected basin. Both Kloof and Beatrix are stand-alone operations in that regard. So when Kloof ultimately comes to closure, it's not interconnected to any other operating mines. So essentially, that can be flooded in line with our environmental permits. So the pumping issues and liabilities that we have previously experienced at the Cooke shaft are not applicable to either Kloof or Beatrix. It would, in time, become applicable to Driefontein. And I think that's where there's obviously an important conversation around extending life of mines around Driefontein and what that future liability may look like. So that is one where that's got to be looked at down the line in the future. Driefontein still got 10 years ahead of it. But for Kloof and Beatrix, that's not a problem on the liability. Charl, I don't know, if you want to just add any numbers to that, and then we can -- I don't... Charl Keyter: No. Yes, we would not provide for pumping or any liabilities because as you've explained, it's -- we have the ability to flood and it's not similar to the Cooke scenario. So no, well covered. Thank you. Richard Stewart: And then Grant, if you are online, do you just want to pick up on the recycling question of Adrian? Grant Stuart: Yes, sure, Richard. online. Adrian, good to chat. Yes, there hasn't actually been much of a decline on the ounces profile delivered by Columbus. If you look on '24 and '25, it was a 2%, I think, decline. I think there is a significant shift though in the market. So there is going to be a lot of different industry play coming out and strategic moves and shifts that will have to take place. And I guess we'll unpack that for you during the April '20 discussion, where we outlined some of our broader recycling strategy. James Wellsted: Thank you. Operator, are there any calls on the line still? -- delay. Thanks a lot. I think that's it really. only one more question. There's always one from Arnold Van Graan about share buybacks mixed. Richard, how do you feel about that? Richard Stewart: Arnold, that's a great way to end this, and thank you very much. Good to hear from you this morning. No, listen, I think as we shared in our Strategy Day, the capital allocation model we're looking at, at the moment is very focused on the 3 pillars. So we've got our dividend policy that largely talks to about 1/3 of distributable free cash flow going to shareholders, 1/3 going to paying down our gross debt, which I dare say should reflect in our overall share price as we get that down. And therefore, hopefully, we would see shareholders benefiting from that capital uplift and then towards growth. I think until such time as we've got our debt in line, for now, we will be sticking to that dividend policy, and we wouldn't be considering any extra. Of course, if commodity prices stay where they are, and we've achieved those objectives on the gross debt side, then we'd have to look at where that policy or the capital allocation strategy lies. But for now, we'll be sticking to our dividend policy, Arnold. Thank you very much. I guess, is that the last question then? If that's the last question, then perhaps just from my side, thank you very much, everybody, for joining us again. As mentioned, this is just one in a series of engagements we're looking to have with the market. I think we can tell that there are still a lot of questions and a lot of details we need to share around some of the projects in particular that we've got, and we certainly look forward to unpacking that with you during April and June of this year. So thank you very much for joining us again. Please have a good and a safe day. Thank you.
Gustaf Meyer: Hi, everyone, and welcome to Redeye and today's interview with the CEO of Senzime, Philip Siberg. Welcome, Philip. Philip Siberg: Thank you. Nice to be here. Gustaf Meyer: Earlier today, you released your Q4 report, and we also have some investor questions. But first, maybe we can have like a broad question at first. If you talk about the sales, SEK 28.3 million during the fourth quarter. You also installed 416 new TetraGraphs systems. How would you summarize the quarter and also, of course, the full year of 2025? Philip Siberg: So Q4 was pretty good. We doubled the business more than that. I had probably expected more. So a little bit came in, in January. It's always hard to define these closings of large hospital systems. But all in all, I think we had another strong year. We delivered according to our messaging and our guidance. We're continuing to strengthen our market position, and we're seeing a continued very fast conversion to our technology. And it's interesting to see as well that it's not just U.S. now that we -- in the Q4, we had strong uptake in Asia and European market as well. Gustaf Meyer: And you mentioned the timing there. But if we look at the number of new installed systems, 416, if you compare that to Q2 2025 and also to Q3, it's a bit lower. But that also depends on how many upgrades you have been doing during the quarter. So maybe you can elaborate on that. And yes. Philip Siberg: Yes. So I mean, during 2025, we definitely had a few U.S. accounts specifically who decided to upgrade from the previous classic TetraGraph to our new next generation. The response has been very positive. And as I presented, the utilization rate has spiked up significantly among these accounts and seeing across the line over 50% uptick in usage. So there were a few hundred devices last year, I think predominantly during the spring and summer that were upgrade deals, while during the fall, it was more normal deliveries. I think it -- I mean, the number of monitors varies a little bit quarter-to-quarter, just depending on when the contracts come in. And as I mentioned, just we had some major contracts come in, in January instead of closing in December. December and Q4 is specifically in the U.S., a tricky quarter. It's Thanksgiving, it's holiday season, and it's hard to push purchasing and contracting to close with the same urgency as we want as a company. Gustaf Meyer: Great. And if we look at the full year, the total sales or the reported total sales came in a bit lower than your guidance of SEK 110 million to SEK 140 million. However, if we look at the fixed currencies, you reached that target. Of course, one of the reasons is the weakened dollar. Are there any other reasons why you're in the lower end of this guidance if we look at fixed currencies? Philip Siberg: Yes. Thanks for good summary. Definitely, the dollar and the euro affected us top line-wise. We had expected regulatory processes in Japan and South Korea to move faster than they did. So we had expected for the year to start delivering great volumes of next-generation TetraGraphs into these regions. We did get the regulatory PMDA approval in Japan in December. So we had our first shipments there. And Korea is still in the process and should happen mid- to late 2026. So once that is in place, I foresee continued strong growth there. So that -- and uncertainties in some of these deals when they come in or not, I think it was really the currency effects and just delayed regulatory processes beyond our control. Gustaf Meyer: Maybe we can also focus a bit on the South Korean market because I saw your presentation earlier today, and you showed a really nice graph about the usage rate in South Korea, and it has increased a lot. What are the main reasons for this? Philip Siberg: So I think it's -- South Korea is an interesting early adopter, fast-moving market, likes technology. We came in there a couple of years ago with a strong partner. We've been kind of methodically working to develop it, and now we're really seeing the results from it. I would say that we have a strong market position by now. Our local partner is successful in their business model. I'm just seeing that the conversion to EMG is now kind of double-digit conversion. So moving very fast. And there is a little bit of reimbursement available in the local market, which we believe is going to increase as well as come into the Japanese market. So those are some of the driving factors. But I think that it showcases as an example of how we can develop markets once we're in there and working methodically, you can get to these types of utilization rates, which is in line with our long-term plans. Gustaf Meyer: Great. If we move on, also talk about the costs. OpEx increased a bit during Q4 if compared to, for example, Q3. Maybe you can add some color to that. Philip Siberg: It did. I mean Q4 is always a more expensive quarter. We have a lot of marketing events. We always have our big congresses happening. And there's always a little bit of an extra boost in terms of sales expenses and commissions. But we did have roughly SEK 4 million to SEK 5 million that were, I would say, onetime effects in the fourth quarter. I did not separately report these as onetime effects, but they were certain expenses that we incurred that we took in Q4. So I think it's -- as we look ahead for 2026 and this year, we're anticipating a flat to decreased operating expense level for this year. Gustaf Meyer: And when you have that guidance, does that include the one-offs in Q4? Philip Siberg: So the one-offs are not supposed to happen again in 2026. So that's why I foresee an operating expense level, which is lower than what we had in 2025. Gustaf Meyer: Great. Also in the report, you had this inventory write-down in the cost of goods sold. What is the reason behind this? Philip Siberg: Yes. So the reason -- I mean, we've had the TetraGraph Classic on the market for a couple of years. And then as most of you know, we introduced the next generation just over a year ago. That platform has been extremely well received. We're seeing increased uptick in usage. So we decided here strategically that we want to carefully start end-of-lifing the classic because of the superiority of the NextGen platform and really the focus that we're doing it. So we decided to make a write-off of some of the older raw material and kind of components related to it and decided to take it in the '25 books. We're still going to remain with the product in the market. We need to have it for 7 years as part of regulatory requirements, but really pushing out the NextGen at a higher price point this year and continue to drive up utilization rates. Gustaf Meyer: Because if we look into 2026, first of all, maybe what trends do you currently see? And also in the report, you have the guidance that you expect growth to be at the same level as in previous years and also you expect to become cash flow positive during Q4 this year. Yes, maybe you can just summarize your overall expectations and also how will you -- what will you do and what actions will you make to reach this target? Philip Siberg: Yes. I think the -- I mean, the headwinds of our business and the tailwinds, sorry, continue to be strong. I mean there's a continued very strong underlying macro effect for neuromuscular monitoring in general, more and more guidelines coming out, more and more data supporting the conversion. I would say that the EMG technology that we are spearheading has certainly taken over as the new gold standard. But it's -- you don't convert large hospital systems overnight, but I think we're winning after winning, and we're really making our success story here. So as I look into this year, we're foreseeing continued growth in all our markets. We're foreseeing continued increase in utilization and using of sensors. And how we do that is work very tightly with our customers. We have a dedicated clinical team that helps to educate, helps to create standardization protocols. We're very methodical in the way we choose our customers. So we make sure that wherever we sell and that we install, there is a clear long-term uptick and usage trend among our customers. I mean we've seen published papers come out looking at other technologies on the market, other similar types of products. And when you don't have that kind of support that we offer, then the usage rates are very poor. So that's part of our mission to have the science, have the team and have the technology to really drive up usage. Gustaf Meyer: Interesting. Also, this morning, you also announced that you have secured a SEK 50 million credit facility. What are the reasons behind this? Philip Siberg: Yes. So we -- I mean, as part of being a fast-growing company, you have -- we have a working capital needs here. We partly need to -- the expectations from our customers are very fast deliveries. So we're kind of tying up a fair amount of capital in inventory, et cetera. And what we wanted to kind of show and have is just the security as we continue to grow that we have this kind of a credit line. So as we have peaks in working capital needs throughout the next 18 months, 24 months, we have the ability to kind of draw that money. And I've been clear to the market before that we're not expecting to do any rights issues or capital raises from equity rather we're funding this company now based on our customers, but also having a little bit of -- we're growing up as a company. I think it's a strong vote of confidence showing that we have a bank and a credit facility to continue to grow this company. And again, this is fair market terms. There are no special covenants or other types of dilutive instruments tied to this. So it more gives the company an assurance to continue to grow in the path we're on. Gustaf Meyer: And also, I guess that this could be related to actually one of the questions that we got from an investor. If you could -- yes, you have talked about introducing a new business model. What is that -- what kind of business model is this? Philip Siberg: Yes. So we're -- I mean, we're seeing that -- I mean, if you look at reference case, Intuitive and the da Vinci robots, I mean, probably the most successful medical device company out there. A big part of their business case has been to do different types of robotics as a service. And we've just seen that there's been a customer demand among hospitals to offer if we could have the TetraGraph as a service offering where you link it to usage rates of disposables. So what we've introduced is a Tetragraph as a service business model. We then offer the monitors on a placement type of agreement. We get a premium pricing for the sensors. We link it to various types of agreements around this. And what we've seen is that the sales cycle reduces about 50% in time because the hospital is no longer relying on burdensome capital processes. So this makes it easier to rapidly deploy into large accounts. We won a number of these deals. It ties up a little bit more working capital or CapEx for us because we own the instruments, the monitors. But the upside of this is that we're getting a significant premium on the sensors. So the return on investment of this is very short and long term, it drives up gross margin and ultimately revenues and earnings. Gustaf Meyer: But just to clarify, this is only in the U.S., right? Philip Siberg: This is the U.S. only. Gustaf Meyer: Yes. But if you look into 2026 then, how many of your new customers do you expect to have this updated business model and... Philip Siberg: Yes, it's hard to say exactly the split. I mean there's definitely a lot of interest among hospitals, but hospitals also are very clear on their strategies. Some simply want to do capital purchases. They want to own the goods. Some of our best customers in the U.S., we have placement agreements with, where we tie usage of the device and secure revenues from that. But this is a third business model where we provide it as a service. But I think that we're going to see a large part of our -- a significant part of our business this year in the U.S. is going to be that. And we've already signed two important deals very fast this year. So I think it's going to help to drive business. Gustaf Meyer: Interesting. Also, another question from an investor was about the manufacturing of the system and also the sensors. Could you elaborate a bit more on the manufacturing location and also components and so on? Where do they come from? Philip Siberg: Yes. So we're Uppsala based. We have a strategy. We produce all the monitors here in-house. I try to drive a very church tower principle, meaning that I want to see my suppliers. I want them to be local because we drive a very sustainable business model in the production where ISO 14001. We are connected to the UN Global Compact. So it's all about making sustainable production. So we produce it in-house. We have the capacity here for the next 5 years to meet the business plan in the current setup. The disposables, we are the legal manufacturer as well, but we produce them together with partners. And we are shifting all our kind of sub-supplies and base manufacturing from Asia to Europe. So we're really localizing this to be a European, Scandinavian manufacturing process. Gustaf Meyer: Many of the investor questions have already been discussed in previous questions during this interview, but we also got a question about if you could give an update on the patent situation? Philip Siberg: Yes. So we continue to invest and really drive innovation and science in the market we are in. We currently have 107 patents approved for our portfolio. We filed 8 new patents in 2025. So really driving field and coming out with new innovations. And I've shared before, what we're doing here is we're continuously coming out with a new feature set and more and more becoming a software company where we're providing -- since we're pulling in so much data from our users, we can use that data to further train, innovate, come out with new feature sets. So our customers can always be assured that they have the latest science and features and benefits of the technology that we have. So a customer of Senzime is not just buying a onetime device. They're buying a 7-year cycle of significant new feature sets coming out that will ultimately drive patient outcomes. Gustaf Meyer: Great. Maybe just the last question here because we haven't talked about that yet, if there are any other Senzime products that are in development? Philip Siberg: There is always a lot of exciting things in development. So keep your eye out. We're going to come out with more things this year. And this is I would say, solutions and products that are adjacent to what we're doing today to help drive up usage rates to make it more universally connectable. Remember that probably 99% of all our monitors today are connected to electronic health records and external monitors. So it needs to be universally connectable to any system and transmit data. But there's more in the pipeline, and there is more in our research lab that we have in the long-term road map, including further development of the RMI ExSpiron technology that we also have in-house. And there are exciting things that are to come. I will get back when that is ready. Gustaf Meyer: And I guess that we all look forward to that. Thank you very much, Philip, for this interview. Philip Siberg: Thank you very much.
Gustaf Meyer: Hi, everyone, and welcome to Redeye and today's interview with the CEO of Senzime, Philip Siberg. Welcome, Philip. Philip Siberg: Thank you. Nice to be here. Gustaf Meyer: Earlier today, you released your Q4 report, and we also have some investor questions. But first, maybe we can have like a broad question at first. If you talk about the sales, SEK 28.3 million during the fourth quarter. You also installed 416 new TetraGraphs systems. How would you summarize the quarter and also, of course, the full year of 2025? Philip Siberg: So Q4 was pretty good. We doubled the business more than that. I had probably expected more. So a little bit came in, in January. It's always hard to define these closings of large hospital systems. But all in all, I think we had another strong year. We delivered according to our messaging and our guidance. We're continuing to strengthen our market position, and we're seeing a continued very fast conversion to our technology. And it's interesting to see as well that it's not just U.S. now that we -- in the Q4, we had strong uptake in Asia and European market as well. Gustaf Meyer: And you mentioned the timing there. But if we look at the number of new installed systems, 416, if you compare that to Q2 2025 and also to Q3, it's a bit lower. But that also depends on how many upgrades you have been doing during the quarter. So maybe you can elaborate on that. And yes. Philip Siberg: Yes. So I mean, during 2025, we definitely had a few U.S. accounts specifically who decided to upgrade from the previous classic TetraGraph to our new next generation. The response has been very positive. And as I presented, the utilization rate has spiked up significantly among these accounts and seeing across the line over 50% uptick in usage. So there were a few hundred devices last year, I think predominantly during the spring and summer that were upgrade deals, while during the fall, it was more normal deliveries. I think it -- I mean, the number of monitors varies a little bit quarter-to-quarter, just depending on when the contracts come in. And as I mentioned, just we had some major contracts come in, in January instead of closing in December. December and Q4 is specifically in the U.S., a tricky quarter. It's Thanksgiving, it's holiday season, and it's hard to push purchasing and contracting to close with the same urgency as we want as a company. Gustaf Meyer: Great. And if we look at the full year, the total sales or the reported total sales came in a bit lower than your guidance of SEK 110 million to SEK 140 million. However, if we look at the fixed currencies, you reached that target. Of course, one of the reasons is the weakened dollar. Are there any other reasons why you're in the lower end of this guidance if we look at fixed currencies? Philip Siberg: Yes. Thanks for good summary. Definitely, the dollar and the euro affected us top line-wise. We had expected regulatory processes in Japan and South Korea to move faster than they did. So we had expected for the year to start delivering great volumes of next-generation TetraGraphs into these regions. We did get the regulatory PMDA approval in Japan in December. So we had our first shipments there. And Korea is still in the process and should happen mid- to late 2026. So once that is in place, I foresee continued strong growth there. So that -- and uncertainties in some of these deals when they come in or not, I think it was really the currency effects and just delayed regulatory processes beyond our control. Gustaf Meyer: Maybe we can also focus a bit on the South Korean market because I saw your presentation earlier today, and you showed a really nice graph about the usage rate in South Korea, and it has increased a lot. What are the main reasons for this? Philip Siberg: So I think it's -- South Korea is an interesting early adopter, fast-moving market, likes technology. We came in there a couple of years ago with a strong partner. We've been kind of methodically working to develop it, and now we're really seeing the results from it. I would say that we have a strong market position by now. Our local partner is successful in their business model. I'm just seeing that the conversion to EMG is now kind of double-digit conversion. So moving very fast. And there is a little bit of reimbursement available in the local market, which we believe is going to increase as well as come into the Japanese market. So those are some of the driving factors. But I think that it showcases as an example of how we can develop markets once we're in there and working methodically, you can get to these types of utilization rates, which is in line with our long-term plans. Gustaf Meyer: Great. If we move on, also talk about the costs. OpEx increased a bit during Q4 if compared to, for example, Q3. Maybe you can add some color to that. Philip Siberg: It did. I mean Q4 is always a more expensive quarter. We have a lot of marketing events. We always have our big congresses happening. And there's always a little bit of an extra boost in terms of sales expenses and commissions. But we did have roughly SEK 4 million to SEK 5 million that were, I would say, onetime effects in the fourth quarter. I did not separately report these as onetime effects, but they were certain expenses that we incurred that we took in Q4. So I think it's -- as we look ahead for 2026 and this year, we're anticipating a flat to decreased operating expense level for this year. Gustaf Meyer: And when you have that guidance, does that include the one-offs in Q4? Philip Siberg: So the one-offs are not supposed to happen again in 2026. So that's why I foresee an operating expense level, which is lower than what we had in 2025. Gustaf Meyer: Great. Also in the report, you had this inventory write-down in the cost of goods sold. What is the reason behind this? Philip Siberg: Yes. So the reason -- I mean, we've had the TetraGraph Classic on the market for a couple of years. And then as most of you know, we introduced the next generation just over a year ago. That platform has been extremely well received. We're seeing increased uptick in usage. So we decided here strategically that we want to carefully start end-of-lifing the classic because of the superiority of the NextGen platform and really the focus that we're doing it. So we decided to make a write-off of some of the older raw material and kind of components related to it and decided to take it in the '25 books. We're still going to remain with the product in the market. We need to have it for 7 years as part of regulatory requirements, but really pushing out the NextGen at a higher price point this year and continue to drive up utilization rates. Gustaf Meyer: Because if we look into 2026, first of all, maybe what trends do you currently see? And also in the report, you have the guidance that you expect growth to be at the same level as in previous years and also you expect to become cash flow positive during Q4 this year. Yes, maybe you can just summarize your overall expectations and also how will you -- what will you do and what actions will you make to reach this target? Philip Siberg: Yes. I think the -- I mean, the headwinds of our business and the tailwinds, sorry, continue to be strong. I mean there's a continued very strong underlying macro effect for neuromuscular monitoring in general, more and more guidelines coming out, more and more data supporting the conversion. I would say that the EMG technology that we are spearheading has certainly taken over as the new gold standard. But it's -- you don't convert large hospital systems overnight, but I think we're winning after winning, and we're really making our success story here. So as I look into this year, we're foreseeing continued growth in all our markets. We're foreseeing continued increase in utilization and using of sensors. And how we do that is work very tightly with our customers. We have a dedicated clinical team that helps to educate, helps to create standardization protocols. We're very methodical in the way we choose our customers. So we make sure that wherever we sell and that we install, there is a clear long-term uptick and usage trend among our customers. I mean we've seen published papers come out looking at other technologies on the market, other similar types of products. And when you don't have that kind of support that we offer, then the usage rates are very poor. So that's part of our mission to have the science, have the team and have the technology to really drive up usage. Gustaf Meyer: Interesting. Also, this morning, you also announced that you have secured a SEK 50 million credit facility. What are the reasons behind this? Philip Siberg: Yes. So we -- I mean, as part of being a fast-growing company, you have -- we have a working capital needs here. We partly need to -- the expectations from our customers are very fast deliveries. So we're kind of tying up a fair amount of capital in inventory, et cetera. And what we wanted to kind of show and have is just the security as we continue to grow that we have this kind of a credit line. So as we have peaks in working capital needs throughout the next 18 months, 24 months, we have the ability to kind of draw that money. And I've been clear to the market before that we're not expecting to do any rights issues or capital raises from equity rather we're funding this company now based on our customers, but also having a little bit of -- we're growing up as a company. I think it's a strong vote of confidence showing that we have a bank and a credit facility to continue to grow this company. And again, this is fair market terms. There are no special covenants or other types of dilutive instruments tied to this. So it more gives the company an assurance to continue to grow in the path we're on. Gustaf Meyer: And also, I guess that this could be related to actually one of the questions that we got from an investor. If you could -- yes, you have talked about introducing a new business model. What is that -- what kind of business model is this? Philip Siberg: Yes. So we're -- I mean, we're seeing that -- I mean, if you look at reference case, Intuitive and the da Vinci robots, I mean, probably the most successful medical device company out there. A big part of their business case has been to do different types of robotics as a service. And we've just seen that there's been a customer demand among hospitals to offer if we could have the TetraGraph as a service offering where you link it to usage rates of disposables. So what we've introduced is a Tetragraph as a service business model. We then offer the monitors on a placement type of agreement. We get a premium pricing for the sensors. We link it to various types of agreements around this. And what we've seen is that the sales cycle reduces about 50% in time because the hospital is no longer relying on burdensome capital processes. So this makes it easier to rapidly deploy into large accounts. We won a number of these deals. It ties up a little bit more working capital or CapEx for us because we own the instruments, the monitors. But the upside of this is that we're getting a significant premium on the sensors. So the return on investment of this is very short and long term, it drives up gross margin and ultimately revenues and earnings. Gustaf Meyer: But just to clarify, this is only in the U.S., right? Philip Siberg: This is the U.S. only. Gustaf Meyer: Yes. But if you look into 2026 then, how many of your new customers do you expect to have this updated business model and... Philip Siberg: Yes, it's hard to say exactly the split. I mean there's definitely a lot of interest among hospitals, but hospitals also are very clear on their strategies. Some simply want to do capital purchases. They want to own the goods. Some of our best customers in the U.S., we have placement agreements with, where we tie usage of the device and secure revenues from that. But this is a third business model where we provide it as a service. But I think that we're going to see a large part of our -- a significant part of our business this year in the U.S. is going to be that. And we've already signed two important deals very fast this year. So I think it's going to help to drive business. Gustaf Meyer: Interesting. Also, another question from an investor was about the manufacturing of the system and also the sensors. Could you elaborate a bit more on the manufacturing location and also components and so on? Where do they come from? Philip Siberg: Yes. So we're Uppsala based. We have a strategy. We produce all the monitors here in-house. I try to drive a very church tower principle, meaning that I want to see my suppliers. I want them to be local because we drive a very sustainable business model in the production where ISO 14001. We are connected to the UN Global Compact. So it's all about making sustainable production. So we produce it in-house. We have the capacity here for the next 5 years to meet the business plan in the current setup. The disposables, we are the legal manufacturer as well, but we produce them together with partners. And we are shifting all our kind of sub-supplies and base manufacturing from Asia to Europe. So we're really localizing this to be a European, Scandinavian manufacturing process. Gustaf Meyer: Many of the investor questions have already been discussed in previous questions during this interview, but we also got a question about if you could give an update on the patent situation? Philip Siberg: Yes. So we continue to invest and really drive innovation and science in the market we are in. We currently have 107 patents approved for our portfolio. We filed 8 new patents in 2025. So really driving field and coming out with new innovations. And I've shared before, what we're doing here is we're continuously coming out with a new feature set and more and more becoming a software company where we're providing -- since we're pulling in so much data from our users, we can use that data to further train, innovate, come out with new feature sets. So our customers can always be assured that they have the latest science and features and benefits of the technology that we have. So a customer of Senzime is not just buying a onetime device. They're buying a 7-year cycle of significant new feature sets coming out that will ultimately drive patient outcomes. Gustaf Meyer: Great. Maybe just the last question here because we haven't talked about that yet, if there are any other Senzime products that are in development? Philip Siberg: There is always a lot of exciting things in development. So keep your eye out. We're going to come out with more things this year. And this is I would say, solutions and products that are adjacent to what we're doing today to help drive up usage rates to make it more universally connectable. Remember that probably 99% of all our monitors today are connected to electronic health records and external monitors. So it needs to be universally connectable to any system and transmit data. But there's more in the pipeline, and there is more in our research lab that we have in the long-term road map, including further development of the RMI ExSpiron technology that we also have in-house. And there are exciting things that are to come. I will get back when that is ready. Gustaf Meyer: And I guess that we all look forward to that. Thank you very much, Philip, for this interview. Philip Siberg: Thank you very much.
Operator: Good morning, and welcome to the Cogent Communications Holdings, Inc. Fourth Quarter and Full Year 2025 Earnings Conference Call. As a reminder, this conference call is being recorded, and it will be available for replay at www.cogent.com. A transcript of this conference call will be posted on Cogent’s website when it becomes available. Cogent’s summary of financial and operational results attached to its press release can be downloaded from the Cogent website. I would now like to turn the call over to Dave Schaeffer, Chairman and Chief Executive Officer of Cogent Communications Holdings, Inc. Please go ahead. Hey. Thank you, and good morning to everyone. Welcome to our fourth quarter 2025, full year 2025 conference call. Dave Schaeffer: I am Dave Schaeffer, Cogent’s CEO. And with me on today’s call is Thaddeus G. Weed, our Chief Financial Officer. I would like to highlight a few key events and significant matters in the quarter. I would like to be able to go through these metrics to help you understand better our business. We are continuing to increase our margins. Our increase in gross margin and EBITDA margins have been driven by cost reductions and a rotation to more profitable on-net products. In 2023, the first full quarter Cogent was combined with Sprint wireline revenues or combined revenues by connection type for the third quarter versus this quarter have changed materially. Our on-net revenues were 47% of our revenues in 2023. Our total on-net revenues as a percentage of revenues has increased from 47% of revenues in 2023 to 61% of revenues this quarter. Our off-net revenues were 48% of our total revenues in 2023 immediately after the combination of Sprint and Cogent. Our off-net revenues as a percentage of our total revenues have decreased from 48% of revenues down to 39% of total revenues this quarter. And our non-core revenues were 5% of total revenues in 2023, our non-core revenues as a percentage of our total revenues have decreased to less than 1% of our revenues this quarter. I would like to take a moment and outline our progress in our Wavelength sales. At year end, we are offering wavelength services in 1,068 locations, all capable of 10 gigabit, 100 gigabit, and 400 gigabit services with provisioning intervals of approximately 30 days. As of today, we have actually increased our service footprint to 1,096 locations. Our Wavelength revenue for the quarter was $12,100,000, a 74% year-over-year increase compared to the comparable quarter in 2024. Our sequential Wavelength revenue growth accelerated and increased by 19%. That is better than the 12% sequential increase in Q3 over Q2. Our wavelength customers increased by 18% sequentially to 2,064 connections at the end of the quarter. Our Wavelength revenue for the full year 2025, which was the first full year we were selling Wavelength services across our footprint, was $38,500,000, an increase of 100% from the 2024 number. Our wavelength customers during that period increased by 85%. As of the end of the quarter, we had sold wavelengths in 518 locations compared to 454 locations at the ’3. We continue to anticipate capturing 25% of the highly concentrated wavelength market in North America. Now for a few comments on margins. Our EBITDA as adjusted for the quarter increased by $3,000,000 to $76,700,000. Our EBITDA as adjusted margins for the quarter increased sequentially by 140 basis points to 31.9%. Our increased margins continue to come from our cost reductions as well as our product optimization. Our EBITDA as adjusted for the full year 2025 was $55,600,000. Our EBITDA as adjusted then adding back the payments under the T-Mobile transit agreement. Our decrease in EBITDA as adjusted was as a result of the $104,200,000 reduction in our IP transit payments from T-Mobile and a reduction of $21,400,000 for other reimbursable Sprint acquisition costs that we incurred in 2024. There were no Sprint acquisition costs in full year 2025. The $104,200,000 reduction in scheduled payments and $21,400,000 reduction in these acquisition costs more than offset the organic growth of $70,000,000 in Cogent’s EBITDA or EBITDA Classic for full year 2025. Our EBITDA Classic for 2025 was $192,000,000.8. For the full year of 2024, it was $122,800,000. Our EBITDA as adjusted margins were 30% for the full year 2025, down from 33.6 for the full year 2024 because of the reductions that I just previously mentioned. Our EBITDA Classic margins, however, for full year 2025 were 19.8%, up from 11.9% for full year 2024, or an improvement of approximately 840 basis points on a year-over-year basis. Under our IP transit agreement with T-Mobile, we will continue to receive an additional 23 monthly payments of $8,300,000 per month until November 2027. There are further cash payments related to lease obligations we assumed at closing of at minimum $28,000,000. This $28,000,000 payment is to be made by T-Mobile in four equal monthly payments from December 2027 through March 2028. Now for a comment on our improvement in leverage. We have refined our capital allocation priorities and strengthened our financial flexibility and accelerated our delevering strategy. Leverage ratios have improved. Our gross debt leverage as adjusted for amounts due from T-Mobile for the last twelve months EBITDA as adjusted ratio was 7.35 as compared to 7.45 in the previous quarter. Our net debt ratio was 6.64 in Q4 compared to 6.65 in 2025. We believe that the amounts due from T-Mobile under our transit and purchase agreement should be considered in calculating our leverage ratios. We believe that these amounts essentially represent both long-term and short-term cash on our balance sheet and are discounted appropriately. And due to T-Mobile’s credit rating and payment history, we are confident that these payments will continue to be made in a timely manner. T-Mobile pays us $25,000,000 a quarter through 2027 under this IP services agreement. The monthly payments from T-Mobile under the IP transit agreement reduce from the balances that are due each month as they are received. Now for a couple of comments on our improved IPv4 leasing activity. Our IPv4 leasing revenue increased 44% year over year to $64,500,000 for full year 2025. We are currently leasing 15,300,000 addresses at year end. This is an increase of 2,200,000 incremental addresses or 17% on a year-over-year basis. We have title to 37,800,000 IPv4 addresses. Our capital expenditures for 2025 once our data center modernization program had been completed was $73,300,000, as compared to $114,300,000 for 2025. This $41,000,000 decrease was due to the completion of a significant amount of reconfiguration work in our Sprint-acquired facilities. We have converted these facilities into data centers in the first six months of 2025 as well as the last six months of 2024. We have converted a total of 125 facilities. At year end, we are providing services in 1,715 carrier-neutral data centers as well as the 187 Cogent data centers. The Cogent data centers have an aggregate capacity of 213 megawatts of installed and available power. Now as many of you know, we have intended to monetize and sell 24 of these facilities that we view as surplus. We acquired these facilities through the acquisition of Sprint. And we intend to monetize them through either outright sale or leasing on a wholesale basis. The nonbinding letter of intent we mentioned on our last call was not finalized due to a change in the original terms, not in price, but a requirement by the purchaser for Cogent to provide a portion of the purchase price in terms of owner financing, which we found unacceptable. We reverted to some of our backup agreements and are in active discussions with multiple parties for multiple offers across a broad set of these data centers. We do expect several of these to result in multisite acquisition offers. Now for a moment about our leverage and balance sheet strategy. Our 2027 June unsecured notes of $750,000,000 are still roughly eighteen months from maturity, but we have begun receiving proposals to refinance these notes. We intend to complete a refinancing transaction for new secured notes of $750,000,000 as soon as the make-whole period expires in June. Now for our long-term goals. We anticipate our revenue growth to continue to improve and be in the 6% to 8% range, we expect our rate of EBITDA margin to actually moderate to roughly 200 basis points a year that we will be able to deliver over a multiyear period. The nearly 800 basis points that we delivered this year was due to some extraordinary cost savings. And while we will continue to deliver these results, we do expect the rate of margin expansion to moderate. Our revenue and EBITDA guidance are meant to be multiyear goals and not intended to either be quarterly or even annual guidance. Now I would like to turn the call over to Thaddeus G. Weed to provide some further detail and provide our safe harbor language. Ted will also give a further breakout of the trends and the revenues acquired from the Sprint base versus the Cogent Classic base since our acquisition in 2023. I know this has been an area of focus of investors and we have been able to disaggregate those revenues and now present them with clear trends and metrics. With that, we will then open the call up for questions and answers. Task. Operator: Thank you, Dave, and good morning to everyone. Thaddeus G. Weed: This earnings conference call includes forward-looking statements. These forward-looking statements are based upon our current intent, belief, and expectations. These forward-looking statements and all other statements that may be made on this call that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. Please refer to our SEC filings for more information on the factors that could cause actual results to differ. Cogent undertakes no obligation to update or revise our forward-looking statements. If we use non-GAAP financial measures during this call, you will find these reconciled to the corresponding GAAP measurement in our earnings releases that are posted on our website at cogentco.com. Some overall comments on results and revenues. So our total revenue for the quarter was $200,140,500, and $975,800,000 for the year. Our total revenue for the quarter declined sequentially by $1,400,000 or by 0.6%. This was an improvement from the $4,300,000 or 1.7% sequential quarterly revenue decline that we experienced last quarter. While our sequential revenue declined within our fourth quarter, our total revenue increased each month in the quarter. Our total monthly revenue increased from September to October, increased from October to November, and excluding a change in USF revenues, increased from November to December. This month-to-month total revenue increase continued from December 2025 to January 2026. There was a negative FX impact on our quarter sequentially revenues of $200,000. So for the quarter, we experienced a $2,200,000 sequential decline in off-net revenues. Our on-net revenues, including on-net wave revenues, increased by $900,000 or 0.6% and our non-core revenues decreased by $200,000 and now those revenues have declined to only $1,200,000. Sequential wavelength revenue growth, which is on-net, accelerated to 18.8% from 12.4% last quarter, and increased sequentially by $1,900,000. Gross margin. Our gross margin for the quarter increased sequentially by $1,600,000 to $112,500,000. Our gross margin increased sequentially by 100 basis points to 46.8% from continued cost reduction and product optimization, including our focus on our on-net products. Our gross margin for full year 2025 increased by $46,700,000 to $442,700,000. And our gross margin for full year 2025 increased by 720 basis points from 38.2% last year to 45.4% for full year 2025. EBITDA. Our EBITDA, not including payments under the IP transit agreement for the quarter, increased sequentially by $3,000,000 to $51,700,000, and our EBITDA margin increased by 130 basis points to 21.5%. Our EBITDA for the full year, not including the IP transit agreement or Sprint acquisition cost, increased by $70,000,000 to $192,800,000 from $122,800,000 for full year 2024. And the EBITDA margin for this year increased by 790 basis points from 11.9% to 19.8% for full year 2025. We analyze and classify our revenues into four network connection types, and three customer types. Our four network connection types are on-net, off-net, wavelength, and non-core. And our three customer types are NetCentric customers, corporate customers, and enterprise customers. Dave mentioned we will provide some information on Sprint wireline acquired revenue and Cogent Classic revenue. We have been hesitant to separately disclose our revenue performance related to our acquired Sprint wireline business and our Cogent Classic business once the operations have been fully integrated. However, we believe that the following analysis will be beneficial and explain some of the changes in our total combined revenues. The substantial changes in the acquired Sprint wireline revenue base have masked the underlying performance of our legacy Cogent Classic business. So in May 2023, when we closed the transaction, the Sprint wireline revenue base had a run rate of $39,400,000 per month or $118,000,000 per quarter. This acquired revenue base has decreased from that $118,000,000 per quarter at the acquisition date down to $43,000,000 for this quarter. That is a $75,000,000 quarterly revenue decline related to the Sprint wireline revenue base or 64% decline since the deal closed. At deal closing, our Cogent Classic revenue run rate was $155,000,000 per quarter. This quarterly revenue base has increased by 27% or by $42,000,000 from that $155,000,000 prior to close to $197,000,000 for this quarter, the 2025. Additionally, our Cogent Classic revenues increased sequentially by 1.5% from the third quarter of this year, increased year over year by 3.1% from 2024, and increased by 2.3% for full year 2025 over full year 2024. Our consolidated revenue declines have been largely attributed to the reduction in the acquired corporate and enterprise revenues from Sprint. At closing, the Sprint wireline revenues represented a total of 42% of our total revenues and that percentage has materially dropped from 42% down to only 18% of our total revenues at year end. Our total corporate business was 42.7% of our revenues this quarter and 43.9% for the year. Our quarterly corporate revenues decreased by 9.1% year over year and sequentially by 2.3%. For the year, our total corporate revenues declined by 9.7%. At the closing of our acquisition of Sprint wireline in May 2023, the Sprint wireline corporate revenues were 30% of our total revenues. Those Sprint wireline acquired corporate customers now represent only 10% of our total corporate revenues. The Sprint wireline acquired corporate revenue base has decreased from a run rate of $13,000,000 per month or $39,000,000 per quarter at closing to a run rate of $2,700,000 per month or $8,100,000 per quarter at year end 2025. Same analysis for NetCentric. Our total NetCentric business continues to increase and benefit from the growth in video traffic, activity related to artificial intelligence, streaming, IPv4 leasing, and wavelength sales. Our NetCentric business was 43% of our revenues this quarter and 40.3% for the year. Our quarterly NetCentric revenues increased by 10.4% year over year and sequentially by 3.1%. For the year, our total NetCentric revenues increased by 6.8%. At the closing of our acquisition of Sprint wireline, the Sprint wireline NetCentric customers represented 20% of our total NetCentric revenues. Those Sprint wireline acquired NetCentric customers now are representing only 7% of our total NetCentric revenues this quarter. The Sprint wireline acquired NetCentric customer revenue base has decreased from a run rate of $6,000,000 per month or $18,000,000 per quarter at closing to a current run rate of $2,900,000 per month or $8,700,000 per quarter at year end 2025. Lastly, the enterprise business. Our total enterprise business was 14.3% of our revenues this quarter and 15.8% of our revenues for the year. Our quarterly enterprise revenue decreased by 24.7% year over year and sequentially by 5.8% primarily due to reduction in the acquired non-core and off-net low-margin enterprise revenues. For the year, total enterprise revenues declined by 20.3%. At the closing of our acquisition, the Sprint wireline enterprise customers represented virtually 100% of our enterprise revenues as this was a new line of customer for Cogent. The Sprint wireline acquired enterprise revenue base has decreased from a run rate of $20,000,000 per month or $60,000,000 per quarter at closing to a current run rate of $8,800,000 per month or $26,400,000 per quarter at year end 2025. These substantial changes in the acquired wireline revenue base have masked the underlying performance of our legacy Cogent Classic business. Analysis on revenue by customer connection network type. On-net revenue. We serve our on-net customers in 3,579 total on-net buildings. For the year, we increased our on-net buildings by a total of 126 on-net buildings, similar to prior years. Our total on-net revenue, including on-net wave revenues, was $146,400,000 for the quarter, a year-over-year increase of 7.8% and a sequential increase of 0.6%. Our total on-net revenues, including on-net wavelength revenues, increased as a percentage of our total revenue by 400 basis points to 58.4% for this year from 54.4% for full year 2024. Off-net revenue. Our low-margin off-net revenue was $92,900,000 for the quarter, that was a year-over-year decrease of 17.9% and a sequential decrease of 2.3%. Our off-net revenue results are impacted by the migration of certain off-net customers to on-net, and the continued grooming and termination of acquired low-margin off-net contracts. Our total off-net revenues decreased to 40.7% of our revenues for this year from 43.8% for full year 2024. Some comments on pricing. Our average price per megabit for our installed base decreased sequentially by 12% to $0.14 and by 34% year over year, essentially in line with historical trends. Our average price per megabit for our new customer contracts were $0.06, a sequential decline of 18% and 46% year over year. ARPUs for the quarter. Our on-net IP ARPU was $509. Our off-net IP ARPU was $1,234. Our wavelength ARPU was $2,114. Our IPv4 ARPU was $0.30 per address. Churn rates. Our churn rates improved sequentially. Our on-net and off-net churn rates improved from last quarter. Our on-net unit monthly churn rate this quarter was 1.2% compared to 1.3% last quarter. Our off-net unit monthly churn rate was 1.9%, compared to 2.1% last quarter, and our wavelength monthly churn rate has been less than 0.5%, so relatively insignificant. Traffic. Our year-over-year IP network traffic growth accelerated for the quarter. Our IP network traffic for the quarter increased sequentially by 4% and by 10% year over year, and for the total year, our traffic increased by 9%. Sales rep productivity. Our sales rep productivity was 4.1 units this quarter compared to 4.6 last quarter and 3.5 in 2024, as compared to our long-term sales rep productivity average of 4.8. Foreign currency. Our revenue earned outside of the United States was about 20% of our revenues this quarter, similar to prior quarters. Based upon the average euro and Canadian conversion rates so far this quarter, so 2026, we estimate that the FX conversion impact on sequential revenues would be positive about $400,000 and year over year, more significant, about $3,500,000. Customer concentration. Our revenue and customer base is not highly concentrated. Our top 25 customers were 17% of our revenues this quarter, similar to prior quarters. CapEx. Our CapEx was $37,000,000 this quarter and $187,600,000 for the year. And principal payments on capital leases were $8,500,000 for the quarter and $33,800,000 for the year. Combined, those amounts have declined year over year. Comments on debt and debt ratios. Our total gross debt at par, $123,400,000 of finance lease obligations under long-term IRUs, was $2,400,000,000 at year end. Our net debt, total net debt of our cash and our $203,100,000 due from T-Mobile at year end, was $1,900,000,000. Our leverage ratio as calculated under our more restrictive covenants under our unsecured $750,000,000 2027 notes indenture was 6.13. The secured leverage ratio was 3.8. And the fixed coverage ratio was 2.38. The definition of consolidated cash flow, similar to EBITDA, under our $600,000,000 secured 2032 notes indenture includes cash payments under our IP transit services agreement with T-Mobile in the definition and determination of consolidated cash flow. Payments under our IP transit agreement were $100,000,000 for the last twelve months, so that is added to the calculation. Our leverage ratio as calculated under the $600,000,000 secured 2032 notes indenture was 4.67. Our secured leverage ratio was 2.9, and lastly, fixed coverage was 3.12. Bad debt and days sales. Our days sales outstanding was 30 days at year end, the same as last quarter. And our bad debt expense was less than 1% of our revenues for the quarter and for the year. And with that, I will turn the call back over to Dave. Dave Schaeffer: Hey. Thanks, Tad. I would like to highlight a few of the strengths of our network, our customer base, and our sales force. Now for some details around our NetCentric performance. We continue to be a direct beneficiary of a number of trends in the industry, whether it be artificial intelligence or streaming activity. At year end, we are able to sell wavelength services in 1,068 data centers across North America with a provisioning interval of approximately 30 days. At year end, we are selling IP services globally in 57 countries and 1,902 data centers. At year end, we were directly connected to 7,659 networks, that is the largest number of directly connected networks of any service provider on the Internet. 22 of these were peers, and the remaining 7,637 networks were, in fact, Cogent transit customers. Now for some details around our sales force. We remain focused on sales force productivity and are disciplined about managing out underperformers. Our sales force turnover rate was 5.4% a month in the quarter, down from a peak turnover rate of 8.7% during the height of the pandemic, and also below our historical average turnover rate of 5.7% of the sales force per month. At year end, we had a total of 590 quota-bearing reps. Our sales force included 289 sales professionals focused entirely on the NetCentric market, 289 sales professionals focused on the corporate market, and finally, 12 sales professionals focused on the enterprise market. In summary, we have made significant progress in a number of areas. We have improved our revenue trajectory and performance and have returned to sequential revenue growth, which we expect to continue. We are improving our margins and growing our EBITDA due to our diligence in cost reduction and our focus in selling profitable on-net services. Over 80% of our sales in 2025 were for on-net services. We have a clear plan to refinance our 2027 $750,000,000 unsecured notes with a new longer-duration $750,000,000 secured note offering. We are actively working to monetize some of the acquired Sprint facilities, which will further accelerate our delevering and allow us to resume a more aggressive return of capital program to our equity holders. We have effectively now completed the integration of Sprint and Cogent’s network into a unified network and business. We have converted all of the intended Sprint switch sites that we intend to convert into data centers. This program is materially complete and will result in a continued reduction in our capital intensity. We are enthusiastic and optimistic about our wavelength business to add to our product portfolio. Our wavelength services are differentiated due to the uniqueness of the routes, the breadth of our footprint, our efficient provisioning, and aggressive pricing. The reliability that we deliver is unparalleled. We have since inception offered superior services, a broad footprint of revenue-rich locations, expedited provisioning, and market-leading disruptive pricing. That is why Cogent continues to be a market leader in the products that we sell. With that, I would like to open the floor up for questions. Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. At this time, I would like to give an instruction. In order to ask a question, please press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, simply press star one again. Our first question comes from the line of Christopher Joseph Schoell with UBS. Please go ahead. Great. Thank you. Dave, you had previously talked about returning to Christopher Joseph Schoell: sequential revenue growth while sustaining sequential EBITDA growth each quarter. Can you just update us how you are thinking about total company revenues and EBITDA for 2026 as that Sprint mix continues to fall? And as we think about the Waves business scaling in 2026, any guardrails you can share on the number of or revenues you believe are achievable based on what you are seeing in the business right now? Thank you. Dave Schaeffer: Yeah. Hey. Thanks for the questions, Chris. So as we mentioned, we are not in the habit of giving specific quarterly or annual guidance. But I do believe that after the significant runoff in the Sprint-acquired revenues, as Tad pointed out, 64% of the revenues that we acquired two and a half years ago have attrited. And during that period, the Cogent revenues, which represented 57% of the combined company, had grown at 27%. As a result of that, we have had now about 10 sequential quarters of revenue growth. We will be back to positive revenue growth on a quarterly basis from this point forward, and we anticipate that the annual rate of growth on average over a multiyear period will be in that 6% to 8% range. We also have a small amount of further cost reductions that will contribute to margin expansion. But the primary driver of margin expansion going forward will continue to be the revenue mix shift and the focus on on-net services. You know, 80% of our sales in the quarter were on-net. We have improved the base from 47% on-net immediately after closing to 61%. We think that percentage will continue to improve and allow us to achieve that, at minimum, 200 basis point rate of margin expansion. The reality is we did nearly 800 basis points last year. That is probably not sustainable over a multiyear period. But we do have some tailwinds there. And then for your question around Wave, you know, we have the largest North American Wave footprint. We are beginning to gain credibility with customers. We saw an acceleration in our revenue recognition and installations. We expect those trends to continue. And because our wavelength products are virtually all on-net, they are significant contributors to our margin expansion. Another way to kind of look at the markets that we operate in, in our on-net multi-tenant footprint, we today have about a 35% market share. That means we can continue to grow there but, you know, it is harder because we already have over a third of the Cogent customers. In the NetCentric market for IP services, we are the largest provider globally and have 25% market share. We will continue to gain share and grow that business, but, again, you know, with 25% share, it becomes incrementally more difficult. What is encouraging to us about wavelength is the fact that we have less than 2% market share in North America. We are now establishing our credibility with 518 sites now having actual reference customers in them. And nearly 1,100 sites wave-enabled, we think that our rate of wavelength growth will accelerate and help us try okay. Thanks, Chris. That kind of 80/20 mix and incremental business. Christopher Joseph Schoell: Great. Thank you, Dave. Operator: Our next question comes from the line of Gregory Bradford Williams with TD Cowen. Please go ahead. Gregory Bradford Williams: Hey. Good morning. Sam on for Greg Williams. Thanks for taking our questions. Two, if I may. First, the Waves business, you mentioned before that the goal is to get the funnel to Waves funnel to about 10,000. Is the idea to get the funnel to 10,000, it kind of stays in that range because you install the backlog as it comes in? Or do you expect the funnel to grow from there? And, second, on data centers. You mentioned the contract changes that pushed out the LOI for the two data center assets mentioned on the 3Q call. Is the expectation this transaction will still close? And if so, is the $44,000,000 a taxable event, or is there some sort of tax shield from the Sprint deal? Thanks. Dave Schaeffer: Yeah. Let me take those in reverse order. On the LOI that we announced last quarter, the counterparty came back to us and looked for us to provide more than 50% of the agreed-to purchase price in owner financing. Since we had a number of other interested parties who had submitted backup offers on those two facilities as well as a broader set of facilities, we decided to terminate that agreement at our choice, you know, and then reengage with some of those parties. We are far along in those negotiations and hope to be able to announce something soon. And that announcement may be for a broader set of assets. Now to the tax consequences, I will let Tad touch on that. Thaddeus G. Weed: Sure. So as a reminder, we paid only $1 for the Sprint business. So the tax basis is essentially the assumed liabilities, which is minimal in both the buildings and the network that was acquired. However, we have material NOLs this year from the tax bill, from 2025, and given the bonus depreciation deduction, we expect to continue to incur tax losses to offset any gain on the buildings going forward. So while it is a taxable event creating taxable income, I do not think on a net basis that will result in income taxes being paid. Dave Schaeffer: And now, Sam, I will touch on your Wave question. You know, while we were in the process of enabling the footprint, we felt it was critical to give funnel KPIs to show expressions of interest by customers. We have tried to be clear with investors that we do not give funnel data, you know, routinely for our other products, and we are treating wavelengths now as any other product. Now we do, in our investor presentation, typically show both our on-net and off-net conversion rates for the previous quarter. We intend to continue to do that. Our funnel is continuing to grow. But we will not be reporting specific numbers. But we do anticipate with the footprint that we now have and the credibility that we are earning with existing customers, we are starting to see a larger percentage of their wave opportunities being shown to us for bid, and as a result of that, we will close more and see further acceleration in the Waves business. Gregory Bradford Williams: Great. Thank you both. Operator: Our next question comes from the line of Sebastiano Petty with JPMorgan. Please go ahead. Sebastiano Petty: Thanks for taking the question. Dave, just a quick follow-up on the Waves business there. Could you update us on the level of the installed but not yet billed balance in the quarter, did that grow off of the third quarter? Because I think last earnings you probably talked about maybe a few hundred waves that have been installed but not yet billed. And so what is the progress there? And then I have a follow-up. Dave Schaeffer: Yeah. Hey, Sebastiano. So two points. First of all, in the quarter, we actually saw the unit number of waves improve, which is an indication that we were eating into that backlog, but we also have been building an additional backlog. And I would say that the installed but not yet billed base is comparable this quarter to where it was at the end of third quarter. Sebastiano Petty: Got it. That is helpful. And then, I guess, maybe just help us think about, back to the data centers to some extent. I mean, I think you did mention that there were some other data centers that had been in active discussions last quarter. And so while the LOI that you just spoke of, I think from third quarter, that is kind of now been terminated, what was the progress on some of the other, I guess, remaining data centers that were in active discussions? Did those progress? And I guess maybe help us think about, as you look at your debt refinancing and the stack later this year, I mean, yes, you talked about trying to perhaps refinance with $750,000,000 of secured, I mean, is there some level of assumed cash proceeds from asset sales anticipated in the intervening period as well? Which probably helps, you know, maybe reduce the prevailing interest rate you might get at that time. Thank you. Dave Schaeffer: Yeah. So, really, three different questions. The first one is, some of the backup offers on the two facilities that we had mentioned previously cover those facilities and others. So some parties were not particularly interested in moving forward without those facilities potentially being included. So it was not a one-for-one, meaning that there was a backup just for the two facilities that were under LOI. And our view was that while there was no difference of opinion on price, we felt that we would be better served with an all-cash purchase rather than one that had us taking more than 50% of the purchase price in the form of a secured note against the assets. In our refinancing, we are not assuming that there will be proceeds from the data center sales. Although, I do think there will be some proceeds. They are not baked into the point that I made around the timing of the refinancing. You know, our plan is to refinance the unsecured notes with secured notes dollar-for-dollar, no increase or decrease in aggregate face value, and do that in a way that allows us to avoid paying the make-whole, which would be due in June of, anytime between now and mid-June, of about $13,000,000. The final point I will make on that is that the proceeds for the data center sale would be reflected as cash on our entire balance sheet. But the proceeds do not go into Cogent Group, which is the borrower group of both the secured and unsecured debt. We may elect to contribute some of that cash to Group, but we are well within the coverage ratios both in terms of secured total indebtedness, and also in debt service coverage. So there is no requirement for us to contribute that capital, but it would be available at an unrestricted sister entity, Cogent Infrastructure. And therefore, could be used to either inject that capital into Cogent Group, the borrower, or dividend back to Cogent Holdings, which can then be used for the benefit of shareholders. Sebastiano Petty: Thank you, Dave. Thaddeus G. Weed: Thanks. Operator: Our next question comes from the line of Frank Garrett Louthan with Raymond James. Please go ahead. Frank Garrett Louthan: Great. Thank you. So on the data center, I think you had originally kind of focused on $9,000,000 or $10,000,000 per megawatt. I mean, what do you think the market is for that now? And why not maybe try and lease those out and then get a multiple on that value? And then what additional room do you have on pricing and maybe leasing additional IPv4 licenses? Thank you. Dave Schaeffer: Hey. Hey, Frank. Let me take those again in reverse order. In terms of IPv4 leasing, we saw a material acceleration in our leasing but a lower price as we did two wholesale transactions of large blocks. We are continuing both on a retail and wholesale strategy. Today, about 46% of our addresses are leased and approximately 4% of our addresses are allocated to customers at no cost. This is nothing new. It has been part of our strategy to win business since, you know, Cogent’s inception. But we do still have half of our address space that is sitting fallow. We have greatly improved the marketability of that address space by being able to deploy RPKI or additional security features across those addresses, which have made them more desirable to counterparties. And we anticipate continuing to see growth in our IPv4 leasing business. The 44% year-over-year growth in that business, again, was extraordinary. I am not sure we can repeat that. But we will continue to see further growth. Out to the data centers, you know, I think when we established a go-to-market strategy, in 2024 and announced that we were going to begin the capital investment to convert these facilities, we looked at both public trading comps as well as transactions in the private market. If anything, over the past year, data center space has become more scarce and valuations have improved. Now we are fully conscious of the fact that our data centers are repurposed switch sites and not purpose-built campuses, which are different and attract a different customer base. We had done a minimal amount of leasing and have been focused mostly on the sales process. I think we feel that based on the number of sites that are in active discussion and a number of counterparties, that we will absolutely be monetizing through sale a significant portion of the footprint. And in terms of exact price per megawatt, we are not going to disclose that because that would impact our ability to maximize value through these negotiations. But as Tad pointed out, other than the capital that we have invested, we have no real basis in these assets. And, in fact, because the assets sit at Cogent Infrastructure, they represent a negative EBITDA cost that is not burdening the borrower Cogent Group, but is a drag on the entire complex. And by selling these data centers, we both get the cash proceeds as well as a reduction in operating expenses. Frank Garrett Louthan: Great. Thank you very much. Dave Schaeffer: Thanks. Operator: Our next question comes from the line of Brandon Nispel with KeyBanc Capital Markets. Please go ahead. Brandon Nispel: Hi. Thanks for taking the question, and, you know, I appreciate the analysis on the Sprint revenue versus Cogent Classic. Wanted to understand and ask a few questions there. First, maybe just can you help us understand how you came up with that? Because I think in the past, you have said it is sort of difficult or impossible to delineate between the two businesses once you integrated. Second, you know, what changed versus your expectations? I think, Dave, when you closed that acquisition, you said you would probably, you know, be more of a run rate of $350,000,000 versus a $190,000,000 annualized run rate that you gave us today. And then do you think the bottom is? What do you think that business does in terms of revenue in 2026? Thanks. Dave Schaeffer: I will take those again in reverse order. One, I think that business is continuing to deteriorate, both based on the nature of the customers and the discipline that we have applied to ensuring that the services we sell have an adequate margin. While we realized that the off-net enterprise customer base is inherently less profitable, in fact, even after a diligent effort of trying to bring enterprise business on-net, we have only been able to get to an 88% off-net and 12% on-net mix, because many of these enterprises operate globally across a footprint that is just not economic to bring on-net. And therefore, we are going to be saddled with that lower-margin portion of our revenue stream, but we do intend to make sure that the margins are adequate. We have virtually completed the burn-off of the non-core products and the vast majority of the undesirable revenue. But with that said, we are still experiencing significant monthly and quarterly sequential degradation in that business. You know, I, you know, had projected the 10.9% rate of decline that we were seeing from Sprint. We thought that we could maintain that rate of decline and migrate customers to more profitable products. What we, in fact, found was that many of those customers actually intended to go away independent of our acquisition at an accelerating rate, and then that was further compounded by the discipline that we apply. You know? I think it will continue to decline. We will continue to report on it. Now in terms of why we did this and how, it was a very arduous and manual task. We had to go into the nearly 1,300 acquired customers and look at every individual order on an order-by-order basis. It was a very manual process. But I do believe based on concerns I was hearing from investors that this was an extremely important metric that they cared about, and we then basically invested what was effectively a full-time person to do this analysis. We will be able to do this going forward, and I think it gives an investor a better lens on how Cogent’s business is performing versus the acquired business, as well as the mix shift that we are focused on and being more on-net. You know? The way to improve our cash flow going forward is growth in top line, but growth in top line of more profitable business. And, you know, the 80% on-net that we sold in Q4 is actually better than we did the quarter before we acquired Sprint. So in 2023, we actually only were 76% on and 24% off. So this focus on on-net is going to be a significant driver of margin expansion. Thaddeus G. Weed: I will just add one thing to the complexity. So when we acquired the business under the TSA, T-Mobile was billing the customers on our behalf through their billing system. We worked an incredible effort to bring all of those customers into our billing systems. We had one billing system for November 2023. But for that period from close, so May 2023 through October ’23, we were relying on the information that we got from T-Mobile billing on our behalf. So bifurcating that and post billing on our system was complicated. I will just leave it at that. Brandon Nispel: Understood. And if I could just follow up with one quick one, where would you estimate the EBITDA contribution of the Sprint business is today? Dave Schaeffer: I think it is close to zero, but slightly positive, but still far below our aggregate margins. It is probably in the zero to 5% range. But we are working on improving that. That does include, in some cases, price increases. Operator: Sorry. The next question comes from the line of Nicholas Del Deo with MoffettNathanson. Please go ahead. Nicholas Del Deo: Oh, hey. Morning, guys. A couple questions on the data center front. Dave, you were explicit that the LOI fell apart because of the demand to help you finance it? I recall that one of the due diligence items that the counterparty needed to complete was confirming power availability from the utilities. Was that availability confirmed? Dave Schaeffer: It was confirmed by that party, and we have now made the data available to the backup providers to go through the same confirmation process. But the reason why we did not move forward with the previous LOI was not a negotiation on price. They got comfortable with both the power availability and title to the actual land, which were their two big concerns. And they just came back and tried to have us provide them financing even though when we executed the LOI, they had assured us that they had proof of funds and the wherewithal to pay all cash. They were just trying to magnify their returns through owner financing. Nicholas Del Deo: Got it. Are you able to share when the LOI fell apart? And if you do have, you know, new deals in hand soon as you suggested, should we expect the press release to announce those? Or would you disclose those on your next earnings call, some other conference presentation or something? Dave Schaeffer: You know, I think we would probably announce it in a stand-alone announcement. And I do think we anticipate something, you know, in the next couple of months. That is probably as specific as I can be. But, you know, unless it was, you know, a day or two before the earnings call, I think we would probably announce it separately. And then to when the LOI fell apart, it was fairly recent. There was a negotiation. They had made the request. We went back and, you know, were trying to keep them moving forward under the original terms. But, eventually, earlier this year, we became convinced that they were not going to move forward unless we provided financing. Nicholas Del Deo: Okay. Okay. And then can I ask a couple about the legacy Cogent versus legacy Sprint revenue splits? So it looks like, you know, you are talking about a $42,000,000 growth in quarterly legacy Cogent revenue from the time of the deal closing to today. Looks like over that time, your quarterly IPv4 revenue is up about $9,000,000. Waves are now at about $12,000,000. So that would imply that about half the revenue growth was from those two line items and about half came from, call it, the core products that you focused on pre-deal. Is that a fair way to think about it? And is it correct to assume that the, okay. Yeah. Okay. Good. And the T-Mobile CSA revenue, is that in the Sprint bucket? Dave Schaeffer: No. It is not. That was revenue that did not exist previously and was a drag to our revenue. You know, I guess it was about $400,000 for the quarter last quarter, and I think at peak, it was almost $6,000,000. So that was the services we were providing to T-Mobile that we had previously never provided, and it was not to a Sprint customer. It was to T-Mobile, but they have been able to reduce their reliance on our paid services by about 93%, 94%. But that remaining $400,000 is in there. So, in fact, the underlying Cogent revenue growth probably would have been a little better if we had excluded the CSA both initially and today. Nicholas Del Deo: Okay. Got it. That is helpful. And if I can squeeze in one more quick one about the IPv4 leasing revenue. So the revenue was down a little bit quarter over quarter despite the addresses leased being up noticeably. Can you just talk about the dynamics there? Dave Schaeffer: It was actually pretty simple. One of the parties that took the large wholesale block had a small retail block with us. It was the timing of when we terminated that retail agreement and converted it to wholesale in conjunction with a much larger purchase. Nicholas Del Deo: Okay. Got it. Great. Thanks, Dave. Dave Schaeffer: Hey. Thanks, Dan. Our next question comes from the line of Michael Ian Rollins with Citi. Michael Ian Rollins: Thanks. Good morning. Dave, I was curious if you could be more specific on the cost base. I think in the past, you described that there are some duplicative costs that the company is incurring during this integration. How much of those are left and the timing of those savings? And then can you also share with us what the burn rate is for the data center portfolio that you are looking to monetize? Thanks. Dave Schaeffer: Yes. Two very different questions. So first of all, we have achieved the vast majority of the increased cost savings that we had targeted. So if you remember, the initial number was $220,000,000. We then increased that number to $240,000,000. And we probably have achieved over $230,000,000 of that $240,000,000 in cost savings. So there is a small tail, but it is not material. Secondly, we have incurred incremental expenses associated with integration activities. Those will continue throughout this year. They peaked at about an annual run rate of $60,000,000 or about $5,000,000 a month. Today, they are down to probably closer to $3,000,000 a month. But there is still monies being spent on various, you know, integration optimization programs, but we do anticipate those ending by the end of the year. And then to the final question, which is the burn associated with the infrastructure that we acquired from T-Mobile. So the infrastructure business, which includes the data centers and the physical fiber network, has a negative EBITDA of about $140,000,000. We have partially offset that because the IPv4 securitization sits under infrastructure and generates about $60,000,000 of EBITDA. So the infrastructure silo of Cogent’s balance sheet is about negative $80,000,000 of EBITDA. Roughly 20% of that is associated with the data centers, and we are looking to sell a significant portion of that footprint, probably at least 50% of it. Michael Ian Rollins: I am sorry. That 20% associated with data centers, is that 20%? Twenty percent of the— Dave Schaeffer: of the $140,000,000 of negative costs associated with the Sprint assets. You know, these are primarily in three buckets. They are real estate taxes, personal property tax, and right-of-way fees. You know, we got the actual for a dollar, with no revenue. We now are completing the repurposing of that. And as we add high margin, the margins accrue to Group, but we can fund those losses over at Infrastructure through our ability to move money out of the borrower group through Holdings and back down to Infrastructure. In fact, that is how we have been funding those to date, using our restricted payments capacity. And we do have about $350,000,000 of accumulated unused restricted payments capacity at the borrower. Michael Ian Rollins: Thanks. And if I could just follow up real quick with two other items. You know, first, if you look at the corporate business of the heritage Cogent side of the equation, can you share with us a little bit more detail about what is driving the heritage revenue change over the last couple of years and if there is any inflection in trend there? And the same, you know, for NetCentric where it might be a little bit easier to unpack the, you know, IPv4 and the Waves, you know, impact just given the concentration of those products in NetCentric? Dave Schaeffer: Yep. Yeah. So on the NetCentric side, it is easier because we do break out the IPv4 revenue, of which 85% of it is NetCentric. We break out the WAVE revenue, which is virtually all NetCentric, and then the incremental difference is the growth in the core transit product. In the corporate business, there was a mix of DIA and VPN services at Cogent, and then a mix at Sprint. At Sprint, the mix was much heavier VPN than it was DIA. At Cogent, it was much more DIA. We have converted some of the Sprint customers from MPLS to VPLS VPNs, improving the profitability, but we are continuing to support the MPLS product long term. We are trying to move as much on-net as possible. But the underlying growth in the corporate business at Cogent has come mostly from DIA. Operator: The next question comes from the line of David Barden with New Street Research. Please go ahead. David Barden: Hey, guys. Thanks so much for taking the questions. Hey, Dave. How are you doing? Dave Schaeffer: Hey. Good. David Barden: Okay. So thank you for squeezing me in. I have got a few questions. The first one, Dave, and I apologize for asking this, is about your new contract that you have signed in January with the board, and how we, as investors, from the outside, look at maybe how your incentives have changed. You know, you always took stock in compensation. Now you are getting cash compensation. Does that change how you think about the business, how you think about dividends? It would be really helpful to get some insight there. I think the second question, maybe for Tad, is when you talk about secured financing, what specifically are you planning on securing? How much are you planning to secure, and what rates are you expecting? Thank you, guys. Dave Schaeffer: Alright. Great. So first of all, with regard to my contract, you know, I am still in negotiations with the comp committee for some additional equity going forward. The vast majority of my compensation, you know, roughly 80% of it, remains in equity. And that equity does not vest, begin to vest, until 2029. So there is both a long-term cliff and a significant portion that needs to vest. Now, so I do not have to pledge shares going forward, which created a cascade of bad events, you know, I now have cash compensation that will allow me to pay both taxes and, you know, to be able to live, but it is a fraction of my total compensation. In terms of being able to go forward and how I think about dividends, you know, I am as committed to shareholder returns as I have ever been. You know, we have shifted our priorities to get our leverage down. And I think we will be in a position where we will see our leverage rapidly fall and be able to return to either buybacks, dividends at a higher rate, or a combination thereof. I will let Tad touch on the refi, and I may jump in as well. Thaddeus G. Weed: Well, I mean, we are in negotiation with multiple parties. We have essentially only kind of come to terms on the amount, but not with respect to rates and the rest of the terms that we are in the process of negotiating. Dave Schaeffer: Yeah. I think we have a very clear structure that will allow us to do this as secured debt. I do not think this call is the correct forum to, you know, roll that out, but we will in short order. And we also will anticipate that the current secured debt is a pretty good indication of about where our new debt will price. David Barden: Got it. And is there anything about the 2032s that is relevant to kind of rolling the 2027s? Dave Schaeffer: Not really. I mean, you know, the same tests will be in place, we will be governed by the most restrictive covenants, which will probably be the existing ’32s, and that will be, you know, four times secured leverage and a 2x debt service test. David Barden: Got it. And if I could just squeeze in one more, really it, guys. Thank you much. Dave, you have kind of mentioned that the two kind of things that were going to be advantages for you in the Wave market were price and time to provision. I think you said you are down to 30 days. I think you targeted two weeks. Could you elaborate a little bit on the kind of process to get to even better provision timing and where are you do you believe on a price perspective relative to, quote, unquote, market? Dave Schaeffer: Yeah. I will take the price one first. I think we are probably at a 20% to 30% discount. I also believe our advantages are more than you outlined. I think the breadth of the footprint as well as the diversity of the routes and reliability, route diversity, are all really important criteria. And I think the acceleration you are seeing in our Waves business is as a result of that. And then in terms of getting the provisioning window even shorter, I think it will be three things. It will be, one, just continued process refinement as we do more, but 30 days is still generally three to four times quicker than industry averages. A third party actually, just last month, released a report benchmarking us. And in terms of Wavelength Services, out of all of the providers, you know, where several dozen providers, both regional and national, were evaluated, we were actually number two in terms of provisioning already, and I think we will end up being number one just like we are in IP. I think the other thing that is a constraint today is actually pluggable optics lead times have become more challenging just because of, yeah, the pressures that some of the massive data center builds have put on the entire ecosystem for telecom and networking equipment. David Barden: Thank you, Dave. Operator: Thanks. Our next question comes from the line of Michael J. Funk with Bank of America. Please go ahead. Michael J. Funk: Hey. Great, Mike. Yeah. I just had one question, Dave. Going back to the to the sequential revenue growth, you know, I am looking at the street forecast, and consensus is for about $3,500,000 sequential revenue growth in 2026. And this is not why it is the twenty-ish. I think, historically, street forecast revenue growth faster than actual, probably in a combination of constructive commentary from the company, the longer-term revenue growth guidance provided, and relative opaqueness of your business. I do not think it is helpful to have revenue growth so much higher than actual. So you know, maybe help us think about the correct rate of sequential revenue growth in 2026 to reduce some of the volatility that we see in your stock on earnings? Dave Schaeffer: Yeah. And, you know, it is a delicate balancing act because while I want to give clarity and guidance, I am not comfortable in giving quarterly or even annual guidance. You know, I do think that over a multiyear period, that 6% to 8% growth rate is what is absolutely appropriate to model. You know, I am going to have to leave it to every analyst to do their own diligence and channel checks, and we are just not going to give a number that says, $3.5 is too high or too low on a sequential increase in revenue. What we said is from this point forward, we are comfortable that our quarterly reported revenues are going to grow. We think that is going to continue to improve. We think that that growth is going to be driven by high-margin products. And you know, just as you said maybe street numbers were too high on top line, they have consistently underestimated our ability to expand margins. Michael J. Funk: Maybe one more if I could, Dave, sneak it in here. Rep productivity, wanted to touch on that. They have been coming down. What are you doing internally, processes, people, to improve rep productivity? Dave Schaeffer: So the productivity is measured on a units basis. If you have actually noticed, our ARPUs have actually gone up somewhat. We are focused more on on-net services. So there is a higher payout for on-net versus off-net to help get to that 80/20 mix that I referenced. And then third, we continue to train, to promote internally, and try to incent our sales force to grow. But, you know, we do still have 5.4% per month of turnover. That is below the long-term average of 5.7%. The peak of 8.7%. But, you know, our productivity at 4.1 for the fourth quarter was actually about 18% better than our rep productivity in 2024. There is some seasonality to rep productivity. And while, you know, the 4.8 that we average is good, we actually think we can do better than that. And I think you will see that number trend up as, you know, this focus is on on-net and as we kind of roll through the seasonality that I am then— Operator: Great. Thank you, Dave. And, Dave, thanks for taking all the questions today. I really appreciate it. Dave Schaeffer: Yeah. Thanks, Michael. Operator: Our last question comes from the line of Anna with Bank of America. Hi. Thanks very much, Dave. So just on the plan to refi the ’27s sort of dollar-for-dollar with new secured, so, and the prior question on the planned use of proceeds of any data center sale, clearly did not commit to using it to repay debt. So I think you said you have options. But when you reduced your dividend about a, in the last earnings announcement, the rationale that was provided for reducing the dividend was that you wanted to focus on deleveraging. And I think implicit in that was the idea that cash on the balance sheet, potential cash from asset sale proceeds, and potential cash from free cash flow would be used to repay debt. So I just wanted to revisit that concept and, you know, what the plan is to get leverage down. And I believe you cited a target of four times. Dave Schaeffer: Yes. That is absolutely correct, Anna. And we are absolutely committed to not materially changing our return of capital either through buybacks or dividends until we reach four times net leverage. We each quarter have less monies due to us from T-Mobile, which we are counting in our leverage. So that is a bit of a hill that we have to climb. We also are, again, delevering both on a gross and net basis. And I think we will continue to do that. And, you know, holding cash on the balance sheet has the exact same impact on net debt. We have not been specific around a gross debt target. And we may opportunistically even buy back some of our debt if it sometimes trades at a discount, as our current secured debt has. That could also be an effective mechanism to use excess cash to reduce leverage. But we are absolutely committed. I want to leave no ambiguity that we intend to get, for the entire complex, not just the borrower group, down to four times net leverage before we materially change our return of capital strategy. Anna: Okay. And then thanks for that. And then secondly, I know you do not provide specific guidance, but in terms of your ability to generate free cash flow, particularly this year, what is your level of confidence? And, you know, maybe some order of magnitude if you expect it to be positive? Dave Schaeffer: So we absolutely, a growth in EBITDA will produce. You know, you can extrapolate what we have done, and then layer on the contribution margins with the mix shift that I described, and then layer in some of the aggregate savings. Two, we absolutely expect our capital expenditures to go down. Those two things will allow us to generate unlevered free cash flow growth, and it is likely that when we refinance the unsecureds, our coupon will be slightly higher probably than it is today for the current unsecureds, even though we will be converting them to secured. That is highly dependent on how the current bonds trade. But, you know, we do think that even on a levered basis, we will be generating free cash. That is as close to guidance as you are going to get me. Anna: Okay. Okay. Well, thank you, Dave. Dave Schaeffer: Hey. Thanks, Anna. Operator: And that concludes our question and answer session. I will now turn the call back over to Mr. Dave Schaeffer for closing remarks. Dave Schaeffer: Well, first of all, I want to thank everyone. I know it was an hour and a half. We have actually gone longer. I thought this was somewhat unique in that we added a lot more granularity to our disclosures around the trajectory of the Sprint-acquired business and also the relative mix of products. You know, I think in summary, there are three really important objectives for Cogent to build value. One is to grow top line. Two, to continue to expand margins. And then three, eliminate any overhang of a debt maturity that is, you know, seventeen months away. And I think on all three of those vectors, we are and will continue to demonstrate meaningful progress. Thanks, everyone, and we will talk soon. Take care. Bye-bye. Operator: This concludes today’s conference call. You may now disconnect.
Operator: Good morning, and welcome to the RE/MAX Holdings Fourth Quarter 2025 Earnings Conference Call and Webcast. My name is Tracy, and I will be facilitating the audio portion of today's call. At this time, I would like to turn the call over to Joe Schwartz, Senior Vice President of Finance and Investor Relations. Mr. Schwartz, please go ahead. Joe Schwartz: Thank you, operator. Good morning, everyone, and welcome to RE/MAX Holdings Fourth Quarter 2025 Earnings Conference Call. Please visit the Investor Relations section of www.remaxholdings.com for all earnings-related materials, including our standard earnings presentation and to access the live webcast and replay of the call today. . Our prepared remarks and answers to your questions in today's call may contain forward-looking statements. Forward-looking statements include those related to agent count, franchise sales and open offices, financial measures and outlook, brand expansion, competition, technology, housing and mortgage market conditions, capital allocation, credit facility, dividends, share repurchases, litigation settlements, strategic and operational plans and business models. Forward-looking statements represent management's current estimates. RE/MAX Holdings assumes no obligation to update any forward-looking statements in the future. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ materially from those projected in forward-looking statements. These are discussed in our fourth quarter 2025 financial results press release and other SEC filings. Also, we will refer to certain non-GAAP measures in today's call. Please see the definitions and reconciliations of non-GAAP measures contained in our most recent quarterly financial results press release, which is available on our website. Joining me on our call today are Erik Carlson, our Chief Executive Officer; and Karri Callahan, our Chief Financial Officer. With that, I'd like to turn the call over to them. Erik? W. Carlson: Thank you, Joe, and thanks to all of you who have joined us today. In 2025, we built a strong strategic foundation, and we're beginning to see the payoff. We've made great progress in enhancing our brand and our overall value proposition and we view 2026 as a year of tremendous opportunity for our company. Our franchisees, our agents and our loan originators. We accomplished all of this despite 2025 being third consecutive year of a historically slow housing market. began with a major win. As in January, we had the largest brokerage conversion in RE/MAX history, an Ontario family of visionary entrepreneurs and their nearly 1,200 agents joined RE/MAX Canada adding to the market-leading presence we enjoy from coast to coast. Engagement throughout the RE/MAX network reflects growing enthusiasm for our strategic investments in the brand, reaffirming the strength of our overall direction. At the same time, we continue to operate the business with discipline as evidenced by our fourth quarter profit and margin performance, which came in at the high end of our expectations. Given the productivity and professionalism of our network and the resilience of our model, we believe we're well positioned to capitalize on a recovering market. We're continuing to support our affiliates in growing their business and increasing their profitability. In terms of housing data and consumer insights, despite a typically slow start of the year in January, we continue to see the housing market normalizing in various ways, and that is a healthy development. According to our latest RE/MAX National Housing Report, inventory and new listings remain higher than a year ago, and the overall fundamentals suggest we'll have a more balanced market this year. Across many markets, we're seeing early signs of a more even playing field. Seller concessions are becoming more common. The negotiations are more thoughtful. And interest rates are trending downward which helps support buyer activity. We also believe some recent policy proposals could prove to be constructive to housing if effectively implemented, including those aimed at increasing the inventory of single-family homes available to individual homebuyers as well as those that aim to lower the 30-year mortgage rate. Over time, we should also see the lock-in effect of low mortgage rates continue to ease. And the results of our recently published consumer survey show that despite delays caused by affordability and broader economic uncertainty, 88% of prospective buyers still say they're likely to purchase a home in 2026. Market conditions have slowed time lines, but not the underlying demand. Also, buyers said they're looking for more than a house. They want a sense of community, too. That plays directly to our strengths as the most trusted real estate brand in the United States and Canada. RE/MAX agents are local experts who skillfully help consumers navigate complexity evaluate trade-offs and make confident long-term decisions. Turning to our operational performance. As of December 31, our overall worldwide agent count hit another all-time high at over 148,500 agents. The growth of RE/MAX agent base outside the U.S. and Canada continues to fuel new records. And now continue to make progress in stabilizing agent count, as evidenced by our best fourth quarter performance since 2021. In a difficult market, Canadian agent count finished the year relatively flat to 2024, but we started the year with tremendous momentum. It's also worth noting that the reach of our global network enables us to serve an unparalleled number of consumers. In this decade alone, since January 1, 2020, RE/MAX agents have closed over 10 million transaction sides worldwide. It's an incredible achievement. And as we continue to evolve our strategies, we're exploring new ways to lean into the tremendous opportunity this global sales power presents. As I mentioned earlier, in mid-January, we announced the largest conversion and history of our company. A family of visionary entrepreneurial real estate leaders, Vivian Risi and her children, Michelle and Justin chose RE/MAX for their 17 office Toronto-based operation, largely to deliver a wider range of tools and opportunities to their nearly 1,200 agents, both for now and into the future. We're thrilled to welcome the Risi's and their talented agents to our network. The Risi also chose RE/MAX for our global footprint, robust referral network and powerful marketing and technology platforms. These advantages should reinforce their agent's productivity and growth potential in a dynamic real estate landscape. This conversion demonstrates that the enhancements to our overall value proposition are working. As brokers both in and beyond our network recognize the power of our current competitive advantages and the momentum that we're building. This landmark conversion is just the beginning. We're increasingly encouraged by our pipeline of conversion, merger and acquisition candidates across the U.S. and Canada. We have a strong slate of sizable opportunities we plan to close and announce in the months ahead. We believe much of the excitement surrounding the RE/MAX brand is driven by the tremendous team effort that has reinvigorated our value proposition. Our innovations are centered on enhancing our competitive advantages and helping agents win more business save time and make more money, which in turn helps increase broker profitability. The new economic models we launched last year, Aspire Ascend and Appreciate continue to provide brokers with greater flexibility and a wider framework for recruiting and retention. While Q4 is always seasonally challenging, our Q4 recruitment rate outpaced last year's building on the positive trends from late Q2 and Q3. The benefits of developing and launching these new options last year should continue to emerge over time. Notably, adoption of Aspire is already over 2,000 agents and the program's educational and technology elements position these newly recruited agents for sustained careers with the network. Announced several months later, Ascend and Appreciate continue to see increasing adoption as word grows about the value they offer. Less than a year after launch, both are still trending upward. We also continue to invest in our digital marketing assets. Our 6-month Marketing as a Service platform continues to gain traction, and the results are very encouraging. For example, listings that are promoted through our platform are delivering 3x more views, 6x more active users and 5x more actions compared to similar listings that have not been promoted on remax.com. These are just some of the initial findings, but they underscore of the product's ROI and value to RE/MAX agents. Overall, the platform is scaling in line with expectations, showing resilient demand, rising paid adoption and strong effectiveness, all of which positions us for continued growth throughout the year ahead. And we've launched a newly designed remax.com and are launching a redesigned remax.ca in Canada. They both incorporate personalized content, AI capabilities that deliver better consumer engagement. Making stronger connections to agents while also furthering our monetization strategies. For example, agents can now turn listings into AI-generated videos with the click of a button. Additionally, consumers can leverage AI to redesign home exteriors and interiors of property photos on our websites, improving engagement and extending the amount of time they spend on site. Our RE/MAX Media Network continues to build meaningful momentum with a healthy mix of programmatic and direct sourcing Revenue this year is pacing ahead of forecast, which is an encouraging sign. Brands are clearly interested in taking part. So there's an ample reason to expect advertising revenue from the RE/MAX Media Network to increase significantly this year. Additionally, our lead top tier curation program continues to deliver a better agent and consumer experience as conversion rates and corresponding revenue contributions are exceeding our initial expectations. Also from a lead source perspective, we're introducing a golf lifestyle designation. This program will enable RE/MAX agents to be certified as a real estate professionals who understand club, course and real estate dynamics unique to golf properties. Our new program will include training, certification and real estate lease that position participating RE/MAX agents as trusted advisers for golfers looking to find new homes and new communities. Let me now spend a moment on important developments within our mortgage business. As we look across the broader housing and mortgage landscape, one of the consistent themes we see is the need for flexibility, particularly in how independent operators structure their business in these changing market conditions. With that in mind, we rolled out a new franchise royalty fee model earlier this year across the Motto network. The goal here is simple. To better align our economic structure with the realities of today's market was supporting long-term growth with our franchisees and the model brand. This new model reduces fixed cost through a lower flat feet and introduces a transaction-based component that scales with performance. It's designed to provide more flexibility, encourage operational excellence and support sustainable growth over time. This is not a force transition. Existing offices can opt into the new new model if they believe it benefits their business, while new franchisees will follow the updated structure moving forward. That optionality is intentional. Different stages, and we want to meet them where they are. From a strategic standpoint, this approach mirrors the thinking behind our RE/MAX fee model options, aspire send and appreciate which were designed to give RE/MAX affiliates more choice, more control and better alignment with how they choose to grow their business. As part of our continued focus on strengthening the long-term health and competitiveness of the Motto brand,we deliberately chose to terminate a number of franchisees during the fourth quarter. These decisions were rooted in our responsibility to maintain a high-quality system that reflects the standards and expectations required to deliver a consistent borrower experience. We continue to see significant opportunities within our mortgage business. These include leveraging the new fee model to grow the Motto base, drive greater adoption of wemlo processing, both from inside and beyond our motto network as well as exploring additional ways to capitalize on the hundreds of thousands of transactions RE/MAX agents close annually in the United States and Canada. We're also exploring possibilities around the thousands of leads that flow through our digital platforms. Applying both the real estate and mortgage, our fourth quarter achievements and enhancements reflect a concerted focus on strategic growth network strength and a differentiated value for franchisees, agents and loan originators alike. As we look across both industries, the pace of change requires brands to offer scale without sacrificing local expertise. All we're providing that constant support and value to our customers. And we continue to lean into our RE/MAX and Motto networks and the enthusiasm we see is very real. That enthusiasm has been fueled by the energy of new leaders who have recently joined the team. One of those inspirational leaders is Chris Lim who we just promoted to President and Chief Growth Officer of RE/MAX. Over the past 13 months, Chris has helped to modernize operations, increase support services, expand our value proposition and elevate the way consumers perceive this global brand, especially on our digital platforms. He brings a creative upscale mindset to every project and played a direct role in several major brokerage conversions, most notably in Hawaii and Ontario. Chris, congratulations. As we look toward the rest of 2026, we remain focused on executing our comprehensive growth and revenue strategy. Last year, we brought a new leadership, launched new products and services develop new economic models and strengthened the foundation for our future. This year, we're focused on driving adoption, managing outcomes and ensuring that our company and networks continue to win. With that, I'll hand it over to Karri. Karri Callahan: Thank you, Erik. Good morning, everyone. As Erik said, we are encouraged by our fourth quarter operating results and overall financial performance. Profits for the quarter landed at the high end of our expectations, and our revenue performance was solid despite a challenging housing market. Some of our notable quarterly financial highlights included total revenue of $71.1 million adjusted EBITDA of $22.4 million, adjusted EBITDA margin of 31.5% and adjusted diluted EPS of $0.30. Looking closer at revenue, excluding the marketing funds, revenue was $53.6 million, a decrease of 0.4% compared to the same period last year, driven by a decline in organic revenue of 0.4% and flat foreign currency movements. The decline in organic revenue was driven mainly by a reduction in U.S. agent count and the impact of recently introduced incentives, including the Aspire program partially offset by an increase in broker fees and revenue contributions from our new initiatives, including marketing as a service and from the monetization strategies from our flagship website. Fourth quarter selling, operating and administrative expenses increased $1.6 million or 4.4% to $37.3 million. This increase was primarily due to losses on sale and disposal of assets an increase in expenses from the timing of other events, partially offset by a reduction in certain personnel-related expenses. The resilience of our franchise economic model and our ongoing evaluation of every aspect of our business, has resulted in our ability to continue to delever despite a challenging macro and housing environment. Our total leverage ratio decreased to 3.12x as of December 31. A continuation from last quarter, our total leverage ratio remains below the 3.5x level, affording us greater flexibility from a capital allocation perspective. And importantly, we currently expect to remain below that 3.5x level throughout the year. From a capital allocation perspective, our priorities remain unchanged. We're strategically reinvesting in the business, and we'll continue to build our cash reserves. Now on to our guidance. Our first quarter and full year 2026 outlook assumes no further currency movements, acquisitions or divestitures. For the first quarter of 2026, we expect agent count increased 1.5% to 2.5% over first quarter 2025, revenue in a range of $69 million to $74 million, including revenue from the marketing funds in a range of $16 million to $18 million and adjusted EBITDA in a range of $14 million to $17 million. And for the full year 2026, we expect agent count to increase 1.5% to 3.5% over full year 2025, revenue in a range of $285 million to $305 million, including revenue from the marketing funds in a range of $66 million to $70 million and adjusted EBITDA in a range of $90 million to $100 million. With that, operator, let's open it up for questions. Operator: [Operator Instructions] Your first question comes from the line of Nick McAndrew with Zelman & Associates. Your line is open. Please go ahead. Nick McAndrew: Questions. Maybe just to start, I think as the earlier Aspire cohorts moved beyond kind of the onboarding phase, can you just talk about what you're seeing with those earlier cohorts just in terms of agent developments or productivity as some of those agents move through the program? Karri Callahan: Sure. Nick, we continue to be really excited about the Aspire program. We know that we see significant reduction in the churn of our agents as we move them up the productivity cohort. . And as we've seen in the -- it's really early that, that cohort is very small. But as those agents have gone through, we are seeing some upticks in productivity as they go through and they do the training and they get engaged with our tools, we are seeing some improvement in productivity, and we're also seeing improvement in retention within that cohort. I think importantly, as Erik said in the scripted remarks, in addition, the ASPIRE program in and of itself is really spurring recruiting activity for our brokerages. So the optionality that the program offers, I think, is another thing that has really been beneficial as we've seen the continued stabilization from a U.S. agent count perspective here in the fourth quarter, best fourth quarter since 2021 and a continued trend from Q2 and Q3. Nick McAndrew: Got it. And I guess, second, just a follow-up. Congrats on the 1,200 agent Canadian addition. And I'm just curious on whether it's the new comp structures, brand positioning or tech offerings, like anything to call out on just what's resonating with that agent base that's coming through RE/MAX and just any factors that might have led them to end up choosing remote. W. Carlson: Yes, Nick, this is Erik. And I appreciate you saying choosing RE/MAX because that's actually the way we look at it. And I think it's a combination of all of the above, to be quite frank. I mean, about a year ago, obviously, we launched the brand modernization. We've done a lot of really hard work on our value proposition. We've showed up with different people from a leadership perspective. we're really leaning in to the network. And as we're talking to prospective clients about the RE/MAX opportunity, it's not only just about tech and our education and the community, it's our global footprint, right? So 148,000 plus agents in 120 countries. -- real estate today, although it's still very local, it is worldwide. And so we're really proud of, obviously, the footprint that we have, but the tools and processes that we're putting in place to help agents and consumers find great agents around the world, right? So our MAX referral program is continuing to see improvements and additional transactions, which is very healthy. So I think the RECs are just such a tremendous family and well respected, obviously, in real estate, we're super excited that they chose RE/MAX as the next partner for [indiscernible] tomorrow. There's simply an outstanding group, and we're seeing very high retention rates right now with agents which tells us, one is Vivian and her team have a lot of respect, but also agency value in our brand and what it represents today and in the future. Operator: Your next question comes from the line of Dae Lee with JPMorgan/please go ahead. Dae Lee: Great. I guess my first one is on -- there's a lot of talk about the tutor AI-driven automation to change the industry. I'm curious like how like what are franchises in redefining optimistic about AI? And how are they responding to the automation derive. . W. Carlson: Yes. Dave, it's Erik. I'll give you a little bit of context on how we think about it and some of the feedback that we're getting from our network. I think AI for the sake of is a mistake. And I think that we're trying to be very purposeful on how we deploy automation technology, and obviously, some of that is our network, and I think just real estate agents and/or brokerages in the industry are very curious about it. there's a sense of, hey, I need to lean in. There's a sense of I'm scared of it. What we try to do here at RE/MAX is be purposeful in our approach. And so you're seeing us deploy tools and services like Max AI which resides on remax.com and CA, which helps nurture leads and helps consumers find the right real estate agent within the RE/MAX network. You're seeing us use tools from our partners at old trail like [indiscernible] which helps to really automate workflow within the e-mail system. You'd be surprised how many agents still use e-mail as a primary method to correspond with consumers, whether on the buy side or the sell side and get business done. So automate some of that work. At a very high level day, like our purpose here is to help agents win listings and win more business, do it in less time and make more money. And so when we think about AI, we think about how we can deploy AI to help achieve those 3 goals. So you're seeing us deploy whether it's through kind of our CRM and symptom and helping folks nurture their contacts, whether it's in back-office-type operations, to help automate and take cost out of the business or whether it's with consumers to help engage and find the right property, the right listing, the right agent for them to be successful. So we're -- I would chalk it up as we're taking a very purposeful approach here, but really leaning into our North Star to help agents be more successful in the market. Dae Lee: Got it. Helpful. And then as a follow-up, I'm encouraged to see momentum into 2026. I'm just curious, what are the key swing factors in the high versus the low end of your guide you're 20x revenue guide? And which KPI should we be tracking to see revenue tilt to the high and that is just positive growth for the year? And does that include U.S. business returning to positive growth as well. Karri Callahan: Yes. Great question. It's Karri. So I think we've been -- as Erik said, we try to take a purposeful approach to everything. I think that there's definitely some opportunity to push to the higher end. Obviously, we're in the -- we just finished the third straight year of a pretty depressed housing cycle. -- anything from a macro perspective would definitely be a tailwind and pushing us up to the higher end of that guide. We obviously can't control what's happening from a macro perspective. But I think we've done a great job really reinforcing the value proposition and really focusing on what we can control. So further stabilization and kind of growth from a U.S. agent count perspective. Erik mentioned in the scripted remarks, some momentum in the pipeline on the coming months in terms of additional conversions mergers and acquisition activity, that would be a tailwind in terms of acceleration beyond what we see today. And then with respect to some of our new monetization initiative, marketing as a service as well as our digital channels monetization opportunities. we're seeing significant growth year-over-year. But if that outpaces kind of our current forecast, which we're already pleased with the growth that we've included, that those are other levers that could push us to the high end of the range. . Operator: Your next question comes from the line of Tommy Mcjoint with KBW. Please go ahead. Thomas Mcjoynt-Griffith: Question on the Aspire program and the impact on the broker fee revenue line. Just wanted to get a sense of the magnitude of how much it impacted it this quarter. And then secondly, it seems like you're going to recognize that ratably throughout the year. So is there a chance for a major kind of true-up at year-end if volumes end up drastically different than you're expecting? Or how could that impact that? . Karri Callahan: Yes. Tommy, it's a great question. As Erik mentioned on the scripted remarks, we do have about 2,000 agents now that are on that and so we're seeing good adoption. And as I mentioned earlier, I think importantly, more than anything, we're also just the program offer optionality. In terms of the broker fee impact to it was not that significant, kind of a couple of hundred thousand dollars, maybe $0.5 million. With respect to just kind of how the activity will get recognized, it's just going to smooth things out a little bit over time. So we're going to start to see a little bit less seasonality in the broker fee line. To the extent that participation in that program grows. So as there's more participation, we can provide more guidance. So there's a little bit of impact in Q4, but it really wasn't that pronounced. Thomas Mcjoynt-Griffith: Okay. Got it. And given RE/MAX's sort of vast network and a number of agents, . Operator: Your next question comes from the line of [ Valentin Alvar ] with Jones Trading. Unknown Analyst: So just regarding your disclosure on the earnings release relating to selling, operating and admin expenses, can you give us some idea of ongoing versus onetime cost pressures, just to gather an idea of the run rate. Karri Callahan: Sure. also, it's Karri. So with respect to kind of what was in the information. There was a couple of things that were a little bit unusual and onetime in nature. We did have about $1 million charge with respect to some sale and disposal of assets. That won't continue into the future. And so as we think about what that kind of looks like going forward, the year-end kind of Q4 run rate of SONA looks actually to be pretty consistent into Q2, Q3 and Q4 of this year once you normalize for that. Keep in mind that Q1 is always a little bit higher for us. We're really excited for next week, which is our annual agent convention in Las Vegas. We've got over 60 countries represented and a lot of agents coming from all over the world to really experience the momentum that we're building from a RE/MAX perspective. But that does result in a little bit of increased investment in Q1, and that should look pretty consistent to Q1 of '24 and Q1 of '25. Unknown Analyst: Got it. for the additional info there. Switching gears a little bit. With where the stock is at today and the mortgage rates remaining near the 6% mark, are you more likely to engage in additional share repurchases versus Q4 also? Karri Callahan: Yes, Valentin, it's a great question. I think when you look at our model from a recurring fee perspective as well as the significant earnings to free cash flow generation that the franchise model is able to generate -- we're really pleased with the fact that we're from a leverage perspective below that 3.5x level for a couple of quarters now. So we do have some increased flexibility now as it relates to return of capital. So I think we're taking -- just given what's happening from a macro perspective, we're taking a prudent approach to capital allocation. But given where we are from a leverage perspective, I think capital allocation is definitely more back on the table than it's been, and we're looking to balance that with reinvesting back into the business and making sure that we can allocate capital to growing the business in a smart way that will generate the highest return. Operator: [Operator Instructions] W. Carlson: Operator, if I may, this is Erik. And Tommy, I know you got cut off on your question. I think we heard a little bit about private listings, happy to address. With the private listing discussion, our view really has not changed. We feel like transparency, broadest distribution for listings gives buyers and sellers the best outcome. As we've talked about a little bit before, obviously, we do have a vast network around the world. If there was a case where we had to participate in a broader private listing type network. I mean we'd be well prepared to do that. But philosophically, we think that the consumer comes first. It is the ultimate North Star not only for our brand but for our agents and our brokers serving buyers and sellers. And so we like the idea of transparency and the broadest distribution of listings. So sorry, you got cut off, Tommy, but I hope that helps. Operator: There are no further questions at this time. I will now hand the call back to Joe Schwartz, Senior Vice President of Finance and Investor Relations. Mr. Schwartz, please go ahead. Joe Schwartz: Thank you, operator, and thank you, everyone, for joining the call today. We hope everyone has a great weekend. Operator: This concludes today's call. Thank you for attending. You may now disconnect.
Operator: Ladies and gentlemen, thank you for joining us, and welcome to the Telephone and Data Systems, Inc. Enderae Fourth Quarter 2025 Operating Results Conference Call. After today's prepared remarks, we will host a question and answer session. If you have dialed into today's call, please press 9 to raise your hand and 6 to unmute. I will now hand the conference over to John Toomey, Treasurer and Vice President of Corporate Relations. John? Please go ahead. John Toomey: Good morning, and thank you for joining us. The presentation we prepared to accompany our comments this morning can be found on the investor relations sections of the TDS and Array websites. With me today in offering prepared comments are on behalf of TDS, Walter Carlson, President and CEO; Vicki Villacrez, Executive Vice President and Chief Financial Officer; on behalf of TDS Telecom, Ken Dixon, President and CEO of TDS Telecom; Chris Bautfeldt, Vice President of Financial Analysis and Strategic Planning of TDS; and on behalf of Array Digital Infrastructure, Anthony Carlson, President and CEO of Array. This call is being simultaneously webcast on the TDS and Array Investor Relations websites. Please see the websites for slides referred to on this call including non-GAAP reconciliations. TDS and Array filed their SEC Forms 8-K including the press releases earlier this morning. As shown on slide two, the information set forth in the presentation and discussed during this call contain statements about expected future events and financial results that are forward-looking and subject to risks and uncertainty. Please review the safe harbor paragraphs in our press releases and the extended version included in our SEC filings. I will now turn the call over to Walter Carlson. Walter? Thanks, John, and good morning, everyone. We are pleased to report to you today our fourth quarter performance, review the progress made on our priorities for 2025, and share our goals for the future. As set forth on slide three, 2025 was a transformative year. Walter C.D. Carlson: We completed the largest transaction in our company's history and significantly strengthened our balance sheet. By divesting our wireless operations, we believe we have now positioned Array for success as a growing tower company and we now have the financial capacity to support TDS Telecom as it continues to expand and grow its fiber operations. Our speakers this morning will highlight many of these accomplishments in more detail shortly. But let me summarize by saying that the TDS team of associates accomplished much in 2025 during a year of significant change. As we look forward to 2026, we have five fundamental objectives for the enterprise as outlined on slide four. We plan to continue our efforts to strengthen the TDS corporate and capital structure. Vicki will share more details on those topics in a moment. We will continue to grow TDS Telecom's fiber business and work to delight our customers. Ken and Chris will share with you updated fiber address goals and other success targets. We intend to support Array's success as a tower company and continue our efforts to successfully monetize Array's remaining spectrum holdings. Anthony will highlight Array's expectations for the year. We also intend to strengthen TDS' culture while delivering strong operational and financial results across all of our businesses. I want to personally thank every associate across the enterprise for their contributions in 2025 and look forward to all that we will accomplish together in 2026. I will now turn the call over to Vicki. Vicki L. Villacrez: Thank you, Walter, and good morning, everyone. As I shared last quarter, across the enterprise, we continue to focus on moving the announced spectrum transactions forward as well as executing on our capital allocation plans. Slide five highlights our progress in these areas. In January 2026, Array closed on the announced spectrum sale to AT&T for $1,018,000,000. Of the special dividend or $726,000,000. Additionally, in January, TDS repaid the last of our outstanding term loan debt of $150,000,000. With this further debt reduction and cash from the proceeds of the closed transactions, we are pleased with the flexibility this affords us to execute on our capital allocation priorities. As a reminder, our TDS capital allocation plan has three key elements. First, continued investment in fiber. With the proceeds from the special dividend related to the AT&T spectrum, we are increasing our fiber goals. As you will hear from Ken in a moment, while we are still in the early stages, we have identified 300,000 additional fiber edge out service address opportunities across approximately 50 new communities where we believe we can be first to market and achieve returns in the mid-teens, and we are increasing our marketable fiber service address goals. Second, as it relates to M&A, we continue to evaluate fiber opportunities in a financially disciplined, accretive, business case-driven fashion. Third is shareholder returns. In the quarter, we invested $67,000,000 to repurchase 1.8 million TDS common shares bringing our total 2025 repurchase volume to 2,800,000. As announced in November, the TDS board authorized a $500,000,000 increase to the then existing share repurchase program. As of the 2025, we had $524,000,000 remaining on this open authorization. The company intends to continue to be disciplined in the timing of its repurchase activity balancing the needs of the business and market conditions as we move forward. Looking back at 2025, we made great progress in transforming our businesses. We continued to unlock significant value and generated significant returns for our shareholders, particularly in the form of transaction-related special dividends at Array. I am incredibly pleased with how we have positioned the businesses for the future and aligned our capital allocation strategy with our growth opportunities and return to shareholders. Thank you. And now I will turn the call over to Ken Dixon to discuss TDS' fiber business. Thank you, Vicki, and good morning, everyone. Kenneth Dixon: I would like to provide an update on our fiber strategy progress. We still have work to do to improve execution, modernize our systems, and continue to scale our build and install operations. The foundation we have built positions us well for the future. Before I talk about where we are headed, I want to share our 2025 full year and fourth quarter performance. As set forth on slide seven, in the fourth quarter, we added 58,000 new marketable fiber addresses, up sequentially over Q3 and up 39% year over year. For the full year 2025, we delivered 140,000 new marketable fiber addresses and expanded our broadband footprint. Execution improved throughout the year. We delivered 40,000 marketable addresses in the 2025 and 100,000 in the second half, showing momentum as our construction engine accelerated. The fourth quarter was our strongest build quarter since 2023, and it was supported by record high construction crew counts. We did not reach our 150,000 address goal. However, we continue to make progress. We know what it will take to reach the level of output that we are targeting and we are focused on carrying this progress into 2026. Looking at sales, in each quarter, we delivered sequential growth in residential fiber net adds. We ended the fourth quarter with approximately 15,000 fiber net adds, up 11% from the 2024, bringing us to approximately 45,000 residential fiber net adds for the year. Driving sales and increasing penetration across our fiber markets remains a top priority as we work to achieve our long-term objectives. We also made progress in our business transformation program in 2025. Through process improvements, organizational alignment, and targeted investments in best-in-class tools, we are strengthening the efficiency and agility of our operations, all with the focus on providing a superior customer experience. These improvements will be foundational to delivering consistent scalable performance as we continue expanding our network. We are continuing to optimize our portfolio to strengthen our strategic focus. The divestitures in 2025, which included the mid-year sale of Colorado and, in December, the sale of our Oklahoma ILECs, have concentrated our footprint in markets with an economic path of fiber. Turning to slide eight, the progress we made in 2025 and the availability of additional capital to invest gives us confidence to expand our long-term fiber goals. We have identified 300,000 fiber address opportunities in new edge out markets that are increasing our long-term goal from 1.8 to 2,100,000 fiber addresses. With that updated target in place, let us move on to the priorities that will guide us in 2026. Slide nine sets forth our TDS Telecom priorities for 2026. First, we are focused on delivering our fiber build plan. In 2026, our goal is to deliver between 200,000 to 250,000 new marketable fiber addresses as we ramp up construction in the EACAM markets, continue expansion in growth markets, and enter targeted edge out communities. This work is critical. When we execute the build plan, we can see sales opportunities in these key markets. Second, we are focused on driving sales and expanding our fiber customer growth. We delivered approximately 45,000 residential fiber net adds in 2025. In 2026, we expect to increase that number by driving higher sales in both new and established fiber markets. Third, we are committed to creating a best-in-class customer experience. That means improving every interaction from installation to service to long-term retention and ensuring the systems and processes behind these touch points support a seamless high-quality experience. Fourth, we will continue executing on business transformation. The work underway will streamline processes and modernize systems in 2026, positioning us to operate as a faster, more efficient, fiber-first organization. As part of this work, we remain on track to deliver $100,000,000 in savings by year end 2028. These priorities align the organization for future success. I will now hand it over to Chris to walk through our 2025 results and our financial outlook for 2026. Chris? Christopher “Chris” Bautfeldt: Turning to slide 10. The chart on the left shows the last five quarters of fiber service address delivery, which strengthened throughout the year. Our address cadence quarter over quarter reflects seasonality, but it also highlights the actions we took to increase crew counts in the second half of the year. In addition, EACAM activity contributed to this acceleration as those builds started to ramp in the fourth quarter. As Ken mentioned, Q4 represents our highest production quarter since 2023, demonstrating the momentum we are seeing in our fiber build engine. On the right, you can see the continued expansion of our fiber footprint. Over the last three years, we have nearly doubled the number of fiber addresses across our markets. Turning to the next slide, the chart on the left shows the last five quarters of residential fiber net adds. In the fourth quarter, we delivered over 15,000 residential fiber net adds, representing year-over-year as well as sequential improvement. This growth reflects the investments we have made in fiber address delivery during the year. The chart on the right highlights the growth of our residential fiber connections, which have also nearly doubled over the last three years. This growth is driven by ongoing footprint expansion, as well as copper to fiber conversions. We expect fiber connections to grow as we continue to expand our fiber footprint. Turning to slide 12, average residential revenue per connection was up 2% year over year. As we have seen across the industry, fewer broadband customers are choosing to bundle with video, which puts downward pressure on this metric. In 2025, we indicated that we expected more modest revenue per connection growth, and our results this quarter remain consistent with that outlook. The chart on the right shows our year-over-year revenue comparison. As a reminder, the markets we divested accounted for $3,000,000 of the revenue decline in the quarter versus prior year. Additional detail on the recent divestitures is available in the trending schedule on our investor relations website. Slide 13 focuses on full year and quarterly financial results. Total operating revenues decreased 1% for the quarter and 2% for the full year. Excluding the impact of divestitures, revenues were flat year over year for both periods. This reflects continued secular declines in our cable and copper markets offset by growth in fiber connections and modest improvement in revenue per connection. Cash expenses decreased 4% in the quarter but were up 1% for the full year, reflecting the impact of our transformation efforts in the second half of the year. As a result of lower expenses, adjusted EBITDA improved 6% in the fourth quarter. For the full year, adjusted EBITDA declined 6% primarily due to the impact of divestitures as well as the first quarter's noncash adjustment to stock-based compensation. After a big fourth quarter, full year capital expenditures were $406,000,000 as we prioritized investments in our internal construction crews and equipment to support future builds. On slide 14, we provide our guidance for 2026. We are forecasting total telecom revenues of $1,015,000,000 to $1,055,000,000. This reflects top line growth from our fiber investments, offset by industry wide declines in video, voice, and wholesale revenues. These ranges also reflect a full year impact from the 2025 divestitures, which contributed $19,000,000 in annual revenues. Adjusted EBITDA is projected to be between $310,000,000 and $350,000,000 in 2026. The 2025 divestitures and legacy revenue stream declines put pressure on this metric, but continued advancement of our fiber program and the benefits from our transformation initiatives will help mitigate these pressures. In 2026, our goal is to deliver 200,000 to 250,000 fiber service addresses. From what we delivered in 2025, and we expect capital expenditures to be in the range of $550,000,000 to $600,000,000, up from $406,000,000 in 2025. The increased CapEx is driven by EACAM builds, continued growth in our expansion markets, as well as spending on new edge out opportunities. Before turning over the call, I want to thank the entire TDS team. Because of your hard work and dedication, we ended the year on a strong footing. We are energized for 2026 and the opportunities ahead. I will now turn the call over to Anthony. Anthony Carlson: Thanks, Chris, and good morning. As I reflect on what the Array team accomplished in 2025, I am extremely grateful for the team's hard work and perseverance during a year of enormous change and new beginnings. I am honored to have the responsibility to lead Array and look forward to growing the business over the coming years. As set forth on slide 16, Array's business portfolio has three significant yet distinct drivers of value. First, we own a portfolio of more than 4,400 towers across the United States. Originally constructed to support UScellular's wireless network, these sites are primarily located in suburban and rural areas. Notably, about one third of our towers have no competing site within a two mile radius, making them especially valuable as carriers expand 5G and other advanced technologies to meet increasing mobile data demand. Second, continue to hold wireless spectrum, principally C-band. This is a valuable asset with an existing ecosystem for deploying 5G that we are opportunistically seeking to monetize. Finally, we have minority interests in a number of primarily wireless partnerships, referred to in our financials as noncontrolling investment interests. These are passive investments that have historically generated substantial income and cash distributions. As I think about our strategic imperatives for 2026, as shown on slide 17, and how we extract value from our business, you will see the same key elements discussed last quarter: a laser focus on fully optimizing our tower operations and monetizing our spectrum. First, a brief update on our spectrum monetization process. As shown on slide 18, we have reached agreements to monetize roughly 70% of our spectrum holdings. As a reminder, in conjunction with the sale of our wireless operations on August 1, we conveyed 30% of our spectrum to T-Mobile. In addition, as previously announced, we signed agreements to sell spectrum to Verizon and AT&T in separate transactions in exchange for roughly $1,000,000,000 each. In August and October 2025, we signed additional agreements with T-Mobile to sell spectrum for total gross proceeds of $178,000,000. This primarily includes the sale of 700 MHz A block and the exercise of approximately 80% of T-Mobile's call option on the 600 MHz spectrum. In December 2025, we received regulatory approval for the spectrum sale to AT&T and that transaction closed on 01/13/2026, with the Array board declaring a $10.25 per share dividend that was paid on February 2. The remaining pending spectrum transactions are subject to regulatory approval and closing conditions. Our retained spectrum principally consists of C-band, and as I previously noted, we continue to believe this is highly attractive spectrum for 5G with an existing ecosystem that carriers can immediately put to use. While there are build out requirements for the spectrum, the first one does not apply until 2029, leaving us plenty of time to monetize the spectrum. Turning to slide 21. As noted with our Q3 results, the T-Mobile MLA significantly increases our revenue, and we continue to focus on a strong partnership with T-Mobile to ensure the integration process is well executed. The team has made material progress in Q4, processing over 2,000 applications and completing structural analyses on over 95% of the applications. This is the first key step in the integration process, and we have executed seamlessly and are now shifting focus to subsequent phases of integration. Growing colocation revenue outside of the T-Mobile MLA continues to be a key priority, and both revenue growth and new colocation application volume remains strong. In Q4, cash site rental revenue increased 64% year over year from all customers and increased 8% when excluding the T-Mobile MLA committed sites. When layering in the T-Mobile interim site revenue, the increase was 96% year over year. Also continue to see a strong pipeline with full year 2025 new colocation applications excluding the T-Mobile MLA, exceeding prior year by 47%. Like others in the industry, we disclosed in Q3 that we received a letter dated September 2025 from DISH Wireless whereby DISH asserts its master lease agreement with Array has been impacted by unforeseeable of the FCC and therefore DISH believes it is relieved of its obligations under the MLA. And despite this, DISH plans to continue to operate certain sites for a period of time. Array continues to believe that DISH's assertions are without merit, and DISH's obligations under the MLA remain intact. Since early December, DISH has generally failed to make contractually required payments. Array will take such actions it deems necessary to protect its rights under the MLA. For full year 2025, Array recognized approximately $7,000,000 of site rental revenue from the DISH MLA, and DISH has obligations at similar levels from 2026 through 2031, with a declining revenue commitment in 2032 through 2035. Slide 22 summarizes Array's financial results. Q4 was the first full quarter of T-Mobile MLA revenue, both the revenue from the MLA minimum committed sites as well as the full population of interim sites. The aforementioned T-Mobile integration volume in Q4 drove elevated service revenues as well as higher cost of operations expense due to the high volume of structural analyses conducted in Q4. Additionally, in Q4, there was a prospective change in classification of property taxes and insurance from SG&A to cost of operations. SG&A expenses in the 2025 include cost to support the wind down of the legacy wireless operations. While we began to see reductions in these costs, we continue to expect these expenses to persist into 2026 but declining over future periods. Turning to slide 24, as a reminder, T-Mobile has until January 2028 to finalize its selection of 2,015 committed sites under the new MLA. Once these selections have been made, addition to any incremental sites above the MLA commitment, Array expects to have between 800 to 1,800 tenantless or naked towers. As laid out in our strategic imperatives, we are hyper-focused on ground lease optimization and, more specifically, reducing the cash burden of our negative cash flow towers. Those efforts are coupled with our sales team continuing to aggressively market our full portfolio of towers, which will aid in reducing the naked tower portfolio. We are also assessing the future leasability of these towers and will prudently evaluate all outcomes and options over a multiyear period as we determine a path forward for the naked tower portfolio. Slide 25 summarizes the results of our partnership, or noncontrolling investment interests. This investment income and distributions are primarily from four wireless entities operated and managed by AT&T and Verizon. As discussed last quarter, investment income and distributions for full year 2025 were impacted by several onetime factors, including the impact of the Iowa partnership selling their wireless operations to T-Mobile, and distributions received from Verizon related to their transaction with Vertical Bridge. Shifting our focus to 2026, on slide 26, we provided guidance for Array for the following metrics: total operating revenue, adjusted EBITDA and OIBDA, and capital expenditures. Notably, our guidance ranges are wider than the industry norm, but there are a few key factors driving this dynamic for 2026. First, is uncertainty with the T-Mobile MLA and timing of interim site terminations, as well as the potential for incremental committed sites above the MLA minimum. And second, on the expense side, we have discussed the currently elevated SG&A expenses and the wind down of these expenses that we expect throughout 2026 and beyond. For total operating revenue, we are forecasting a range $200,000,000 to $215,000,000. This reflects a range of outcomes related to the T-Mobile MLA uncertainty and includes anticipated new colocation and amendment revenue driven from applications we received in 2025 and expect to receive in early 2026. Our guidance range does not include DISH revenues given the uncertainty related to their recent actions. For adjusted EBITDA, we are forecasting a range from $200,000,000 to $215,000,000. Given the passive nature of our noncontrolling investment interests, our guidance range assumes equity income similar to 2025, excluding the onetime events outlined on slide 25. Adjusted OIBDA guidance of $50 to $65,000,000 simply removes the equity method investments. Finally, for capital expenditures, we are forecasting $25,000,000 to $35,000,000. This range is largely driven by a degree of uncertainty around ground lease purchase volume. Our CapEx spending in 2026 will continue to include onetime tower light monitoring migration costs of about $6,000,000, as we complete our efforts to migrate tower light monitoring to our long-term solution. In closing, I want to again thank the entire Array and TDS teams who have dedicated countless hours and energy to the stand up of our tower company. Array's future is bright, and 2025 was a transformative year. I am excited about the opportunity to lead this team through a year of integration, growth, and a focus on operational efficiency. I will now turn the call back to Walter. Thank you, Anthony. Walter C.D. Carlson: As you can see, TDS is in the midst of a vital period of transformative change. The successful close of the T-Mobile and AT&T transactions have unlocked tremendous value enabling us to expand and deepen our fiber program, stand up a strong and growing tower business, and strengthen our capital structure. Let me again thank all of the outstanding associates across the TDS enterprise for the fine work you do every day to serve our customers and advance our business. Operator, please now open the line for questions. Operator: We will now begin the question and answer session. Ric Prentiss: If you have dialed into today's call, please press 9 to raise your hand and 6 to unmute. Your first question comes from the line of Rick Prentiss with Raymond James. Your line is open. Please go ahead. Morning, Rick. Rick, a reminder to kindly unmute yourself. Once more, a reminder to kindly unmute yourself by—Got it. Okay. Can you hear me? Yes. Good morning. Okay. Hey. Thanks for that. Sorry for the technical problems. Appreciate it. Anthony, good to talk to you. Thanks for the update on the DISH. We were wondering if it was in or out of guidance. So as I understand it, then DISH is completely out of your 2026 guidance from revenue to OIBDA to free cash flow then? Correct. And so any settlement from that would be upside from here. Correct. Okay. Alright. And when you think about what you are seeing in the tower leasing application area, how are you feeling about the application pipeline? It does feel like a lot of the carriers are focusing on rural America, T-Mobile, Verizon, and even AT&T. But can you give us as far as some insight into what growth rates might look like from new lease activity? And how is it coming along as far as other tower companies that have been focused as tower companies for longer than you guys? They are able to break out the cash revenue contribution, say, from escalators, versus new lease activity, versus churn, call it legacy churn versus kind of carrier consolidation churn or odd events like T-Mobile, Sprint, and Mobile UScellular and DISH. How is it coming as far as getting reporting out there on new lease active new leasing activity escalators in turn. Great. Okay. And on the TDS Telecom side, thanks for, as we called it, we want the number. So we now know the number of service addresses for the long-term target. Thanks for that, Vicki and Ken. So the 2,100,000, a couple of related questions, of course, to that is, what is the definition of long term? Because it does feel like there is a race to be first to fiber, as you mentioned. The markets you have identified, you think you have got a good chance to be first to fiber there, but help us understand why is 2.1 now the right number, what the competitive dynamics look like in that? And what is the pacing? I know you mentioned 200,000 to 250,000 service addresses this year as a target. Is that something that could accelerate? But it was kind of give us a sense what is that long term mean? What is the pacing to get there? Anthony Carlson: Yeah. So thank you, Rick, for the question. We are feeling quite optimistic about our sort of growth prospects for 2026, of course. The T-Mobile MLA for on a full year basis represents significant growth, but we also expect to see, you know, excluding DISH and excluding the T-Mobile MLA, significant same store growth. Right? So, you know, example, there are elements such as when UScellular was in the market, you provided roaming to a lot of other carriers. And so with us leaving the market, some carriers have elected to use to replace the roaming that they had with us with building up some of their own sites. So that is one element that is driving things forward. In addition, other element, other actions that we have taken, such as insourcing our sales team, and the agreement that we signed with Verizon, we have already seen positive results for in terms of driving our sales growth, and we expect that to continue into 2026. We will, we are continually in the process of evaluating which of these metrics we will put in our public reporting. Right now, we are focused on standing up an effective power company's operations. And we reserve the right to make those changes in future reporting if and as you see fit. Vicki L. Villacrez: Yeah. Rick, this is Vicki. I will just jump in here. I was really pleased. We had a really strong fourth quarter. As you know, it is our first full quarter of reporting for Array, and we will continue to focus on this as we go forward and keep our priorities in front of us. Christopher “Chris” Bautfeldt: Hey, Rick. This is Chris. I am going to take the first part of this question, and then I am going to hand it off to Ken to add more color. So, yeah, we are very excited to be raising our long-term fiber address target from 1,800,000 to 2,100,000. These goals reflect two multiyear fiber programs that we have in place. We have our EACAM program as well as our ongoing fiber expansion that we are building out to those 100 communities where we initially planted flags. Now we are taking advantage of additional edge out opportunities to further expand those strategic clusters, so these goals reflect when those builds are substantially complete. And as we shared last year, said that roughly a five-year time horizon from our initial goal was a reasonable time frame, and that timeframe has not changed with these increased goals. So still that 2029, 2030 timeframe, but we are doing everything we can to accelerate these goals because, as you said, we see a window of opportunity to be first to fiber in these new expansion markets, and we want to make sure to seize that opportunity. Kenneth Dixon: Yeah. So I will add to that. I absolutely love the markets that have been selected prior to my joining. And we still see very favorable competitive landscapes. And as Chris mentioned, we have a great opportunity to be first to fiber and continue to plant those flags in the marketplace. Also see these edge outs, candidly, where we are already building and have a presence and it allows us to expand into a bigger strategic cluster. So we are very bullish on the markets that we have chosen. And we have confidence in that incremental 300,000 to bring us to the 2,100,000. Ric Prentiss: Great. And a couple of extra color questions around that. Can you break out for us how much is going to be EACAM versus expansion markets? Because I would assume the capital spending is greater in the EACAM markets than the expansion markets. So maybe a rough breakout on how much is EACAM versus expansion of the 2,100,000 target. And then you mentioned, Ken, I think in your prepared remarks talking about focusing on sales, and that, you know, you still have a top priority and what your long-term objective is. So maybe update us on what that long-term objective is for fiber penetration. Vicki L. Villacrez: Rick, this is Vicki. I will just jump in and say our guidance is a total capital number. But, specifically, as you are thinking about the size of the EACAM program relative to our full, full fiber target. Chris, you want to comment on that? Christopher “Chris” Bautfeldt: Yeah. So raising our goals from 1.8 to 2,100,000, that is entirely for these additional 300,000 edge out communities adjacent to existing expansion communities. This does not include any incremental EACAM addresses. When we raised our guidance last year, that included 300,000 EACAM addresses. And so we are not moving off of that. Kenneth Dixon: Right. I will give you a quick update to your sales question. Obviously, address delivery creates sales opportunities. So our plan for 2026 is to continue our momentum. We are seeing very good presales volumes sixty days in advance launch. The other update I will give you is, we are spending a lot of time on sales channel development. In addition, we have brought on some new door-to-door vendors based on all of the markets that we have launched and the markets that we are expecting to bring in into these new agile opportunities. So that allows us to increase our sales capabilities. We have also put significant improvement into our dot com channel, and we have a great roadmap of go-to-market execution outlined for the remainder of 2026. We also are very focused in penetration rates. You will see us focus more on multi-dwelling unit in 2026 in addition to single-family homes, and we have also brought in some new leadership to help run sales in our call center environment and sales throughout our various distribution channels. Two folks that are very tenured in the industry and have a great background in fiber sales. Thank you. Ric Prentiss: Thanks, everybody. Thank you. Thank you. Sebastiano Carmine Petti: Your next question comes from the line of Spazdiano Petty with JPMorgan. Your line is open. Please go ahead. Hi. Thank you for taking the question. I guess maybe cleaning up there on the fiber questions. Any help in terms of thinking about the shaping of in-year service delivery? Think Ken you kind of talked about, I mean the fourth quarter delivery was, I think, the strongest you said in, you know, since 2023. How should we think about that 02/1950, you know, ratably over the balance of 2026? Obviously, weather implications in 1Q, April. So just trying to help think about that. And then I guess in the press release, I feel like the comments regarding the C-band or just spectrum monetization seemed a little bit new or, you know, a little bit more, you know, pointed. So I was just wondering if you can help update us on how you are thinking about that, the level of conversations you might be having in the market. Obviously, the reauction of the AWS-3 midyear this year, you have visibility into upper C-band next year. So any color there would be helpful. And then lastly, I will just throw it out there. As it pertains to the buyback, any interest or what is your view on potentially buying back AD shares in the market as opposed to the TDS shares given the implied look-through discount on your own shares. How does the board perhaps maybe evaluating that? How do you think about that? Thank—I will start off with the fiber goals for 2026. As I mentioned earlier, we have, I love the markets that we are currently operating in. One of the first things that the team focused on was how do we absolutely get as many crews into the markets constructing our service addresses as possible. As you saw in my opening remarks, in the fourth quarter, we had record crew counts, and we were able to keep those crews throughout those, what I would say, winter months, and that gives us confidence going into 2026. One of the other big things that we did in 2025 is we made some very strategic investments in our internal construction capacity. We added additional equipment and plan to have additional crew capacity throughout 2026. I believe one of the biggest advantages that TDS has in the marketplace is the fact that we have internal construction crews and we also have contractors throughout the marketplace. As I mentioned, with those construction crew count levels in the fourth quarter, it gave us, what I would say, a very healthy funnel of service addresses coming into 2026, which we had not had coming into 2025. So I am very bullish on what we can accomplish in 2026. And I will hand it off for the tower question. Yeah. So in terms of, you know, the spectrum, right, you know, as you know, the primary spectrum niche from a value perspective would be maintained as a C-band spectrum. We believe that spectrum is very attractive. Speech front mid-band spectrum. Is an established infrastructure ecosystem. All major carriers can use it, and it is deployable immediately. And in addition to the major big three carriers, of course, there may even be other potential acquirers such as cable, regional carriers, speculators, what have you. You know, certainly, the availability of other spectrum could affect demand. But that could be pos, that could be positive for us as well because of where companies, where potential acquirers of the upper C-band spectrum, wind up in the band range. So we think that that is potential upside for us as well. And then, you know, want to reiterate simply that the C-band is very attractive spectrum, and we are optimistic that it has significant value. I am going to hand over the capital structure questions to—Yeah. Thank you for the question. You know, Sebastiano, you know, each company's board determines their own capital allocation based on a number of multiple factors. As you know, TDS has announced that share repurchases are a part of its capital allocation plan and use of proceeds that have come from the transactions in the special dividends. The Array organization is very focused right now on standing up the new tower business. They are excited with the fourth quarter results and our outlook for next year and very focused on growing that business going forward. So I cannot comment. That is a decision that each individual board makes. Vicki L. Villacrez: Yeah. But would TDS consider buying AD shares rather than its own TDS shares? To not only accrete yourselves higher, but also buy back your stock at a discount to the market. Walter C.D. Carlson: So Sebastiano, this is Walter. I think that Vicki's given the guidance that we can offer in response to your question. Issue of share buybacks is one that each board thinks about. And we do not have any further comments at this time. Sebastiano Carmine Petti: Okay, and then one last question, is the implied EBITDA guide at TDS, does that imply ex divestitures? Does that imply growth, or how should we think about that? Christopher “Chris” Bautfeldt: Thank you. Yes, Sebastian. No. I can take this. This is Chris. So for our adjusted EBITDA guidance for 2026, we are seeing an impact from the divest as well as those legacy revenue stream declines. But past that noise, there is growth there. And, really, that is coming from not only our investments in our fiber markets, but our continued business transformation efforts, and we are really liking the potential we are seeing from that program. Michael Rollins: Your next question comes from the line of Michael Rollins with Citi. Your line is open. Please go ahead. Thanks, and good morning. Thanks for the additional disclosures in the deck today. If I could turn to slide 21. So in that slide where it walks through the tower revenues, you described 8% growth excluding the committed and interim sites. And just curious, if we take that now to 2026, what growth rate is embedded within the revenue guidance for '26. And then I have a question on TDS Telecom afterwards. Anthony Carlson: Yeah. Sure. So assuming I am interpreting correctly, your request was a sort of same store growth. Right? So I want to, like, if you take out the DISH revenue, right, the fact that that is going to zero, you know, we are expecting the growth of around 6% or so on a same store basis. With DISH included, that would be closer to, you know, if you would, with DISH included, it would be closer to zero. So flattish if you assume DISH was still around, but 6% excluding DISH. Michael Rollins: And when you, and when you think about, and thank you for that. And when you think about same store, is that the combination of existing leases and then new colocation or amendment leases signed on those locations? Anthony Carlson: Yeah. Correct. Excluding all the T-Mobile activity. Michael Rollins: Great. And including any churn, normal course churn? Anthony Carlson: Correct. Great. Michael Rollins: Very helpful. And moving over to the TDS Telecom side of the equation, you mentioned some of the issues with, you know, video take rates influencing overall account, you know, ARPU or ARPA, and just kind of curious, you know, how you are thinking about video on a go-forward basis. You know, are you able to discern in your current footprints the types of customer lifetime value churn and margin and economics of customers that are just, like, standalone broadband versus those that bundle video. And at some point, is there going to come a fork in the road where you decide, you know what? If you just kind of let video be handled by others, you know, in terms of streaming and so forth, that you could deliver a more efficient effective broadband ENL for investors. Thanks. Kenneth Dixon: Thank you. So I will tell you when I came to TDS Telecom, I was very, very happy with the video business and what I would say very strong margins out of that video business. So I do not see us looking to outsource video. I think it is a critical part of our overall value proposition to attract a bundled customer that still wants broadband. And we still do hear loud and clear from some segments, customers that if we did not offer a video bundle, they would not have chosen TDS for their broadband service. So I still think it is very important. So I would say the other big opportunity for us in long-term value and churn reduction by having a bundled customer. We see that and we think it is still very important to our business. As you know, in 2025, we launched the mobile product to have a quad play offering to our customers, and you will see us again, as we have with video bundles, also look to bundle the mobile product much stronger throughout 2026. But, we have a very healthy video business. We are happy with the margins. And I think the team has done a very good job in terms of the content packaging. And I like where we are positioned in the market for 2026. Thank you. David Barden: Your next question comes from the line of David Barden with New Street Research. Your line is open. Please go ahead. Hey, guys. Thanks so much for taking the question. So you guys have been pretty clear about your strategy to monetize the C-band. I am interested in your posture on monetizing specifically the naked towers that you foresee that may emerge over the course of this decision making that Mobile makes between now and 2008. But also the unconsolidated investment interests that you have largely with Verizon, how actively you are considering the monetization of those, or if you consider them kind of the anchor tenants of a going concern business and that we should really think about this as a terminal value run rate cash flow business or as a sale value business? Or which ones we should consider which? Thank you. Anthony Carlson: Alright. So starting on with the second question first, on the noncontrolling interests, we like the cash flow from these investments. We are not in any hurry to sell them. There is only one natural buyer for those investments. If those companies are interested in buying them at a price that is attractive to us, of course, we will entertain that, but we are in no hurry to sell them if we like the cash flows from them. In terms of the naked towers, you know, our perspective on those is this: that there is significant latent value in the majority of those naked towers. Right? Some, obviously, we will need to, at some point, decommission or otherwise exit from, although decommissioning is quite expensive, and it is an interesting math exercise to go and take a look at that versus the cost of retaining them. But we view it as an option, and it is our objective at Array to reduce the holding cost of that option, you know, as quickly as possible in order to get the potential value from those towers because we do think that there is substantial lease-up opportunity on those naked towers over the long term. David Barden: So the kind of industry standard has been to underwrite per tower per year a 0.1 incremental tenant. Is that something that you would underwrite? Or are you not confident in underwriting that, or are you more optimistic than that? Anthony Carlson: We are not going to take a position on that at this time given just how new a situation we are in with this portfolio of towers no longer having the UScellular tenants. David Barden: Got it. Thank you, guys. Really appreciate it. Sergei Dluzhevskiy: Your next question comes from the line of Sergei with Gamco Investors Inc. Your line is open. Please go ahead. Morning, guys. Thank you for taking the time. Morning. Good morning. Good morning. First question is on the TDS Telecom side. Obviously, you are increasing the run rate of the build. Although in the fourth quarter, it was pretty close to the lower end of your guidance. As you look into 2026, and maybe if you look at your past build history, and what are some of the lessons learned and maybe what are some of the best practices that you are planning to utilize in 2026 to, and going forward, to make sure that the build is more efficient and more successful. Obviously, you did not meet your target in 2025 by about 10,000. But in 2026, obviously, you feel much better about the opportunity. My second question is on the Array Digital side. And, Anthony, it is nice to meet you virtually. I guess my question is, obviously, you have made progress on improving tenancy ratio since the T-Mobile transaction and running this company as a more focused tower business. As you look into 2026 and maybe even 2027, what are some of the initiatives that are working well for you in terms of improving this tenancy ratio XT-Mobile. And also, what are some of the new things that you are potentially contemplating and maybe would focus more on in 2026 and 2027 to accelerate the tenancy rate increase. And maybe my last question is also on the Array side. So, you have talked already about your focus on monetizing C-band spectrum. Obviously, we have seen several transactions last year involving EchoStar and their spectrum. We have several spectrum auctions coming up. So maybe if you can just provide more color on how you are thinking about the monetization opportunities for C-band, maybe the timeline, and to what degree some of those developments is or is other third-party transactions or with auctions are putting or creating more urgency to find an appropriate transaction sooner rather like— Kenneth Dixon: So thank you for the question. What I will tell you is our focus is around how many crews we have out in the marketplace. That is vital to our success to deliver our targets for 2026. What we have seen at TDS in the past is that you have typically good service address delivery in the fourth quarter, but you lose most of your external construction crews through what I would say the winter months post-holiday, and then it is very difficult in the past to get those crews back in time for spring. So we have monitored that very, very closely and kept our crew counts stable in the fourth quarter. And we now are monitoring those crew counts and have those same levels here in the first quarter. So that gives us much better confidence than we have had in years past about getting off to a strong start with our service address delivery at the beginning of the year. Anthony Carlson: So, Sujay, thanks for the question, and nice to meet you virtually as well. So there are a number of initiatives that are in place that we expect will help our performance in terms of increasing our tenancy ratio. So first, as we have mentioned before, we insourced our sales team, and we believe that that is already paying significant dividends in terms of getting our tenancy ratios up. The new deal that we signed with Verizon that we announced last year also is having an impact, as well as, I mentioned, the fact that some carriers are doing roaming replacement builds for their old UScellular network. Finally, we did not have much of a focus at all on non-tower carriers within our sales team. We do have goals that are doing that now, and we believe we are seeing early results from approaching more vertical potential tenants. So all of those are elements that we believe are going to help us increase our tenancy ratio going forward in 2026 and beyond. So a couple comments on that. First, I think those transactions with EchoStar show that there is very robust demand for spectrum. You know? And I think that bodes well for the spectrum that we indeed do have. Second is that, you know, we believe our spectrum is very valuable. We believe that if we have to, the carrying costs of maintaining that spectrum are manageable relative to the potential value that we could get for it. So we are not going to be a forced seller of the spectrum, and nor do we feel that we need to be. You know, with all that said, continue to look for opportunities to monetize it. And we are going to continue to be active in pursuing those. Operator: There are no further questions at this time. I will now turn the call back to John for closing remarks. John Toomey: Thank you, and thanks again to everyone for joining the call this morning. As always, please do not hesitate to reach out with further questions or and I hope everyone has a wonderful weekend. Thank you.
Operator: Thank you for holding, and welcome to Alliant Energy Corporation’s Fourth Quarter and Full Year 2025 Earnings Conference Call. At this time, all lines are in a listen-only mode. Today’s conference is being recorded. I would like to turn the call over to your host, Susan Gille, Investor Relations Manager at Alliant Energy Corporation. Please go ahead. Good morning. I would like to thank all of you for joining us today for Alliant Energy Corporation’s Fourth Quarter and Full Year 2025 Financial Results Conference Call. We appreciate your participation. With me here today are Lisa M. Barton, President and CEO, and Robert J. Durian, Executive Vice President and CFO. Following prepared remarks by Lisa and Robert, we will have time to take questions from the investment community. We issued a news release last night announcing our fourth quarter and full year 2025 financial results and affirmed 2026 earnings and dividend guidance. This release, as well as an earnings presentation, will be referenced during today’s call and are available on the investor page of our website at www.alliantenergy.com. Before we begin, I need to remind you the remarks we make on this call and our answers to your questions include forward-looking statements. These forward-looking statements are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters discussed in Alliant Energy Corporation’s news release issued last night and in our filings with the Securities and Exchange Commission. We disclaim any obligation to update these forward-looking statements. In addition, this presentation contains references to ongoing earnings per share, which is a non-GAAP financial measure. References to ongoing earnings exclude material charges or income that are not normally associated with ongoing operations. The reconciliation between ongoing and GAAP measures is provided in the earnings release, which is available on our website. At this point, I will turn the call over to Lisa. Thank you, Sue. Good morning, everyone, and thank you for joining us. 2025 was defined by major shifts in public policy, global trade, tax legislation, and the acceleration of electric demand. We delivered another year of strong financial and operational performance while making significant progress across our strategic priorities. From a financial perspective, we continued our consistent track record of performance, with ten-year compound annual EPS growth of 6.3%. Our ongoing 2025 EPS growth of 6% exceeded the midpoint of our guidance and aligns with our long-term earnings growth target of 5% to seven plus percent. We also increased our dividend, marking the twenty-second consecutive year of dividend increases, and delivered a total shareowner return of over 13% for the year. Regulatory execution was another area of strength. In Wisconsin, we achieved a highly constructive outcome in our 2026–2027 rate review, a unanimous settlement approved by the Public Service Commission of Wisconsin. We executed well against our customer-focused investment plan. During the year, we completed 275 megawatts of energy storage investments. We completed the Neenah and Sheboygan Falls turbine upgrades. And we proactively protected future customer investments by safe harboring planned renewable and energy storage projects amid evolving tax legislation, preserving flexibility and enabling cost-effective future energy solutions. Strategically, unlocking the potential of our customers and communities remains central to our approach. Data centers represent significant capital investments in local communities that strengthen local tax base and support schools, infrastructure, and public services. Lisa M. Barton: Combined with our commitment to keep Iowa retail electric base rates flat for existing customers through the end of the decade, this approach demonstrates our ability to deliver win-win solutions, capturing growth that helps absorb fixed costs and reduces rate pressure for existing customers. We are utilizing individual customer rates in both Iowa and Wisconsin to ensure all customers benefit from economic development. A relentless focus on customers and building stronger communities is at the heart of everything we do. The Alliant Energy Advantage is our ability to move at the speed of our customers, aligning capital, infrastructure, and regulatory solutions to enable growth, while advancing outcomes that meet customers’, communities’, and shareowners’ expectations. Swiftly pivoting when our customers pivot is part of that advantage and a key differentiator for Alliant Energy. We aim to be a partner of choice with the goal of continuing to attract these customers to our service area. In furtherance of that goal, we closed the year with four executed ESAs totaling three gigawatts of peak load, translating to a 50% future growth in demand. We have a solid execution plan and a backlog of opportunities to drive future waves of growth for our shareowners, customers, and communities. Navigating this environment requires agility, disciplined decision making, and a steadfast focus on long-term value. As we previously shared, QTS, one of the data centers we serve, made the decision to relocate its Greater Madison, Wisconsin, data center project. After assessing multiple sites within our service area, QTS has selected a new location within our Iowa service territory. I am pleased to share that we have signed a new electric service agreement for this relocated QTS project, and our four-year consolidated capital expenditure program and investment growth expectations remain on track. Robert will provide additional details on these updates. The speed and effectiveness of our response to the QTS data center relocation highlights the strength of our partnerships, the flexibility of our planning, and our disciplined focus on near-term execution. Looking towards 2026, we are focused on pursuing industry-leading demand growth and successful project execution against those opportunities. We are actively engaged with customers and continue to pursue between two to four gigawatts of additional large load growth opportunities beyond what is already reflected in our current capital and financial outlook. Importantly, these growth opportunities are in addition to the four previously announced contracted projects. We expect to provide updates as we make further progress with new electric service agreements. Driving affordable energy solutions is foundational to our strategy, and we have built a strong foundation that positions us well for sustainable growth and delivering meaningful value to customers. This is supported by maximizing existing resources, extending asset life, investing in natural gas resources, and strategically integrating renewables and energy storage facilities. These remain the most cost-effective ways to maintain reliability. Proactive safe harboring of renewable and storage investments, prioritizing plug-in-ready sites which minimizes transmission investments and accelerates our ability to serve new customers. In addition, we continue to unlock ancillary value through the optimization and monetization of our fiber network, creating unique financial benefits for existing customers. As I reflect on my second year as CEO, I am incredibly proud of what our team accomplished and I am excited about the opportunities ahead. The commitment of our employees enhances our ability to serve customers and communities, contributing to sustainable long-term value generation for shareowners. As we prepare to celebrate National Engineers Week, I want to recognize the exceptional contributions of our engineers, whose innovation and expertise continue to propel our industry forward. I sincerely thank our generation teams, line crews, gas techs, and extended workforce for their dedication, especially in maintaining safe and reliable systems during extreme winter weather events. Your efforts are the foundation of our success. There is tremendous opportunity ahead and Alliant Energy Corporation is well positioned to help build a stronger, more resilient energy future—one that benefits customers, communities, employees, and shareowners alike. I will now turn the call over to Robert to provide our financial update and an update on regulatory matters. Robert J. Durian: Thank you, Lisa. Good morning, everyone. Yesterday, we announced 2025 GAAP and ongoing earnings. For the full year 2025, Alliant Energy Corporation delivered ongoing earnings per share growth of $0.18 compared to 2024. This year-over-year improvement was driven primarily by increased revenue requirements from rate base increases, reflecting continued investment in generation and energy storage, as well as favorable temperature impacts on electric and gas sales. These positive drivers were partially offset by higher operating and maintenance expenses, primarily related to planned generation maintenance activities and the addition of new generation resources, as well as higher generation development costs to support long-term growth. Increased depreciation and financing associated with expanding capital investments also offset a portion of the earnings improvement. Temperatures in 2025 contributed approximately $0.03 per share to electric and gas margins. For comparison, 2024 temperatures reduced margins by approximately $0.15 per share. Excluding the impact of temperatures, electric sales increased by nearly 1% in 2025 compared to 2024, driven by higher commercial and industrial sales across both IPL and WPL. Our ongoing earnings for 2025 exclude two non-recurring items, including a $0.05 charge related to the suspension of production at Travero’s wind turbine blade recycling operations, based on a review of strategic options for the business, and a $0.03 charge associated with remeasurement of deferred tax assets. This tax item reflects updated state income tax apportionment assumptions driven by higher projected electric utility revenues from commercial and industrial customers, including new data center agreements. With these results, we continue to deliver the consistent financial performance investors expect from Alliant Energy Corporation. We have now achieved annual ongoing earnings growth of over 6% for more than a decade, while maintaining our focus on customer affordability. Turning to our capital plan. As Lisa mentioned earlier, our consolidated four-year capital plan remains on track, as shown on slide six. Following the relocation of the QTS load from Wisconsin to Iowa, we reallocated certain gas, wind, and energy storage investments between our state utilities. This update represents a repositioning of resources within our consolidated portfolio. With flexible and proactive resource planning, we have strong confidence in our ability to execute the projects within our updated capital expenditure plan. We have secured gas turbine reservation agreements and project locations for all planned self-developed gas resources. Our plan includes simple-cycle gas resources to address increasing capacity needs, while retaining flexibility to expand these gas resources to combined-cycle facilities in the future. The additional Iowa wind investments will be part of our advanced rate-making proposal, for which a settlement has been filed and a final IUC decision is pending. And we have taken action that protects tax credits for our planned renewable and energy storage projects through proactive safe harboring and development activity. This ability to pivot while maintaining execution certainty reflects the strength of the Alliant Energy Corporation Advantage. As a result of the new electric service agreement for QTS’s relocation, and with our capital plan remaining materially consistent, we are affirming our 2026 earnings guidance. As shown on slide seven, our 2026 earnings guidance reflects several key assumptions. These include higher earnings from growing capital investments, including allowance for funds used during construction; expected retail sales growth of approximately 1%, inclusive of sales to new data centers during construction; higher O&M, depreciation, and financing costs, consistent with increasing capital investments; and the ability to utilize investment tax credits from energy storage placed in service in 2025 and 2026 to support earning our authorized Iowa Electric ROE while maintaining stable base rates for our electric customers in Iowa. With respect to our longer-term outlook, and incorporating QTS’s new load expectations, we expect our compound annual earnings growth rate across 2027 to 2029 to be consistent with what we shared in November 2025: 7% plus. This growth rate is based on current projections for the timing and execution of capital expenditure plans and data center load. We will continue to assess our long-term earnings growth potential as we execute on our data center expansion and capital expenditure plans. Turning to financing. As shown on slide eight, our 2026 debt financing plans include up to $1,200,000,000 of long-term issuances, consisting of up to $400,000,000 at the parent, Alliant Energy Finance; up to $300,000,000 at WPL; and up to $500,000,000 at IPL. With our strong liquidity position, we are well positioned to address upcoming parent-level maturities in March 2026. And we have already retired our $300,000,000 term loan, with a new term loan expected in the first quarter. As a reminder, our four-year capital plan is funded through a balanced mix of cash from operations, including proceeds from ongoing tax credit monetization, and new financings, including debt, hybrid instruments, and common equity. Of the approximately $2,400,000,000 of expected common equity needs over the four-year period, we have already raised approximately $1,000,000,000 through forward equity agreements. This leaves approximately $1,300,000,000 of remaining equity to be raised through 2029, excluding equity expected to be raised under our share purchase plan. Overall, our financing plan provides flexibility to support efficient execution of our strategy. Turning to our regulatory matters, we achieved several constructive regulatory decisions throughout the year, as listed on slide 10. Our 2026 regulatory agenda remains closely aligned with our capital investment plans, as we have no active rate reviews planned in 2026, reducing regulatory uncertainty. In Iowa, the Iowa Utilities Commission recently approved certificates of public convenience and necessity for two generation facilities: a 720-megawatt natural gas facility using simple-cycle combustion turbines in Marshall County, Iowa, referred to as the Bobcat Energy Center, and a 94-megawatt natural gas RICE unit in Burlington, Iowa. We are also awaiting an IUC decision on the settlement for advanced rate-making principles for up to one gigawatt of new wind generation, which we expect to allow customers to avoid significant fuel costs and generate tax credits, while supporting investment in cost-effective, responsible energy resources. We anticipate a decision in this proceeding during 2026. In Wisconsin, we currently have five active dockets, including three requests for preapproval of customer-focused investments. These include our first-ever liquefied natural gas storage facility to add physical gas capacity and enhance winter reliability, and a request to add approximately 430 megawatts of new wind generation to deliver zero-fuel-cost energy and tax credits for our customers. We expect decisions on these matters over the next twelve months. We are also awaiting a decision from the Public Service Commission of Wisconsin on the individual customer rate filing associated with the metadata center in Beaver Dam, Wisconsin. Earlier this month, intervenors submitted testimony that was generally supportive, while offering proposals for additional company and existing customer protections. We are expecting a decision on this docket in the second quarter. Looking ahead, we expect to make additional filings throughout the year to support planned customer investments. In addition, we anticipate filing a new individual rate application with the Iowa Utilities Commission related to the relocated QTS data center in 2026. I will now turn the call back over to Lisa to provide closing remarks. Lisa M. Barton: Thank you, Robert. Delivering consistency in financial performance year after year, growing at the pace of the people and places we serve, is the Alliant Energy Corporation Advantage that sets us apart. Our proactive approach and commitment to economic development is a strength as we continue to serve the needs of our communities. By pursuing win-win solutions, we are driving affordability, fueling growth, and creating lasting shareowner value. In closing, thank you for your continued support and engagement with Alliant Energy Corporation. We look forward to connecting with many of you at upcoming investor conferences. I will now turn the call back to the operator to open the line for questions. Operator: Thank you, Ms. Barton. At this time, the company will open the call to questions from members of the investment community. Should you have any questions at this time, please press 1 on your telephone. And if you would like to withdraw from the polling process, please press 2. And if you are using your speakerphone, you will need to lift the handset first before pressing any keys. Please go ahead and press 1 now if you do have any questions. Thank you. First, we will hear from Shahriar Pourreza at Wells Fargo. Please go ahead. Shahriar Pourreza: Hey, guys. Good morning. Lisa M. Barton: Good morning, Shah. Shahriar Pourreza: Morning, Lisa. So just firstly, on the three gigawatts of data centers you have in plan, can you just remind us what is the minimum take agreements? And is that minimum what is assumed in your current plan? So if we could look at it this way, if these hyperscalers were to ramp faster and take on more power over time, that would be accretive to your current planning assumptions? Robert J. Durian: Yeah. That would absolutely be accretive to our planning assumptions. Shahriar Pourreza: Got it. Okay. Perfect. And then obviously, you know, we are seeing a lot of noise in Wisconsin around data center developments and moratoriums, etcetera. Just can you talk about how your conversations are going with the hyperscalers? And are you kind of now implementing somewhat stricter safeguards so a situation like QTS does not happen again? Or has the conversation really shifted to more deals being done in Iowa versus Wisconsin? I mean, between active and incremental deals, you guys have, like, four to eight gigawatts out there. Thanks. Lisa M. Barton: Yeah. No. Great question. I mean, we have always talked about the fact that the differences between Iowa and Wisconsin with respect to growth—that Iowa does have some strategic advantages. As you may recall, we serve 75% of the communities in Iowa, 40% of the communities in Wisconsin. There is a little bit more of an advantage in terms of access to transmission there, and a bit of a broader access to gas. So Iowa does have some strategic advantages. You know, as it relates to Wisconsin data center growth, we are committed to making sure that Wisconsin is open for all business, including data centers. And I will remind folks about some of the uniqueness associated with the QTS DeForest opportunity. That required not only annexation but rezoning as well. So it was a higher bar there than we would traditionally have with other sites. Shahriar Pourreza: Got it. So just maybe, follow-up to that. If more of the deals strategically are going to be shifted towards Iowa, is there anything, you know, Robert wants to call out fundamentally that could be advantageous for us— Robert J. Durian: Yeah. When I think about it, both jurisdictions have very strong regulatory environments, so I do not see a lot of difference between the two. We are fortunate that we have got a construct in Iowa right now that is very receptive to growth. When you think about what we agreed to in the last rate case, we really have structured ourselves to be able to grow at the pace of our customers while achieving our authorized returns and maintaining base rates that are stable through the end of the decade at least, and we are trying to extend that over a longer period of time. Shahriar Pourreza: Got it. Super helpful, guys. Thank you so much. Appreciate it. Operator: Thank you. Next question will be from Nicholas Joseph Campanella at Barclays. Please go ahead. Nicholas Joseph Campanella: Hey. Good morning. Thanks for taking my question. Morning. I wanted to ask on the QTS, too. And it is good to see that this was shifted to a new site. Can you maybe just kind of talk about what is required there from a, you know, permitting, zoning, approval process—anything that you really kind of move forward with construction—think you said in the prepared you are going to be making a pair of filing for that in the state soon, but just what is the path to construction? Thanks. Lisa M. Barton: Yeah. Just as a point of clarity, it would be an ICR. We have the individual customer rate constructs that we use in both Wisconsin and Iowa. So we have been super pleased with our ability to pivot and, quite frankly, pivot on a dime with respect to this. I think this shows the strength of our team as well as the robustness of the opportunities that we have across our service territory. So, we offered them, you know, basically in both states. If you think about it, it has got a similar demand, similar timing, similar ramp rate, and they have land control, and it is zoned industrial. Nicholas Joseph Campanella: Okay. Thank you. And then just on the two to four gigs, is there anything else that you can kind of give us around your goals for timing when you could bring in another deal to the plan? I know you said that you will announce them as they come, but something that you think you could see by the first half of this year, or what would you say in terms of timing? Lisa M. Barton: Yeah. No, great question. And it is always very fluid. As we have—we have got two to four gigawatts in terms of active discussions. I will give it to you in maybe a little bit of a breakdown which might be helpful. We, in essence, have three buckets. We have got expansion opportunities at existing sites. We have existing customers in new locations, and we have new customers in new locations. And I will remind folks that we have set ourselves up with a pretty high bar with respect to making sure that we have got high-quality ESAs. And then with those ESAs, there is a very high degree of success off of it. First and foremost, we make sure that we have got a very clean understanding of the timing of the project, the peak load, the load ramp. In doing so, we are also identifying the generation investments that would be needed. We make sure we have got comprehensive transmission studies so that they can understand what the cost of the interconnection is, as well as land control, and we do think that that land control element is particularly important in these situations. As you all know, we have been talking about growing at the pace of our customers and communities and really, in our strategy, trying to make sure that we are first movers. We feel that that combination gives very high-quality ESAs for our investors to count on for growth. Nicholas Joseph Campanella: Okay. Thank you. Operator: Next question will be from Paul Zimbardo at Jefferies. Please go ahead. Paul Zimbardo: Hi. Good morning, team. Lisa M. Barton: Good morning. Paul Zimbardo: Thank you. And just to continue the comment theme a little bit, you mentioned the land control, the two to four gigawatts. Does that include kind of industrial and the appropriate zoning and annexation? Just any color you could provide there would be helpful. Lisa M. Barton: Yeah. So we can certainly provide color to all of the folks who are out there and all of the land. But what we can say is that certainly for land that we own—and we own a considerable amount of land—has been part of our economic development strategy for the past couple of years. And in doing so, all of that land is zoned industrial. If that is helpful. Robert J. Durian: That is helpful. Paul Zimbardo: Thank you. And then just turning to 2026, I see you are assuming about 1% retail sales growth, which sounds like it is consistent with what you experienced in 2025. I do not know if you think that is a fairly conservative assumption just as the data centers start to ramp, or there are other dynamics at play there. Robert J. Durian: No. Yeah. I think it is fairly consistent. We are expecting to see some level of data center load start in 2026. But, really, think about most of the load coming in from the data centers in 2027 and beyond, and that is when you will see the much higher growth rates that we are expecting in our plan. Lisa M. Barton: Okay. Paul Zimbardo: Great. Thank you, team. Next question. Operator: Will be from Paul Fremont at Ladenburg. Please go ahead. Paul Fremont: Thanks, and congratulations on the shift in QTS. Does the shift in renewables in your CapEx from the gas generation supply—is that being driven by the expected supply for QTS? Or is there something else that is driving that shift? Robert J. Durian: Yeah. Paul, when you think about our investment plan, it is pretty consistent overall when you think about the four years of 2026 through 2029—still at roughly that $13,400,000,000 with what we shared with investors back in November. Most of the recent shift, as you indicated, was just a shift between what we call gas generation to renewables. There is also some shift between our Wisconsin utility to our Iowa utilities that coincide with the relocated load. When I think about the renewables, you may be familiar—we do have an RPU filing in front of the commission right now in Iowa, and as the team continues to identify further renewable development opportunities that are cost-effective for our customers, we are going to continue to add those to the plan. And so we saw an opportunity to do that with this recent update. And then on the gas side, we had previously had a gas combined-cycle plant within the planned time horizon, but we have shifted that out beyond the planned horizon, really in favor of trying to get to simple-cycle facilities quicker because we know the capacity is important for our customers to be able to get them online quicker. So I would still say that combined-cycle is an opportunity for us and really upside opportunity to us when you think of beyond the planning horizon of 2026 through 2029. Lisa M. Barton: One thing that I would add is just a reminder of the fact that we do not have an IRP process, a litigated IRP process, so that allows us to be flexible in terms of our resource planning and to be able to pivot as we identify other projects that we can get into service fairly quickly to grow at that pace of our customers. It is speed to market, which is what we are acutely focused on, and one of the advantages I think that we have with respect to attracting these large loads. Paul Fremont: Great. And when I guess, when I look at some of your peers, in terms of where your rate base growth is, you are at 12%. Many of those peers that are at very high levels of rate base growth have somewhat more robust EPS growth rates. Is there something we should think of that is sort of holding you at lower levels? Robert J. Durian: Yeah. Paul, I would say we are probably pretty consistent with most others when it comes to the level of dilution we are going to see from the equity that we need to be able to finance this rate base growth. Maybe something that is a little bit different for us is we do have some current level debt that we are going to need to refinance, and the current debt is at pretty low interest rates. And so we have built in some, I will say, conservative assumptions as to what the new interest rates will be in the plan, and that is probably maybe a differentiating factor and hopefully, we will be able to beat that when we execute those transactions. But prefer to be a little more conservative at the outset here. Paul Fremont: Great. Thank you very much. Operator: Thank you. Next question will be from Andrew Marc Weisel at Scotiabank. Please go ahead. Andrew Marc Weisel: Hey. Good morning, everyone. Wanna echo the kudos on the change there. Like you said, nice to see you pivot on a dime, as you called it. First question is on turbine reservations for gas and safe harbor credits for renewables and storage. I know you have got that all covered for what is in the plan. Please remind me or help me understand, what do you mean by what is in the plan? Specifically, does that cover everything related to the three gigawatts for the four projects that have ESAs? Would that cover some of the two to four gigawatts of upside? Just how are you thinking about serving all of those needs or potential needs from a generation perspective? I know you alluded to that a little bit in the last question, but maybe you could get a little more specific, please. Lisa M. Barton: No. That is fine. With respect to the three gigawatts, you know, that is all in the plan. And as we look towards the two to four gigawatts that we are in active negotiations on, we are all working on the generation side, and I will just point folks to a recent RFP that we had issued here in 2025. So we are actively continuing to pair the load growth with generation. Andrew Marc Weisel: Okay. So the comments refer to the three gig but not the two to four. Is that right? Lisa M. Barton: Correct. Andrew Marc Weisel: Okay. Got it. Thank you. And then in terms of, excuse me, moving the CapEx around, I know you talked about moving generation from Wisconsin to Iowa related to the QTS relocating. Looks like some of the timing changed as well, some spending moved up from 2027 to 2026, and then a little bit got pushed back from 2028 to 2029. Is that just fine-tuning, or was that related to QTS? Or maybe you could just detail some of those changes. Robert J. Durian: Yeah. Most of those are pretty modest. I do not think any one year is probably moving around more than about $100,000,000. And so think of that as just refinements to the process as we continue to work through completing all of the contracts and stuff for the capital expenditure planning. So I would not read anything more than just more refinement than anything. Andrew Marc Weisel: Okay. Very good. And then maybe this is just kind of a nitpicky one, but just to clarify, the 50% increase in projected demand—that stat is not a change, but it looks like the base did change. Now you are saying off of 2025 base of five and a half gigs, previously, it showed off of a 2024 base of six gigs. So it looks like, and now you are saying by 2031 versus by 2030 previously. Just trying to understand. Are you now saying it is going to be a little later and a little smaller? Is that meant to be a change in the messaging of future demand? Or how should we think about that? Robert J. Durian: I would think that most of those numbers are refinements and rounding issues more than anything. There is some, as we think about this relocation of QTS from Wisconsin to Iowa, there is a little bit of a delay in the ramp, as you can imagine, because starting out a little bit later with the development activities, but it is less than a year. And so again, we are just probably getting a little more fine-tuned on the numbers and the dates. I would not read anything more into that than that. Andrew Marc Weisel: Okay. Very true. Transparency. We appreciate the specificity. Thank you so much. Operator: Thank you. A reminder, ladies and gentlemen, please press 1. Next will be Renny at Bank of America. Please go ahead. Renny: Morning, guys. Just quick question on, you know, the gubernatorial races. So, you know, with heading into those races in Iowa and Wisconsin and with the incumbents not running, I guess, are you thinking about, like, regulatory continuity and potential policy shift? Policy shifts, like, basically around generation planning and large loads. Lisa M. Barton: Yeah. Great question. And, you know, this is fundamental to our philosophy of making sure that—you have heard us talk about a Rubik’s cube. We are solving for reliability, resiliency, growth, and affordability. That is core to everything that we do. We actually posted, recently this week on our site to ensure that there was clarity in terms of our philosophy, our commitment to our customers, which is they will not be paying for this data center growth. They will be benefiting from this data center growth. So really trying to make sure that that message is clear. Obviously, we have, in both states, governors who have elected not to run for reelection. In Iowa, the primaries are coming up fairly soon in the June 2 time frame. You have got five Republicans running, three Democrats. In Wisconsin, it is very early days. August, I think eleventh it is that the primaries are set for—there are two Republicans and nine Democrats, really, in that race. You know, we expect the races to very much be focused on healthcare, housing costs, potentially energy costs, and so forth. That is why how we are navigating this growth is so critical. And we have certainly had the support of the public utilities commissions as it relates to our approach. And, again, as a reminder, with this individual customer rate contract that we submit to the commissions, it really gives the commissions an opportunity to truly understand the details of it, to make sure that all customers are benefiting, to make sure that they have got that opportunity for oversight on an individual basis. We think that that is a strength as well. Renny: That makes sense. And then just secondly, you know, keeping on theme with the data centers. Do you, like in Wisconsin, do you kind of view it as—is it kind of more broadly the challenge as being tied to local or township concerns, or based in Wisconsin? I know Iowa has a strategic, you know, advantages. But do you think, like, for example, with the MITT ICR there is more need to provide more disclosures in Wisconsin, or is this kind of township level— Lisa M. Barton: It is really township level is how we are viewing it. And, again, just as a reminder, that DeForest community is just outside of Madison, very close to Madison, and it did require annexation and rezoning. It certainly was a lift for the community. Governor Evers, in his State of the State address, was extremely supportive of data centers and highlighted the importance of data centers for the growth of the state, making sure that we continue to be a bit of a tech hub and so forth. That is very much in line with how we are seeing it. So this is just a local issue in our minds. Renny: Great. Thanks so much. Operator: Ms. Gille, there are no further questions at this time. Susan Gille: With no more questions, this concludes our call. A replay will be available on our investor website. We thank you for your continued support of Alliant Energy Corporation and feel free to contact me with any follow-up questions. Operator: Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines. Have a good weekend.
Operator: Good day, and welcome to Ryerson Holding Corporation’s Fourth Quarter 2025 Conference Call. Today’s conference is being recorded. There will be a question-and-answer session later. If you would like to ask a question, please press 1 on your telephone keypad at any time. Again, that is 1 to ask a question. At this time, I would like to turn the conference over to Justine Carlson. Please go ahead. Good morning. Justine Carlson: Thank you for joining Ryerson Holding Corporation’s Fourth Quarter 2025 Earnings Call. On our call, we have Edward J. Lehner, Ryerson’s Chief Executive Officer, James J. Claussen, our Chief Financial Officer, and Molly D. Kannan, our Chief Accounting Officer and Corporate Controller. A recording of this call will be posted on our investor relations website at ir.ryerson.com. Please read the forward-looking statement disclosures included in our earnings release issued yesterday, and note that it applies to all statements made during this call. In addition, our remarks today refer to several non-GAAP measures. Reconciliations of these adjusted numbers are also included in our earnings release. I will now turn the call over to Edward J. Lehner. Thank you, Justine. Good morning, Edward J. Lehner: and thank you all for joining us to discuss our fourth quarter and full year 2025 performance. Before diving in, I would like to first extend a warm welcome to Richard Marabito, Richard Manson, and Andrew Greif, who are joining this morning’s call as our President and Chief Operating Officer, our Senior Vice President of Finance, and our Executive Vice President of Ryerson, and President of the Olympic Steel Business Unit, and all of our Olympic Steel faithful following the successful merger of Ryerson and Olympic Steel which we closed just a week ago today. It is my absolute pleasure to be working alongside you to serve both our collective shareholders and our combined employee base that is more than 6,000 strong in approximately 160 locations. I am looking forward to the great things we are going to accomplish together as a unified enterprise with significantly greater scale and expanded product and service offerings. We are in the very early days of integration—as in seven—but we have been sitting on a spring for several months and that has sprung, and we are off to an excellent start. We have established an experienced integration team focused on realizing the expected $120,000,000 in annual run-rate synergies with an emphasis on combining best practices, optimizing asset utilization, and capturing combined targeted cost and revenue merger benefits. We are highly confident in our ability to deliver on the aforementioned synergies over the next two years and are looking forward to sharing our progress with you quarterly. Turning to the business, the underlying commodity price gumbo for our mix of products increased at a faster rate than anticipated during the fourth quarter as supply-side price drivers outpaced buyer price absorption and demand was still subdued and contractionary in the quarter. By the end of the quarter, supply-side price increases had not yet materialized in our customer end markets due to contract customer pricing lags and transactional customer price stagnation. With Q4 2025 in the rearview, and as we progress through 2026, we are seeing encouraging strength in customer quote and order activity relative to the past several years and we expect to see gross margin expansion year over year and sequentially as better pricing propagates through the industrial metals value chain along with improving demand signals. We also expect operating income improvement sequentially and year over year given better manufacturing demand, improved operating leverage, and revenue growth. These encouraging trends, though still early, when looking at synchronized manufacturing growth at a more desirable duration, certainly represent the best demand start to a year since 2022. It is always better to close a merger with improving industry fundamentals and it is part and parcel of why the stage is also well set from a timing perspective for our just-completed merger with Olympic Steel. Independently, over the past four years and now together, we have both invested significantly in our capabilities with strong balance sheets leading up to the merger and now together we expect to execute on $120,000,000 of annual run-rate synergies at the cusp of what we hope to be at least a multi-quarter cyclical inflection upward. As we advance in 2026, our clear priorities are to continue integrating the combined organization in a way that preserves and enhances the customer experience as well as our employee culture. To begin realizing merger synergies as communicated to stakeholders, to improve the quality of earnings through disciplined execution of service center fundamentals across our expanded value-added service center network, and to reduce leverage to within our targeted range with updated shareholder capital allocation plans coinciding with synergy attainment. Before we get into the details of our financial results, I want to thank all of my Ryerson-Olympic teammates for their hard work over these past six months, particularly given the additional time and effort involved in consummating our merger with Olympic Steel. We also appreciate the continued engagement and support of our customers, suppliers, and shareholders as we enter this next phase together for the desired betterment of all. With that, I would like to turn the call over to James J. Claussen for a review of market conditions and financial results. Thanks, Eddie. And good morning, everyone. North American industry volumes, as measured by the Metals Service Center Institute, experienced normal seasonal decline in the fourth quarter relative to the third, decreasing by 5.8% sequentially, James J. Claussen: and 1.5% for the full year of 2025 compared to 2024. By comparison, Ryerson’s North American shipments decreased by 6.8% sequentially and less than half a percentage point for the full year, indicating market share gains for the full year of 2025 despite retracement during the quarter on majority depressed OEM program demand and shipments. Our total company tons shipped were down just under 5% quarter over quarter, in line with guidance, and approximately 3% higher compared to the fourth quarter of last year. For the full year of 2025, our total company tons shipped came in just ahead of last year, up by half a percentage point. Turning to performance at the end-market level, I would first like to note that we recently wrapped up a top-to-bottom review of our classifications and realigned our reporting to gain a clear, more accurate understanding of our business performance and better direct strategic decision-making. Utilizing these new classifications, we saw the most year-over-year volume growth in our fabrication and welding sector followed by growth in the machine shop and machinery and equipment sectors. Partially offsetting that growth was weakness in the commercial transportation sector and, to a lesser degree, by weakness in our climate sector, which includes HVAC, and in our heavy equipment sector, which includes agricultural and construction equipment. Turning to fourth quarter performance, we achieved revenue within our guidance range with volumes in line with seasonal trends. However, as Eddie mentioned, material costs rose faster than anticipated during the quarter, growth outpacing our average selling price, and the quarter expired before we were able to fully price these increases into the market. As a result, we experienced weaker-than-expected gross margin and recorded a higher-than-expected LIFO expense for the quarter. Our operating expenses came in largely as expected. In all, our net loss of $38,000,000, or $1.18 per share, and our adjusted EBITDA, excluding LIFO generation, of $20,000,000 came in below our guidance expectations. Turning to current expectations, we have been seeing very strong activity in 2026, and we anticipate finishing the quarter with tons shipped up 13% to 15% compared to 2025. Same-store revenues are expected to be in the range of $1,260,000,000 to $1,300,000,000 with average selling prices expected to be flat to up 2% quarter over quarter as fourth-quarter material price increases start to flow into the market and expand gross margins. We also expect to realize operating leverage as demand conditions improve. In all, we anticipate generating net income for the first quarter in the range of $10,000,000 to $12,000,000 before any merger-related fees. We also expect to record LIFO expense of between $6,000,000 and $8,000,000 and adjusted EBITDA excluding LIFO of $51,000,000 to $54,000,000 in 2026. Turning to our expectations for Olympic Steel, in the last six weeks of the quarter, we anticipate that Olympic will experience similar market dynamics and therefore generate accretive revenue in the range of $260,000,000 to $280,000,000 and adjusted EBITDA, excluding LIFO, in the range of $12,000,000 to $13,000,000. For our combined companies, we anticipate first-quarter revenue in the range of $1,520,000,000 to $1,580,000,000 and adjusted EBITDA, excluding LIFO attainment, between $63,000,000 and $67,000,000. Turning to our investments in the business, in the fourth quarter, our capital expenditures totaled $21,000,000, contributing to a full-year investment of $52,000,000. In 2026, we anticipate investing approximately $50,000,000 in capital expenditures on a same-store basis or $75,000,000 including a prorated expectation for Olympic Steel. We generated fourth-quarter cash from operating activities of $113,000,000 as our seasonal working capital release more than offset the net loss generated. Inventory days of supply increased by three days quarter over quarter, to 79, and was well managed considering the typical fourth-quarter trend. Our overall cash conversion cycle also remained well managed, coming in at 68 days for the fourth quarter, which is consistent with the prior quarter and 11 days leaner than the same period last year. Utilizing our cash flow generation, we decreased our debt by $37,000,000 and net debt by $34,000,000 compared to the prior quarter. As a result of continued incremental improvements in both our net debt and trailing twelve-month adjusted EBITDA excluding LIFO, our leverage ratio decreased quarter over quarter from 3.7 to 3.1 times, continuing to approach our target range of 0.5 to 2.0 times. From a global liquidity perspective, the company’s profile remained healthy during the fourth quarter and we ended the period with $502,000,000 of liquidity compared to $521,000,000 at the end of the third quarter. In conjunction with the closure of our merger with Olympic Steel, we successfully extended the maturity of our revolving credit facility and expanded its capacity from $1,300,000,000 to $1,800,000,000. We expect to utilize the facility to fund our combined general corporate needs as well as support the pursuit of synergistic growth opportunities. Turning to shareholder returns, Ryerson distributed $6,100,000 in the form of dividends, or $0.18 per share, during the fourth quarter and has announced a first-quarter dividend of the same amount payable to our now combined shareholder base. We did not repurchase any shares in the fourth quarter and ended the period with $38,400,000 remaining on our share repurchase authorization. I will now turn the call over to Molly D. Kannan to discuss our financial performance highlights for the fourth quarter. Molly D. Kannan: Thanks, Jim, and good morning, everyone. For 2025, Ryerson reported net sales of $1,100,000,000, a decrease of approximately 5% compared to the previous quarter, driven by lower tons shipped, with average selling prices flat. Compared to 2024, net sales increased by 9.7% with average selling prices 6.3% higher as well as increased tons shipped of 3.1%. As discussed, commodity prices rose more than anticipated during the quarter and resulted in a LIFO expense of $22,500,000 compared to our expected expense of $10,000,000 to $14,000,000 and compared to the previous quarter expense of $13,200,000. Gross margin contracted by 190 basis points to 15.3% and gross margin, excluding LIFO, contracted by 100 basis points to 17.3% during the fourth quarter as we were unable to price these rapid increases into the market before the end of the period. Warehousing, delivery, selling, general and administrative expenses totaled $205,300,000 for the fourth quarter, an increase of $4,900,000 compared to the third quarter driven by advisory service fees related to the Olympic Steel merger. In all, the gross margin compression and one-time expenses contributed to our fourth-quarter net loss attributable to Ryerson of $37,900,000, or $1.18 per diluted share. This compares to net loss of $4,300,000 and diluted loss per share of $0.13 for 2024. Our adjusted EBITDA excluding LIFO generation for the fourth quarter was $20,400,000, which compares to $10,300,000 generated in 2024. And with this, I will turn the call back to Eddie. Edward J. Lehner: Thank you, Molly. While fourth-quarter results were adversely influenced by ongoing recessed manufacturing conditions, we are seeing the signs of an improving manufacturing economy through the early part of 2026, and the combined potential and prospects of our merger have us aiming much higher in the quarters and years ahead. Regardless, whatever the macro gives or takes away, our determination and conviction are resolute in making good on the $120,000,000 in annual synergies we expect to deliver, and we as a team could not be more confident in the Ryerson Rise—whatever you prefer—organization that we have assembled to deliver it. As Ronnie Coleman—and you have to Google it—used to say, “Ain’t nothing to it but to do it.” With that, we look forward to your questions. Operator? Thank you. Thank you. Ready for questions. Is anybody out there? Operator: Thank you. If you are dialed in via the telephone and would like to ask a question, please signal by pressing star-1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star-1 to ask a question. We will take our first question from Katja Jancic from BMO Capital Markets. Please go ahead. Maybe starting on more, I guess, near term, 4Q was negatively impacted by the fast increase in prices and not you not being able to push prices higher. Are you right now still seeing any potential pushback from your customers about fully accepting these price increases? Edward J. Lehner: Hi, Katja. It is Eddie. And, you know, we have Richard Marabito and James J. Claussen and Richard Manson and Andrew Greif and Nick in the room with us. So we could give you a really fulsome answer. I will tell you that I have been pleasantly surprised by the increase in business activity overall. When we look at quoting rates and we look at conversion rates, Richard Marabito: it is the best we have seen in a really long, long time. So that is very positive. I think getting price increases into the market, it is finally starting to happen. But I will also say if you look at mill utilization rates and you look at some of the recoveries in certain end markets, it is still somewhat uneven. It really is sort of the end market by end market and customer by customer. So it is a gradual pricing through on that side as we look at mill pricing getting through the distribution channel to customers. But for the first 45-plus days of the quarter, it has been very positive overall. Edward J. Lehner: Rick? Yeah. Thanks, Eddie. Agree. Richard Marabito: I think—and everybody knows we closed on the 13th, so the first half of the first quarter is not included in our results going forward. But I agree with Eddie. We saw and have seen a good start to the year in terms of both volumes and pricing. So we are optimistic, as Eddie said earlier in his comments, you know, it is good to close a transaction and merge and have a little wind in our sails in terms of the market. So we are feeling good about that. And, Katja, I would say this too. I mean, you know from our attendance at the BMO conferences, which we are looking forward to seeing you again next week. Last couple years, I mean, it has been a long trough, and it got very tiresome to talk about the same things over and over again. Looking at the investments that we both made individually and collectively and looking at the execution of both companies and having a lot of the CapEx really behind us. I will give you an example. Shelbyville had a record month and we had done a major expansion in Shelbyville. Edward J. Lehner: And Richard Marabito: we are starting to see, you know, the promise of those capital investments really show through in a meaningful, tangible way. And you know, the call does not afford us the opportunity to go through every single one, but just suffice to say, we are really pleased with how those investments now are starting to look when we see some operating leverage in the industry and across our assets. Operator: Given that the markets are improving, right, and you have bigger portfolio now. How are you thinking about capital allocation moving forward? And I understand that you are in the process of combining fully combining or integrating the two companies. But how should we think about that? Edward J. Lehner: Yeah. So I will start, and then I am going to kick it over to Rick. So it is important to keep the main thing the main thing, and that is Richard Marabito: really getting after the $120,000,000 in annual run-rate synergies and deleveraging. Still want to bring the debt down. People ask us about growth, but we just took a major quantum leap forward when it comes to growth through the merger. So we want to delever. We want to get the synergies. We want to go ahead and optimize the footprint of the assets. And that is job one. And I think when we get through the year, as we get through the year and we have the success that we expect, then I think we could start to keep one eye out for, you know, what may be on, you know, that horizon. James J. Claussen: Rick, what do you think? Yeah. Agree. And I think Richard Marabito: obviously, Eddie talked about continuing the dividend, which we thought was really important as a piece of the capital allocation. But yeah, I think really focusing on the cash flow and getting the debt down is job one. But certainly, continuing to look to also reward the shareholder through dividends, and then we will frame in as we move forward some more specifics on that. Operator: Perfect. Thank you, and I will see you next week. Edward J. Lehner: Thanks, Katja. Look forward to it. Operator: Thank you. If you wish to ask a question, please signal by pressing star-1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We will take our next question from Samuel J. McKinney from KeyBanc Capital Markets. Samuel J. McKinney: Hey. Good morning, guys. Richard Marabito: Hi, Sam. Samuel J. McKinney: Just going back to Katja’s first question, this was not a Ryerson-specific headwind this week. But you talked about the challenge in passing through rising mill prices to customers. Were there products, and maybe aluminum, where that struggle was more pronounced than others? Edward J. Lehner: Yeah. I would say that Richard Marabito: of the three commodities, I would say that aluminum has probably been the slowest to propagate through, but that is picking up now in terms of the ability to start to get those price increases through the value chain. But, yeah, if you are asking about aluminum specifically, I would say of the three, that is probably been the toughest when you look at when that price started to go up—around April—on a, you know, on a regression line where it really started to turn up in April and it has continued to move higher. You know, sitting here today, you know, past February, carbon—you know that story. I mean, it is like a sticky ride, right? And now finally, we have got some momentum upward on carbon, which has been good to see. And it has been somewhat gradual. It has not really spiked the way it has in years past, and that is a good story. And then stainless was really—I mean, stainless and nickel have been beat up for what I will call structural reasons and also cyclical reasons. But, you know, as Nick Weber has said, you know, we finally maybe caught a bid on stainless where we have seen that now move higher over the last several months, and so that is starting to get into the price book as well. Samuel J. McKinney: Okay. And then the first quarter same-store volume guidance up in the mid-teens sequentially, safely above your historical seasonality. Are you starting to see some restocking or some more activity from some of your major industrial customers? Richard Marabito: Yeah. I mean, the real story of 2025 for us was transactional was up 11-plus percent, and OEM was down 8%. And that was really the first time we have seen that type of decoupling when it comes to directional movements, you know, within an industrial metals manufacturing cycle. You know, so I would say that overall we are seeing, on balance—we referenced—we are seeing a stronger market consistent with a stronger PMI print, and now industrial production and orders are moving in the same direction. So we are tracking that really well. I also think it is a function of the improvements that we have made. It is a function of how well Olympic is over the last several years and how well they continue to execute. And so I think it is also us getting better and improving and bringing those investments through finally to full, you know, to full operating status. But let me kick it over to Rick and, you know, he will give you some more color. Yeah. Could not agree more. I think—and you know, Sam, just from following the Olympic story—much the same in terms of some of the concentrations of investments over the last year or two. So we had a pretty heavy CapEx—I will call it—last 18 to 24 months. A lot of those investments are really just coming to fruition right now and are phasing in over—I will call it—fourth quarter into second quarter of this year. So, again, you know, a little wind in the sails from the market plus, you know, some of the self-investment. We are optimistic about growth. Eddie mentioned the PMI finally. I do not need to—you know, we do not need to keep continuing the historical bad news, but, you know, wow. How many months in a row and how many out of two years were we going to have PMIs printing down? So, yeah, feel pretty good about the momentum in the market. Feel really good about the combination of the two companies. And really excited about really showing everybody what we are going to be able to do in terms of those synergies and really bringing the combined strengths of the two companies together. And, really, that is what it is all about—being able to service our customers better with more capabilities, additional geography, and, you know, we are on it. I tell you, we got off to a—you know, I called it—I said we want to get off to a running start. I think we got off to a sprinting start. But just excited about all that. And, again, it is good to have a little James J. Claussen: wind behind us. So, yeah. Edward J. Lehner: And Sam, let me give you a little bit more— Richard Marabito: I would say a little bit more of the inside baseball when we look at how does our company operate. I think how does the industry operate. Stability is a big thing. I mean, you are going to take a hit when you make investments. If you shut down a service center that has been in a place for a long time and you build a new one and you do greenfields—I mean, you know—greenfields will shorten your life expectancy. And I think it is hard to go through them, but once you are on the other side of them it is really, really good. So I will give you an example. Central Steel & Wire, where we moved out of Kenzie, and we moved to University Park—that was a 900,000 square foot greenfield. And when we bottomed out during the construction, just before the grand opening, volumes went down to about 520 tons a day, as an example. Okay? Well, bookings at CS&W—very proud of the team and the leadership there—bookings at CS&W are now over 780 tons a day, not including the intercompany work that they do for other Ryerson locations. So when you think about that incremental 260 tons, it is very meaningful, but I also think it is indicative of what happens when you do major CapEx greenfields and you do heavy investments in facilities, you do ERP conversions—you take a hit. And it is a hard thing to go through. But when you do get to the other side of it, things start to work and operate a lot better. And it then syncs up very well with what we see historically where if you have got the right balance of investment to go with, I would say, stable, consistent, well-performing operations, you start to really realize that upside operating leverage in your network, and things start to get and look a lot better. Samuel J. McKinney: Okay. Thanks. I appreciate all the color on that question. And then last one for me. Increasing the revolver by $500,000,000 to $1,800,000,000 in the context of trying to get back down to the leverage range. What is the chance you use this to explore more M&A, and if so, could you do this before the achievement of synergies, or are those mutually exclusive? And what do you feel you need to round out the now combined portfolio? Richard Marabito: I think we finally have, like, half the CFO questions—we will be able to pop that over to Jim and Rich. But I would just say, Sam, I mean, when it comes to M&A, we just did a huge transaction, and I want to emphasize to keep the main thing the main thing. I do not think you ever look away from what could truly be an exceptional opportunity, but you are just so much more selective because you really do not want it to fracture the attention of the organization on what it is we really have to do first and foremost, which is get our marks, get the synergies, and boost the overall performance that flows through our financials. So that really is the priority. But let me send it over to Jim and Rich. James J. Claussen: Yeah. Good morning, Sam. I mean, Eddie really really touched on it. I mean, we did amend and extend the ABL, raising it up, you know, in order to really work through this merger and put the company in a good spot to continue to grow forward. But right now, as we sit here week one in, it is full speed ahead on working through the synergy case, continuing to operate the business, serve our customers, and we will continue to work through our capital allocation plans. Richard Manson: And Rich Manson is the synergy czar. So, Rich, what do you think? Yeah. No. I think Rick said it well earlier. As soon as the merger was done, we jumped in with both feet and started sprinting. And so lots of people involved, lots of great ideas. And we look forward to tackling and hitting all the numbers that we have set forth. We will do it. Samuel J. McKinney: Alright. Thanks, guys. Good luck, and nice to talk to you again. Edward J. Lehner: Hey. Thanks, Sam. Operator: As a reminder, to ask a question, please press—We will now take our next question from Alan W. Weber from JP Capital. Alan W. Weber: Good morning. Edward J. Lehner: Hey. Good morning, Alan. Hey, Alan. Are you there? Alan W. Weber: Yeah. I am here. Can you hear me? Yeah. So a question, you know, given you guys doing the merger, which sounds great, and then you have Klöckner being, you know, announced that they are going to be acquired. Can you talk about how you think about it longer term—more consolidation impact on Ryerson-Olympic and like that? Edward J. Lehner: Sure. Richard Marabito: Sure. You know, Alan, I think, you know, members of the team here have certainly socialized the reality that for a long, long time M&A activity was lacking in our sector. And it really is just a mathematical fact. If you look at consolidation on the mill side, you know what—consolidation on the customer side—we in the middle would just continue to really get squeezed given that there are, like, 7,500 firms that identify themselves as metal distributors, 2006 up to the present time. This was really a fantastic opportunity and move by both of our companies to do this, both when we look at the DNA of both organizations, but really in the larger industry as a whole. So answer is yes. I am really, really thrilled that we did it. I think our prospects are fantastic. And I think that the Worthington-Klöckner announcement, I think, is overall—it is a positive. It is healthy for the industry. Rick? Edward J. Lehner: I think you nailed it. I really have nothing to add to that. Richard Marabito: Consolidation is good for our industry, period. James J. Claussen: And Alan, it is—and it also is the customer experience. Richard Marabito: Like, we want to get closer to the customer. We have more touch points. We can get closer. You know, Andrew Greif has started out leading the supply chain integration council, the commercial integration council. And Andrew can give you some color too on just how attractive the opportunities look, you know, with the combined companies. Andrew? Edward J. Lehner: Well, think, Eddie, you said it right. The Richard Marabito: opportunity to take two great storied companies, and as customers today, the industrial OEM is really looking for help. And one of the first things they look at is the balance sheet of the companies that can help support them. I think you take this combination—it really sends a very strong message to our large customers that not only are we there financially to be able to support them, but if you look at the investments that the two companies have made over the last three to five years, really taking everything downstream as the customer today is looking for, you know, not just the rectangle of what was, you know, once upon a time important in our business, but, you know, finished welded product that is going directly into their assembly—there are not a lot of people that can do that to the scale that our large customers are looking. So I think the consolidation in this one is going to be fantastic for our customers. We have already gotten a number of calls as to what can we do collectively to try to help them grow their business, and we are excited to get in front of the customer. Edward J. Lehner: Yeah. And, I mean, I think, look, the better Richard Marabito: the better solution we offer, the more repeat business and growth we are going to see. We just have to really make sure that the experience we offer is, you know, to the highest level and meets our aspirations for what we want to deliver post-merger. Alan W. Weber: Great. Thank you, and good luck. Edward J. Lehner: Hey, Alan. Thanks a lot. Operator: As we have no further questions, I would like to turn the conference back to Edward J. Lehner for any additional or closing remarks. Edward J. Lehner: No. Really, thanks so much for your support. We really look forward to being with you next quarter to report out on how we are doing with our synergies, how the business is operating, and I look forward to the next call. Thank you. Everybody stay well. Operator: This concludes today’s call. Thank you for your participation. You may now disconnect.
Operator: Ladies and gentlemen, thank you for standing by. My name is Colby, and I will be your conference operator today. At this time, I would like to welcome you to the Pulse Biosciences Q4 and Full Year 2025 Earnings Call. [Operator Instructions] I will now turn the call over to Trip Taylor. You may begin. Philip Taylor: Thank you, operator. Before we begin, I would like to inform you that comments and responses to your questions during today's call reflect management's views as of today, February 19, 2026, only, and will include forward-looking statements and opinion statements, including predictions, estimates, plans, expectations and other similar information. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are more fully described in our press release issued earlier today and in our filings with the U.S. Securities and Exchange Commission. Our SEC filings can be found on our website or on the SEC's website. Investors are cautioned not to place undue reliance on forward-looking statements. We disclaim any obligation to update or revise these forward-looking statements. We will also discuss certain non-GAAP financial measures. Disclosures regarding these non-GAAP financial measures, including reconciliations with the most comparable GAAP measures can be found in the press release. Please note that this conference call will be available for audio replay on our website at pulsebiosciences.com in the News and Events section on our Investor Relations page. With that, I would now like to turn the call over to Co-Chair of the Board and Chief Executive Officer, Paul LaViolette. Paul LaViolette: Thank you, Trip. Good afternoon. Thank you, everyone, for joining us today. At Pulse Biosciences, we aren't just making a better medical device, we are creating a pulsed field ablation platform to completely shift how physicians treat disease. We intend to transition the entire medical field away from using energies that apply extreme heat or cold to destroy tissue and toward our much more precise method, nanosecond pulsed field ablation or nsPFA. Our technology has potential to completely disrupt multiple soft tissue ablation markets. And here are the reasons why. First, it offers incredible precision. Our system directs ultra-short duration bursts of energy, lasting only a few billionths of a second to only the precise locations where therapy is needed. Second, nsPFA creates a human body compatible healing advantage by initiating regulated cell death. Third, it operates with blisteringly fast speeds measured in billionths of a second. Precisely because of the speed and efficiency in ablating cells, we deliver less cumulative energy due to significantly shorter treatment cycles delivered in record fast procedure times. And finally, we have built an imposing legal fortress of intellectual property. We added 67 issued and 77 pending patents in 2025 alone, equivalent to adding a new piece of intellectual property every 2.5 days throughout the year to protect our novel developments. In total, 250 patents have been granted to Pulse Biosciences and an additional 180 patents are pending approval. Overall, we made progress in calendar year 2025. Today, I will walk through those updates and our plans for 2026. After that, I'll turn the call over to our CFO, Jon Skinner, to review the financial results, and we will conclude with a question-and-answer session joined by Bob Duggan, Co-Chair of the Board. At the start of 2025, we defined a focused set of objectives for the year. Our highest objective was and remains to advance our nanosecond PFA platform into late-stage clinical development to treat atrial fibrillation in both electrophysiology and cardiac surgery. In addition, we plan to explore launch feasibility of our soft tissue ablation system prior to gaining a specific therapeutic claim using Category II reimbursement. We are pleased to report we made progress across each of those goals in 2025, and that noteworthy progress continues into early 2026. On the clinical front, we secured IDE approvals for both our electrophysiology catheter and our cardiac surgical clamp programs, positioning both to move into pivotal trial enrollment. In parallel, we significantly expanded treatment of patients in our European feasibility studies across both cardiac platforms, generating increasingly robust data sets to show superior workflow and procedural consistency. We also started publishing those data sets and through today have produced clinical performance of interest in each of our 3 clinical programs. On the commercial front, we continued the highly controlled launch of the Vybrance platform for soft tissue ablation in a targeted disciplined manner. We did so by focusing on supporting a few select institutions dedicated to procedural excellence in order to validate the clinical and economic model. We fully appreciate the essential value of FDA indication clearance as well as reimbursement certainty. We anticipate this to be a worthwhile work in progress over the next 4 to 8 quarters. Operationally and financially, we executed well and maintained disciplined expense management, exiting the year with a strong balance sheet that will enable us to execute on our clinical priorities in 2026. As we look ahead to 2026, our focus is clinical and market development execution. In electrophysiology, we intend to commence and complete enrollment in the nPulse cardiac catheter IDE study while continuing to treat patients in Europe in support of expansive clinical data essential to our successful CE Mark submission. In cardiac surgery, we intend to expand and accelerate IDE site activation and complete patient enrollment in 2026, while continuing European feasibility activity and preparing for an additional CE Mark submission by the end of the year. In soft tissue ablation, we are completing enrollment of the PRECISE benign thyroid nodule study, deepening commercial utilization in key accounts, driving the business model to our goal of financial viability and continuing to demonstrate the clinical advantages of the Vybrance nsPFA treatment. Each of these milestones advances our position as the disruptor in PFA therapies and first mover in nanosecond pulsed field ablation, a position that is reinforced by our significant intellectual property estate. Pulse Biosciences is advancing a platform that integrates advanced biophysics and precision engineering that will be changing for the better the standard of care for multiple disease states affecting patients worldwide. I will now start with our nPulse cardiac catheter system for AF ablation. While our nsPFA technology is a versatile platform designed for multiple clinical applications across the body, our primary focus is transforming heart care for AFib patients. We have developed the world's first one-shot ablation solution for atrial fibrillation. Our nPulse cardiac catheter can treat a targeted area of the heart with a 5-second single-shot burst, delivering circumferential pulmonary vein isolation or PVI. The nPulse cardiac catheter minimizes the need for the physician to reposition the catheter or overlap lesions. The nPulse cardiac catheter incorporates several differentiated design and performance features that set it apart from existing ablation technologies. We have previously presented data on acute procedural measures that validate workflow advantages and our recently presented outcomes data provide the first long-term clinical evidence of procedural success and are available on our website at pulsebiosciences.com. Because nanosecond pulsed energy is delivered so rapidly, the system delivers minimal cumulative energy to tissue. This results in no measurable tissue temperature elevation and low neuromuscular stimulation, which contributes to shorter procedure times and may reduce required anesthesia levels. In addition, the catheter incorporates a patented proprietary flexible electrode design that enhances maneuverability and conformability within the left atrium, allowing physicians to deliberately move the catheter within the left atrium and rapidly achieve stable positioning, enabling seamless procedural efficiency. In comparison to the current standard of care, the clinical benefits we reported in February 2026 have been nothing short of outstanding. In our European studies presented at the AF Symposium on February 5, the lead investigator of our feasibility study provided comprehensive as well as compelling data on procedural speed, workflow, safety and outcomes durability. Key study findings were outstanding and highlighted 100% procedural success or freedom from AFib at 6 months and 96% procedural success at 1 year for evaluable patients. Overall, freedom from atrial arrhythmia was 90% at 12 months as shown on a Kaplan-Meier curve and the data are available on our website. All 3 of these endpoints represent new standards of therapy effectiveness for nsPFA treatment of paroxysmal AF. Procedural efficiency remains remarkable. While still early on, we are routinely seeing physicians finish these ablations in just 6 to 8 minutes or faster, which could cut total procedure times by over 50%. These results reflect the underlying advantages of nanosecond PFA, deeper lesion formation with fewer applications and lower cumulative energy to deliver durable isolation. Physicians continue to highlight the simplicity of a single-shot approach and the reduction in catheter manipulation and lesion stacking compared with legacy technologies. The nonthermal nature of nsPFA continues to show a favorable profile, allowing physicians to treat efficiently and proceed to additional targets without delays between dose deliveries, unlike microsecond PFA, which requires prolonged recharging times. The Pulse Biosciences system directly addresses limitations of current generation catheters, microsecond PFA or thermal modalities by enabling complete durable isolation in a single energy delivery with the potential to cut procedure times in half. We expect to use the data from our European feasibility study to finalize our CE submission in the second half of 2026 with the potential for CE Mark approval in 2027. We are focused on accelerating our market entry strategy through strategic mapping partnerships. To bring this revolutionary nsPFA technology to the global market as swiftly as possible, we are actively pursuing strategic partnerships with world-class mapping providers and EP market leaders. Such a partnership should produce a tremendous win-win. By integrating our best-in-class nanosecond PFA solution with an existing best-in-class mapping ecosystem, our potential partner or partners can capture and solidify their market share with the most advanced energy solution available, while Pulse would benefit from nanosecond PFA worldwide commercial launch acceleration. These synergies should ensure that physicians and patients gain rapid access to the fastest, most precise and durable nanosecond PFA solution in present time. Let's now discuss our surgical ablation clamp. Our nPulse cardiac clamp is the first in the world FDA-approved IDE pivotal study, NANOCLAMP AF for a surgical device that delivers PFA. This represents a significant landmark in cardiac surgical innovation. Our system is designed to deliver fast, contiguous transmural ablation lines during open heart procedures for patients with atrial fibrillation. We believe the current treatment of preoperative AF with concomitant ablation is significantly underutilized and the speed and effectiveness of ablation delivered with nsPFA can transform this therapy and market. Our IDE program is progressing and enrollment activity is underway and expected to conclude during 2026. As a reminder, NANOCLAMP AF is a prospective single-arm multicenter study designed to assess the primary safety and effectiveness of the nPulse cardiac surgical system in treating AF during concomitant cardiac surgeries. We intend to enroll 136 patients in approximately 20 sites, including 2 international locations. In Europe, we continue to generate excellent results. Data presented previously at EX highlighted what we consistently see with this system, very fast total ablation times, clean lesion sets and reproducible workflow in the surgical environment. Surgeons continue to emphasize the importance of speed and predictability in this setting, which aligns well with the intuitive workflow and short energy delivery times observed with our system. These initial treatments keep us on track to file for CE Mark by the end of 2026. Beyond the significant clinical progress of our cardiac programs, the nPulse Vybrance percutaneous electrode system is validating in real-world use our technology in non-cardiac soft tissue applications. The nPulse Vybrance system is initially being used by physicians to treat symptomatic benign thyroid nodules, eliminating the need for traditional surgery. This is a very common and disabling condition associated with 250,000 new annual U.S. diagnoses. This annual incidence converts into 150,000 total or partial thyroid removal surgeries each year. And this is precisely the clinical practice opportunity we are exploring with our minimally invasive application of nsPFA to reduce nodule size and eliminate patient symptoms. Our current nPulse Vybrance technology has the potential to shrink nodules while sparing vital nerves, blood vessels and sensitive structures in the neck. In the fourth quarter, the team generated $264,000 in revenue from Vybrance systems and electrodes, an increase in revenue versus the third quarter. We are taking an extremely disciplined approach as we closely monitor individual account procedural volumes, site-by-site patient outcomes, all local procedure reimbursement results, procedural efficiency and overall clinical and business success factors routinely considered by each hospital when adopting a new procedure. Our approach remains deliberate, evidence-based and focused, operating at an intentionally limited scale to demonstrate how meaningful this opportunity can be within key accounts at large hospital systems in selected geographies. From a clinical perspective, the PRECISE benign thyroid nodule study remains on track to complete enrollment of 50 patients in the next few months. We plan to further expand the study to 100 patients over the ensuing 2 quarters. Broad adoption and viable long-term market expansion is our goal. It is important to note that scientific recognition of this work is on the rise. Data from Dr. Stefano Spiezia in Naples, Italy, have been accepted for a podium presentation at NAFID, the North American Society for Interventional Thyroidology in March. In parallel with the PRECISE-BTN study, we are expanding the clinical scope of the Vybrance platform. In the fourth quarter, we announced a research collaboration with the University of Texas MD Anderson Cancer Center, one of the world's leading oncology institutions to evaluate the use of nanosecond PFA for the treatment of both benign and malignant thyroid tumors. Under this collaboration, we are conducting an FDA-approved IDE study evaluating nsPFA for the treatment of papillary thyroid microarcinoma and expect to complete enrollment by year-end 2026. In addition, preclinical work is underway exploring the potential application of nsPFA in anaplastic thyroid carcinoma, a highly aggressive cancer with limited treatment options. We view this collaboration as strategically important for several reasons. First, it meaningfully expands the potential indication set for the percutaneous electrode beyond benign disease and into cancer, while remaining within the same core workflow of endocrine surgeons targeting thyroid disease. Second, it reflects external validation of the nonthermal mechanism of action of nanosecond PFA, particularly its ability to ablate cellular tissue and initiate regulated cell death while sparing surrounding critical structures, an attribute that is especially relevant in the neck because of the high density of critical nerves such as the recurrent laryngeal nerve, which controls the vocal cords, major blood vessels, the trachea and esophagus. And third, partnering with a world-class institution such as MD Anderson reinforces institutional and physician belief that the Vybrance nsPFA platform has broad applicability and will expand over time beyond its initial commercial use case in benign thyroid nodules. While this work remains in the research and feasibility stage, it underscores the platform nature of nsPFA and its multi-decade potential to address a wide range of soft tissue applications as clinical evidence develops. Economically, the Vybrance system is driven by recurring disposable electrode utilization and minimal facility overhead. The opportunity and model align with the growing trend toward minimally invasive procedures performed in lower overhead settings. We look forward to continued adoption of the Vybrance system and additional data publication in the second half of 2026. It is clear to us that multiple therapeutic FDA clearances beyond the soft tissue ablation clearance, while not yet achieved, will be essential to building a significant revenue growth business. Our commitment to generating clinical evidence, which will be highlighted later this quarter, will be the next critical step toward achieving FDA therapeutic clearances. With that, I will turn the call over to Jon to speak about our fourth quarter and full year financial updates. Jon? Jon Skinner: Thank you, Paul. Now I will highlight our GAAP and non-GAAP financial results before providing commentary on future cash use. I encourage listeners to review today's earnings release for a detailed reconciliation of non-GAAP measures to the most comparable GAAP measures. In the fourth quarter, we generated nominal revenues comprised of both nPulse Capital and Vybrance disposable sales. Total revenue was $264,000, up from $86,000 in Q3. This sequential growth was driven by both capital and disposable devices. Cost of product revenue was $260,000 for the quarter, slightly lower on a sequential basis as compared to Q3 2025. Total GAAP costs and expenses decreased by $1.7 million to $18.5 million compared to $20.3 million in the prior year period. The decrease in GAAP costs and expenses was primarily driven by a decrease in nonrecurring expenses. To remind everyone, non-GAAP costs and expenses exclude stock-based compensation, depreciation and amortization as well as nonrecurring costs. Total non-GAAP costs and expenses in the fourth quarter of 2025 increased by $2 million to $13.3 million compared to $11.3 million in the prior year period. The expected increase was driven by increasing clinical trial and early commercial launch activity. GAAP net loss in the fourth quarter of 2025 was $17.4 million compared to $19.4 million in the prior year period. Non-GAAP net loss in the fourth quarter of 2025 was $12.2 million compared to $10.4 million in the prior year period. As of December 31, 2025, cash and cash equivalents totaled $80.7 million compared to $118 million as of December 31, 2024, and representing a decrease of $14.5 million versus Q3 of 2025. Cash used in operating activities during the fourth quarter of 2025 was $14.8 million compared to $9.1 million used in the prior year period and $13 million in Q3 of 2025. We have also recently completed important corporate housekeeping filing a $200 million shelf registration. This provides the company with flexibility to support the balance sheet in an expeditious manner to ensure we have the resources required to achieve upcoming clinical milestones. Cash usage aligns with investment expenditures in pivotal trials, device scaling and initial commercialization. Expense growth remains deliberate and focused on long-term value creation. We continue to maintain ample liquidity to fund operations and clinical programs through major inflection points during 2026. With that, I will now turn it back to Paul for closing remarks. Paul LaViolette: Thank you, Jon. We are standing at the forefront of a medical transformation, leveraging Nanosecond PFA energy. Our Nanosecond PFA platform is no longer just a concept. It is scientifically validated, clinically proven in early use and its vast potential is slowly but certainly emerging across the fields of electrophysiology. We are moving forward with speed and purpose to establish Nanosecond PFA as the new global therapeutic standard. Our mission is steadfast, delivering significantly better outcomes for patients and creating robust long-term value via an emerging new era of patient and physician-friendly therapy for our shareholders. We are enthusiastic about the promising journey ahead, and thank you for your continued support. Now joining us for the question-and-answer session is Bob Duggan, Co-Chairman of the Board. Operator, please open the call for questions. Operator: [Operator Instructions] Your first question comes from Anthony Petrone with Mizuho Group. Anthony Petrone: Congrats to a strong start to the year in 2026 to the team. Maybe Paul, I'll start with Vybrance and then jump into nPulse for pulsed field ablation. Maybe looking at Vybrance here, we're 2 quarters into the launch. The team is expanding in a limited launch release phase here. Maybe just as we think about the next couple of quarters, when do we transition from limited release to a broader release for Vybrance? And then maybe just a recap on the enrollment time lines for the post-market surveillance study for thyroid, and then I'll have a follow-up on nPulse. Paul LaViolette: Yes. Thank you very much, Anthony. I appreciate your comments. Vybrance is exactly where we want it to be right now. It is in a market development mode. We are at a limited number of centers, and we are evaluating exactly how it works and exactly what we need to really scale it. I would say that phase is going really well. You alluded to the fact that the team is stable. We're focused on quality and as one would say, going deep rather than going broad. And we're very focused on data, and I'll talk about the benign -- the BTN study in a second. We're very focused on data. We're very focused on repeating quality outcomes for patients in multiple centers, and we're now at a number of centers. And we're very focused on accelerating the reimbursement process. So data will drive all of that and ultimately, data will drive a further therapeutic indication from FDA. We think those are the things that are required in our line of sight before we push on an accelerator to expand commercialization broadly. I've done a lot of market development work in my career in med tech, and it's really important to get the foundation right. That's what we are really focused on. We are very pleased to report increasing revenues. But we're really focused on the qualitative build-out of the market development and market enabling factors that will underpin revenue growth going forward. And so our focus is on building that rock-solid foundation for the long term because we know given the size of this market, given the lack of alternatives to these patients, given the quality of the outcomes we're seeing, given the, I'll call it, exclusivity of nsPFA and its ability to treat benign thyroid nodules in comparison to other minimally invasive alternatives or surgery, we know that we have that right formula. And so we're really focused on ensuring that we build that foundation because growth in patient treatments, growth in activation of patients both in converting them from surgery to less invasive nsPFA and in recruiting patients off the watchful waiting list. We know those things will happen once we build the fundamentals. On the recap, if you will, of the enrollment, we had mentioned in our prepared remarks that we expect to finish enrollment in the next few months. We are right on track for that. We have already enrolled a majority of that patient target in the first few quarters, and we're on track to finish it over the next 1 to 2 months ahead. So we feel very good about completing that enrollment on time. And then as I said earlier, our plan is to expand the study. We think we have the likelihood for very favorable clinical outcomes. We think those clinical outcomes which are very focused on quality of life and qualitative performance of those patients symptom relief based on the ThyPRO-39 score. We think that data set in concert with the data set that we will present at the NAST conference, which will focus on long-term outcomes from our feasibility study in Europe. We think the combination of those two will really create a very strong data set for additional regulatory authorization. So that's our focus with the current enrollment completed on time and the plan for expanded enrollment to increase the robustness of that data set. Anthony Petrone: Very helpful. And then I'll just squeeze one in on nPulse. So obviously, good showing at AF Symposium '26. 96 procedural success rate at 1 year, 22-minute dwell time in the left atrial wall and 90% freedom for arrhythmia. So a quick 2-part question. One is we move away from that medical meeting a few weeks ago. What has been the reception from the community? There seems to be quite a bit of buzz at the conference. And then what are the updated time lines for the IDE study in terms of enrollment? Can it actually be accelerated just coming off a strong feasibility study? Paul LaViolette: Yes. Thank you, Anthony. Receptivity to the data, I would say, has been exceptionally positive. The buzz in the meeting, which I appreciate your comment on, I think you read that accurately. The reason AFib is so exciting is because as a business, it treats the single most common arrhythmia in our population. And so it's a very large market. We all know that over time, the retreatment rates for ablation generally fall in the real world in that 20% to 25% or 25% plus range. And so technology after technology, system after system have come along. We've seen the progression from RF to PFA. Most physicians would still say, in the real world, regardless of the system use, the recurrence rate requiring retreatment is still about 1/4 of the patients. So when we report a 96% 1-year procedural success rate or a 90% rate for left atrial freedom from arrhythmia, that is an exceptionally differentiated outcome. It needs to be validated in a pivotal study. But it is, I would just call it noteworthy, and it has garnered a lot of attention. So we feel very good about how folks in all constituencies, if you will, physicians, patient populations, the corporate entities in the cardiovascular space, I think the reception to the data has been very, very positive. The time lines are, as we discussed, previously. We're expecting to commence enrollment in our study in the next 1 to 2 months ahead. We would then expect to enroll relatively swiftly. Our plan is to complete -- to start enrollment and complete enrollment in 2026. And you asked about acceleration, and certainly, we're prioritizing this program, and we're looking at all ways feasible to accelerate. I think in my experience, I've run dozens of pivotal studies. There are many factors that contribute to enrollment velocity, nothing more important than physician embrace of the technology. It's important to have a clean protocol, one that yields high patient flow through the screening process, one that fits well into the workflow of the clinical setting and physician interest in the technology because they believe it will treat their patients well and importantly, because it represents an improvement in workflow, in speed and ease of use. That is a very powerful combination. We've previously demonstrated with our data that our workflow is superior. We hadn't until the AF symposium put forth data that would imply an outcomes benefit. So those 2, we think, will accelerate physician interest and attention to the study. And when you look at that study hurdle of 155 patients in our protocol and look at the number of centers and the interest in participation in the study, we think it can move along quite swiftly. Operator: Your next question comes from the line of Suraj Kalia with Oppenheimer. Suraj Kalia: Gentlemen, I'd like to echo congrats on the exceptional data for nPULSE at the AF Symposium. Paul, if I could, just piggybacking on Anthony's question, right? So we do expect or at least hope pace of enrollment would pick up. But one of the things that Dr. Reddy had said at the presentation, Paul, was the nPulse wasn't really integrated effectively with mapping. I'm paraphrasing, but you get the point. For the IDE Pulse, are any steps being made to make the nPulse more effectively integrated with, let's say, CARTO or EnSite? Just trying to analyze or assess if there could be some incremental benefit in the IDE from mapping integration. Paul, next question, if you could give us any update on the next-gen nPulse. And are you seeing any spillover on the NANOCLAMP side of the equation, just given the EFS with nPulse? I know I threw in a lot in there, Paul. Hopefully, you got all my questions. Paul LaViolette: Thank you, Suraj. So I'll try to get them all. The question really -- the first question is about the potential benefit associated with a more completely or more effectively integrated catheter with mapping system. And so first of all, for those who may not have been at the AF Symposium, we did conduct a live case that morning from -- that Saturday morning from Prague, which put on display a more completely integrated system between catheter and the mapping software. That is a good example of, I'll call it, contemporary display of catheter rendering on a system. And it is precisely the quality of that rendering that had not been available for those first 150 cases. So that is what, Suraj, your point is alluding to. And the answer to the question is yes, we do expect to have improved software integration in the IDE, number one. And it remains open to speculate -- and I think Dr. Reddy commented on this in a couple of ways. It remains open to speculate how much better the results can be, and he somewhat jokingly implied that you can't get much better than the results we've already achieved. On the other hand, he also said that through the dozens of cases that he had performed in the feasibility study, he couldn't really tell exactly where the catheter was. And now having performed cases with a more integrated system, he could. And he felt that, that would improve the accuracy of his lesion creation and potentially reduce the number of lesions he might make. Already at a record low for nPulse, but he could do even fewer lesions with high confidence that he was placing them precisely where he wanted. So I do think we could receive both acute procedural as well as outcomes benefits from improved integration, and we do expect to have improved integration available in the IDE. The next-generation nPulse system is a device that is still in the development phase. So we're not providing time lines on that. Suffice it to say, it is intended to be a device that would integrate a regional footprint ablation system, which is what we have today with the current 360 as well as a, I'll call it, a focal or a large footprint focal device integrated in the same product. What that would allow, of course, is pulmonary vein isolation and then left atrial ablation points or lines without having to exchange the device. So that, we think, is a really breakthrough concept and will have significant procedural benefits, but is still in the development stage. And then lastly, your question about spillover benefit from nCLAMP. And I think the answer to that question is yes. And of course, those benefits are nsPFA derived. We're now applying the same energy to cardiac tissue in different methods and for the same indication, but with different ablation line patterns. And as we previously reported, we've done comprehensive remapping of those open surgical cases, which builds our confidence in the, I'll call it, the potency, the power of our ablation energy. We now have seen that 96% procedural success rate, that further reinforces the potency of our ablation energy. We have outstanding safety being derived from both cohorts of data presented at ESC for surgery, at AFS for electrophysiology. You can imagine that those data sets are being submitted to the FDA. We feel we had an excellent process for IDE approval with FDA. I'm certain that the TAP program status and the breakthrough designation of the clamp device provided some tailwind, if you will, for the approval that we ultimately receive for the IDE for the EP catheter. So those, of course, will both be going through their data collection and ultimately, submission processes around similar times. And really, what that provides the FDA with is just more safety data, more clarity that we can deliver great lesions in either lesion set, interventional or surgical. And I think it's difficult to specify the benefits, but we know that there are real synergies as we generate great data in each application and both of those data sets go into the FDA to essentially comparable review teams on nearly overlapping time lines. Operator: Your next question comes from the line of Josh Jennings with TD Cowen. Joshua Jennings: It was great to see the stellar feasibility results for nPulse at AFib Symposium. During the data presentation, Dr. Reddy and others kind of discussed the clinical success rate that 90% freedom from atrial arrhythmia at 12 months, exceeding expectations and maybe even higher than what we expected just based on procedural success or lesion durability alone, suggesting the possibility of some other biologic impact or modulation beyond just the conduction block. You reviewed some of the hypotheses behind that at the Pulse event at the symposium. But maybe if you could just review those? And is there any way to confirm any of these hypotheses with either an animal model or anything on the preclinical side? Paul LaViolette: Yes. Thank you, Josh, and very good question, and thank you for paying such close attention to everything that was reported at AFS. It's great to see. I would echo exactly what you said. These are hypotheses. We don't know that any incremental mechanism is actually required in order to achieve the results that we've seen. I think the first thing I would say is that the reason a hypothesis for incremental benefit might be pursued is because the original data that we presented were so strong in comparison to a history of delivering lesions with PFA that clearly maxed out at lower levels. It leaves one to question how it is that such a significant leap can be made. We have less wonder about why that leap can be made. We've been making lesions in preclinical models for years. We have tremendous understanding about the power of nsPFA and that it is a differentiated energy. Yes, it's a form of pulse electric field delivery, but we really do believe it is a different type of energy. It has a different mechanism of action already as we've defined than microsecond PFA and the consistency and depth and the transmurality of our lesion generation, we think is on its face, the explanation for superior results. That being said, we certainly can conduct preclinical experiments to assess whether other nerve targets that might be extra atrial could be effective. But while we will work with our clinical advisers to do that, I would say we are less inclined to search for a novel mechanism because we believe we understand the clinical results and why they are a direct result of the energy that we are delivering. What's unique about nsPFA, and we see this in multiple indications, is that it is hard to imagine how effective it can be while being so fast, while being so nonthermal and fitting into workflow as exists already in existing clinical practice. But that is what we're seeing essentially time after time. So we believe the most important thing to replicate is not a novel mechanism that is the result of speculation, if you will, but rather to replicate these clinical trial results. They've been derived on a large n. We're continuing to follow those patients. So I think the most important clinical discovery will be how does the next tranche of patients as you build up the full 150 now going to beyond that and follow those patients 6 and 12 months and continue to just reinforce the fantastic clinical results. To us, that's more important than looking at preclinical models for atrial ganglia ablation. Joshua Jennings: Understood. And then just to follow up on the tail end of your answer, just how should we be thinking about the timing of future updates to the feasibility study results and particularly the final results that will be submitted, it sounds like for CE Mark approval. Paul LaViolette: Thank you so much, Josh. Timing, really the next event will be at HRS. We plan to submit data for review at HRS. And that, of course, will be, I'll call it, on a rolling time line. So as many patients as meet the endpoints by the various presentation cutoff deadlines, that's what we'll present. We think that will provide us a very nice increment in total number of patients over time. And so that will be the next event in addition to an update when we commence enrollment in the study, which we expect, as mentioned in the next few months. So very nice updates coming between the announcement of first patient enrollment as well as HRS by just a few months down the road. Operator: Your next question comes from the line of [ Jesse Crawford ] with Luxury Lifestyle Design and Development. Unknown Attendee: Thank you guys. Thanks for putting on these calls. These are actually really, really beneficial to everybody, especially all of the people who really believe in the technology. I'm one of those people. I evangelize for Pulse all the time. And when people ask me what it is, I kind of have to give them the dumbed down version of it, but I kind of equate it to the tricorder in Star Trek. People laugh at that analogy, but I really think this is the future of kind of the 2 holy grails of treatment for cancer and heart disease. So as an avid investor, I like to participate in the calls, but I also have AFib. So I would be very interested in participating in one of the clinical trials. I'm that big of a believer in it. Paul LaViolette: Well, thank you, Jesse. And I appreciate your transparency about AFib. The fact of the matter is it is so common. We can't go very far without finding a patient right in our midst. And AFib is so common. It's growing in incidence. And what we're faced with right now is, as you well know, a progression through early diagnosis and then most commonly drug therapy, which is often undesirable for the patient, some combination of anticoagulation therapy and antiarrhythmic medication. And I think the ultimate vision for a therapy is to pull forward the option that can be offered to a patient to allow for a very safe and highly effective intervention as first-line therapy so that a patient that is tolerating atrial fibrillation, which is obviously associated with higher risk factors that, that you would not have to tolerate AFib because the balancing act between first-time effectiveness and safety is so favorable that you can be offered the option of going straight to an intervention. We know that with AFib, the earlier one intervenes, the likelihood is that the AFib is not advanced in its complexity. And if it resides still in the pulmonary veins, one is more likely to treat it definitively, which is to say an ablation can be a cure. And that's not really the way patients are provided therapy opportunities today. That requires more data, more changes in guidelines. But I think the trend as supported by the kind of early results that we've seen so far could be supported by this kind of a breakthrough technology. So we really appreciate your support and your evangelizing. And I would say from what I've seen, if I had AFib, I would want the therapy, too. So we are like-minded. So thank you, Jesse. Unknown Attendee: Thank you. I'm very -- actually a very pharmaceutical treatment at averse. So this is very exciting to me and a lot of my friends as well. And I guess a follow-on question to that would be for Bob on what his strategy is for partnerships? Robert Duggan: Jesse, good to hear your question. You sound -- your viewpoint on the product and our efforts and the technology is really a duplicate of my own here and I'll get to the money question that you just asked. The challenges have really been it's a novel technology. This is not MicroPulse. It's a nanoPulse. It's different from, say, laparoscopy as robotic procedures where people recall robotic as it's an extended form of laparoscopy, but it was quite a bit different, had a real significance. That had to be proved out, and we've had fortunately, the benefit of working with the world's top-class surgeons, and we're comfortable now. So we go into this final study on the CA side. It won't be the final study, but it will be a study that we would expect we would go forward and get approval from. So we're very optimistic about that. When it comes to reimbursement in this business industry, which I've been in for a couple of decades, you -- it's really a high priority to have a label. But to get a label, you've got to have the top quality professionals using your product and really signing off on its ease of use and the duration of outcomes that they achieve because some of these are the best of the best and they can get almost anything to work. So you really have to democratize it for a bit. So we're well into all of that now. On the -- but importantly, we do not have a label from anything other than soft tissue ablation, which we cannot directly pinpoint and tell people. Here's what you should do or train them for that and originate that. And given the scarcity of people through a trial, we do not have reimbursement. Paul said on the call, and I think it's accurate, that will come over the next 4 to 8 quarters. And so those that are potentially frustrated on the Vybrance, it's just -- we just have to live with that. I've seen many companies rush in without that. They get stalled out and you become a company that your revenues are not able to even match your expenses. So we will not be doing that. And it will take a little bit of time on the Vybrance side. We're still working now to get a label on the CAF side and the clamp side, but we believe those are coming in 2027. But we think the probability of that is extraordinarily high. We are more than pleased with the outcomes. And just one touch more back on the Vybrance side. We look forward to the readouts on that trial coming by midyear. So that news is all good. Now how do you turn around and fund that? That will require additional funding, but it could come in the nature of a partnership. It could come through distribution. There are any number of forms that, that could take place. We did a significant rights offering a year ago or so and you saw us participate in that. And we're still living off of that. We have about $80 million in the bank closing the year out. We have another $2 million in warrants as the stock would trade over $22 a share for another few weeks. So that's what we have in mind. We watch it carefully knowing that we've always got access to money. We haven't had to go and get 2 years' worth of equity dilution in order to have a couple of hundred million on account. But we're very pleased with our following now. We're very pleased with the leadership. And I would say there's a touch of frustration on the Vybrance side where the singular importance of being able to achieve a label has been long coming. But we're now closing that gap, and we'll get on that. And as much as -- I wish I could say it was 2 to 4 months, but it's really going to be about 4 to 8 quarters out before we have that lined up. And then it's Katy bar the door. So I appreciate your enthusiasm. I think you called it correctly. I too have AFib. And as soon as this is labeled, I'll be getting it, if not sooner. It's -- I've been in the operations, seeing the procedures, some without full anesthesia. -- just really, it's just warm my heart to know that I've participated in this and the benefits that will be accruing from it. So I hope that addresses your questions, Jesse. Operator: And with no further questions in queue, I'd like to turn the conference back over to Paul for any closing remarks. Paul LaViolette: Well, first of all, thank you, Bob, for those comments and really for the great questions we received. On behalf of the team here at Pulse Biosciences, thank you all for your interest. We look forward to providing you with updates throughout the very busy 2026 we have ahead. So thank you all for joining, and good afternoon. Operator: This concludes today's conference call. You may now disconnect.
Operator: Good morning, ladies and gentlemen, and welcome to the Air Liquide Full Year 2025 Revenue Conference Call. [Operator Instructions] I will now hand over to the Air Liquide team. Please begin your meeting, and I will be standing by. Aude Rodriguez: Thank you, and good morning, everyone. This is Aude Rodriguez, the Head of Investor Relations. Thank you very much for attending the call today. Francois Jackow and Jerome Pelletan will present the performance of the full year 2025. For the Q&A session, they will be joined by Emilie Mouren-Renouard and Adam Peters, both Group VP overseeing, respectively, EMEA and North America. Adam is on the phone with us from the U.S. In the agenda, our next announcement is on April 28 for our first quarter revenue. Let me now hand you over to Francois. François Jackow: Thank you, Aude, and good morning to all of you. It is a real pleasure to be with you today for this earnings call. This past year, Air Liquide has reached new heights in both operational excellence and financial performance. The inherent strength of our operating model, coupled with the transformation momentum driven by our teams, has delivered robust performance across all key metrics. This is particularly significant, given the ongoing macroeconomic and geopolitical headwinds. Let's look at the specifics. Sales grew plus 2% on a comparable basis. This proves our ability to capture growth even in a complex environment. Our focus on operating discipline is delivering clear results. It reflects more and more the visible contribution of the transformation momentum throughout the organization. We achieved a record Gas & Services OI margin improvement of 130 basis points, excluding energy pass-through. At the group level, the 100 basis point improvement keeps us firmly on track to meet our 2026 commitment of plus 460 basis points in 5 years. This operational leverage translated directly to the bottom line with recurring net profit growing by plus 10%, excluding currency impact. Our recurring ROCE continues to rise above 11%. Sustaining this momentum while simultaneously scaling up our investments is a testament to our disciplined capital allocation and, of course, improve performance. Our ability to generate cash has again improved. Cash flow is growing at plus 8%, excluding currency impact, providing us with significant strategic flexibility. Our performance is equally strong on extra financial fronts. We achieved record safety levels. We also further decoupled growth from carbon with CO2 emissions now 13% below our 2020 baseline, and the carbon intensity had been reduced by 46% in 10 years. Finally, our investment backlog remained at a record high of nearly EUR 5 billion in spite of the exit of the ExxonMobil Baytown project. This is more than 15% above last year. These are committed, signed projects already under construction effectively locking in our future growth. Our investment portfolio of 12 months opportunities is also at a record high level of EUR 4.6 billion. As these results demonstrate, Air Liquide is steadfast not only in delivering profitable growth regardless of the macroeconomic conditions, but also preparing for the next phase of growth. This is a structural strength of the group. 2025 marks the end of the 4-year strategic ADVANCE plan. You see on Slide 4 that we have successfully delivered on all 3 objectives of our ADVANCE strategic plan: Growth, first, with over 6% average annual sales growth on a comparable basis versus 2021, we have exceeded our midterm ambitions. Returns, our recurring ROCE has remained consistently above 10% since 2022, hitting this target a full year ahead of schedule. Decarbonization. Finally, with 3 consecutive years of absolute CO2 emissions reduction, our emissions are now 13% below 2020 level. We have officially reached the inflection point we projected for 2025. In summary, the ADVANCE plan has met its objective across all horizons. In the current supply environment, this track record demonstrates our ability to deliver consistent results. It is the foundation upon which we build our next chapter with confidence. On Slide 5, you see one of the reasons to be confident. The acceleration in margin improvement you see here is a direct result of our evolving culture of operational excellence. Looking at the graph, the progression is clear. We shifted gears during 2017, 2021 period, stepping up our performance to plus 240 basis points versus 50 basis points in the previous 5 years. Under the ADVANCE plan, we have accelerated once again. With a national 100 basis points delivered in 2025, we are now fully on track to reach our record-high target of plus 460 basis points by the end of 2026. This momentum proves our ability to structurally enhance our profitability year after year. And there is more to come. And the reason why there is more to come is that our margin expansion is underpinned by the structural transformation program we launched in mid-2024. In 2025, we shift from design to full-scale execution, leveraging data and AI to drive structural efficiency. Here are some examples across each of our 4 pillars. First, streamlining the organization. We have simplified our structure, reducing by up to 3 management layers. In the past 18 months, we have reduced our global headcount by 5%. This is without taking into account the new restructuring projects announced in 17 European countries this past December. This will secure midterm synergies as they are fully implemented. Second, industrial excellence. Our new performance management system is now 100% deployed, creating a unified global standard for operation benchmarking. It is designed to continuously boost our performance across more than 400 industrial sites and covering the full value chain. Another example is our end-to-end optimization for liquid gases, which is already rolled out at 45%, significantly reducing our industrial and supply chain costs. Third, Global Business Services, GBS. We have eliminated subcritical smaller GBS and expanded our reach with a fourth state-of-the-art GBS center located in India. GBS headcount has grown by plus 35% as we migrate tax from local operations to specialized hubs. We have now secured 25% of our targeted savings from this initiative. As you see, there is more to come. Finally, commercial initiatives to transform customer care to AI-driven automation. Five major projects are now in the rollout phase, including the AI powered streamline processing of over 17,000 daily customer e-mails and orders in Europe and in the U.S. This transformation program is still in its early stages but the momentum is clear. Leveraging our customer-centric and employee engagement culture, we are building a leaner more disciplined, more standardized, more data-driven and more agile Air Liquide. On Slide 7, as a matter of fact, I want to highlight the strength of our human and social commitments, which are foundations of our long-term success. Safety excellence. We achieved the lowest lost time accident frequency rate in our history. It represents a 60% reduction over just 2 years. Why? I am personally proud of this progress by our teams. Safety remains an absolute priority. And our ambition remains unchanged, 0 accident. Social impact. Under the ADVANCE plan, we have reached several milestones in our social commitment. We have significantly increased the representation of women in management, leading the industry by example. I am also pleased to announce the full deployment of our common social care coverage across every country where we operate. Finally, community engagement. We have successfully scaled our global program to support local communities, ensuring our growth, create a positive impact wherever we are present. These achievements are the tangible evidence of Air Liquide's commitment to combining financial performance with a positive impact. All-weather growth is a unique strength of Air Liquide. Moving to Slide 8. We have clear evidence of our 4 growth engines in action delivering both immediate and long-term value. First, asset optimization. We continue to unlock low CapEx growth by leveraging our existing pipeline networks and infrastructure. This allows us to secure new sales with minimal investment. Then core business leadership. Our technological edge remains a major differentiator. As such, in 2025, we secured several long-term contracts in electronics across Asia and the U.S., alongside a landmark project in Europe. Then, energy and industry transition. The industry transformation, which implies carbon reduction, but also electrification and automation is ongoing. It is a long-term trend shaping the manufacturing industry for years to come. Here, we are solidifying our leading position in many ways being at the forefront of our customers' needs. Key milestone this year includes the signing of second 200 megawatt electrolyzer in Europe and the electrification of 2 air separation units in China. Then, of course, strategic acquisitions. Beyond the targeted 13 bolt-ons to increase local density, we reached a major milestone in 2025 with the acquisition of DIG Airgas in South Korea. This is highly strategic, providing us with a leading position in the world's first largest industrial gas market, a market expected to double over the next decade. In summary, while the first 3 engines fueled our growth by EUR 5 billion of investment backlog, the addition of the DIG acquisition and our bolt-on strategy brings our total capital deployment to nearly EUR 8 billion. Every euro of this is dedicated to securing future growth with return on investment remaining our absolute priority. Turning to Slide 9. Let's look at the exceptional positive momentum in our Electronics business. This is a key structural growth driver where Air Liquide is uniquely positioned. Over the past 24 months, we have converted demand into a record of EUR 1 billion in CapEx through new projects signed worldwide, accretive on margin. But the pipeline ahead is even more significant. We are currently tracking EUR 2 billion in active opportunities targeted for signature in the upcoming year. To give you a sense of scale, Electronics now accounts for over 40% of our 12-month investment opportunities, with a heavy concentration in the high-growth markets of Asia and the U.S. These recent wins powered by our leading-edge technologies do more than just grow the business. They firmly reinforce our position as the global #1 in electronics. On Slide 10, we are committed to converting this increased performance and growth pipeline into value for our shareholders. These are not just words. Supported by our Board of Directors, we will propose to increase the dividend to EUR 3.70 per share at the next general assembly. This represents a significant increase of 12% compared to last year. It continues our long-term track record of almost 8% average annual growth in dividend per share over the last 20 years with a clear acceleration over the past 3 years, reaching almost a 40% increase. In addition, the Board has decided to propose to proceed with a 1-for-10 free share attribution in June 2026, subject to the authorization of course, of the next general assembly. These new shares will be eligible for dividends starting in 2027 further compounding shareholders' return. This balanced approach has delivered an average total shareholder return of 11% per year over the last 2 decades. Our original model and our focus on performance continue to turn operational success into sustainable return for shareholders. Turning to Slide 11. Let's review our outlook. On the left, you will find our formal guidance for 2026, which remained centered on our commitment to performance. For 2026, we reiterate our objective of delivering an additional plus 100 basis points of margin improvement. In addition, to provide you with greater visibility into our long-term trajectory, we have decided to further raise and extend our margin ambition. This extension through 2027 implies an additional 100 basis points of improvement for the 2027 fiscal year. With this, we are now increasing our total target to 560 basis points over a 6-year period. By expanding our ambition today, we are demonstrating our strong confidence in our ability to drive further performance. This is a clear commitment to delivering sustainable, long-term profitable growth and value for our stakeholders. We look forward to hosting a Capital Markets Day in the second half of this year, where we will outline our strategic road map and long-term financial ambitions. Thank you very much for your attention. I now ask Jerome to drive you through the details of our financial performance. Jerome? Jérôme Pelletan: Thank you, Francois, and good morning, everyone. I will now review our numbers in more detail. So coming back to the full year now on Page 13, group sales delivered sustained resilient growth in a still uncertain environment. Energy pass-through turned into a slight tailwind, and there was no significant scope effect in 2025. DIG being closed in January 2026. So overall Gas & Services sales achieved a plus 2% comparable increase as did our newly consolidated Engineering and Technologies activity. Thus, overall group sales were also up plus 2% on a comp basis for the year with a slight uptick for Q4 at plus 2.5%. So zooming into Q4 2025 on Slide 14, all business lines as well as all geographies delivered sales growth. Let us now review the Q4 activity for each of main geographies. I am now on Page 15. So sales in the Americas remained strong, up plus 5% on a comp basis. Large industry were strong and benefited from additional hydrogen volumes in the U.S. as well as solid Airgas and Cogen. In Merchant, sales were driven by an improved pricing effect of plus 2%, supported by active pricing management at Airgas. Volumes were resilient with regards to gases, while hardgoods remained soft. Growth in Healthcare was very strong driven by sustained high pricing in the U.S., including U.S. proximity care and our intel core -- Intelli-OX service cylinder development. Growth was further supported by the increase of home health care patients in LatAm, together with solid pricing. Finally, in Electronics, the very strong growth in carrier gases for new project start-ups and ramp-up was offset by high 2024 base in equipment and installation. Overall sales in EMEA were up plus 1% with continued very solid growth in Healthcare. Large Industry was flat. Solid airgases in Italy and South Africa and a favorable mirror effect on the customer turnaround in Q4 '24 in Saudi Arabia offset low hydrogen and Cogen sales, especially in Benelux. In Merchant underlying sales were resilient, excluding transfer activity from GM&T. Pricing was positive at plus 0.8% despite the impact of the indexation on decreasing energy prices in bulk contracts and low pricing in Helium. Finally, Healthcare growth was robust at plus 4.3%. Sales have been supported by strong home health care activity, notably in diabetes, community care in Germany and sleep apnea. Mix Asia posted positive growth in Q4. In Large Industry, low demand offset positive contribution from start-up and ramp-up in China and Korea. Sales in Merchant were flat. China posted growth despite helium headwinds. Sales in the Rest of Asia were somewhat mixed, but mostly low. Electronic sales improved by plus 5%. Growth in carrier airgas came mainly from start-up and ramp-up, in particular, in Taiwan and strong growth in materials were only partly offset by the equipment and installation comparison to a very high level in 2024. I will now comment on our Q4 activity by business line on Page 16. In Merchant, we saw increased pricing at plus 3.2% in Q4. So overall volume were resilient in a subdued industrial environment. Large Industry benefited from start-up contribution, mainly in Americas and Asia and from a solid base activity in the Americas. EMEA and Asia saw overall low demand. Page 17 now. There was a strong underlying momentum in Electronics at plus 6%, excluding E&I. Sales benefiting from a strong contribution from carrier gas, mainly start-up and ramp-up, in particular, in Taiwan and in the U.S. as well as solid materials performance in Korea and Taiwan. This growth was tempered as E&I sales normalized following a record year in 2024. Finally, in Healthcare, we pursue strong trends despite a high comparable in Q4 '24. Home Healthcare was again robust, supported by diabetes, sleep apnea and community care. In medical gases, sales growth was strong with steady pricing addressing inflation, especially in the Americas. On Page 18 now, as Francois mentioned, the success of our structural transformation program has been again demonstrated by our improved operating margin. Results were even more impressive regarding Gas & Services OIR margin, which improved by plus 130 bps. Getting into the detail, purchase were down minus 3.6%, though stable, excluding the currency impact and the reclassification effect and the increase in energy price, particularly natural gas was offset by the decrease in purchase of material and equipment due to a decline in sales and goods. Personnel expense were down minus 1.5% and showed a limited increase of plus 1.5%, excluding the currency impact in an inflationary environment that benefited from the reduction in headcount of around minus 5% since the beginning of 2024, supported by the rationalization plans across all geographies. Depreciation is aligned with the level of start-up and ramp-up. This has resulted in group operating margin improvement at plus 100 bps, excluding the impact of the energy pass-through. On Page 19, now this margin improvement was supported by a structured execution plan based on the 3 pillars. First, Industrial Merchant pricing remains solid with adapting to inflationary pressure and amid pressure in the Americas and to lower energy cost in Europe. We have and we will continue to focus on price management above the cost curve. We have also executed a record level of efficiencies, delivering EUR 631 million in 2025, which is significantly above our yearly advanced objective of EUR 400 million. Thirdly, we're active in portfolio management. We closed indeed 13 acquisitions in 2025 and executed 3 divestitures with a continued focus on strategic, profitable and margin accretive opportunities. Let us now review quickly the bottom of the P&L. I'm now on Page 20. Operating income ratio increased plus 3.5% as published. Excluding the currency impact, it goes by plus 7.7%, which is significantly higher than comparable sales growth, highlighting the strong leverage effect. Nonrecurring operating income and expense account for EUR 300 million, including restructuring costs for approximately EUR 200 million with the main parts in Europe. Net financial costs were down slightly with a decrease in average debt outstanding and in factoring. The cost of debt now stands at 3.3%, slightly down from 3.4% in 2024. The income tax rate was at 25.2% and compared with 24% in 2024, impacted by an exceptional stock tax surcharge in France in 2025. Net profit growth was up 6.4% and recurring net profit, excluding FX, increased significantly by around plus 10%. I am now on Page 21. We generated a record EUR 6.8 billion in cash in 2025. As you can see, our strong cash flow finance increased CapEx at EUR 4.1 billion gross value or EUR 3.7 billion net of asset divestiture as well as EUR 1.9 billion in dividends, which represents another record level for us. We are also able to reduce net debt, while net debt-to-equity ratio stood at 31.2%, highlighting the strength of the cash flow. Keep in mind now that this ratio will increase by more than 10 percentage points with the DIG acquisition, which closed early 2026. On Page 22, you can see that recurring ROCE continues to ramp up well above our 10% advanced objective and this despite continued large investments to fuel our long-term growth. On Page 23, although the DIG acquisition closed in January '26, in order to give you a complete picture with regards to the full project development, I will present the 12 months portfolio of opportunities and backlog, including the opportunities and site projects acquired with DIG Airgas. So industry and financial decision for the year remain at a high level of EUR 4.2 billion. Strategic financial decision of DIG Airgas will appear with our Q1 2026 decisions. Our investment backlog now remains very strong at EUR 4.9 billion, which is now the fourth year in a row above EUR 4 billion. The backlog is very much and well diversified, including more than 70 projects across all geographies with approximately 40% of the backlog now being dedicated to electronics projects. Finally, our 12-month portfolio opportunities at a record high, EUR 4.6 billion. The removal of the Exxon Baytown project is now compensated by the entry of new projects in Electronics and Large Industry as well as opportunities from DIG Airgas. The current 12 months portfolio now consists of more than 40% project in Electronics. And bear in mind that the portfolio beyond 12 months remains dynamic and totals above EUR 10 billion. On Page 24, as mentioned by Francois for 2026, we're strongly aligned with our ambition to improve operating margin by plus 100 bps and confident in our ability to deliver recurring net profit growth at constant exchange rates. We now commit to a further expansion for OIR margin improvement in 2027 to reach plus 560 bps of cumulative improvement over 6 years 2022-2027. Thank you for your attention. Back to you, Francois. François Jackow: Thank you very much, Jerome. I believe we can start the Q&A. Operator: [Operator Instructions] The question comes from the line of Alejandro Vigil from Santander. Alejandro Vigil: Congratulations for the '25 results. The first question is about the organic growth. In the fourth quarter, we saw some acceleration of 2.5% from the previous quarter. How you are starting this beginning of the year? If you can give us some indication of the level of activity in the beginning of the first quarter? And the second question is about the remuneration, there's a whole distribution. You increased double digit the dividends for '26. My question is about your considerations or your thoughts about the buybacks. At the end of the day, the level of leverage is still low. Looking at the opportunities, probably you have room to fund these acquisitions through the balance sheet. If you can elaborate on why to increase double-digit dividends instead of considering buybacks instead? François Jackow: Thank you very much for all the questions. I will take the first one and Jerome will comment on the second point. So indeed, I mean, we have seen a pickup in the activity at the end of the year. This being said, I think in the current environment, we believe that we will be probably, and that's the main assumption, in the same kind of trend for 2026. So this time probably a soft growth. But if we just look back a little bit, we tend to see a more positive sign that could definitely, I mean, give us some uptick during the year, maybe not in Q1, but as we go during the year. What are those? I mean, clearly, we mentioned electronics. And you remember that there has been a very strong comparison effect where the activity of E&I was extremely strong in 2024. So you have not seen the underlying trend. But clearly, we see the volume and the carrier gas contribution clearly picking up. We start also to see, I mean, some signals in some subsegments in the U.S. industrial activity. So again, we have to be cautious, but those could be positive signals coming later on during the year. Even in Europe, and maybe Emilie will have the opportunity to talk more about that later on, we clearly, I mean, see that some sectors like chemicals are still in the middle of difficult time with some restructuring. But in the past few weeks, we have heard positive news regarding the steel industry, especially with new announcements for new plants, but also the start of some of the production lines. So I think all those could definitely contribute. Again, our best assumption for our financial projection is that it will be basically the same kind of trend for 2026 as what we have seen for 2025. And we do consider that anything better than that would be an upside for us. And regardless of the environment, of course, we are absolutely committed to deliver the margin improvement. And finally, on the outlook and the momentum, I think we have to keep in mind that we have a super high level of business development activity. We mentioned electronics, we mentioned also a large industry. We start to see, I mean, project popping up in the U.S., which is probably the effect of the reshoring. So all this should be good opportunities and potentially also further M&As of different sizes. So this is the outlook for 2026. Again, confident in our ability to continue to deliver the improved performance, I would say, regardless of the environment. Jerome, do you want to talk about the increased dividend and our thinking behind that? Jérôme Pelletan: Yes. Thank you very much for your question. So you're right to point that plus 12% increase of dividend is a very good and a strong sign of confidence, and that's really the state of mind that we are today. We have also to bear in mind that when you come back to the different I would say, parameters, we can see that we have delivered nearly EUR 7 billion of cash flow. So this is strong. And the level of gearing today is quite low at slightly above 31%. So we have the means to distribute, and that's why we have decided, which is very much the result of our, I would say, improvement of our performance trend and the overall performance over the last year. So that's why we have decided. And you know this is also a sign that Individual shareholders like as well. But to come back on your second question, our policy has always been very clear. Given this very strong cash flow improvement in the last years, our order of, I would say, allocation is first, and we want to continue to finance the CapEx and that's important because that's where when we earn projects, we want also to allocate on that. The second point is M&A and significant M&A and that's why we have also the means to accelerate and to acquire DIG at the beginning of the year. And the last thing is on distribution on dividends, which again is a very strong one. So as it related to buyback, no, our current status is very clear. There is no taboo, okay? And this is something that we are looking. We basically continue to monitor the performance on the cash. And we have no specific announcement to make today, but we are looking at all options. Operator: Now we're going to take our next question. And it comes line of John Campbell from Bank of America. John Campbell: I will ask 2, if possible. So coming back to one of the points you made. You talked about potential positive signals in the U.S. in terms of activity. Can you perhaps elaborate on what those potential signals are? And maybe to give you an example, your U.S. peer recently discussed they see packaged gas volumes as a leading indicator of activity. Do you agree with that assessment? And perhaps how are those activity levels trending? That's my first question. The second question, I noticed there was a big meeting in Antwerp, I think it was last week, to discuss economic competitiveness in the EU, and they have been caused to review the CO2 emissions levy that is placed on industry. Maybe perhaps in light of this, how do you see the level of engagement with potential customers, particularly in Europe when around the energy transition? And perhaps you mentioned that electronics is a large opportunity. Would you say that sort of electronics potential orders can match the scale of potential previous hopes for energy transition projects? François Jackow: Thank you very much, John. I will ask Adam who is in the U.S. to comment on the merchant, but also the large industry and the electronics business probably. And Emilie will talk about the CO2 situation in Europe and how we see this. Adam? Adam Peters: Yes, absolutely. Thanks, Francois. Thank you, John. So if I look at activity levels in the U.S. and kind of building off of some of Francois's previous points about what we see, we definitely see some positive signals. So if I go kind of sector by sector and take the merchant business, we continue to see resilient gas volumes and we see in the merchant business where it's buoyed by the pricing effect that we have. We also see on the hard goods side, some potential tailwinds coming in 2026 around sectors like defense, for example, like space and the like. So we see activity coming in various areas. We're still a bit cautious in that regard because, obviously, this depends heavily on certainty around tariffs and certainty around interest rates and the like. But overall, when we look forward, we see positive signals. I would say on the really positive side, what we see is, a strong shift towards more traditional investment opportunities in business development. So when we look at business development, we can probably talk a little bit about this later, we see a shift from energy transition more towards the examples that Francois mentioned earlier around core investments and existing assets, where we see a lot of interest from clients and a continued very strong business development effort on the electronics side and in large industries going forward. So I would say we have definitely not seen a slowdown in the activity for business development. The customer engagement remains very high. And I'm quite optimistic about 2026. And I think this feeds into the backlog comments that Francois and Jerome talked about earlier and also the portfolio that we see. François Jackow: Thank you very much, Adam. I cannot resist, I mean, to build up on what you mentioned about the space because there has been a lot of discussion recently about the opportunities in the space area. And indeed, we are very excited and positive on this because we are today in the space business, and we are probably the only player with covering the full chain from the oxygen-hydrogen supply, but also, I mean, krypton, xenon for satellite and all the technology from the launcher to the satellite. So as you may know, I mean, we have a strong position in Europe and also a presence in the U.S. In the U.S. alone, we have more than 180 customers in the space ecosystem. So we see the momentum, clearly, and we benefit from this. And there are indeed a lot of opportunities. What we have to keep in mind, and I don't want to pull down, I mean, the excitement about this new opportunity is that some of the bigger opportunity may end up actually being a sale of equipment. So it's not, at this stage, traditional over-the-fence business. So there again, I mean, we are very well positioned. But let's not -- I mean, it's not necessarily comparable with the rest of the large industry or the electronics business. It may be a onetime sale of equipment for some of those projects. But again, very well positioned and ready to take the opportunities as we have done in the past years and months. I turn over to another area, Emilie. Do you want to speak a little bit about Q2 and Europe and what we hear and see from customers? Emilie Mouren-Renouard: Absolutely. Thank you, Francois, and good morning, everyone. So yes, we followed this Antwerp meeting last week carefully, and we were actually present in Antwerp. The chemical industry really did some strong speeches about competitiveness of the European industry and also on ETS, the CO2 tax Europe. So that created a bit of confusion. Just to remind everyone, a revision of the ETS was anyway due and flat for the second half of this year. So this is not new. But of course, the ETS price is impacting some of our customers positively or negatively. For us also, I want to remind everyone, our own emissions are subject to ETFs that are covered by our long-term contracts and the cost of the ETF is passed through to our customers the same way energy is. So definitely, chemical industry is suffering right now from structural competitiveness gap, like was said last week in Antwerp. But there are also positive signs in Europe. Francois mentioned one on steel industry. So on the steel industry, we see positive signs of picking up volumes picking up in January, in particular, more than we had seen in the overall 2025 year. This is helped by quotas and limiting imports to Europe and of course, the CBAM as well. We also see some positive signs in Germany, so not necessarily on the chemical industry, but in Germany overall with a bit more volumes and also a bit better business mood. Remember, we are very committed to Germany. We've announced investment of a large basin in electronics last year in Dresden. So this is positive. And overall, we continue to have a strong backlog of projects in Europe as well. So we'll continue to work with the European Union, with governments to improve the competitiveness of the industry in Europe, but there are also positive signs that I just mentioned. François Jackow: Thank you very much, Emilie. I think, John, you had kind of also a side question, which was the share of electronics versus energy transition. I think with what was mentioned by Emilie and also what we see in other regions like China, the energy transition is still alive. So there is still a pipeline of projects, a very robust project. Again, it's a long-term trend. So it's not by any means disappearing, and we are very well positioned there again. What we see, and that was your point, clearly, is the pickup in the electronics projects driven by the AI and the rate for capacity in chips, but also in memory. And this is clearly accelerating in the past few weeks even and the need for sovereignty. That's why, I mean, we see most of the major region of the world, a very, very strong momentum. As of today, there is 40% of our backlog, which is the electronics projects. So you see there is a shift. They are gaining importance. We do expect this to continue to grow. This being said, again, there are some energy transition projects that remain. So I think the takeaway probably from this is to have in mind that in the current time, having a very diversified portfolio and being able in terms of footprint and segment to be agile and to capture the opportunities wherever they are is really a differentiating factor and as of now, leveraging our #1 position in electronics is clearly the strength. Operator: And the question comes line of Tony Jones from Rothschild & Co. There is no answer from Tony Jones' line, and we're going to the next question. And the question comes from the line of Alex Sloane from Barclays. Alexander Sloane: Two for me, please. The first one, just on Baytown. I mean you've been clear, that's contractually protected, no financial impact. But stepping back, do you see any broader risk of customer-led causes or deferrals across decarbonization projects in your backlog or opportunity pipeline? And what are you seeing in terms of customer decision cycles? And is your '26, '27 margin trajectory, assuming any change in conversion rates? That would be the first one. And secondly, on electronics. Clearly, up to 40% now of the backlog and opportunity pipeline driving outsized growth. Can you comment on whether we should expect any material mix effect on margins from the outsized growth of this segment over the next 2 years? Are you seeing any change in the competitive dynamics in this segment as clearly it's driving most of the opportunity at the moment? François Jackow: Alex, thank you very much. So briefly on the first one, no, we don't see projects which are at risk today in the portfolio, in the backlog. Again, I mean, all the projects have secure contracts, secure customer, secure fundings when they are registered in the backlog. You remember, we have been extremely prudent in the way we were accounting for the Exxon project. So there may be projects, which appear or disappear in the portfolio, but not in the backlog, so no incidents on our financial performance for 2026 and 2027. On the second one, on the electronics, what we see are mostly carrier gas projects, which today represent 50% of the electronics business activities. So you see gradually, it's moving. And those projects in terms of margin should be accretive because in some of those projects, the energy is included. But in others, the energy is not included. So the margin ratio is higher. So when they will come on line and keep in mind that those project takes 2, 3 years to build, yes, they will have a positive margin contribution. At the end of the day, what is very important for us is the return on the capital employed, and that's how we are making a decision. Yes, it's a competitive area. Many people are fighting for those projects. The good news is that given the volume of the projects, we can be selective and we are selective and we choose the battle basically where we have a competitive advantage and we can really create value for our customers. And when you look at 2025, we get more than our share of the new projects, and we are committed to continue in that way. Operator: And the question comes from line of Martin Roediger from Kepler Cheuvreaux. Martin Roediger: Thanks for taking my 2 questions, please. First, on energy supply. In case several energy suppliers within the European Union have a problem in providing you with energy, to which extent are you protected against that shortfall in energy supply? How is the compensation scheme? Is there any difference in the compensation scheme between the energy resource electricity and the energy resource natural gas? And the second question also related to energy, on energy costs. I recall that a few years ago, you had EUR 3.5 billion energy costs on a global basis. Is that still the case? Is the split in energy still 60% electricity and 40% natural gas? Or did that change? And is that also a good proxy for the individual regions? François Jackow: Martin, thank you very much for your question. I will ask Emilie who is a specialty of energy in Europe to speak about it. And probably, Jerome, you take the global view on the energy costs. Emilie? Emilie Mouren-Renouard: Absolutely, thank you. So briefly, of course, energy is a very large part of our cost stack, especially in large industry. So it is important for us. We monitor that quickly on a regular basis, and we are protected by our contract with the pass-through clauses to our customers. And in case to answer more precisely to your question of a problem of energy supply, then it falls under the force majeure type of clauses we have in all our contracts with our customers. François Jackow: Thank you very much. Jerome? Jérôme Pelletan: Thank you very much, Martin, for your question. So when you refer to EUR 3.6 billion, it was very much at the time where the impact after the beginning of the war in Ukraine started to have significant high prices on the energy cost and mainly in Europe and mainly on natural gas. So today, I would say that it is coming still above the level of pre-war. But the mix is related to the share between natural gas for hydrogen business, HyCO business, and electricity for other should be relatively close. And those, as said by Emilie, are fully secured and fully pass-through to the customer. So no big change in terms of the weight of those energy or consumed and presented in the cost stack. Operator: And our next question comes from line of Georgina Fraser from Goldman Sachs. Georgina Iwamoto: It's one question, but I think it might be 2 or 3 combined. You have this EUR 200 million in onetime costs related to European restructuring measures for 2026. Could you please put some context around this number? What percent of European sales will be impacted? Are there any networking effect implications? And are these measures in line with existing customer plans? Or is Air Liquide moving independently? François Jackow: Thank you very much, Georgina. So Emilie, do you want to talk a little bit about how you want to transform and to adapt our footprint in Europe and what you have launched? Emilie Mouren-Renouard: Absolutely. Thank you. So in Europe, we've well embarked on the structural transformation launched at the group level since 2024, so we are adapting our cost structure to the level of activity into the volumes, and we are restructuring. So maybe I'll give you some elements. First, on the organization and processes. So streamlining our organization. That is what we are doing, removing layers of management, simplification of our organization. And for instance, we moved from 4 clusters to 2 in Europe. If I include med gas that we integrated and merged into the merchant activity to create synergies, so we now have all the med gas activities under the same operational and management team as merchants in Europe. So this restructuring effort is taking place in all parts of Europe. The idea, like I said, is really to adapt the cost structure to the activities, moving some tasks to the GBS as well. This is an important part of our transformation and also really restructuring to be prepared for the long term to be more profitable over the long term. So this is structural. We're also streamlining our processes and tools, having the same way of doing things across Europe, one single state-of-the-art ERP across Europe. And finally, also using more and more AI to automate, to optimize our operations in all domains, customer care, call centers, in sales, in safety, in industrial part of the activity. François Jackow: Thank you very much. So that's for Europe, which is the bulk of the EUR 200 million. I mean I think this is 70% of that. There are other things which are similar in other parts of the world. What is absolutely key is that in this world, which is transforming, we want to anticipate. So part of it is to adapt the footprint, and that's what Emilie has mentioned. And we want to do that with courage, with determination in a respectful manner for our employees and for our customers because those are the values of Air Liquide, but we have to do it, and we have started and already done that in several cases, and we will continue to do that. At the same time, and that's the positive news, we continue to invest in leading segment and to support and to drive this transformation, as we mentioned before. And as a matter of fact, in the past 3 years, we have invested more than EUR 3 billion in Europe, showing that we are positioning ourselves to be able to be a key partner and key supplier for the transformed Europe industry that is being built. So thank you very much, Georgina, and good to hear you. Next question, please. Operator: And the question comes from line of Chetan Udeshi from JPMorgan. Chetan Udeshi: The first question, I was just -- sorry my first question is on your investment opportunities and backlog. I think you have included the part from DIG now in those numbers. And I was just trying to see the underlying shift if I remove DIG. And it seems for the first time, maybe in many quarters, sequentially, the backlog and investment opportunities are actually down versus Q3. And I'm just curious, is this all because of the removal of the Exxon project? Or do you actually see that the incremental opportunities are probably slowing? And just second associated question. You got this compensation from Exxon project in 2025 because it's been terminated. Did this have a positive impact on your second half margins? Because I see there's a big jump in the other income in the second half of '25, and I'm assuming almost all of that is associated with this project. If that's the case, if you can quantify? And last question, simple. I don't see any guidance on start-up revenue this time. So maybe if you can just help us what do you think we should have in mind? François Jackow: Thank you very much, Chetan. Thank you for your questions. I think Jerome will be pleased to answer the 3 questions. I may complement if needed, but go ahead, Jerome. The first one on the DIG and the contribution of DIG and the backlog. Jérôme Pelletan: So it's very simple. When you took the backlog of EUR 4.9 billion today, you have about EUR 200 million of backlog coming from DIG, okay? So EUR 4.7 billion plus EUR 0.2 billion. And you recall, Chetan, it's very much aligned with what we said last time during the call when we made the announcement of DIG, that there was some CapEx underlying. So that's very much aligned which is showing that basically a very good trend on this opportunity. On the portfolio of opportunities, you have a total of EUR 4.6 billion, a record. And that does include about EUR 800 million of DIG. So I hope it's quite clear. François Jackow: And just Chetan, on this one, on the backlog from one quarter to another one, in my point of view, there is no worries. Basically, this is a normal life of a pipeline of the project. You have the projects which are exiting because the projects are starting up. So it's normal that depending on the timing, they go up and down. So the general trend is a very solid backlog, which is continuing to increase. If you look at a year-to-year basis, it's plus 15%, as I mentioned. So from that point of view, absolutely no worries. Exxon contribution for the year? Jérôme Pelletan: So I hear what you said. So basically, it's neutral on margin because the compensation we had from the customer as basically covering our consolidation costs and so on. So that's basically neutral on margin for 2025. That's what you have to bear in mind. You have also to bear in mind that we have no financial exposure on that, that's basically it, okay? And your last question, start-up guidance for 2026. So we have not disclosed this contribution for 2026 for a few reasons, Chetan. First, Francois explained that many times, there is shift today in contract structure. The fact that we have some energy transition projects, which have increased, which are going more and more into a tolling style contract, basically is polluting the fact on this contribution. So that's the very first point. The second point is, as you know, there is geographical energy volatility, and disparity in energy pricing. So basically, as we are showing this number with energy contribution, it's create artificial difference in sales contribution from the same level of CapEx, which gives difficulty to estimate future sales contribution, the second reason. François Jackow: And the last reason, by the way, if I may, Chetan, none of our competitors currently disclose its contribution from start-up and ramp-up. So all these different elements make us the conclusion that it was not super relevant at this stage. We are looking potentially as other indicator review. We see maybe on EBIT level and so on, but it's a bit early to say. But the main reason, clearly, Chetan is that it's becoming a proxy, which is less relevant to predict the growth overall for the reason mentioned by Jerome, but you mentioned energy transition. But as a matter of fact, it will be the same with the electronics project because some of the current sales, it has energy included, others do not. So again, the traditional way of looking and predicting the sales with the amount of investment does not work anymore. We'll try to find a way to help you to do your forecast, but that's why today we are dropping this proxy. All right. Thank you very much. I think we still have time for 1 or 2 questions. We have many more questions. So go ahead. Operator: Now we're going to take our next question. And it comes from Jean-Luc Romain CIC CIB. Jean-Luc Romain: It relates to the cement industry. When we look at some of your clients or partners in the industry, there are several projects to decarbonize the cement plants And your CryoCap technology is all over the place on their website. Could you give us an idea of what's moving towards a decision? What's still a long way ahead? François Jackow: Thank you very much, Jean-Luc. Emilie, do you want to speak about this? Emilie Mouren-Renouard: Jean-Luc, on the cement industry, this is one of our key growth opportunities for the future, like you said, around our CryoCap technology, proprietary, and we are really the leader in the carbon capture technology. So the discussions remain active with our potential customers in the cement industry. They are continuing on their journey, knowing that they have all the commitment towards carbon neutrality by 2050. There's no way they can achieve that without carbon capture. So we continue the discussion with all of them. Of course, it depends now on FID to answer precisely your question. It depends on ETS price, on the regulation subsidies in place, and also on the whole chain, it's not just about the capture, but the capture, the transport and the sequestration that need to also be ready and also missing a few still mechanisms like CCSD to really make it to the final investment decision, that again, momentum is still there with all our cement industry players. François Jackow: Thank you very much, Emilie. So we'll take 2 quick questions, 2 more questions, please. Operator: And now we're going to take our next question for today. And the question comes line of Sebastian Bray from Berenberg. Sebastian Bray: Can I ask about the backlog composition? Because leaving aside the question of how much is electronics and how much is associated with other end markets, have there been any changes relative to what Air Liquide has done historically in terms of contract length and the split between large industries and on-site that include parts of electronics in that and merchant gases. The reason I ask this is that Linde has pretty high backlogs close to record. Their products looks fairly healthy, excluding the new energy parts and Air Liquide is at record levels. And if we hit 2 to 3 years' time and everybody is bringing online new projects, does that pose an issue for merchant pricing, given that a lot of these large on-site projects are going to be adding capacity to merchants? François Jackow: Well, thank you very much, Sebastian, for your question. So as you know, we are extremely disciplined in the way we are evaluating projects. So every time there is a project, we look at, of course, the merit of, I would say, the anchor customer when it's a large industry or electronics customer. And if there is a potential upside with the merchant, we do consider that after careful consideration of the market potential and the local situation. And what you have to take into account here is clearly that the merchant market is a local market. So it depends on the situation. And with those new investments, you can bring very effective new source of products in regions where we are lacking products, and there are still quite a bit of those globally. So today, I don't see a threat at least from the Air Liquide point of view, I cannot speak for our competitors. But are extremely careful and disciplined in the way we justify new merchant investment. And again, it's based on the local situation. So that's how we are looking at things for the backlog, again, mostly driven for us by large industry and electronics. Thank you very much. Last question, please? Operator: And now we're going to take our last question for today. And it comes line of James Hooper from Bernstein. James Hooper: I've got a couple, please. First one is on the 2027 margin target. Great to hear the extension of that target. Are there measures that will deliver this going to be the same as the ones driving 2025 or 2026 or they may be different? And then a second question. I'd like to pick up on some of the -- about lower demand in Asia in large industries. Can you give us an indication of what's happening on the ground in Asia, particularly China? Is there any effect from overcapacity and anti-involution? And also a quick update on the helium market, please? François Jackow: I will start with the last one maybe on Asia because we didn't talk so much about Asia. Right now, again, we see a clear momentum in electronics across the board, and this is for a new project, but we see also picking up, clearly. So that's a very positive one. When you talk about overcapacity, mostly, it relates to what we have seen in the manufacturing in China. And we see some slowdown or maybe extended turnaround from some of the customer in China. But I would say on average, we are probably less impacted than other players because of the quality of the portfolio of companies we have. We have been extremely discipline in selecting over the years, I mean, the top-tier customers, which are the ones typically who have the best competitive situation. This being said, we do expect a further consolidation in some sectors, which overall should bring benefit to have cleaner, more efficient manufacturing capabilities for China and to export. Regarding the helium situation, again, globally, I mean, we are in a situation where there is low demand compared to the supply for helium. Keep in mind that for Air Liquide, and that's not necessarily the case for all our competitors, helium is only 3% to 4% of sales and 80% of our business is based on long-term contracts, both in electronics, which is still growing and Industrial Merchant. So yes, we are impacted mostly in some regions. China is clearly one market where we see a decreasing volume and decreasing pricing. But overall, our helium business is still strong and well resilient. Regarding the 2027 margin objective, I think really what you need to take out of that is the confidence that we have in our ability to continue to provide margin improvement. And the reason that we are confident it's because this is based on the structural efficiencies, which are the results of the transformation program. If you step back, you have seen that 3 years ago, I mean, a lot of the margin improvement was coming from the pricing. The pricing is still there, and we have really moved up our capabilities to secure pricing whenever it's possible. But with the lowest inflation, the pricing contribution is decreasing everywhere. But what we see is a pickup of the efficiencies, again, almost 30% more this year compared to last year, and we do expect this to continue. As I mentioned today and previously, we are at the beginning of the journey for many of the transformation initiative. So there is more to come in '27, '28 and so on, maybe not always at the same rate, but for 2027, we are very confident with this margin improvement. So thank you very much. This concludes our session. Thank you very much for all your insightful questions for sure. In conclusion, I would like to say that after a strong performance in 2025, Air Liquide entered 2026 with a proven model, record backlog, momentum in transformation and clearly, extended horizon for profitability. And we are all ready to build on this momentum. Thank you very much for your attention. I wish all of you a very good day. Operator: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.
Peter Stierli: Good afternoon. Nice to see you all again here in Zurich. A warm welcome also to the participants in the webcast. My name is Peter Stierli, I'm the Head of Communications and IR. And with me is, as always, Marcel Imwinkelried, our CEO; and Reto Suter, our CFO. Marcel will first give us a summary of our numbers, then Reto will talk about the financials a little more detail. And then Marcel will elaborate more on what's ahead next for us in the coming months this year. At the end, we will have a Q&A session. And for those who dialed in through the webcast, you can ask your questions through the audio or video call. With that, Marcel, I'd like to hand over to you. Marcel Imwinkelried: Thank you very much, Peter. I'm really happy. You know why? It's for me the first time that I'm presenting the full year results of Siegfried under my full responsibility for the full year. I'm really proud what we have accomplished as a team, and I'm standing as the CEO in front of the entire team of Siegfried, and I'm telling you why. Most of you, I met 18 months ago in Barcelona, and I was introducing the new strategy, EVOLVE+. Great news. We are making progress. In most of the dimensions, we are ahead of the game, ahead of the plan. I will tell you more in the upcoming minutes. Now I think, let's first look back what's the result of the full year 2025. Not functioning. Maybe somebody can help me to -- Yes. Thanks a lot. I would like to highlight, first of all, the profitable growth. For us, a big opportunity, and Reto will give you more insights, but when I joined Siegfried, 5 years ago, we were at 17-ish percentage of EBITDA. We're coming up step-by-step, year-over-year. And this is really important that we are coming up to the high 20s. I'm confident to do so, because operational excellence, which we have introduced in the last 2 years is the trigger that we are achieving such a high number at the core EBITDA margin. I think 23.5% is a very good result. Of course, we need to consider a one-timer of CHF 7.5 billion. Despite this one-timer, we are still above the 23 percentage with 23.05%, which is good. We have a strong plan in place also to keep this momentum and further improve our margin. Secondly, we kept and we met our guidance with a growth of 4.3% in local currency versus last year. And last but not least, what's really important, not yet reflected also in the outlook in this presentation is the new acquisition of Noramco and Extractas, which will contribute significantly in top line and bottom line already this year, but also the next year. But this year, it depends when the closing will happen. Outlook. I think here, really important also to show that Drug Product, we have created the momentum. We have an outlook for 2026 of high single-digit growth. This is also much more compared to 2025. So we have created the momentum there. In Drug Substance, low single-digit growth. This is reflecting a prudent uncertainty or assumption regarding one large product for one company. Now also to clarify that a little bit, this doesn't mean that this product is -- will be gone or is still in. It's one-timer because our customer doesn't know yet how the demand will evolve further because it's an in-market product. So this will continue. And also in the future, this will be also an important product for us as well. In a nutshell, then low single-digit growth for the group and of course, the core EBITDA margin, we are confident to be above the 23%. Of course, this is excluding the acquisition. It depends. This can happen end of March, so starting off the second quarter or at the third quarter this year. As soon as we have the clarity when the closing will happen, we will give the new guidance will, of course, increase significantly than the guidance at the top line. And also you can expect something at the bottom line as well because as already outlined, during the acquisition presentation, there is no dilution coming through due to this acquisition. As already also shared with you, we have a momentum created due to commercial excellence. We have adapted our organization, and we have also defined and implemented the new go-to-market strategy. Good news. And that's also the reason why I really confident that we can keep and that I can confirm the positive midterm outlook for the next years. Due to the fact, I've already shared with many of you also during the conferences that we were able to win additional RFPs inflows by 30%, but really good news, we won in 2025, 30% more projects, new customers in both clusters in Drug Substance as well as Drug Product versus 2024. Now I would like to give you a flavor about operational highlights, 2025. As you know, safety is really close to our heart. And we are making progress also year-over-year in this dimension as well. We have reduced the lost time frequency -- injury frequency rate by 25% and further implemented the Class A project, which is the prerequisite to make sure that we are becoming a really top-notch supplier for our customers. We have 6 out of 13 sites already certified. So the last 7 sites, and then, of course, the newcomers will also be part of this. Quality. Quality is the permit to operate in our industry. And especially also, you need to know that the FDA, the U.S. health authorities are raising the bar. One of the other competitors of us are struggling. But we have not only a great track record, we passed also successfully four FDA audits in the last year, which is prerequisite to win and to get new customers and products. Sustainability highlights, 2025 further progressed. Compared to 2020, we have reduced close to 50% our carbon ambition. The same also for reduction of energy. This was also highlights over the last years. We're continuing to make progress on this as well. To come back to EVOLVE+ strategy. We are investing quite heavily to be prepared for our near-term and midterm growth. We are making progress. As you know, in El Masnou, we are working and in a niche with the ophtha production and good news since 2 years, the ophthalmic growth is high single digit. If you are comparing that to the last decade, it was at the low single digit, and we are one of the market leaders for the ophtha business. That's the reason and the good news that we can and that we are doing, investing and expanding in our site in El Masnou for sterile ointments and also for droptainers. Also to capture the new trend in the steriles, which are prefilled syringe and cartridges, we are installing as we speak. Two new lines. One is already installed. The operation is starting the qualification. The second one will come operationally by end of this year. Minden. Minden, the transfers are underway. I told you we will get the first revenues in 2025. This happened. Now the ramp-up is coming through, and we will do the integration mid of the year as quite a lot of trades are already in operation at this time. DINAMIQS, another highlight. Here, we did the integration last September with -- in Sweden close here to Zurich for the final vectors. Good news, we could not include that this in this presentation. 36 hours ago, we successfully passed the Swissmedic inspection to get the permit, the certificate that we can start with the GMP production, which is a great achievement. Now I would like to hand over to Reto, he will give you more insights about the financial numbers. Reto Suter: Thank you very much, Marcel. Good afternoon, everybody, [Foreign Language] and thank you for joining us today. 2025 was another year of continued growth, structural margin expansion and strong cash generation for Siegfried. We delivered a really record profitability. And at the same time, we continued to invest and deploy capital in a meaningful way into capacity expansion into new technologies and obviously also into new capabilities. The results that we achieved confirmed three very important elements of our business strategy. First, strength from a diversified portfolio across customers as well as products. Secondly, a significant impact from operational efficiency measures and portfolio optimization. And third, a contribution from diligent financial management, and also a diligent deployment of fresh capital to new opportunities. So despite significant currency headwinds and also, let's say, a challenging macroeconomic environment, we in 2025, delivered the best set of financial numbers in the history of Siegfried. Now having said all this, and as we look now into 2026, we apply a very careful approach to guiding due to this outstanding confirmation of one single customer for one single product. This diligence and this prudence reflect honesty and also transparency. It's by no means a change in the structural growth trajectory of Siegfried as a company. Now let's dive into the numbers, starting with sales. We grew by 4.3% in local currencies for the group to CHF 1.33 billion. That growth was equally spread along the two business lines, 4.3% in Drug Substances and then 4.3% as well in Drug Products. We saw the more pronounced seasonality that we announced a year ago, 53% of revenue was captured in H2. And of course -- not a surprise, a very heavy ForEx headwind as well, especially in the dollar and, of course, also in the euro. The currency split, as you see, it's more or less unchanged to the last year. This is transactional analysis. So really contract-by-contract underlying currency, 50% of what we do is in the euro, 13% in the dollar, the remainder is in Swiss francs. Good news here, as in the past, we had no impact on the margin and the bottom line through these volatile currency environment. Then the tariff exposure, as mentioned also throughout all of last year, minimal, we saw less than CHF 5 million of sales being affected by import duties, tariffs, et cetera. So optimally set up as well now to go into 2026. Let me spend just a few words here on the reconciliation between the reported numbers under our accounting framework, Swiss GAAP versus the core EBITDA. These are the numbers that we and the team use to manage and stay our business. You will see that in 2025, core numbers are below the reported numbers as it may be the case from time-to-time. Due to one fact, we have this pension liability in Germany mainly, which became smaller during 2025 as interest rates increased. And this CHF 10 million gain, we basically took out. And then we did what we always do, CHF 2.9 million of running current net interest, we basically transferred down to financial expenses. And then we adjusted for CHF 0.8 million of transaction cost. This is cost for a transaction where we had a serious look at, but did not ultimately consume it. So -- and that's that. Now I would like to basically bring the 2025 results a bit into a broader context. Driven by organic growth and smart acquisitions, we have expanded the business and grew it profitably quite a bit. So sales grew from 2020 to 2025 from CHF 145 million to CHF 1.33 billion in this year. This is in Swiss francs. That's a CAGR of 9.5%. Would we do it in local currencies? So basically adding the currency headwinds, the absolute currency headwinds to the 2025 numbers, we are at 11.7%. In total, over this period, we have lost CHF 140 million for currencies. That's around the effect of the acquisition that we had in Spain. So it's significant. From a margin point of view, this didn't impact us. We grew the margin from 17.7% to 23.5%. And this wasn't an easy environment to operate in. So this growth in sales, but also specifically in the margin, we managed despite the few disruption elements. So we have COVID, which was, of course, also an opportunity for us. We saw inflation. We saw destocking. We saw disruptions in supply chains. We saw currency wall and obviously also some elements of geopolitics. It's a resilient growth that we have been able to demonstrate and that we are going to demonstrate also going forward. Specifically, we have proven the ability to as well replace substantially large components of our revenue streams. I'm referring here to the COVID vaccines, which we had, and then obviously, which went away luckily. The margin expansion was structural, and it was driven by basically three things. The one was portfolio optimization, which we started in 2021 on the Drug Substances side, which we have now expanded to Drug Products, but where you see the effects in Drug Products not yet. Then operational excellence, which added efficiency in a quite a significant scale year-on-year. Also, this will continue. And then, of course, effects of scale, where we brought onstream idle capacities, which then developed into basically revenues and also profits. The growth was balanced. You know that. Mostly organic, and then the acquisition effect of the acquisition in Spain. And that's the plan also going forward. If you go to the margins now comparing '24 numbers to '25 numbers, you see that at each margin level, we reached new record highs. So we translated the growth in Swiss francs of 2.6% to substantially larger expansions across the margin aggregates. So core gross profit was driven mainly by cost discipline portfolio optimization. Operational excellence increased to CHF 354 million plus 7.6%. Core EBITDA, which includes, of course, the drivers for the gross profit margin plus the operating expenses, which we kept in check, 9.3% higher at 312.3%. And on it goes. Obviously, if you have a look at core net profit and core EBIT, this reflects the fact that we have invested into capacities, which are, as the case maybe not yet fully ramped up. So that will correct over time. Diversification. It's a crucial key element in our business strategy and our business setup. We are well diversified relating to customers as well as to products. So we have no dominant customer dominating our revenue base. And the same is true for the products. This is largely the same numbers that I have presented to you a year ago. Customer one, this is Novartis, 13% to 17%, largely diversified portfolio of products, and customer 2 at 10%, customer 3 to 10 at 31%. With the products, the top product at 6%, product 2 to 10 at 26%. We continue to generate the vast majority of our revenues in the commercial phase, 96%. So we're not exposed to early phase financing risks, important to understand. This gives us the stability in order to continue to grow in a structured way. On profitability, just a few additions to things which I have already mentioned. Operating expenses remain disciplined at now 11.4% of sales. Despite some changes in the perimeter, we have added the acceleration hub and of course, also invested into capabilities, digitalization, et cetera. The other operating income, as mentioned by Marcel, includes a one-off payment, which we don't expect to reoccur next year, CHF 7.5 million, which related to a 2021 incident of fraudulent payments. That's good news. We have all the money back. So we just follow through on these type of things. Core financial expenses remained under control. We had, throughout the year, a bit higher level of debt but we kept the financial expenses in check. Effective tax rate still below 20%. We significantly improved the cash flow, the operating cash flow, 35% up year-on-year, driven by higher profitability and disciplined working on the net working capital. We continued to focus on net working capital. We saw some timing effects of revenue recognition. So by year-end, we had the vast majority of the invoices in December. And of course, that goes against net working capital freeing up. I will say one word about this when I come to net debt-to-EBITDA ratio. Strategic investments at CHF 231 million, that's tangible plus intangibles or brick-and-motor plus IT systems, which will support the future growth that we will see also going forward. On the financing side, we have placed successfully a CHF 300 million bond and we have introduced the factoring solution, a non-recourse factoring solution, which we used in an amount for CHF 40 million over year-end. Now why did I do that? Factoring allows me to flatten net working capital consumption throughout the year. And I can do that if I compare the cost of this solution to other financing instruments at very attractive conditions. So I absolutely needed to do that. The balance sheet now prior to the acquisition is solid at year-end at 1.5x net debt to core EBITDA which allows me to maintain financial flexibility also for the future. As of yesterday, a few days after the close, net debt-to-EBITDA is at 1.0x, which means that around CHF 150 million of accounts receivable have by now been converted into cash. It gives you a bit of an idea on how net working capital consumption fluctuates throughout the year. This means that even after the funding of the announced acquisition, I will be able to continue to basically have a balance sheet to continue to invest. Now based on this very strong financial numbers and the commitment of our Board of Directors to shareholder returns, we have decided to increase the distribution to shareholders. The proposal to the AGM, which will take place on April 16 this year will include the proposal of a par value repayment of CHF 0.4 per share. Now let me summarize 2025. We saw continued growth for both businesses. We saw a structural expansion of the margin. We saw a record profitability, strong cash generation and a strong -- now even more flexible balance sheet. All of the factors which contribute to our structural growth trajectory remain in place. One, the diversification; two, the contribution from operational excellence and optimization of the portfolio, which we now expand also into Drug Products; and three, the strong balance sheet and the careful application of new capital to new opportunities. So Siegfried is well positioned to capture all the opportunities which lie ahead of us and will continue to be the steady compounder that we have been in the past. And with that, thank you very much for the attention. And I hand back to Marcel. Marcel Imwinkelried: Thank you very much, Reto. Now let's talk about our future. And here, I'm really excited. I will give you some insights why I'm doing so. EVOLVE+ strategy, I think already highlighted, it's now really coming through, and it's resulting also in the results, which we have presented just now with operational excellence, which is the key contributor at the end for the EBITDA margin uplift. And secondly, really, what we see is the inflow and also the wins or the wins for new products and also projects and customers. Now I would like to come to another topic and which I was asked several times in the past about M&A. It was always repeating M&A is always on, but really, you need to have the patience to find the right tool and to get it for an affordable price. That's something which is the secret of success of Siegfried, what we did, and we will continue. We found such a tool. It took quite some time to make that happen. And it was obviously also according to our EVOLVE's strategy to further grow on the existing core with Drug Substance, small molecules and then, of course, due to the current recent situation, which will not disappear in the near future for the U.S. supply points. I'm constantly in touch with our customers, and they are telling me since 12 months. Marcel, I need to have a second supply point out of U.S. for U.S. It's not predictable for us anymore what will happen. It's independent of the administration in U.S. what will happen. All pharmaceutical companies are preparing this future setup, not only U.S. ones, also the European ones, they're asking for it. They are looking really to expand it. But what happened over the last 30 years. In U.S., the pharmaceutical companies and also CDMO, they were investing in large molecules, Drug Substance, followed by sterile fill and finish locations, supply points in U.S. and also in new modalities like cell and gene. But over the last 3 decades, Drug Substance small molecules was transferred out of U.S. to China, to India and also to Europe and of course, we are participating accordingly. However, the game is changing now. They are looking for it, and it's not a surprise, read the news, and you will find out the big pharmaceutical companies they are investing or were looking also for acquisitions in U.S. to get a hub, a location to produce Drug Substance small molecules. We did the same. But at the end, you need to find something which is really unique what you can offer compared to the community or also the competitors. And what we found at the end, we found such a tool. First, you need to know there are less than 15 large-scale CDMO locations available in U.S. We did a lot of due diligence. I was several times in U.S. was watching and look how these sites were recapitalized, but very often very poor outed facilities and, of course, also missing capabilities. When I was the first time in the U.S., I found a strong location in Delaware and the second one in Georgia, excuse me. And of course, I think the unique opportunity, but why we got it is so affordable at the end, Siegfried was the only company which is able to keep the production supply of this essential controlled substance also in the future. Now if we are looking at the case, we have with this acquisition, a very stable market and also portfolio which we are taking over. Strong contribution also at EBITDA, protect market also for the future, because you're not allowed to import from somewhere else to this -- to U.S. for such controlled substances, a moderate growth. But for us, what's really on top of it is really the opportunity to gain exclusive business with this setup. Wilmington, this would be the new site from Noramco together with the existing Pennsville site, which is just 20 minutes away by car. They are really, really close to each other, but even more important, also the product portfolio is overlapping. We are talking here about controlled substance. We know the products. We know the processes from each other because Noramco was also a customer of us and vice versa. Some of the people we even know already also from the past and vice versa. And there is -- will be very soon one approach for both sides. And what we can do is really to optimize this controlled substance portfolio in the Pennsville site. And then we will free up Facility #5, where 80 cubic meters are installed there to go for exclusive business. Athens and Grafton. As you know, 1.5 years ago, we have acquired Grafton as an acceleration hub to start with early development activities for Drug Substance small molecules. With Athens also, by the way, like Wilmington, a previous J&J facility. So it was not a surprise to find two sites at the end with strong people, capable people, very well regarding process, which are in place, very well maintained and also high automation what we found there. There are also an add-on with Athens compared to Grafton because Grafton is really strong in Phase I and Phase II. Athens is even stronger in early phase activities. So it's for us at the end, an add-on. We have a sweet spot and a big opportunity, and that's why I'm really truly excited about this deal. One is from closing of the day when we have the deal, we have a strong contribution, top line and bottom line immediately. However, the exciting case is really then to fill this capacity, which we are freeing up in the next 2 years. And of course, to bring in new customers, new business, it will also take 2 years. So we will do that in parallel. So after 2028, on top of the base case, which we have also shared with you, we are looking forward to further increase the top line and also the bottom line. As you can imagine, also the pricing is very interesting because supply constraints to push demand, it's a different position which you have. So we will do the ramp-up after 2028. And I'm really excited, but I'm not alone. I'm not alone. Many of our colleagues in our organization who are waiting for it. And I would like also now to give some quotes and voices also of my colleagues. [Presentation] Marcel Imwinkelried: We are really excited. Now we are ready. We have the plan in place to make that happen independent when the closing will happen. If we are looking out at the entire network of Siegfried for Drug Substance, small molecules, we are complete now. This doesn't mean that we're not further looking also to expand. However, if you are looking from early phase preclinical up to commercial, we are very well positioned. We have all capabilities for all development phases in place. And if you're looking backwards, especially then from Phase III commercial and then out of patent, you see that we have seven sites in all three continents: China, Europe and also U.S. to make that happen. Whatever the demand is from the different customers and the demand is there. So the dual supply points are given for the future, and this is a great achievement for us. Now I would like to share with you something else about an exciting new molecule mechanism platform. It's called protein degraders. It's a new mechanism, which is coming through. Of course, the research we were working since 2 decades on that. But now in the upcoming months, you will see the first approval for big products coming through. Why is this so exciting for Siegfried? We are perfectly set up exactly for this kind of products. They need Drug Substance small molecules where we have the entire network in place, which I have just shared with you. But secondly, they need and will end up then in tablets or in capsules. So that means for Malta, but especially for Barbera, that's the place to be. So we can really offer for big pharmaceutical companies, but especially also for the small and mid-caps, the entire service what they need. Just recently, over the last 5 weeks, we won three new products and three new customers directly linked with the same mechanism, what I'm sharing here with you. One -- by the way, is not the same molecule when I'm talking about these three, we are talking about three different molecules. We're talking about three different customers. One is in Phase III, very interesting. So this will become quite soon, it will get approval. The other ones are a little bit earlier, but this will be a changer for the entire industry, a game changer and also a game changer for the company of Siegfried. And we will -- we are really full in there. Happy to share with you more. And I'm sure in 3 years, we will talk more about this protein degraders. Now capital allocation. I think, we are really disciplined on that. So if we are able to do an M&A acquisition and very often in the past, and we did it again to do acquisition and to buy new assets for half of the price, which is always then helping us at the mid- and long term to fill then the sites and also to gain the revenues really profitable. This is still on because I was also asked what does this mean with this acquisition now of Noramco and also Extractas. And also outlined by Reto, we still have firepower ready to use if we find one another tool what I was sharing with you. So this is ongoing, but you need to be patient. And it's not predictable at the end. We will see how this will evolve, but it's still on. Now we are really set up to outpace the market growth, just also what I was sharing with you, inflow is great, 3%. This will come through also then midterm-wise as well. And for 2026, it depends because what I'm guiding you now will change definitely. It's just a question by when. Will it be in the second quarter or will it be in the third quarter? Because with the new acquisition after closing, we will significantly improve our guidance for 2026. So far for Drug Products, high single-digit growth. So compared to last year, much better, much higher, doubled. Secondly, Drug Substance low single digit due to the missing, pending confirmation for a product which is in-market product. So it's just fluctuation, but it will also support us in the midterm as well. That's for sure. And for the group, also reflected then in a low single-digit growth. We are confident. And this is really important because the bottom line is absolutely key for me. Not just to growth, I want to over proportionally grow in the bottom line. And that's what we have shown up you as well, which is proven, and we will continue on that. And you can expect also then a core EBITDA margin above 23%. We have a strong plan in place, and we will make it happen. Thanks a lot for your attention, and now happy to go for question and answers. Peter Stierli: Thank you, Marcel. We'll now start with the Q&A session. Of course, many questions from the room here, but those who are joining us through the webcast, who would like to ask a question, please do that through the audio or video call, and you will be directed to the operator. Laura Pfeifer-Rossi: I'm Laura Pfeifer from Octavian. Maybe first on Drug Products. Here, you're guiding for an acceleration to high single digit. So to what extent is this growth driven by the large originator contract you have previously announced? I think it was 1 year ago or so. And also, could you provide more detail on the size and ramp-up time line for this contract? And maybe also what are the key terms? Is this a multiyear arrangement? And then, I think the second one is more on Slide 21. You highlighted the protein degraders, but you also show obesity metabolic as a complex small molecule area. So can you provide us just an idea on your current overall exposure to metabolic GLP-1 programs across your overall business. So both -- all clusters, all service offerings and also what share of revenue this could represent over the next couple of years? Thank you. Peter Stierli: Marcel? Marcel Imwinkelried: Yes. Sure. Thanks a lot. Let's first start with the project, which we have announced 1 year ago. This is one part. But to be honest, we are growing in most of the -- really of the different dosage forms in Drug Product. So we are moving also upwards in Hameln especially in El Masnou. That's also the reason why I was sharing with you the expansion. This is significantly also coming up now. Also the new lines which we are investing in there are already more or less fully utilized by the new contracts, which is helping as well. Also the other portfolio in line is developing very nicely. It's in line with what I was highlighting with the ophtha growth and also in Barbera and in Malta, we are also coming up nice step-by-step. And I think it's a contribution broadly across all different dosage forms and all different sites, which is great. That's -- it's ending up then in this high single digit, more to come because, as I already outlined, with the additional wins of 30% to 2024, you can assume that further growth will come in the upcoming years. Then ramp up. With this -- what I was highlighting with the three new products, which we won over the last 4 weeks, it's -- this is really coming through then in 2027. The first one is Phase III. The other two ones, which are early, they are coming through them in 2028 and afterwards, but this will help us. And that's why I'm so confident for the midterm outlook independent from the acquisition that we have really the momentum and the inflow in the pipeline that you will take off. Yes. Protein degrader, this is something exactly in line with what I was just sharing with these products, more is coming if you are looking and always -- and this gives you also a little bit of flavor. We are not the followers and waiting is like a CMO that somebody is coming to us and are you ready to send us no offer. We are doing that really proactively. What kind of technologies? What are the next future or the next trend in the industry to capture that and to read it also to proactively to approach them and tell them, listen, we can provide the full service what you need. And that's a different approach compared to the past, and this is helping us now. Now to the GLP-1 exposure, I think this goes -- I think, of course, we were explaining that the GLP-1 exposure products -- molecules, they are really complex. But the same protein degraders, which I'm highlighting are also so complex like this. And I'm really happy that the third part of the true story that we have invested and decided to invest in the spray drying because the common approach for all of these different molecules, they need to have this spray drying, bridging technology in place. And here, we are unique that we can offer end-to-end or I'm preferring to use the word from beginning to the end. Laura Pfeifer-Rossi: Just, sorry, to clarify, so I'm now a bit confused. So the three new products that you have won over the last 5 weeks, these were all protein degraders or these were all... Marcel Imwinkelried: Yes. Protein degraders. Yes. Laura Pfeifer-Rossi: Okay. And then, but then you did not really answer my question then on the obesity exposure. So do you already have established contracts for whatever Drug Product, Drug Substance? Marcel Imwinkelried: We are not talking about obesity exposure. You know that Laura, because if I would share something related to that, and it's clear then I would highlight a product or also a company. That's what we are not doing. Peter Stierli: Sibylle. Sibylle Bischofberger Frick: Sibylle Bischofberger from Vontobel. I have two questions. First, about the past. Sales from Wisconsin and the DINAMIQS should have increased in 2025, and they should more and more support sales growth also in 2026. If you could say something about these two parts of your business? And then secondly, 2026, the outlook about the phasing between first half and second half. And if you could say something about the currency effects, how much they would affect sales on the top line if currencies would stay as they are at the moment? Marcel Imwinkelried: Yes, I will take the first one, and Reto will take the second one. DINAMIQS here, of course, we were really successful. I think, I shared that also in the conferences as well. So we won 10 additional customers over the last -- in the last year, one in Australia, four in U.S. and the rest in Europe. However, here, we are talking about development activities. The growth rate is quite significant with 30% what we can plus/minus. However, 30% of a very low amount is still not a game changer or will change dramatically. That's the reason. But the prerequisite was exactly what I was highlighting during the presentation. First of all, we need to get the permit, the certificate from the Swissmedic Health Authority to operate and to start then with the GMP production. And as also outlined in the order presentation during the financial part, the money is really in there as soon as we can start with the GMP commercial production. So it's coming. But this setup is coming through then next year, mainly what you see then step-by-step coming up then. For this year, it will be not significant growth for us as a company. Wisconsin also here, I think that's stable. Of course, this is not a game changer related to the top line or bottom line. So here, we are looking to develop 10, 15 projects on a yearly basis, but this is the funnel for the pipeline. So we are getting, of course, for the service we get paid and also the margin. But this is not a contributor at the end for our growth top line and bottom line. This is just filling then from now in 3 to 5 years to get one of these products, commercial, which ends up then really also visible in the P&L. Peter Stierli: Thanks, Marcel. Reto, seasonality and FX impact. Reto Suter: No, absolutely. I think we had this question quite a few times. So let's clarify. Obviously, we do have, again, in 2026, we expect a negative impact on the top line by currencies. Looking at the first 7 weeks of the year, comparing that to last year, I see a currency headwind of a bit more than 2% for the year. Now obviously, for the first half, this effect is stronger as degrading of the dollar only started after Liberation Day, sometimes at the beginning of April. So for the first half, it's actually closer to 3%. So I'm at 2.8% for the group. On seasonality, while we are still working on that. The indications are that this is very similar to what we have been observing in 2025. So more like 47% to 53% instead of 48% to 52%. Peter Stierli: The next question is from Charles Weston. Charles, can you hear us? Charles Weston: Two topics, if I can. First of all, on the product that has meant the sort of lower Drug Substance guidance. It's quite unusual to see such a sort of a change and volatility like this in a large on-market product. So is there any further color you can provide on this? Is your customer destocking? How confident are you that, that customer will come back? And then because it's so late, ordinarily contracts would be -- would include some sort of compensation payments or take-or-pay payments. So perhaps you can just touch on that for 2026. And then the second question, please, is on the non-recourse debt. Is that off balance sheet? And you talked about CHF 40 million. Is it still CHF 40 million? Or is it going to be increasing going forward? Marcel Imwinkelried: Okay. I will take the first one, and Reto will take the second one. For the first one, we are pending for the order confirmation. So he has also -- he is not sure how the demand, what he needs also short to midterm. That's the reason why we are waiting to get the final agreement on that. I think it's -- by the way, it's a customer which we are working together since 30 years. So it's not a question if the customer will come back. We have really strong relationship together since 30 years. And I think he has quite currently some volatility in the market regarding this product and he needs to figure out what does this mean. So that's also what I was highlighting. This market will remain in this very big more product also in the future as well. Now if this not what come through, that the demand will be at lower than expected. Of course, you need to know that's a good question, Charles, that contractually, we are protected from the margin point of view. So maybe we would get a smaller hit than at the top line, but the bottom line is fully protected. Reto Suter: Yes. If I may, the second question, basically, the factoring solution. Basically, you sell accounts receivable, you receive cash, this affected the cash position in a positive way about CHF 40 million at year-end. This facility has a total size of CHF 50 million. So yes, I could go higher CHF 10 million. And as mentioned, this is not used for window dressing. It's really used to flatten out net working capital consumption throughout the year, which will then automatically mean that I can size the funding contracts accordingly lower. And as this facility comes in a better condition than usual funding contract, it's a net gain from the cost of debt point of view. Charles Weston: Okay. So we should just assume a similar rate going forward for that, should we? Reto Suter: Yes. Not more than CHF 50 million, yes. Peter Stierli: Next question, Tanya? Tanya Hansalik: Just to follow-up on this outstanding product confirmation. So I was surprised by the size of the magnitude of the product volumes that are missing or need to be confirmed. What are the implications if the demand stays lower in 2027? Do you also get a compensation or then it takes a while to ramp up the new product? Would there be a gap there in 2027? And then my second question is on free cash flow. If you could provide some sort of guidance on that with your Project FALCON and then the non-recourse factoring, you mentioned, yes, when we can basically expect free cash flows to be positive? Marcel Imwinkelried: As usual, I take the first one, and let Reto take the second one. First one, so I think for 2027, I think this will come back because it's a onetime. They have to look at the stock level and how the latest forecast for there looks like. However, we have always a little bit some fluctuations. Some products are going through the roof, then you need to be flexible and to capture that, some of them are coming a little bit down. It depends, of course, we have also frozen horizon. That's the reason why we are protected also for this product from a margin point of view. But as I just outlined ,with the win of this very important protein degrader for Barbera, where we are doing then the filling of the capsules. Then next year, this can already help to the potentially to fill if something like this, this would happen. So I think in a nutshell, this will not change our outlook for 2027. It's small fluctuation. It's, of course, a bigger product. It's not a very small one. But at the outlook also for '27 and afterwards, this will not change our view. Reto Suter: Yes. On the second question relating to free cash flow, that's obviously the result of two distinct topics. The one is how much operating cash flow do you achieve? And then secondly, what do you spend for investments? Now I address these one by one, and then the combination is the answer. The operating cash flow in 2025 was, of course, masked and impacted by a very low revenue recognition. And this has obviously destroyed a lot of the good work that we had done when we speak about Project FALCON. I was sharing that as of yesterday, net debt-to-EBITDA is at 1.0, which means that CHF 150 million of accounts receivable have by now converted into cash. So, ceteris paribus, if I will close the books now, my operating cash flow would be about around CHF 120 million higher than the one that I showed to you. So that's really dependent on when you close the book. The second is, of course, we now had two very heavy years of investments, mid-teens. This year, it was actually 16% more like. This will now return and come back to low teens. As mentioned by Marcel, this is our guidance for 2026 and also for the years to come. So you see both parameters somewhat go into the right direction. I'm not worried around cash conversion, around cash generation, around the quality of the balance sheet and the flexibility that we have to fund further investments, not at all. Tanya Hansalik: I just wanted to follow up on the replacing with the protein degrader. So you mean the API part of the contract or because you said you had the drug oral dosage form and also the API, maybe on the time lines of these two when they... Marcel Imwinkelried: Yes, we're working on. I want to have everything from beginning to end. But we are very successful in both in Drug Product. Here, you can maybe imagine that if a big pharmaceutic company has developed such a product, where they are producing Drug Substance by themselves and then they are looking for somebody like Siegfried, who is then providing the service for the finished drug product. That's in this case. But in the other cases, here is really Drug Substance, but we are also in discussion to go then for the Drug Product as well. And that's exactly in line with the end -- beginning to end strategy that we can provide that. Peter Stierli: Next question is from Fynn from Deutsche Bank. Fynn Scherzler: I also have a follow-up question on the product that's awaiting the confirmation. So, you said it's an in-market product. Can you help us maybe with the size of the order that you are awaiting? So essentially asking what would growth look like with the product coming through? And could you clarify, is this an all-or-nothing situation? So did you either get the full amount? Or do you maybe want to get it partially? And then -- sorry, more on that, do you have any indication on timing of that? So when do you expect to hear back from the customer? And do you have any idea for the odds of this actually coming through? Marcel Imwinkelried: Yes. Happy to answer this question, sure. I think the magnitude -- of course, it's somehow a little bit impacting or impacting us. Otherwise, I stand in front of many strong analysts here, and they have their models. Of course, we would guide different or give a different guidance mid-single digit for Drug Substance. That's also according to the model, also what we had in our mind. And that's why we have taken the conservative approach this pending missing confirmation, but we will see how this will evolve. I think for this customer and this product is a little bit unique because it's -- the fluctuation is quite tough. I cannot share you with you with which kind of treatment, we are talking here about. Otherwise, it's clear for which product and customer you're talking about. But this will maintain and going on. So of course, this product will be also important for the customer in the near future in 2027 and afterwards and also for Siegfried. Fynn Scherzler: Okay. So if I can just follow up on timing. Do we expect to hear back from you on this specific measure before half year results? Or is this an ad hoc event? Or how should we think about it? Marcel Imwinkelried: Yes. It's -- we have strong, strong relationship with these customers all 3 decades. We were growing together significantly. We had a lot of fun, but also you need to work if you have a little bit uncertainty like this in this moment. And we are continuously in touch with them, and he needs to figure out that we have already next week, the next exchange meeting. And as soon as we know more, then, of course, we will share then also to the external role as well. Fynn Scherzler: Perfect. Second -- sorry, just one final question on the first Barbera contract that you've told us about already earlier that is supposed to start ramping in the second half of this year, if I understand correctly. Can you maybe expand a bit on how the preparations are going there? And maybe also what sort of magnitude of revenue we should expect from that in 2026? Marcel Imwinkelried: This is coming through. So we are starting with commercial production has also announced that this will happen in '27 -- '26, excuse me. And then afterwards ramp-up in '27 and more. This is exactly according to plan, which is great. We had also the second one there as well, which we don't have so prominently announced, but we are filling now step-by-step also Barbera and with the new news, which I have just shared with this protein degrader. I'm looking forward also really for a bright future in Barbera as well. So this is according to plan. Reto Suter: I think it's important to understand, Marcel has answered that in his first answer to the first question, that the momentum in Drug Products is much larger than just one product in one site. It affects all of the dosage forms across all the sites and is broadly diversified and does not just rely on one or two contracts. I think that's important for the general understanding. Peter Stierli: Next question from Daniel. Daniel Jelovcan: Daniel Jelovcan, Zurcher KB. So, still a bit parceled about this order confirmation. I mean, it's -- I heard that for the first time. And when I look at the exit rate from the second half, the momentum, 6.5%, which per se was a bit disappointing, to be honest. When I extrapolate that to the '26 growth, 6.5%, there's a delta of, let's say, 3 percentage points versus your guidance now. So we talk about the CHF 40 million product on a yearly base. So it's significant when I look at your diversification. So, and I'm a bit puzzled how come? I mean, you need the tech transfer and everything you need the approvals from Swissmedic FDA EMEA, and that takes 18 months. So that means that the product is already set up with Siegfried. So is that correct, the assumption? It's only dependent when the customer gives the green light and then you start just to be very sure. Is it more complex? Reto Suter: I can maybe take the technical elements of that, if I may. No. First, I don't buy into the concept of exit valuation, as much of the growth that we see is 1 year compared to the other year, as you know, we have long manufacturing cycles. So you can't take the revenue recognized in the second half and say that's the growth rate that we can assume then also for the first half of the following year. So that's that. On the calculation of the magnitude, yes, of course. I mean, it was significantly large enough for us to change the guidance. And that gives you a bit of an indication and your number is not totally wrong. And then thirdly, your assumption on the product, of course, it's an in-market product, which we already in the last year and the year before manufactured, and which we will continue to manufacture, as Marcel has mentioned. But now due to demand effects on that specific product for that specific customer in specific market there's uncertainty, but we are ready to go as soon as we have the confirmation. Daniel Jelovcan: So it's an existing product? Reto Suter: Yes. Daniel Jelovcan: You already do? Reto Suter: Yes. Since many years. Daniel Jelovcan: This product is then very successful. Reto Suter: Obviously, yes. Daniel Jelovcan: Okay. Marcel Imwinkelried: But maybe our customer thinking it would be even more successful. That's exactly currently the demand. Daniel Jelovcan: That's good to hear. And then the protein degrader. I mean, I'm not a chemist. So is that something which you can patent, I guess, not production process. And then your competition, let's say, I mean, the Chinese, the WuXi AppTec -- as the world, they are all over the place. Can they do that as well? Marcel Imwinkelried: Sure. I think, first of all, we cannot do the patent because that's a mechanism of the -- for the research to do the -- to find the molecules and then to appropriate that. So this has nothing directly to do with us, with Siegfried. It's a new mechanism how to treat because this kind of proteins in the past, they were really successful always to push back the treatment of the APIs. That's also why you have then to build up very specific molecule chains. With this new treatment, you can destroy such proteins. And then you can directly treat with the API then the patients. And that's the revolution and the game changer. But this is at the research companies, big pharma, small mid-sized pharmaceutical research companies. So we cannot patent. However, the unique situation of the setup is really what we have, it's Drug Substance small molecule. Second, due to the fact that so complex, you need to have spray drying, but it's for the majority of the small molecules nowadays. And thirdly, these products are ending up as a tablet or as a capsule. And we have for the colleagues which also have visited 1.5 year ago, Barcelona, Barbera, that's the perfect setup, what we can offer to this kind of product families, which is coming through now. That's the unique position. Daniel Jelovcan: Competition? You can certainly do that as well. Marcel Imwinkelried: Yes, sure. But I think, competition-wise, you don't have a setup like Siegfried who can do everything with small -- Drug Substance small molecules. Of course, we have also -- we have competitors there. With spray drying, also competitors. However, in combination in order to have both Drug Substance plus spray drying we are quite alone. And if you're talking about them to add the tablets and capsule manufacturing, you can research and ask also ChatGPT, you will not find so many. Daniel Jelovcan: Okay. Great. And last question. You still haven't answered to why the second half was to us, to the market, I mean consensus was higher for sales growth. And you were quite vocal in November and December at various events. And so that's why the market was quite bullish. And now you have the 6.5%, which is not bad, but below expectations. So were there some batch delays from December into January, which is quite typical in your industry or any specific reason? Marcel Imwinkelried: No, nothing specifically. I think we have delivered according to our guidance. I know that the market expectation was a bit higher. But for us, it was perfect. And at the end, for us, it's important to come back to look really at the profitable growth and not just at the top line. And I think top line-wise, you have expected a little bit more, but I think we were doing much better than the bottom line. So at the end, for me, it was great. Peter Stierli: Laura, again. Yes. Laura Pfeifer-Rossi: Maybe a question on the EBITDA margin guidance here. You guide for above 23%. So what are the drivers and the headwinds we should consider this year? I mean, will there be kind of a negative impact from -- if we assume this order is not coming through? So this could be one of the headwinds. Just keen to listen to your thoughts here. And then also when we use 23.0% as the clean base from '25, is there still the possibility for 60 to 100 basis points uplift as you did in the past? Reto Suter: Yes. I mean, for 2025, you guided ahead of 22%. So we define somewhat the floor. And our concept of guiding has not changed from 1 year to the other. Then secondly, on the positive side, what will we see as tailwinds for the guidance. It's, of course, commercial excellence, efforts of portfolio optimization, it's continuing process excellence, it's continuing operational excellence, and it's a bit of scale. That's what we're going to see on the tailwind side. On the headwind side, of course, cost of doing business also in 2026 will increase. So we have continued inflation in the U.S. We have continued inflation in Germany. Both countries, we will have 700 in the U.S. We will have 1,000 -- continue to have 1,000 in Germany. That hurts a bit. So there, we will need to become more efficient, increase prices a little bit. And that's what allows us to also, as in the past, increase the margin from '26 compared to '25. Marcel Imwinkelried: May to add that, the first question about this product, will this have also an impact on EBITDA? No. Also in the worst case, contractually, we are protected for the margin. So this will have any way no impact at the bottom line, and that's -- I'm really convinced that we will be above the 23%. Peter Stierli: Next question, we have online from Ed Hall. Ed, can you hear us? Edward Hall: Yes. I think maybe switching gears up. I was curious if you can talk about the outlook of multiclient versus exclusive. And we've seen another year where multiclient performance in the double digits and [indiscernible] business as a structural trend. Is there how much pricing is associated with this growth? That would be my first question. Reto Suter: No. The question was on the split between multiclient and exclusive products, if I got that right. Whether there is a structural shift or so, something taking place. No, we just also have quite an attractive set of multiclient products that we manufacture. I think that's the answer. Is this something which is structural? No, I don't think so. I honestly believe that over time, in the midterm, we will have and see a quicker growth in the exclusive part versus the multiclient part, which will, all-in-all, remain stable. However, from period-to-period in the short term, there can be a little fluctuations around that, but it's nothing which is structural. Edward Hall: Okay. And you mentioned pricing a little, just last question. And how much is pricing that contributed to growth when [indiscernible] Reto Suter: Honestly, we can't hear you. You sound like you spend your time in a wine seller or somewhere. Could you please repeat and maybe move a little closer to the microphone, Ed. Edward Hall: Is that a little bit better? Okay, perfect. Yes, I was just curious about the contribution of pricing to the generics and compare that to maybe some of the exclusive business. Reto Suter: Honestly, I don't think that there is a pricing difference between exclusive and the generics business. On top of my head, I don't have the numbers with me currently. Pricing impact on the 2025 numbers was not dominant. To be fair, we have in price here and there, but it was mostly efficiency gains and as well portfolio management, which helped us to increase the margin. Peter Stierli: Good. Is that all, Ed? Or do you have a third question? Edward Hall: Sorry. One final question. I was wondering if you could just share the capabilities that you're looking to bring to the market when we think about these two drugs more holistically. Marcel Imwinkelried: Sorry, we really -- we are having difficulties to understand. The capabilities... Edward Hall: I'll send an e-mail. Marcel Imwinkelried: Yes, please send an e-mail, and then we will answer to you for sure. Peter Stierli: Then we have another online question from Kristina. Kristina Blaschek: It's Kristina Blaschek on for Max Smock, William Blair. I just wanted to circle back on the large Drug Substance contract driving uncertainty in your guide. Curious what's leading to a large range of outcomes in the customers' demand outlook for the already commercial product in the short term. And given your very strong RFPs in 2025 in Drug Substance and assuming likely strong backlog. Here's why you cannot so in some of the project work to offset potentially lower volumes from this one large contract in 2026. It was just a timing and ramp consideration. I'm really trying to get at if the contract ends up on the low end of volumes, will you be able to offset the shortfall with current projects in hand for 2027? Or will it require some more contract wins to offset? Reto Suter: Yes. No, a very good question. And Marcel was indeed referring to some project wins that we had. Now obviously, if you win a project of an exclusive product, this is still in the development phases, which means that the equipment that you use is mostly small scale, pilot scale and not commercial. The same is also true for the revenue expectation. These products gain size as they enter the commercial manufacturing. So the product and the wins that Marcel was referring to, these are products which are still in clinical phases, II entering III maybe. So even if we wanted, we couldn't slot them in, in the large commercial equipment that we use to produce this other product in question. Peter Stierli: And the first question was whether if we would win or if the customer gets green light for the DS product, would we be closer to the consensus expense? Reto Suter: Yes, of course, yes. Immediately. Kristina Blaschek: Got it. And then, [indiscernible] The second and final question is on the recent acquisition. In terms of valuation, I know you've said impressive under 10x EBITDA multiple. But wondering if you can give the purchase price and also expected incremental capacity and revenue on an annualized basis. I realize it's not exactly clear when the acquisition will close, just if it were to close on January 1. Marcel Imwinkelried: I take it. Yes, I think I understood it. Regarding the acquisition, here, I think -- first of all, the price. We were sharing the evaluation compared to the EBITDA that we are paying or will pay less than 10. So really an affordable multiple. Now I think you need also to understand that we have not incorporated any synergies. So that's exactly what I was highlighting during the presentation to free up this 80 cubic meter capacity for the exclusive business. This would be on top, but this is not included in the price. So for us, that's why I'm so exciting. It's one of the top corporate targets for 2026 to make that happen, to free up the capacity and to start then to ramp up in 2028. That's the big opportunity what we have, and we will make -- we will take care to make that happen, yes. Peter Stierli: Good. There is no more question from the webcast. Is there any other questions here from the room? If not, then thank you so much. For those who still have some time, we would like to invite you for a drink and some snacks here around the corner. It would be great to meet as many as possible. Then yes, we're looking forward to see all of you again at the half year results on August 26. Thank you so much. Marcel Imwinkelried: Hopefully, earlier for the closing and new guidance. Thanks a lot for your attention.
Operator: Good morning, ladies and gentlemen, and welcome to Lundin Gold's Fourth Quarter and Fiscal Year 2025 Conference Call. [Operator Instructions] I would now like to turn the conference call over to Jamie Beck, President and CEO. Please go ahead. James Beck: Thank you, operator, and good morning, everyone. Thank you all for joining us today. I'm joined here by Terry Smith, our Chief Operating Officer; and Chester See, our Chief Financial Officer. And we're going to take you through our results for the fourth quarter and full year 2025. Please note Lundin Gold's disclaimers on this slide. This discussion includes forward-looking information. Actual future results may differ from expected results for a variety of reasons described in the caution regarding forward-looking information and statements section of our press release. Lundin Gold is a U.S. dollar reporting entity, and all amounts in this presentation refer to U.S. dollars unless otherwise indicated. 2025 was an exceptional year for Lundin Gold marked by strong operational delivery, record financial performance and important advances across our growth pipeline. At Fruta del Norte, we produced approximately 498,000 ounces of gold and sold 503,000 ounces. Our average head grade was 9.5 grams per tonne average recovery was 89% and the mill processed over 1.8 million tonnes at a record average throughput of 5,009 tonnes per day. These results underscore the consistency of the operation and the success of our ongoing optimization work. Amidst strong gold prices, we remain focused and disciplined on our cost performance. For the year, cash operating costs averaged $838 per ounce, and our all-in sustaining costs averaged $1,015 per ounce, resulting in a basic margin of 72%, the combination of robust production and disciplined costs translated directly into record financial outcomes. From a cash generation standpoint, we delivered $1 billion of cash flow from operations and $926 million of free cash flow in 2025. After paying $664 million in dividends in the year, we ended the year with $630 million in cash. For the fourth quarter, we announced a dividend of $1.15 per share or approximately $278 million, which will be payable on March 26 this year. These results reflect our continued focus on returning capital while maintaining balance sheet strength. On growth, we achieved a major milestone with the inclusion of FDNS into mineral reserves, and we are now proceeding with underground development. We have advanced our mine to mill expansion study that will evaluate increasing throughput beyond 5,500 tonnes per day, and we continue to demonstrate the district scale potential of our land package expanding the epithermal gold deposits at both FDNS and FDN East as well as identifying 5 copper-gold porphyries within the emerging corridor. Turning briefly to the quarter. The fourth quarter was the strongest in our history on multiple measures. Revenue reached $527 million. Net income was $234 million, EBITDA was $364 million; free cash flow at $328 million. Earnings per share were $0.97 and our AISC margin per ounce climbed to $3,106. Each representing a quarterly record and significant year-over-year increase. This performance reflects both continued operational excellence and our ability to capture margin in a strong gold price environment. With that, I'd like to now turn the call over to Terry to discuss our operations in more detail. Terrence F. Smith: Thanks, Jamie, and good morning, everyone. I'm very proud of our team that delivered great production results yet again and we did it safely. We started 2025 with a goal to improve our safety performance, and I'm pleased to report that we recorded no lost time incidents and achieved our lowest annual total recordable incident rate ever. This accomplishment speaks to the team's strong commitment to safe production. While preventing injuries is our objective, we continue to focus on leading indicators and getting out in the field, reinforcing behaviors that keep our people safe every day. Operationally, the fourth quarter capped a year of consistent delivery and steady optimization. In Q4, we achieved record mining output of 501,301 tonnes. The mill processed 484,950 tonnes at an average of 5,271 tonnes per day, even with the reduced operating hours during unplanned maintenance activities at the mill. This is a 14% increase as compared to Q4 2024 when the plant expansion project was largely complete. Our progress through the year keeps us on track toward our goal of averaging 5,500 tonnes per day in 2026. For the full year, we achieved our elevated 2025 production guidance range of 490,000 to 525,000 ounces, finishing the year with 498,315 ounces produced. We recently added a portion of the growing FDNS deposit into our mineral reserves, marking an important step forward for this emerging ore body. With this milestone, underground development towards the deposit will proceed. We currently anticipate nonsustaining capital of $30 million to $35 million in 2026 associated with FDNS development. FDNS is also being integrated into our mine to mill expansion study which is evaluating opportunities to sustain higher mining rates by incorporating FDNS into the broader mine plan. Together with potential plant debottlenecking and upgrades to supporting increased throughput. Our intention is to make a single integrated investment decision in 2026 informed by analysis of the most efficient mining rates at both FDN and FDNS, along with options to increase processing capacity beyond 5,500 tonnes per day. Further estimates for nonsustaining capital associated with FDNS development and the potential plant expansion will be provided as these studies continue to advance and are finalized. With that, I'll turn the call over to Chester to discuss our financial performance. Chester See: Thanks, Terry, and good morning, everyone. I'll begin with our quarterly and full year financial results, then move to cash flow and our dividend. The fourth quarter delivered record results. Net revenues were $527 million and income from mining operations was $373 million. Net income for the quarter was $234 million, and we generated EBITDA of $364 million. Free cash flow in Q4 was $328 million, reflecting strong operations and continued margin capture. For the year, net revenues totaled $1.78 billion. Net income was $792 million and EBITDA reached $1.24 billion. We generated $926 million of free cash flow for 2025 and our cash operating cost and AISC were $838 and $1,015 per ounce, respectively. These cost metrics were above our 2025 guidance range, primarily because our guidance was based on a gold price assumption of $2,500 per ounce, while average realized gold price for the year was $3,594 per ounce or an increase of approximately $1,100. For every $100 per ounce increase in gold price, our cash operating costs and AISC are impacted by $10 per ounce due to royalties and statutory profit sharing. This implies a $110 per ounce impact on our cost metrics well above the $60 range we used for our guidance. Turning to free cash flow in more detail. Q4 free cash flow of $328 million contributed to a full year total of $926 million, reflecting strong underlying operating cash flow and modest capital spending requirements in 2025. Our capital intensity remains low which, combined with our cost structure and realized pricing, supports robust free cash flow generation on a sustained basis. From a balance sheet perspective, as of December 31, 2025, we had working capital of $595 million, up from $459 million a year ago. During the year, we generated $1 billion in cash from operating activities and ended with $630 million in cash after paying $664 million in dividends. The strong liquidity position provides significant flexibility to full fund growth and continue delivering capital returns. Consistent with our capital allocation framework and the strength of our Q4 free cash flow, the Board has declared a quarterly dividend of $1.15 per share comprised of a $0.30 fixed dividend and $0.85 variable dividend. The variable dividend reflects 100% of normalized free cash flow this quarter, above the policy minimum of 50%. The total distribution is approximately $278 million payable on March 26 to shareholders on record on March 11 with payment on March 31 for shares trading on NASDAQ Stockholm. For a more detailed discussion of our dividend and financial results, I encourage you to read our MD&A. I'll now turn the call back to Jamie. James Beck: Thanks, Chester. I'll spend a few minutes on our mineral reserves and resources and then provide an update on exploration. 2025 marked our largest FDN reserve and resource statement ever published with the highest contained ounces reported to date. Proven and probable reserves now stand at 5.85 million ounces, an increase of 6% year-over-year, accounting for approximately 535,000 ounces of mining depletion and the inclusion of the inaugural FDNS reserve of 0.54 million ounces. Measured and indicated resources total 7.48 million ounces also up 6% versus 2024 and include 0.77 million ounces from FDNS, where an indicated material was confirmed at a higher grade than previously reported in the inferred category. Inferred resources now total over 2 million ounces with 0.58 million ounces added from FDNS and FDN East, including FDN East inaugural inferred resource of 0.42 million ounces. Since 2019, FDN has produced approximately 2.9 million ounces and has added approximately 4 million ounces of new reserves relative to the 2016 estimate. More than replacing depletion over that period. And these results continue to demonstrate the quality, scale and longevity of this world-class district and its future potential. Turning to near-mine exploration at FDNS. Conversion drilling continued to confirm strong gold mineralization and help define wider, higher-grade zones within the broader mineral envelope that support further mineral reserve expansion. In parallel, exploration drilling outside the current resource delivered several exceptional results, including one standout Intercept of 20.65 meters at 91.32 grams per ton and also identified new veins to the south as well as extensions to the North. Together, these results reinforce the significant growth potential of the FDNS system and highlight the ongoing opportunity to expand the mineralized footprint. At FDN East, exploration drilling has extended the footprint by approximately 150 meters beyond the inaugural mineral resource. The work confirms a broader mineralized trend than previously defined, and we see potential for extension under cover towards the Sandia porphyry. The deposit remains an exciting and complementary opportunity immediately adjacent to our existing infrastructure. The emerging porphyry corridor on our concessions continues to deliver exceptional drilling results. At Sandia we reported our best porphyry intercept to date, 322 meters of 1.08% copper equivalent near surface. Drilling has outlined a large and still open mineralized system with strong continuity in multiple directions. Trancaloma drilling is vectoring into a shallowing high-grade potassic core, again demonstrating the presence of substantial mineralized center with room to grow. Castillo is a shallow copper gold discovery approximately 2 kilometers south of FDN under about 100 meters of conglomerates with a highlight intercept of 101 meters at 0.8% copper equivalent confirming the Southern continuity beneath the Suarez basin. We also advanced at Trancaloma West, where mineralization and alteration are consistent with what we see at Trancaloma and we identified Chontas as a fifth new porphyry system, some 7 kilometers south, doubling the corridor from 5 to 10 kilometers along strike. Collectively, these results continue to demonstrate the significant district scale copper gold potential alongside our high-grade underground operation. Looking to 2026, our objectives are clear. We will remain focused on health, safety and environmental performance. We intend to achieve our 2026 production and unit cost guidance. We also plan to execute a record 133,000 meter exploration program as we continue advancing multiple growth fronts across the district. Importantly, FDNS is now incorporated into our mineral reserves and underground mine development towards that deposit will proceed. At the same time, we continue to advance our integrated mine to mill expansion study and plan to make an integrated investment decision in 2026, informed by the analysis the most efficient mining rates for both FDN and FDNS and options to increase processing capacity beyond 5,500 tons per day. As we continue to grow and strengthen the business, we remain committed to delivering meaningful shareholder returns through our disciplined dividend framework. Collectively, these initiatives position Lundin Gold for another year of strong performance and meaningful value creation. In closing, 2025 was a record year for Lundin Gold. We delivered both strong operational and financial performance. We advanced key growth catalysts and returned significant capital to our shareholders, all while maintaining a clean balance sheet and a relentless focus on safety and responsible mining. Thank you to our employees, contractors, communities, partners and shareholders for your continued support. Operator, we're now ready to take any questions. Operator: [Operator Instructions] Your first question is from Anita Soni from CIBC Wealth Markets. Anita Soni: I just wanted to ask about the study that you're going to be putting out or sort of the decision that you're going to make around FDN and FDNS. Is this an incremental -- I think you said it was constrained, I guess, by the mining rate. So are you considering a step-wise change or like a 25% increase to throughput. I assume that would mean that you're accessing this by drift? Or are you considering thinking a shaft and I think that would mean that you would probably have significantly more capital but also significantly more throughput and a bigger change to the mill. So can you just give us an idea of what you're kind of seeing at this point? James Beck: Yes, Anita, thanks for the question. No, we see this as a relatively small incremental expansion to the existing facilities. This is unlikely going to require a shaft or anything like that. We'll be able to access from existing underground development that we're moving out towards the south. So this is really, I think, an opportunity for us to capture consistent production and see that sort of consistent production at these levels for a number of years moving forward. So being able to bring in FDNS in a complementary way, to what we're already mining at FDN. So yes, these aren't a big massive step change. This is another incremental expansion, I think that will allow us to maintain production at current levels. Anita Soni: Okay. So the intention is the grade will probably decline, but you're going to try to offset that with higher throughput? James Beck: Yes. I think that's natural. We've been mining FDN 11, 12 grams for the first few years. Now we're down in the 9s and the 8s. And you can see reserve grade ultimately trends a little bit lower than that. So the increased throughput will allow us to maintain that production profile. Anita Soni: Okay. And is there any change in terms of the way that you're -- like as you're looking at it now from a mining -- sort of like the mining methodology perspective? Is there -- it would be similar mining methodology? Or are you seeing wider widths or anything like that? James Beck: Yes. Maybe I'll let Terry respond to that one. Terrence F. Smith: Sure. Anita, it's Terry here. It is similar. We do transverse stoping in FDN and so the stopes are big and wide and tall and obviously very productive because of that configuration. What we have at FDNS is not as massive an ore system as we have at FDN. This is a series of stacked veins. And so we'll need to approach it with a long-hole stoping method, but longitudinal stoping. So narrower and less productive stopes, but we'll have more of them in production at once than we do at FDN. Does that make sense? Anita Soni: Yes, it does. So maybe higher development CapEx and higher mining costs as we're looking at that? Terrence F. Smith: Yes. Anita Soni: Okay. And then lastly, if you -- can you give us an idea of like what -- you said $35 million for development for this year, but what's the time frame that you expect to bring this onstream and the capital that you think you might be looking at? James Beck: Yes. I think that's -- you'll see the language in our release, Anita and what we talked about today. We'll come back sort of later on in the year with a more fully baked plan that will lay out the -- our capital expenditures for this project over the next few years. But we see this having a meaningful impact over the next 3 or 4 years in terms of bringing FDNS into the mine plan and actually starting to produce some ounces. Operator: [Operator Instructions] And your next question is from Don DeMarco from National Bank. Don DeMarco: Jamie and team. So I just wanted to build on the last call's question about the FDNS. Could you add a little more color on the FDNS made reserves? I mean I understand that this just reflects a portion of the inferred endowment. And so do you have rigs currently turning to convert that rest of that endowment? And then also I see you're getting these high grades to the South which is encouraging. Do you expect to potentially put that into an inferred category at some point this year? And then also, is there any scope for those intercepts to potentially lift the grades? Terrence F. Smith: Don, it's Terry. Yes, so the reserves that we converted is obviously just getting started. And our intention is to continue to convert the 2 million ounces that we have in the inferred category up to indicated with more drilling this year. So that's just part of the natural process of derisking and expanding this project. And I know that the exploration team is going to continue to expand the inferred resource beyond what we see today. So yes to all your questions, I guess. I didn't quite catch the last thing that you asked, actually. James Beck: I think it was around some of the grades. Yes. And I mean you would have seen from the results -- some of these grades are spectacular. In fact, FDNS has returned a number of sort of the top 10 holes from a grade width prospective ever drilled on the project. 20-plus meters of 90 grams. Last quarter, we put out around 5 meters of almost 500 grams. So just absolutely remarkable results. And I think we're seeing that -- if you compare sort of our original inferred resource on FDNS last year to where we got to today, we've seen that grade kick up. And importantly, some of the conversion drilling that we're doing from underground is helping to guide that. I think as we continue some of these high-grade hits, we've been positively surprised from a grade perspective and anticipate that may continue moving forward. Operator: And your next question is from Charles Ehidiamhen from Jefferies. Charles Ehidiamhen: My question is on Bonza Sur. I wonder if you could provide some updates to us on that and when we could expect some maybe the resource estimate on that front. James Beck: I'm sorry, Charles, that your line is breaking up a little bit on our end. Would you mind repeating the question? Charles Ehidiamhen: Yes, definitely. I was asking about Bonza Sur. So I wonder if you could provide some update on that front if we could expect any resource estimates anytime soon? . James Beck: Yes. Thank you. It's around Bonza Sur. And I think one of the things that's opening up our development at FDN South is allowing us to take a look at is, with the mine development now moving towards the South, are there going to be opportunities for us to think about taking a look at Bonza Sur a little bit differently. You may recall, in the early days of discovery of Bonza Sur and thinking there our original thoughts were around potentially accessing that from open pit methods from surface. We now see opportunity to consider whether or not we can get at some of the higher-grade portions of that Bonza Sur deposit from underground, especially as the northern part of Bonza Sur starts pushing up against the southern part of FDN South and the success that we're having with extending FDN South with our conversion and exploration drilling. So that's going to be a priority for us to share, for sure. I'm not really going to guide you 100% at this point in time. But if there's opportunities for us to look towards pulling some of that Bonza Sur mineralization into our future long-term planning, we'll be evaluating that pretty closely this year. Operator: There are no further questions at this time. I will now hand the call back over to Jamie back for the closing remarks. James Beck: Okay. Thank you so much, operator. I think we are super excited about our growth potential at Fruta del Norte. It's been really interesting to see all of this exploration work come together and to have that supported by such strong operations this year as we mentioned, was remarkable in terms of record financial and operational performance. Our dividend continues to be strong with a clean balance sheet. I think the future remains bright at Fruta del Norte, and we look forward to delivering on our 2026 objectives over the year. Operator: Thank you, ladies and gentlemen. The conference has now ended. Thank you all for joining. You may now disconnect your lines.
Operator: Good day, and welcome to The Western Union Fourth Quarter 2025 Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Tom Hadley, Vice President of Investor Relations. Tom, please go ahead. Tom Hadley: Thank you. On today's call, we will discuss the company's Fourth Quarter and Full Year 2025 Results, 2026 outlook, and then we will take your questions. The slides that accompany this call and webcast can be found at westernunion.com under the Investor Relations tab and will remain available after the call. Additional operational statistics have been provided in supplemental tables with our press release. Joining me on the call today is our CEO, Devin McGranahan, and our CFO, Matt Cagwin. Today's call is being recorded, and our comments include forward-looking statements. Please refer to the cautionary language in the earnings release and in Western Union's filings with the Securities and Exchange Commission, including the 2025 Form 10-K, which will be filed later today, for additional information concerning factors that could cause actual results to differ materially from the forward-looking statements. During the call, we will discuss some items that do not conform to generally accepted accounting principles. We have reconciled these items to the most comparable GAAP measures in our earnings release attached to our Form 8-K as well as on our website, westernunion.com, under the Investor Relations section. I will now turn the call over to our Chief Executive Officer, Devin McGranahan. Devin McGranahan: Good morning, and welcome to Western Union's Fourth Quarter 2025 Financial Results Conference Call. It was great to see many of you at our Investor Day last fall for the launch of our Beyond strategy. We are excited about building a Digital First, Retail Enabled, Consumer Services Company that is powered by payments and innovation. We remain optimistic about the longer-term outlook for our business as we believe our core retail remittance business will improve as migration patterns normalize, and we work to increase both our revenue and share gains in this important market. We believe that our focus on becoming market competitive, driving productivity, expanding our payments capabilities and growing share within higher-growth corridors and geographies is the key to delivering on this vision. A key element of our strategy has been to build everyday financial services that can leverage our global brand and our extensive payment capabilities. As these products and services gain critical mass, they will moderate some of the swings we have seen in the core remittance business as they tend to be less correlated with immigration trends. As witnessed in this quarter where our Consumer Services business continued to perform which allowed us to report a reasonable quarter against a difficult macro backdrop, demonstrating the benefits of our global and now multiproduct business model. For the fourth quarter, we reported revenue of $1 billion. On an adjusted basis, this was a decline of 5% year-over-year. Consumer money transfer transactions were down 2.5% in the quarter and cross-border principal growth was up on a constant currency basis, speaking to the resilience of our customer base and their perseverance in the current macro environment. In this quarter, we again saw incremental improvement in transactions as Q4 was better than Q3, coming off of the lows that we saw in the second quarter of 2025. We continue to focus on operational efficiencies as we seek to benefit from our scale. This strong operational focus allowed us to deliver at the top end of our earnings guidance this year even in the face of these macro-driven revenue headwinds. Adjusted earnings per share came in at $0.45 compared to $0.40 this quarter a year ago. Our retail business in the Americas continued to face headwinds associated with the current geopolitical environment. And while it may be too early to say that we have reached bottom, we are potentially seeing some stabilization. We did see strong performance in many corridors and geographies offset by continued weakness in the Americas across several large corridors, most notably U.S. to Mexico. Although from a transaction growth rate perspective, the U.S. to Mexico quarter improved hundreds of basis points relative to the third quarter. Our branded Digital Business increased transactions 13% and adjusted revenue by 6% in the quarter, with gains driven by some of the new relationships that we have recently signed in the Middle East earlier in the year. Consumer Services adjusted revenue was up 26% in the quarter and roughly 30% for the full year, driven by growth in Travel Money led by Euro Change as well as growth in our bill payments business. We expect Consumer Services to have another strong year in 2026 as our Travel Money business is expected to approach $150 million in revenue, up from nearly nothing a few years ago. We see a market opportunity for a globally branded Travel Money franchise as the market remains very fragmented and some of the prior large global players have retreated since COVID. Given the strength of our brand, our global footprint and strong retail distribution, we believe there will be many more opportunities for geographic expansion. A hallmark of the company for many years has been a strong commitment to returning excess capital to shareholders. Over the past year, we delivered again with above-average industry margins and a return of over $500 million via dividend and share buybacks. I am also excited about the capabilities we've been building on the M&A front. The deals we were able to do in 2025, and I now look forward to welcoming Intermex into our family, hopefully, in the second quarter of this year. Matt will discuss our fourth quarter results and 2026 outlook in more detail later in the call. Switching briefly to the macro environment. While economic conditions globally remain reasonable with inflation rates declining in key markets around the world, and GDP outlooks remaining relatively strong. The landscape for human capital mobility continues to shift each and every day. For example, in the last quarter, we saw an election in Chile that will have implications across the region for immigration and mobility. Also a change in leadership in Venezuela for which the implications are still being assessed. These kinds of macro conditions provide a dynamic and constantly changing environment for our business. While we expect them to stabilize over time, in the near term, we believe that companies with larger and more global operating models are better positioned to withstand disruption in any individual country or region. On the policy side, the U.S. remittance tax went into effect on January 1 for all cash-based international money transfer transactions originated in the United States. I would like to take a brief moment to call out the strong work our team did and the flexibility of our new retail platform that enabled us to implement attacks across all our channels and all our partners flawlessly. We have received positive feedback from both send and receive side partners on our relative execution. With that said, through the first 6 weeks of this year, we have not seen a material impact on our business, but we continue to monitor the situation closely. Since the beginning of the year, however, we have seen an uptick in our prepaid cards and our V-Go Money Wallet. We launched the V-Go Money Wallet in the U.S. in March of 2025, since then, we have onboarded over 30,000 customers and have a couple of thousand weekly active user base now. An important note here is the vast majority of these customers are the result of a money transfer redirect. We have spent very few marketing dollars on customer acquisition. This is a powerful and effective approach to building our digital wallet customer base. These payout customers who traditionally have taken their money and left Western Union are now becoming weekly active users who are frequently using their debit card at points of sale and about 1/3 of them are initiating new international money transfer transactions. While these numbers remain small compared to the scope of our overall U.S. business, they do highlight the power of the model we are building. As you know, the U.S. wallet is an extension of our broader wallet strategy. Our goal is to create a 2-sided network that makes it easy for our customers to move funds cross-border while staying within the Western Union ecosystem. In addition to our U.S. wallet, we are continuing to see strong results out of our wallets in both Argentina and Brazil. In Brazil now, we have onboarded roughly 20,000 customers since our launch in May of last year. And in the most recent month, we have redirected roughly 5% of all inbound transfers to the country into our wallet. This saves commission expense as well as gives us an opportunity to increase retention and potentially monetize our receiver base like we are seeing in the U.S. as referenced above. For context, in Argentina, which we launched earlier than Brazil, we are now up to 17% of all inbound remittances ending up in our wallet in that country. We have anticipated launching a wallet in Australia later this year, and we continue down the path of developing a wallet for Mexico as we await regulatory approval for our pending acquisition. In addition, we believe that we will see an expansion of our wallet capabilities in Singapore, the Philippines and potentially Israel as well, all in 2026. Since the beginning of 2026, our sale of prepaid cards has also gone up with now over 1,000 agent locations enabled to sell prepaid cards we are seeing a market-driven increase, which we believe may be because of the remittance stacks. Linkages between this consumer services product and our core business are high with over 30% of all transactions being Western Union money transfers and 60% of newly loaded cards being used to send a cross-border remittance with Western Union. Two years ago, we began a program to enable digital payment acceptance in our point of sale for retail agents. We firmly believe that the retail experience and value proposition is more than just being about cash. It is about the trust needed for an important transaction that comes from personal assistants in-language, culturally appropriate communications and high-quality service in the event of an issue. As more and more of our customers have access to payment and banking products, we need our retail systems to support card-based payments. The passage of the remittance tax has accelerated this transition in the U.S. with debit cards now accounting for 15% of all retail funding in the U.S. in the month of January on our Western Union point-of-sale system. This is up materially over the last several months. Another focus in the U.S. market in the quarter was U.S. to Mexico. The team has been working hard to identify market and agent segment opportunities to focus on, driving promotions and pricing strategies and increasing our digitally directed payout services. That said, while it is still negative on a year-over-year basis, we are beginning to see improvements on a quarter-over-quarter basis with last summer being the low point. And while corridors like Mexico, Venezuela, Ecuador, Nicaragua and Colombia continue to decline. We have begun to see transaction growth in the quarter to a number of other important corridors, including Brazil, Guatemala, Jamaica and the Philippines. The Bank of Mexico data would seem to indicate that the worst may be behind us with principal growth in the most recent reported month going slightly positive on a year-over-year basis improving materially from the summer lows, although there may have been some pull forward in that number as customers look to move money ahead of the implementation of the U.S. retail remittance tax. Despite these short-term headwinds, we believe the long-term trajectory remains clear. Global migration is not disappearing. It is adapting. People will continue to move in search of opportunity, education and family and Western Union will continue to provide trusted compliant and accessible financial services. As the market continues to evolve, we continue to see a shift towards the digital channel particularly among younger and more technologically savvy customer cohorts. This varies by region and country, but the trend is generally consistent globally. It does not mean, however, that a growing digital business necessarily means a shrinking retail business. In Scandinavia, for example, a region that is highly digital and has nearly eliminated the use of cash. Our retail business grew transactions and revenue double digits last year. What does it mean? What it does mean is that the most attractive and growing part of the market, we will have to be able to compete with digital natives, that do not have the complexity or the history of a large retail business. To do this, we believe we have 2 real sources of competitive advantage. First, we see our strong brand recognition and the large base of existing customers as the key building blocks to cost effectively build our digital business without having to overinvest in non-scalable marketing expense. Second, our unit economics for key functions like compliance, tech, network management, payout costs and customer service benefit from our overall scale as the largest remittance player in the market. Now that we have largely achieved price competitiveness we believe these benefits can be more easily transferred into competitive advantage. In the end, there will only be a few players that will have the scale to effectively compete on a global basis digitally. We believe we are well positioned to be one of them. To capture this opportunity, we have to deliver a digital-first customer experience throughout the entire journety across the majority of our markets. With the launch of our Beyond platform in 2025, we believe we now have the infrastructure to achieve this goal. We are planning to have all of our markets on the Beyond platform by the end of 2027. This will be a meaningful acceleration to the work that we have been doing to modernize our technology and experience over the past 2 to 3 years. Second, we need to translate our brand strength and market presence into scalable gains in new customer acquisition. Over the past 12 to 18 months, we have seen a flattening of our customer acquisition trends outside of the Middle East and we need to improve upon that. These opportunities will be accelerants to our digital business, which has now grown in transaction double digits and revenue mid-single digits for 2 straight years. Our digital business now accounts for over 40% of the principal we send around the world. And as the world continues to move more digital, we will continue to move right along with it. You see this with our payments network, where we have made meaningful progress in creating one of the largest at scale funds in and funds out platforms anywhere in the world. Today, we have over 300 funds in types that we support and billions of accounts and wallet endpoints in our digital funds out network. We are using this network not only to drive both our retail business and our digital business, but to launch new businesses like our recently announced digital asset network. As a matter of fact, I just returned from a trip to Dubai to visit some of our large partners in that region. There may not be a region in the world that is moving to digital at a more rapid pace than the Middle East. Last year, we announced 2 partnerships in the Middle East to complement our existing business there. As you know, these markets are difficult for traditional MTOs given the restrictive ownership and [ licing ] requirements in most of these Middle Eastern countries. These partnerships are with well-known digital native brands who have accumulated large customer bases and essentially function as super apps or financial ecosystems for their customers to provide a wide range of telecommunications and financial services. We are pleased to be partners with these institutions and offer them the benefits of our payout network and our scale that few others can match, which enables us to win their business. Next, I would like to provide a quick update on our digital asset strategy. At our Investor Day a few months ago, we laid out an ambitious plan to use our assets in new and unique ways and to become a more meaningful player in the digital asset economy. Over the last few months, we have successfully minted our first U.S. dollar payment token, US DPT and have moved it between our treasury department and our agents wallets. These pilots are focused on leveraging on channel settlement to reduce dependency on legacy correspondent banking systems, shortened settlement windows and improve our capital efficiency. We see significant opportunities for us to move money faster and at lower cost without compromising compliance or customer trust. These milestones put us on a path to meet our expectation of offering our payment token to the market by the middle of this year. I'm happy to report that we remain on schedule and we were looking forward to our market launch. Finally, we are expanding our partnerships and capabilities to allow our customers to move and hold stable coin digital assets and to allow them to have more control in how they manage and move their money. In many parts of the world, being able to hold a U.S. dollar-denominated asset has real value as inflation and currency devaluation rapidly erodes an individual's purchasing power. We are working with [ Rain ] and Visa to bring the first US DPT stable card to market and are targeting an initial launch of more than a dozen countries later this year. I look forward to continuing to update you on these initiatives as the year progresses, and we are excited about the opportunities in front of us. Finally, I would like to take a moment to highlight several new agent wins. Over the last 2 years, we have invested heavily in modernizing our retail technology platform making both integration and ongoing experience management significantly easier. We believe our partner OS platform is now the gold standard in the industry for large retail networks. Combining these improvements with our move to a more competitive consumer value proposition and the extensive work we have done on our agent support model, we are seeing renewed momentum and interest from large distribution networks. A little over a month ago, we put an announcement out that we have re-signed the Deutsche Post. This was 1 of the 2 significant European agents we lost a couple of years ago as they made the decision to exit the remittance business. With our improved market position and capabilities, Deutsche Post has decided to return to the remittance business with a multiyear exclusive relationship with Western Union and a planned relaunch sometime in the middle of this year. This will be a great addition to our German business, and we look forward to offering our services across the Deutsche Post network. Second, we recently signed an exclusive 5-year contract with Canada Post. This is a new win for us and a competitive takeaway Canada Post is expected to begin offering Western Union service in the majority of its 5,600 locations in the coming months and we look forward to servicing our Canadian customers throughout the post extensive network. This win should help bolster our North American business and provide a substantial retail network across Canada. Third, we have recently signed a long-term exclusive contract with the California grocery store chain Vallarta Markets, which caters to the Latino community across the state. This is a new relationship for Western Union, and we look forward to offering our services to customers and Vallarta locations. Lastly, we announced at Investor Day, we have gone back to being exclusive with Kroger for Money Transfer. This builds on the 40-plus year relationship we have had with the company. We look forward to continued collaboration and are excited to see now what we can accomplish together in this exclusive partnership. With these partnerships that I have discussed today, we expect at least an incremental $100 million of retail revenue per year when fully ramped. I am excited not only about these 4 opportunities, but about the future prospects as our pipeline continues to remain robust. The changes we have made to our retail technology platforms, our agent support, our improved pricing and our leading payout network has put us in a position to grow our agent base for the first time in several years. In closing, I want to reiterate our confidence in the path we're on. Western Union is transforming, becoming more digital, more agile and more aligned with the evolving needs of our global customer base. We are expanding our product suite. Modernizing our platforms and unlocking new opportunities for growth across all of our channels. We are positioning Western Union to lead in the future of cross-border and accessible financial services across the globe. It is a privilege to be the CEO of this wonderful and now 175-year-old company. I am proud of what we have been able to accomplish so far. I would like to thank our Board of Directors for their continuing support and our combined commitment to drive shareholder value. I would also like to thank my leadership team and our nearly 10,000 employees for their laser focus on delivering for our customers even in these tough times. Thank you all. I will now turn the call over to Matt Cagwin, our Chief Financial Officer. Matthew Cagwin: Thank you, Devin, and good morning, everybody. I'm delighted to be here today to walk you through our Fourth Quarter and Full Year results as well as our 2026 financial outlook. For the full year, we delivered GAAP revenue of $4.1 billion. Adjusted revenue came in below our outlook, reflecting ongoing industry disruption. Adjusted revenue growth, excluding Iraq, was down 2%, driven by growth in Consumer Services and Branded Digital, offset by the Americas Retail business. In the fourth quarter, GAAP revenue was down $1 billion, and our adjusted revenue was down 5%, driven by our Consumer Services and Branded Digital business offset by the Americas business, which continues to struggle with macro headwinds. The deceleration relative to Q3 was largely due to the slowdown in consumer services as communicated last quarter. In 2025, our full year adjusted operating margin was 20%, up from 19% in the prior period. Adjusted operating margin in the quarter was 20% compared to 17% in the prior year, benefiting from our continued cost discipline. For the full year, we delivered adjusted EPS of $1.75 in which benefited from higher adjusted operating profit and fewer shares outstanding, offset by higher interest expense, which landed us at the top end of our guidance range of $1.65 to $1.75. Adjusted EPS was $0.45 in the fourth quarter compared to $0.40 a year ago. Adjusted EPS benefited from our cost management discipline as well as fewer shares outstanding partially offset by higher interest expense. The adjusted tax rate for the quarter and the full year was 12% and 13%, respectively, consistent with the same prior year. Now turning to Consumer Services, which contributed 14% to total revenue this quarter. Fourth quarter adjusted revenue grew 26% driven by growth in our Travel Money business as well as growth in our bill pay business. I'm pleased to share that in 2025, adjusted revenue from Consumer Services grew almost 30%, we continue to believe that our Consumer Services business will grow double digit annually over the next several years. This growth will come from continued market expansion of existing products as well as potential new product offerings and through inorganic growth strategies that can benefit from Western Union's brand, scale and global nature of our business. As Devin highlighted, we are continuing to evolve our portfolio, moving beyond remittances to build a broader suite of consumer services. Travel Money demonstrates what's possible. In just a few years, we've grown from a few million dollars to over a $100 million business and we believe there's more to come. This illustrates the power of our brand, global footprint and unique capabilities. Now transitioning to Consumer Money Transfer or CMT. For the full year, CMT adjusted revenue, excluding Iraq, was down 6%, while transactions excluding Iraq, declined 1%. In the fourth quarter, CMT adjusted revenue declined 9%, while CMT transactions declined 2%, driven by the slowdown in our retail business as industry conditions remained challenging throughout the quarter. U.S. immigration policies have continued to impact customer activity. These dynamics have been present for most of the year and remain a factor in our results in the fourth quarter. Customers continue to send fewer transactions but with higher average principal per transaction. Our PPT increased roughly 5% in the fourth quarter compared to the prior year on a constant currency basis. We see this as a new normal for the industry. And in the short term -- we see this new normal in the short term, and we continue to look for ways to improve in this environment. In the fourth quarter, our Branded Digital business grew adjusted revenue by 6%, with a 13% increase in transactions. This marks the ninth straight quarter of solid revenue growth. Our performance in this environment reinforces our confidence in the Western Union brand. We have also seen strong Branded Digital transaction growth across the globe, underpinned by the Middle East, APAC and the Americas. Account payout transactions continued their strong momentum, growing over 30% in the quarter. For the full year, adjusted revenue grew 6% and transactions grew 12%. As Devin highlighted, a big contributor of branded digital growth over the past couple of quarters has come from some of the new digital partnerships in the Middle East. These relationships have led to a substantial growth in transactions but a more muted growth in revenue as they are primarily account-to-account transactions where revenue per transaction is lower than our traditional Western Union license business. This will likely cause a spread between transaction growth and revenue growth to remain elevated. We are even likely to see an increase in transaction growth rate over the next couple of quarters as these partners are gaining real traction in the market. Turning to our retail business. Overall, the performance in our retail business was similar to Q3 on a transaction basis and slightly worse on a revenue basis. We will continue to see softness in North America. But from a growth rate perspective, North America transactions improved a couple of hundred basis points in the fourth quarter compared to the third. Although some of these improvements may have been pulled forward ahead of the new remittance tax as it went into effect on January 1. APAC also improved in the fourth quarter from a revenue growth rate perspective, while Europe, Middle East and LACA slowed slightly. Now turning to our cash flow and balance sheet. In 2025, we generated $544 million in operating cash flow compared to $406 million in the prior year period. Included in this year's number is approximately $220 million in cash taxes paid related to the transition tax. We're excited to have these tax obligations behind us and look forward to the additional flexibility that we will have to invest our free cash flow in support of our business or to return it to our owners. Western Union continues to be a cash flow machine with adjusted free cash flow conversion of over 100% for the past 3 years. In 2025, our CapEx was $151 million up 15% from the prior year. CapEx increased slightly due to higher technology infrastructure spend and a busy year in new agent wins and renewals, which drove a slightly higher CapEx number. We expect CapEx to remain elevated in 2026 due to the strategic wins and the addition of Intermex. We continue to maintain a strong balance sheet with cash and cash equivalents of $1.2 billion and debt of $2.9 billion. Our leverage ratios were 2.9x and 1.6x on a gross and net basis, which we believe continues to provide us ample flexibility for capital return or potential M&A while maintaining our investment-grade credit rating. I'm pleased to report that in 2025, we returned more than $500 million to our owners with $305 million paid in dividends and $225 million used to repurchase shares. Now moving on to our 2026 outlook, which assumes no material changes in macroeconomic conditions. Our adjusted revenue outlook for 2026 is for 6% to 9% revenue growth inclusive of Intermex which we now expect to close in the second quarter of this year. Our adjusted EPS for the full year, we believe will be between $1.75 to $1.85. This includes higher interest expense as we look to refinance our existing notes coming to maturity in Q1, which are currently yielding 1.35% to something closer to today's interest rate environment. This also assumes roughly $100 million of stock repurchases for the full year as we look to integrate Intermex and potentially execute our robust M&A pipeline. We believe that EPS will accelerate as we go throughout the year as our Travel Money business is seasonal. It has less fixed cost coverage in the first and fourth quarter of the year. In addition, some of our expense benefits related to incentives that hit in Q1 of 2025, will occur later this year. In both the benefits of our operational efficiency programs announced at the Investor Day, as well as the benefits related to Intermex integration will ramp as the year progresses. Thank you for joining the call. And operator, we're ready to take questions. Operator: [Operator Instructions] Our first question comes to us from Tien-Tsin Huang at JPMorgan. Tien-Tsin Huang: Thanks for going through all of this. So I'm just trying to -- I'm thinking what to ask here. So maybe on the outlook with just January and February trends that you talked about. I'm curious how that informs your outlook in terms of what you learned. It sounded like there's no real impact yet from the [indiscernible] so far, but you're monitoring what's happening across a lot of different countries, including Venezuela. So what's baked in the outlook in terms of assumptions? And I'm very curious on what you're assuming for Intermex in the outlook in terms of either contribution or impact from some of the trends that you're seeing in the early part of the year? Matthew Cagwin: Tien-Tsin, thanks for joining the call so early in the morning. A couple of things here on your question. So we are 6 weeks into the year. We are seeing an improvement relative to our Q4 performance 6 weeks into the year. As you know, we saw the slowdown in the Americas, in particular, the U.S., starting in the second quarter of last year. So we'll start to lap those harder comps we have here in Q1 as we get into Q2, 3. So all that will make the continuing progress we've seen in the first couple of weeks, get even easier as the year progresses. And then as far as Intermex concerns, they have not published yet, so it's not fair for me to give their numbers, but you could imagine their North America-centric business. So the results are largely consistent with what you've seen both in our results today and largely consistent with what Euro net published, something on that line will give you a good sense of where they are, and we factored them into say Q2 close. So you can think about the middle of the quarter. Tien-Tsin Huang: Middle of 2Q. Got it. And then just my follow-up then. The retail agent wins stood out to me. It sounded like many were exclusive. Devin, you talked about $100 million incremental revenue, one's fully ramped. A couple of questions there. Just it sounds like there's a pipeline for more of these deals given your distribution. Correct me if I'm wrong there. And I'm curious, is there anything to share on the cost for this exclusivity and maybe the margin profile of these deals, if there's anything different than what we've observed in the past. Devin McGranahan: Thanks, Tien-Tsin. We are excited about it. They are exclusive deals, which is part of the strength of the Western Union brand in model with large strategic partners. We believe that these will be meaningful as they are largely competitive takeaways, so they benefit both our inbound and our outbound. So in the example of Canada, adding incremental distribution. This is similar to what we saw when we added the U.K. Post, adding incremental distribution, particularly in some of the less metropolitan areas will increase inbound into Canada. We saw that also when we lost the Deutsche Post again, which has great coverage in the nonurban areas, we saw inbound to Germany go down. So for us, these kinds of networks not only benefit outbound in the country, but help our global model and our global footprint because they provide important payout services in places where it's difficult to sustain an independent agent on money transfer remittance kind of revenue only. So we see them both as a network benefit overall, but also as great partners with great brands in these markets. Matt can talk about the economics, but they are generally consistent with our overall branded large network economics. So these are not deals that we bought. These are deals that we won based on strong value proposition, good technology and great partnership. Matthew Cagwin: Let's build on Devin's point for 2 things here. I think what it's closing was there's probably if you take away 2 takeaways on this. We alluded a quarter ago or maybe 2 now about a pipeline building. These are -- we knew these were well on the way at that time. We put a lot of money into rebuilding our retail platform and having what we believe to be the gold standard now in the marketplace. So we believe this will be the first of many coming over the next 2 years. And then from a margin standpoint, you should view this, Tien-Tsin, is it will contribute to our overall OI. So it's better than our OI. Devin McGranahan: The other thing, Tien-Tsin, in my tenure, it's great to talk about adding so that instead of talking about losing. So it's a great transition for us. Operator: Our next question is from Darrin Peller at Wolfe Research. Darrin Peller: Can we touch on the digital transaction growth for a moment? I mean, I know -- it's good to see the 13%, and I know that you wanted to see that even accelerate over to the mid-teens over time. But we're also -- I'd like to hear more about your view of what you're doing there to keep that sustainably in that rate or better. and your conviction around that. But I'd also love to hear more about the spread. I know at the Investor Day, we talked about that spread narrowing a bit. You touched on it earlier in your prepared remarks. So maybe just revisit that again, if you don't mind, I mean, what should we expect on the spread between the transaction growth and the revenue growth rate there? And what's driving the spread now still a little bit wider? Devin McGranahan: So Darrin, let me take the transaction and the potential for acceleration and then I'll let Matt take the spread question. By the way, thanks for joining early in the morning. We see market opportunities. So we are excited about our business now in the Middle East. For many years, we had a tougher Middle Eastern product and platform and strategy. Licensing is tough in those markets. And so we went to market with a model we call the digital master agent, which was really one of our retail agents partnering with us to try to do digital. We still have that model, but we've expanded our model again with the improvements in our technology platform to be a bit more partner aligned with some of the larger digital players who have amassed critical mass of customers in that region across a wide range of products, telecommunication, financial services. And so it's opening up for us a market opportunity and a customer base that we had trouble accessing in our old digital master agent model in the region. So we see potential there to accelerate. We also see regions in the world like in Europe, where we believe we are underperforming the market and with some changes in the approach, model leadership, we'd like to see some acceleration there, which again would be additive to the current results that we're publishing. I'll let Matt talk about the gap. Matthew Cagwin: We actually alluded to this last quarter, our Q3 as we were ramping these partners, the gap would be wider for the year as we ramp it. Devin also had in the prepared remarks a minute ago, we've seen our new customer and our non-Middle Eastern business growth narrow a little bit, flat line. We are working hard on that to get it back. That will get the core non-Middle East to accelerate and narrow the gap. But as the Middle East is contributing to this, it is what's causing the widening. The other thing as you know is we launched the program, I guess, been now 2, 3 years ago where we did the new go-to-market strategy, is that happen, we saw each region we went to accelerate and grow in the last part of that really is the Middle East where we're doing through partners. So -- and then they come to RPTs. Darrin Peller: Okay. All right. That's helpful. And just a quick follow-up would just be your comments around what you're seeing with regard to the corridors impacted by migration policies in the U.S. Just I want to make sure I understand it. Are you saying that it's gotten to a point where you think it's now stable. Maybe it's a little bit better. We see a new norm in Mexico, for example, was stabilizing. I mean I know it's pressuring transactions, especially on the retail side. But do you think we're at a new steady state now? Or I'm just curious where you're seeing the data. Devin McGranahan: Yes. So we -- the summer was pretty dramatic. Bank to Mexico [ Data ] was negative. In 2025 for the first time, Darrin, in over a decade. And so it's a tough situation, and it's an important corridor for us given its relative size. And so we pay a lot of attention to that. We did see it turn positive at the end of the year, and we're continuing to see some reasonable trends in the first part of this year. That's had it does, as evidenced on the chart, jump up and down. October was starting to head in the right direction and then November fell off a cliff, December came back pretty well. So we think that is moving directionally in the right direction, and now we have a couple of months in a row that look a little bit better. It's not where it was. Historically, it's growing mid-teens month-over-month, quarter-over-quarter, year-over-year, but at least it's not descending at mid-teens like it was in the summer months. The rest of the LACA regions is becoming a bit mixed, right? And so we see certain markets like Nicaragua, where we're still seeing reasonably low performance and others that are starting to stabilize and in some cases, even begin to grow again like the Guatemala. So I think we're seeing stability. But again, as I said in the prepared comments, any given day, an election or a geopolitical change can happen that disrupts the region again for another 3 to 6 months. Operator: Our next question comes to us from Will Nance at Goldman Sachs. William Nance: I wanted to just ask the digital question in a slightly different way. I mean it sounds -- I totally hear you on the Middle East and some of the mix shift dynamics you're expecting around the spread just relative to the revenue growth rate that you just saw when you put all the moving pieces in a blender, like how are you thinking about absolute levels of digital revenue growth over the course of the year? And then I'll just ask the second question now, but I was wondering if you could put a finer point on the [ IMXI ] revenue assumptions assumed in the guide for the closing just so we can kind of true up the models ahead of the close. Matthew Cagwin: I put those 2 tough questions together. So on the branded digital side, what are we expecting, what's built into the guide. We've now had 2 years of mid-single-digit growth. We have built into our guide a modest improvement in that. We think there's meaningful improvement opportunity, but our guidance includes a very modest improvement driven by -- we think we're going to continue to accelerate in the Middle East, and we think we can reinvigorate our growth rates for new customers in many other markets. On the Intermex side, we have built into our model a Q2 close as I talked about with Tien-Tsin a minute ago, you can view that as something closer to the middle. And we've assumed a growth rate is commensurate with our North America [ Orias ], North America business growth rate. So you look at industry growth rates for that. Operator: Our next question comes to us from Rayna Kumar at Oppenheimer. Rayna Kumar: So I also want to ask about Intermex. I think you guys put out a $0.10 a share accretion number for the first year. Do you still expect to hit that target with Intermex. And I'll ask my follow-up as well. You had some nice commentary on is the partnerships and products you're adding with stable coin. I'm wondering if you're actually starting to see some demand from consumers to send stable coin. And are they utilizing the on and off ramping for stable coin? Matthew Cagwin: Rayna, thanks for joining the call today. To your first question on Intermex, when we had the announcement later part or middle of last year, what we had indicated at the time was a $0.10 from the first full year. And our thought process there is we need some time for integration. There's a meaningful amount of synergies that we are confident we can go get. We're more confident today in those synergies than we were when we signed the deal because we've had a lot of time to do some integration planning. The deal is coming a few months earlier than we thought right now, subject to regulatory approvals, there's still a few states that get approved in one country from a change of licenses, all the competition stuff of material substance is done, but there is a few more lingering regulatory things to go. With the deal coming a few months earlier, it will be accretive this year. It's in our $1.75 to $1.85 but the $0.10, you should view more as a 2027 activity for us as we get the benefits of all the synergies that we're working on. Devin McGranahan: Let me try to take the stable coin question. As you remember from Investor Day in the prepared comments, we are most bullish on the use of stable coins to create efficiency in the global movement of money, particularly between us and our partners to increase speed allow us to move money 24/7 and for Matt to get capital efficiency out of that process. I also talked about launching the stable card which we believe doesn't require senders to necessarily choose to open a digital asset wallet, by a stable coin, send a stable coin, it will enable a traditional retail or digital center to have their customer receive a stable coin-based asset in the stable card, which we believe has value in our remittance countries for allowing the receiver to have more control over exchange rates and the ability to hold a U.S. dollar-denominated assets. We have not seen strong market demand from our center-based clamoring to send money via stable coin. We have, however, seen and we believe that this is a market opportunity for us people who already have customer bases with digital asset wallets are looking for ways to exchange those digital assets back into [ fiat ] currencies. And so what we've talked about is our digital asset network, and we continue to sign partnerships with existing digital asset players who own digital asset wallets and customer bases looking for those on-ramps and off-ramps. And so that's another part of our digital asset strategy that's coming along, and I will talk about more about that on the next earnings call. Operator: Our next question is from Timothy Chiodo at UBS. Timothy Chiodo: So you mentioned a few times now around some flattening of your customer acquisition trends outside of the Middle East. I was hoping you could dig into this a little bit more on 2 levels. One is a recap of some of the initiatives that you have to address that flattening. But also, what are you seeing in the competitive environment, whether it's around advertising spend or promotions or other initiatives that might be impacting that flattening of customer acquisition that you mentioned. Devin McGranahan: Thanks. Great question. I think there are 2 things that have transpired over the course of, call it, the last 12 to 18 months. The market for value propositions for new customer acquisitions has gotten increasingly competitive as global macro forces have put pressure, particularly on lower scale players, you're seeing aggressive -- increasingly aggressive new customer offers. And so one of the things that we're evaluating is how do we compete with that and still maintain our rigor in terms of our ability to have the high returns on acquisition cost to lifetime value. And so we're looking at how some of our models work and how we are going to go to market compete with these more aggressive new customer acquisition offers. The second thing that we're seeing is has search is changing and a genetic AI and how people go to market, the traditional model of buying lots of space on Google or in the Apple store is a shifting landscape now in terms of how you gain access to customers and where those customers are actually shopping and looking for opportunities to send money. And so we are shifting our go-to-market strategy to align better with the kind of emerging landscape for digital customer acquisition. Operator: Our next question comes to us from James Faucette at Morgan Stanley. James Faucette: Appreciate all the details and color here. I wanted to follow up a little bit just on recent trends. As you mentioned a lot of volatility in the latter months of 2025. How do you think about like what are the kind of primary drivers there? And just trying to think about the things that you're looking at to extrapolate out for the rest of this year, especially given the month-to-month volatility. Devin McGranahan: Great question. I think the month-to-month volatility has caused us to have a much more dynamic operating model. So Historically, this was a relatively predictable calendar-driven, holiday-driven, paycheck driven business. And many of us have publicly said that we could pretty much tell you what the next week, month, quarter was based on trends and the calendar. With some of this more dynamism in terms of the landscape, we have to be a lot more agile, recognizing where the trends are moving and shifting both our approach to go to market but also in some cases, our model for agent incentives and/or for marketing dollars to recognize where the strengths are and start to quickly address where we're seeing market change is on a much more dynamic basis. But it has become the new normal for us. And so we are doing the best we can in this new normal to adjust our operating model to a more dynamic approach to dealing with it. Matthew Cagwin: If I can just take one step back to build onto Devin's answer. You have to keep in mind the fact that we are global. We're in 200 countries. So we do have some puts and takes. The conversation we're having right now is a few countries in Latin America, U.S. and Mexico, which has been up and down over the last 6 to 9 months. Holistically, it's been very similar across the U.S., the Latin American corridor starting in Q2 last year. So we will start to lap that as we get into the second quarter and start having easier comps. So any given market is volatile. The economy as a whole to a step down in Q2 for this industry and we will start to lap that as we get into the second quarter. James Faucette: I appreciate the nuance there and color. Just want to ask quickly to -- if you could compare and contrast a little bit around the European retail versus U.S. business. And in particular, I'm trying to get a sense from you how you think about what a realistic time frame is to transition the U.S. model to look more like Europe and maybe more importantly, at least for me and modeling purposes, what investment is going to be required? Devin McGranahan: Thank you for the question. The important impetus to transforming the U.S. model as we've talked about publicly, is the close and then the integration of Intermex into Western Union. The Intermex model, as we've said publicly, is very similar to our European model with a much more tactical location-based strategy that relies on kind of agent level and corridor level activities and strategies. And so with the a little bit of acceleration into the second quarter from our original belief on when the deal would close, I think that helps us move forward in terms of the transformation of the North American and particularly the U.S. retail business. Operator: Our final question is from Bryan Keane at Citi. Bryan Keane: Hi, guys. Thanks for all the details here on the call. Just want to ask about Consumer Services growth. Obviously, that's been the strength and powering a lot of the top line. Can you talk a little bit about what we should expect for growth rates this year and some of the key driving factors? And then I'll ask my second question. I think Matt, what people are trying to figure out is the actual revenue dollar amount assumed in the Intermex transaction. And then maybe just what that means for organically the business this year ex-acquisition? Matthew Cagwin: So Bryan, I'll work my way backwards. On your second one, the simple answer is our organic is going to be close to flattish. And then Intermex will help us get closer to the 6% to 7%. We think we'll get some positive growth, but call it flattish. And then for your question on Consumer Services, we have our last quarter of the acquisition we did last year, which will help power Q1 to be very solid from a consumer services standpoint. And then I intentionally talked about, we see a path for double-digit growth going forward as we continue to expand products as we continue to look at inorganic activities and we expanded in new marketplaces. So view it as higher in Q1 and then working its way down closer to our double digit. And then you may have some tuck-ins as the year progresses. Devin McGranahan: Thanks, everybody. Operator: There are no more questions in the queue. Thank you for joining The Western Union Fourth Quarter 2025 Results Conference Call. We hope you have a great day.
Operator: Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press 0, and a member of our team will be happy to help you. Please standby. Your meeting is about to begin. Hello, and welcome everyone joining today's Q4 2025 Transocean Ltd. Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. To register to ask a question at any time, please press 1 on your telephone keypad. Please note this call is being recorded. We are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to David Kiddington, Vice President and Treasurer. Please go ahead. David Kiddington: Thank you, Nikki, and good morning, everyone. Welcome to Transocean Ltd.'s fourth quarter earnings call. Leading today's call will be Transocean Ltd. President and CEO, Keelan I. Adamson. Keelan will be joined by other members of Transocean Ltd.'s executive management team, Chief Financial Officer R. Vayda, and Chief Commercial Officer Roderick J. Mackenzie. In addition to the comments that will be shared on today's call, we would like to refer you to our earnings release and fleet status report filed yesterday that contain additional information, all of which is available on Transocean Ltd.'s website www.deepwater.com. Following our prepared comments, we will open the conference line for questions. Please limit your inquiries to one question and one follow-up as this will allow us to hear from more participants. Before we begin, I would like to remind everyone that today's call will include forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially. With that, I will hand the call over to Transocean Ltd. CEO, Keelan I. Adamson. Keelan I. Adamson: Thanks, David, and welcome, everyone, to our fourth quarter and year-end 2025 conference call. We appreciate your interest in Transocean Ltd. I will cover several topics today. First, I will recap our key accomplishments over the last year. Next, I will cover our 2026 priorities. Third, I will quickly recap the highlights of our recently announced definitive agreement to acquire Valaris and why we are excited about this transformational combination. And lastly, I will close out with some market updates from around the world. Let us get started. 2025 was an important year for Transocean Ltd. The company executed very well both operationally and financially. Yesterday, we reported our fourth quarter results including solid adjusted EBITDA of $385,000,000 and free cash flow of $321,000,000. Year on year, our results improved significantly, with adjusted EBITDA of $1,370,000,000 up nearly 20% and a significant increase in free cash flow to $626,000,000. During the year, we materially strengthened the balance sheet, retiring about $1,300,000,000 in debt. We executed two key capital market transactions to delever and improve both our liquidity and the timing of our debt maturities. These actions and the additional debt payments made in 2025 reduced our annual interest expense by nearly $90,000,000, enhanced our financial flexibility, and increased the value of our equity, ultimately enabling the recently announced transaction with Valaris. We sustainably improved our cost structure by removing $100,000,000 in costs and are on track to decrease our costs by an additional $150,000,000 in 2026. We took the difficult but necessary steps to rationalize shore-based support around the world, reduce G&A costs, and restructure the organization to drive efficiencies without adversely impacting our operational performance. Today, we are leaner, more efficient, and more profitable. The operational performance of our rigs and, more importantly, our people were superb. Once again, we demonstrated why Transocean Ltd. is an industry leader. We achieved record uptime performance just shy of 98%. We had zero operational integrity events and zero lost time incidents across our entire fleet. Our process and occupational safety performance was exceptional. We completed five major planned out-of-service projects on time and on budget, and we continued to rightsize and high-grade the technical capability of our fleet. We recycled six rigs in 2025, with one more completed earlier this year. We entered 2026, Transocean Ltd.'s one hundredth anniversary year, with strong momentum across the business. Now let us review Transocean Ltd.'s key objectives. Our first priority is to optimize the value of our differentiated assets. Transocean Ltd., through our people and fleet, has unparalleled capabilities. We strive every day to deliver best-in-class performance, with the most experienced and proven team of professionals, maximizing the capabilities of our high-specification fleet. We have an exceptionally capable drillship fleet and a high-spec fleet of semisubmersibles capable of executing in the harshest environment. As the technology leader in the offshore rig business, we continually innovate to improve the safety, reliability, and efficiency of our operation. Second, we are focused on generating industry-leading free cash flow. We have roughly $6,000,000,000 in backlog that will efficiently convert into cash, the key measure of value in our business. The more we generate, the faster we can reduce our leverage, which will materially benefit our shareholders. And third, as we continue to reduce our total debt, we will establish a stronger, more simplified capital structure that provides financial resilience and the ability to weather the cycles of this business. Moving now to our recently announced definitive agreement to acquire Valaris. We are incredibly excited about the capabilities of our combined business. As we head into what we anticipate will be a very constructive period for the offshore drilling business, we believe that this transaction is well timed and know it is perfectly aligned with all of our strategic priorities. It positions us to be a leader, combining the best fleet with the best team, working diligently every day to provide our customers with the best, most disciplined execution in the industry. Our geographic footprint and customer base will expand. Wherever our customers go offshore to find and develop reserves, we will be able to provide a rig solution to fit their requirements from a broader, high-quality asset base. We have identified more than GBP 200,000,000 in cost synergies, on top of our ongoing cost reduction initiatives. Our pro forma combined backlog of nearly $11,000,000,000 and cash flow generating capability are expected to accelerate debt reduction, resulting in leverage of around 1.5x within twenty four months of closing. We strongly believe that this combination will enhance returns to shareholders and create an exceptional opportunity for investors desiring exposure to the offshore rig business. We expect to close the transaction in 2026, and we look forward to sharing more information on our progress in the coming months. I will now provide a brief market update. While we had seen some near-term moderation in tendering activity, the underlying outlook for deepwater offshore drilling is strengthening. In fact, tendering activity is growing, with opportunities developing in most major basins. In this market environment, we expect deepwater utilization to move meaningfully higher, and to greater than 90% through 2027, setting the stage for an increasingly constructive business environment. Looking regionally, in the U.S. Gulf, long-term demand remains robust driven by the Paleogene plays and the new lease awards with improved fiscal terms. Any apparent short-term softness will likely result in preferred assets repositioning to other increasingly active markets elsewhere. In Brazil, we expect rig activity to remain stable. Any reduction in Petrobras' projected fleet count will be small and temporary, offset by increased demand from international operators. We anticipate that Petrobras will conclude its blend-and-extend renegotiations by the end of the quarter, which will add multiple years of backlog. Africa continues to exhibit considerable growth potential. We expect the region's rig count to increase from roughly 15 today to at least 20 over the next year or two. In Mozambique, we anticipate three multiyear program awards from each of ENI, Exxon, and Total, all scheduled to start in 2027 and 2028. In Nigeria, Shell has already awarded its two-year program, with additional awards expected shortly from Exxon and Chevron. In addition, Total is preparing to tender this quarter. Collectively, this implies four rig lines from 2027 onward. In Angola, activity remains solid, supported by anticipated and announced extensions for rigs currently operating with Azule, Total, and Exxon. We also understand Shell will reenter the basin for a material exploration program in 2027. In Namibia, we are now seeing the first results from recent exploration success, with Total launching a major tender for the Venus development: two rigs, three years each, beginning in early 2028. We also expect further development activity as operators assess their recent discoveries for commercial viability. And in the Ivory Coast, we understand ENI is preparing to issue a one-rig tender for three years of work beginning in early 2027. In the Mediterranean, activity has returned to pre-COVID levels, driven by strong regional gas demand in Egypt, Israel, and Cyprus. Rig count is expected to increase to around eight units. In Israel, we expect two rig fixtures to support the recently sanctioned Chevron and Energean developments. In Egypt, Shell and BP will add new programs starting this year. And in Cyprus, ENI's Kronos development is expected to begin drilling in early 2027. Moving now to Southeast Asia and primarily Indonesia, we anticipate incremental demand of three to four rigs between ENI, Harbour Energy, Mubadala, and INPEX. In India, momentum is building with the government's objective to drill 50 deepwater wells per year going forward. In addition to the recently awarded one incremental fixture in the region, ONGC have just issued a new tender for three drillships and two semisubmersibles with contract durations of four years each, beginning in 2027. In Australia, the deepwater Skiros will commence a minimum one-year development program in early 2027. We see stable activity from all our semisubmersible customers with programs currently out for tender by Woodside, Santos, and INPEX. In Norway, utilization of the high-specification harsh environment semisubmersible fleet will remain robust through 2028, supported by recent awards from Equinor and Aker BP. Other operators are also seeking high-spec harsh environment units for 2027 starts, which is expected to drive utilization of these units to nearly 100%. In closing, tendering activity is increasing. Multiyear opportunities are now in the market, and visibility into 2027 and beyond continues to improve. As operators move ahead with new developments and meaningful exploration programs, we are well positioned to capitalize on improving demand. I will now hand the call over to Thad for some brief comments on the quarter and our guidance. Thad? R. Vayda: Thank you, Keelan. And good day to everyone. Our performance during the fourth quarter and for the full year 2026 was very much in line with our expectations and the guidance ranges that we provided to you in November. In the fourth quarter, we generated contract drilling revenues of $1,040,000,000 at an average daily revenue of approximately $461,000, which is generally consistent with the average daily revenue achieved in the last several quarters. Operating and maintenance expense and G&A expense was $605,000,000 and $50,000,000 respectively. Adjusted EBITDA was $385,000,000, implying a very healthy margin of 37%. And cash flow from operations was approximately $349,000,000, a sequential increase of 42%. Free cash flow of $321,000,000 reflects $349,000,000 of operating cash flow net of $28,000,000 of capital expenditures. Our free cash flow margin was notable at 31%. I highlight that this is the best quarterly free cash flow we have generated in several years. It is a direct result of excellent operational performance, execution on our cost savings initiative, lower cash interest expense, and effective management of our working capital. We ended the fourth quarter with total liquidity of approximately $1,500,000,000. This includes unrestricted cash and cash equivalents of $620,000,000, about $377,000,000 of restricted cash, and $510,000,000 of capacity from our undrawn credit facility. In addition to now issuing our fleet status report concurrently with our quarterly results, we have slightly changed the presentation and content of our press release. Going forward, in addition to some format and tabular modifications, the release will include our guidance ranges. This report provides guidance for the first quarter and full year 2026 for Transocean Ltd. on a stand-alone basis, as will be the case until the Valaris transaction closes, expected later this year. The guidance ranges provided include the effects of our cost reduction initiatives and reflect slightly lower levels of activity versus 2025, specifically assuming some idle time on several rigs, including the KG2, the Deepwater Proteus, and the Deepwater Skiros. I note that the potential to achieve the upper regions of the revenue guidance range relates mostly to these rigs being extended beyond their contract end dates or commencing new contracts earlier than anticipated. Even with the assumed idle time on these rigs, we expect free cash flow to be in line with or better than that achieved in 2025 as we continue to reduce cost and interest expense and make additional improvements in the management of our working capital. We also intend to continue to utilize our free cash flow to opportunistically reduce debt in excess of our remaining 2026 scheduled obligation of approximately $380,000,000, which includes capital lease payments. This reflects about $130,000,000 in payments we have already made in 2026. Additionally, our stronger credit profile and improved cash flow generation may enable us to refinance some debt instruments at lower interest rates. Finally, we expect to end 2026 with liquidity of between $1,600,000,000 and $1,700,000,000, which excludes the effect of any incremental opportunistic deleveraging. That concludes my prepared remarks. Operator, we are ready to take questions. Operator: Thank you. And if you would like to ask a question, please press 1 on your keypad. To leave the queue at any time, press 2. We ask that you please limit yourself to one question and one follow-up. Once again, that is star and 1 to ask a question. Our first question from Gregory Robert Lewis with BTIG. Please go ahead. Your line is open. Gregory Robert Lewis: Yes. Hi. Thank you, and good morning. You know, Keelan, I guess at this point, the market has definitely had some time to digest the acquisition of Valaris, and congrats on that again. And while it was definitely transformational to the balance sheet, you know, Transocean Ltd. was already the second largest owner of high-spec ultra-deepwater rigs prior to acquiring Valaris. Yeah. I guess I would be curious, post the acquisition, does this change the chartering strategy at all? And really, what advantages could the company benefit from just simply from these new potential economies of scale? Keelan I. Adamson: Greg, and thanks for the question. As we think about consolidation and what it means for our industry and the upstream industry in general, and our customers have been consolidating, as you know, over the last few years, it is really driven around driving efficiencies into our business. It is about taking cost out of the chain and looking to provide a better service to our customers and to the consumers. So from our perspective, this combination allows us to address unnecessary cost across the combination. It allows us to ensure that our overlap of cost structure is minimized. We drive efficiencies into that structure. But, more importantly, we are starting to look at how do we improve our service provision as a combination across the world, to all of our customers. And, ultimately, when I talk to our customers, they always are focused on project execution. In a capital-disciplined world where they only have a certain amount of CapEx to spend across their opportunities, they want to ensure they are working with partners that can deliver and can deliver in a reliable and predictable fashion. We are very proud of our operation on the deepwater fleet that we own right now, and we have strived to ensure that we can deliver that level of performance no matter where we are working for whoever around the world. And I see this as a huge opportunity for us to combine two excellent operating companies and continue to deliver that sort of level of service, improve our reliability, and improve our predictability to our customers, that ensures that their projects are delivered on time, on or better than budget, and ultimately reducing the cost of these projects around the world. It will enable more work in the future, and it will obviously help the consumer at the end of the day. So I think the other aspect of this transaction that helps is the drilling industry has gone through, as you know, a pretty rough time over the last ten to fifteen years. Many companies have had to restructure. We have been carrying a lot of debt through the down cycle, and it does not help where companies do not have a sustainable business structure. And I think for the benefit of the upstream as a whole and the benefit for our customers, having drilling contractors that are sustainable, robust, can be resilient against the inevitable cycles in this business, I think, is a huge plus, and I think this combination delivers against those. Gregory Robert Lewis: Okay. Super helpful. And then just I did want to talk a little bit about, you know, kind of how you are thinking about the jackup markets. Definitely on a lot of investors' minds. You know, it is, I mean, drilling is drilling, but, you know, if you think about the jackup market, it is more of an NOC-heavy market where, you know, hey, Petrobras and Equinor side, but the deepwater market is more of an IOC market. Just kind of curious how we are thinking about how does that change? Does management have to change a little bit of its view or its kind of structure in dealing with, you know, these NOCs in the Middle East and Asia versus, say, you know, the traditional opportunities that you are seeing with IOCs? Keelan I. Adamson: Yeah, Greg. Another great question. You know, we have been a jackup player in our history. Right? We have, we understand the highly competitive nature of that arena. And as we enter back into the jackup business post close, we are looking forward to embracing the lessons we have learned over time as an operator ourselves, and, of course, Valaris have done a great job with running their jackup fleet in a competitive environment with NOCs and international operators around the world. Clearly, it is a business that needs to be run very efficiently to generate good cash from that business, and it is important that companies who run those businesses understand the subtleties of how to manage that cost structure and ensure that they can get the efficiencies and the performance from that jackup market. So it is not strange to us. We certainly learned from the past, and I see a great opportunity for us to learn from the Valaris team that runs that jackup fleet to continue to deliver exceptional performance and incremental cash to the combined entity going forward. Gregory Robert Lewis: Super helpful. Thank you very much. Keelan I. Adamson: Thank you, Greg. Operator: Thank you. Our next question comes from Eddie Kim with Barclays. Please go ahead. Your line is open. Eddie Kim: Hi. Good morning. So this group as a whole often gets a bad rap because the offshore inflection always seems to be about twelve to eighteen months away. You and your peers have been consistently saying for several quarters now that this inflection will happen in late 2026 and into 2027. We do not necessarily disagree with that. But just curious, what gives you the confidence that this is going to happen on time this time around? And outside of some sort of oil price collapse, do you see much risk of this getting pushed out? Keelan I. Adamson: Yeah. Morning, Eddie. No. I think it really stems from twofold. It stems from our conversations that we have all the time with our customers, and it also stems from the data that comes through from the number of tenders that release, the number of prospects that are going through their field development programs. And some of the public commentary from the oil and gas company executives that are starting to talk a little bit about reserve replacement, declining production, and the need to build exploration budgets to ensure that they are able to do that. So we triangulate around lots of pieces of information, some subjective, some very objective. And that is all triangulating now to I think what we have said all along is we felt like 2026 and early 2027, we were certainly going to bridge into over 90% utilization across our drillship fleet and that is continuing to play out. And there has been some recent news that I highlighted in my commentary that, you know, was kind of hidden from view at that point in time. Roddie, do you want to add anything to that? Yeah. For sure. So just to pick up the what gives us the confidence. So as we look at, you know, last year, the number of rig years that were awarded just progressively got better and better, quarter over quarter. We went from, like, 12 rig years to 14 to 18 and then 22 rig years in the fourth quarter, which was actually disappointing for us because we were expecting probably double that to be awarded. There were several awards that slipped into 2026. But you will see that from, you know, not only ourselves, but a lot of our competitors have booked multiyear programs. So we see a lot of multiyear programs, whereas we only saw a few last year. We see a lot more now. We are actually tracking, I think, at 32 open tenders that are expected to be awarded over the next few months. So those open tenders, the average length is well beyond a year. So there is just a lot of work being awarded now. I think you saw that period in 2025 where a lot of the customers were basically kind of, you know, protecting their own balance sheets and, you know, not putting on excessive amount of commitment. But, as we work through that capital discipline, what we are seeing now is a transition now clearly towards it is time to develop a lot of these assets that they discovered over the last couple of years. And a marked increase in exploration budget because the pressure is now on to find replacement reserves. So we are very confident in terms of the number of awards that have been made. So I would say that is not a forward projection. That is data that is in the market already. We are definitely through the trough of contracting and now we are kind of on the other side of things beginning to really pick up. So again, just lots of opportunities. And they are all much longer in term than they were before. Eddie Kim: Got it. Very helpful color and great to hear. Thank you. Just wanted to ask about the Petrobras blend-and-extends. Those negotiations have taken a little bit longer than we had, but you said you expect those to conclude by the end of the quarter. Just curious if your full-year guidance already baked in some potential earnings risk related to those blend and extends, if the results of those negotiations should be seen as an incremental impact to the guidance you have laid out? R. Vayda: Yeah. So thanks for the question. The guidance that we provide is representative of our best guess based upon the conversations that we have had. So I would not consider it to be significant incremental upside with respect to the blend-and-extends. Eddie Kim: Got it. Understood. Keelan I. Adamson: Great. Thanks for the call. I will turn it back. Thank you. Operator: Our next question comes from Fredrik Stene with Clarksons Securities. Please go ahead. Your line is open. Fredrik Stene: Thank you, Fredrik. Hope all is well. And thank you for the detailed market commentary in your prepared remarks. I wanted to touch a bit on, I guess, fleet placement in general. I think the way I interpreted your commentary was that, you know, the U.S. might, while it is your best long term, might face, you know, some softness in the near term, but then you have, you know, good activity levels in West Africa, which is a great example. I think the ONGC tender, which came out yesterday, kind of in the new format, was incremental to what most of us have expected, at least if you asked me a couple of months back. So just wondering, do you have any color on how you see your fleet positioned, let us say, a year out in time? Do you expect many rigs to move regions, or do you think some of that will, call it, be solved by the acquisition of Valaris? Just thinking about, you know, you having rigs available to actually compete in most of these long-term tenders. Thank you. Keelan I. Adamson: Fredrik, and thanks for the question. Yes. Look, I think what we definitely see is opportunities developing as discussed in the Africa and Asia regions. We operate in, as you know, a global worldwide market that is highly competitive. We are able to move our units anywhere around the world that meets that demand. I would say because we have a very high-spec fleet, our customers are always going to want, all else being equal, the higher-spec rig that they can find. As we experience, you know, the Gulf has been a strong market. It will continue to be a strong demand. If there is any near-term softness in that area, we will move those rigs to the other opportunities that exist around the world. Brazil continues to be a high utilization area for drillships. And the Med has been, it is great to see the Med back. It is great to see a lot of activity building in the Mediterranean. Obviously, the gas and energy security conversation is playing a role there. But, yeah, that is the way we see the movement. And I will just pass it over to Roddie. He will have a couple more comments to add. Roderick J. Mackenzie: Yeah. No. Exactly right, Keelan. And great that you noted the ONGC tender that came out. I mean, that is twenty to twenty five rig years in one go that was on nobody's radar. So I think that stuff is extremely interesting. You know, the stuff that is coming out of Mozambique, interesting. The stuff that is coming out of Indonesia, very interesting. And, of course, we are engaged in discussions that, you know, not at liberty to divulge, but, you know, there is plenty of other activity going on. And as Keelan pointed out, for these hot rigs that are doing a great job performance-wise, the customers are very interested. I just think there is no shortage of opportunities. And if there is any near-term softness in the Gulf of Mexico, I mean, at the moment, we are fully utilized. But if that does transpire, then I do not think there is any problems in moving those rigs onto other programs. There is certainly enough work around the world for the rigs over the next couple of years. It is just a question of timing and when we move things. But yeah, we are super pumped about the opportunities that have just recently been announced that nobody has got in their models. So I think that is really going to push utilization up. Fredrik Stene: Yeah. No. I agree. I think that is both of us. We are going to see kind of probably do something with everybody's mindset about how tight this market can become. Just one follow-up, which relates to one of the U.S. Gulf rigs. I think you mentioned that the guidance included some idle time on KG2, Proteus, and Skiros. You know, the Asgard, that is running off in June this year. Should I, you know, by adding these two things together, assume that the Asgard might have some new work coming up for it shortly? R. Vayda: Yeah. I do not really have anything I can comment on at this time, but if anything does happen, of course, we will announce it in due course. Fredrik Stene: Alright. Thank you so much. Have a good day. Keelan I. Adamson: Thanks, Fredrik. Operator: Thank you. We will move next with Doug Becker with Capital One. Please go ahead. Your line is open. Doug Becker: Thank you. Q1 investors are always voting with their pocketbooks, and it looks like they like the Valaris acquisition. Just curious on the early response from customers. Keelan I. Adamson: Yeah. Doug, good morning. Thanks for the question. You know, the feedback I have had from our customers, and I know speaking with my counterpart, Anton, at Valaris, has been overwhelmingly positive. They understand the situation in the market. They understand the need to drive costs out of the business. They understand that the opportunity, you know, as they have, they have had to look at consolidation from their business perspective, they understand that it should not, it does not surprise them that consolidation would happen in the drilling contractor offshore rig business as well. And I think they are very supportive of the potential of the combination. They are very supportive of both companies' operations. You know, there are things to learn from each of us, and we will look to grab those and where we can improve our service to our customers around the world and on a bigger scale basis, we will be doing that. And so overwhelmingly positive comments, directly from the customers that we deal with on an operational basis. I have been very pleased with that. And they can see where the synergies of these companies will come to benefit them and their project delivery. Doug Becker: Well, it is very encouraging. Also wanted to circle back on the blend-and-extend negotiations with Petrobras. Just trying to think through what would you consider a win-win for Petrobras, where maybe they get some rate relief in the near term, but to make it a successful negotiation for Transocean Ltd. as well. R. Vayda: Yeah. I will take that one. Yeah. So Petrobras is all about basically cost reductions and optimization. So the concept is not just about day rates and what have you, but also a lot around terms and conditions and doing things in the contract that kind of, for want of a better word, reduce mutual waste. So we are feeling pretty good about that in terms of, you know, the opportunity to be more efficient with revenue. So we will get a couple of points up on revenue efficiency, that kind of stuff. But also, this is kind of like the workhorse of the fleet. Right? So you have got the sixth-gen rigs down there that provide a great service. They do a fantastic job. And we love the idea about, you know, putting significant extensions on those because we are talking about quite a lot of rig years. So that kind of checks everybody's boxes. If we can be a bit more efficient cost-wise for them and at the same time extend our kind of core sixth-gen fleet and keep them busy for the foreseeable future, that is a real win. So we are excited about that. We hope that does come to fruition. And, yeah, as we say, we will definitely update when we have definitive developments there. Keelan I. Adamson: Maybe one add on that. I think every drilling contractor understands that continuity is really important for delivering performance over time, and Petrobras, you know, they have the ability to scale their operations, drive those efficiencies, and they understand the value of continuity with their fleet as well. And so from our perspective, it addresses utilization for our sixth-gen and low seventh-gen fleet. It allows us to work with our customer to drive their cost down. And to improve our Ts and Cs and reclaim some of that benefit to the company in that way. And we are able then to provide a service for longer on a high-continuity basis, which can only be good for our cash flow generation. Doug Becker: That makes sense. Noel Augustus Parks: Thank you. Operator: We will move next with Keith Beckman with Pickering Energy Partners. Please go ahead. Your line is open. Keith Beckman: Hey. Thanks for taking my question. Had a question around, you know, in a market that is much further along and everything is more positive, capacity is a little bit tighter, do you have any feel on which of your three seventh-gen rigs could potentially come back to market first? And does that change at all with Valaris' three seventh-gen stacked rigs as well? Keelan I. Adamson: Yeah. It is, look. We are going to be really excited when the utilization gets to that point, right? But right now, obviously, we have got an active fleet that needs to roll over. We are very encouraged by the market signs that are there right now to continue to find opportunities for the active fleet. We are very happy with the three seventh-gen units that we have kept on the sideline, and the Valaris units obviously are high spec as well. So we take the same standpoint. We will not bring one of these units back speculatively. And the market would need to be in a position where we could recover the investment of those reactivations inside that contract. We believe that the longer-term outlook is very strong, and the opportunities will present themselves, but we do not see that in the very near term. Keith Beckman: Awesome. That is helpful. And then my second question kind of comes back around to the Gulf market again in the back half of the year. Whenever I look at kind of what is in the fleet and could potentially be rolling off, I look at the Conqueror, Proteus, and Asgard, late this year potentially needing some work. I just wanted to know if all of those were to win work, I am assuming there is a little bit of upside to your guidance. Just wanted to get a feel for what is baked into 2026 guidance in regards to those three rigs. R. Vayda: Yeah. So we called out the three rigs that we, you know, we think it makes sense to assume some idle time, with upside associated with those under the conditions that I suggested. The other asset that you mentioned, I think, are all probable to go back to work. It is sort of what we have thought about. So there is some probability-weighted assumption in the guidance range, but it would definitely move it towards the higher end. Keelan I. Adamson: Yes. And just some color around those rigs. Obviously, as you know, they are our highest-spec drillships in the world. There are opportunities for these rigs to pick up additional work. We are fairly confident that the market will develop nicely for those units to grab some utilization. I think, you know, it is important to remember that we want to keep these rigs working. We want to keep our utilization up. And at the same time, we understand the value of those assets. So we will be looking to fill it with short-term work recognizing that the longer term is a little bit more constructive and ensuring that we are keeping our powder dry. Keith Beckman: That is very helpful. I will turn it back. Thanks for taking my questions. Keelan I. Adamson: Thank you. Operator: Thank you. We will move next with Noel Parks with Tuohy Brothers. Please go ahead. Your line is open. Noel Augustus Parks: Hi. Good morning. One thing I was wondering is, as you had mentioned that there has been more public commentary about reserve replacement among producers, and the need for exploration. I am just wondering among the players out there who might have been the latest to the party in terms of, you know, deciding that, yeah, we have to address the return to the offshore. I am just wondering, maybe you could kind of characterize what some of the more recent companies approaching you have been thinking. I am just wondering, have they been sort of sitting back and deciding that, you know, they are happy to be fast followers? Or are they, you know, now feeling like, oh, we have hung on the sidelines too long. We need to be more aggressive given the tightness in supply. I was wondering about, like, as I said, the latecomers. Roderick J. Mackenzie: I think this is really a story about many of the companies pivoting back towards oil and gas, particularly offshore and deepwater. So it is really a story about, you know, there is less commentary or there is a pivot away from spending a tremendous amount of money in renewables and alternatives. And definitely much more of a focus and an acknowledgment, if you would, that, you know, the most economic, the most reliable sources of energy are coming from traditional hydrocarbon sources. So I think that is the key shift that we are seeing is that there is a pivot back towards the business that we are directly engaged in. And within that, we do offer the most cost-effective and the lowest carbon barrels. So there is a lot of wins there for that, and I think it is really a case of reality governs everything and eventually, all kind of head towards that path. So that is definitely what we are seeing from our customers is that they are perhaps not spending more money overall in the name of capital discipline, but they are pivoting back towards stuff that makes the most sense, which is the business that we are focused on. Noel Augustus Parks: Right. Thanks. And related question, does producer M&A and A&D activity, do you see anything particular either announced or on the horizon that you see as, you know, potentially exciting opportunity. It seems we are kind of in a mode of basins rationalization, but perhaps that is weighted more toward the independents. But even among those, there are quite a few of them that maybe went entirely onshore for a decade or so but have a legacy of international and offshore operations. Is there anything in anything you have seen in the sort of state of deals we have seen recently has been quite interesting to you. R. Vayda: Yeah. I mean, obviously, we have seen several consolidations there. Over the past couple of years. Do not see a tremendous number more on the table, but, you know, I am sure whatever makes sense, that is going to happen, you know, for the same reasons that we are going through our consolidation. It is all about bringing those costs down and making ourselves more efficient. So it is actually not necessarily a bad thing, because the industry overall, with the nature of these consolidations, just becomes more efficient. We become more cost effective. And therefore, we attract more dollars towards our type of exploration, our type of development. That is very important for us. So I think the consolidation at various sectors in the industry, it just makes sense from that point of view. Noel Augustus Parks: Great. Thanks a lot. Roderick J. Mackenzie: Thanks, Noel. Thank you. Operator: At this time, there are no further questions in queue. I will now turn the meeting back to David. David Kiddington: Alright. We would like to thank everyone who participated in our earnings conference today and invite you to follow up with us for any additional inquiries. And with that, we will close the call. Operator: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.
Operator: Welcome to the Ardelyx Fourth Quarter 2025 Earnings Conference. [Operator Instructions] I would now like to turn the conference over to Caitlin Lowie, Vice President of Corporate Communications and Investor Relations. Caitlin, you may begin. Caitlin Lowie: Thank you. Good afternoon, and welcome to our fourth quarter and full year 2025 financial results call. During this call, we will refer to the press release issued earlier today, which is available on the Investors section of the company's website at ardelyx.com. Please note that we are also including a slide presentation to accompany today's remarks. You can view the material by accessing the webcast version of today's call on the Investors section of ardelyx.com. During this call, we will be making forward-looking statements that are subject to risks and uncertainties. Our actual results may differ significantly from those described. We encourage you to review the risk factors in our most recent annual report on Form 10-K that will be filed today and can be found on our website at ardelyx.com. While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so even if our views change. Our President and CEO, Mike Raab, will begin today's call with opening remarks followed by Eric Foster, Chief Commercial Officer, who will provide an update on the performance of IBSRELA and XPHOZAH. Dr. Laura Williams, our Chief Patient Officer and Interim Chief Medical Officer, will share an update on our recently announced development program before our Chief Financial Officer, Sue Hohenleitner, reviews the company's financial performance. We will then open the call to questions. With that, let me pass the call over to Mike. Michael Raab: Thank you, Caitlin, and good afternoon, everyone. It's great to be with all of you here today. 2025 was an extraordinary year for the company as the team delivered on every single one of our strategic priorities. That performance establishes a strong foundation for what we will accomplish in 2026. We will continue growing XPHOZAH/IBSRELA and execute on our growth initiatives. What we've accomplished over these past 12 months is remarkable. We delivered on all 4 of our key strategic priorities, accelerating IBSRELA growth momentum, executing on our XPHOZAH strategy, building a pipeline focused on addressing areas of unmet patient need and delivering strong financial performance. First, IBSRELA has proven to be a critical growth engine for the company and is a powerful example of our disciplined execution and our conviction in the benefit that a first-in-class medicine can offer IBS-C patients. IBSRELA is now helping tens of thousands of patients, evidenced by the incredible revenue growth of 73% compared to 2024 and 61% year-over-year growth in the fourth quarter. Second, 18 months ago, we made the decision to preserve access to XPHOZAH for all appropriate patients as we recognize at a core foundational level that staying true to our principles and doing what is best for patients will result in doing what's best for the company. Today, I can tell you that our patient-first strategy is working. More patients now have access to XPHOZAH than ever before, and we're confident in our growth expectations. An additional development from just a few weeks ago was the issuance of a new patent for the commercial formulations of IBSRELA and XPHOZAH that expires in 2042 and is now listed in the Orange Book at the FDA. This patent is an important component of our strategy to create additional valuable intellectual property to support IBSRELA and XPHOZAH. Our job is to maximize the value of these franchises by building a comprehensive IP portfolio, and this patent is an important step in just doing that. Third, we launched 2 development programs, which along with our IBSRELA pediatric program, exemplify how we plan to build out our portfolio, develop and commercialize innovative medicines for patients with unmet needs that align with our long-term strategy, leverage our internal core competencies that reflect thoughtful use of our financial resources to create durable long-term shareholder value. In the fourth quarter, we announced that our Phase III program to expand the IBSRELA label to include chronic idiopathic constipation or CIC. Assuming addition of this indication, IBSRELA would be better aligned with real-world prescribing habits, allowing us to be more comprehensive in our messaging, serve more patients and increase the scale and the opportunity for IBSRELA. As well, we announced the commencement of the development program for our next-generation NHE3 inhibitor, RDX-10531, which we refer to as 531. Building on our foundational expertise in NHE3 inhibition, 531 presents us with the opportunity to potentially extend our reach into new therapeutic areas. Finally, coupled with this extraordinary performance is continued disciplined cash management and execution, resulting with ending 2025 in a stronger financial position than was the case at the end of 2024. We made bold patient-centric decisions in complex market environments. We strengthened our leadership team to pursue our growth aspirations, and we positioned Ardelyx for long-term growth and value creation. We are in a great position. I'm excited about where we're going and our ability to identify and capitalize on the opportunities ahead. In 2026, we will elevate our organization to even higher levels. Our priorities haven't changed, but our expectations for them have. We're delivering on our vision for what the future of Ardelyx is becoming a consequential patient-centric enterprise built on a broad, thoughtful portfolio of best-in-class medicines. We are focused on significantly growing IBSRELA and maintaining XPHOZAH's momentum. With the guidance we shared in January, IBSRELA is clearly demonstrating its blockbuster potential and is on track to deliver $1 billion in revenue in 2029 with significant growth thereafter. IBSRELA is a powerful engine for the company. We are determined and extremely excited about our future and the many opportunities ahead. Our confidence is high, and we have the leadership, the team, the strategy and the urgency to execute and achieve these goals. With that, I'm turning the call to Eric, Laura and Sue to walk you through specific drivers and our outlook in more detail. Eric? Eric Foster: Thank you, Mike. It's great to be with you all again. 2025 was an outstanding year. It was marked with incredible commercial execution and performance. We grew IBSRELA by more than 70% versus the prior year with record highs across all key performance metrics. For XPHOZAH, we ensured patient access continued, and we increased total dispenses year-over-year. Our teams drove clinical conviction among HCPs, created greater brand awareness for patients and ensured the prescriptions that were written were filled. We thoughtfully invested across the commercial organization to improve the patient and HCP journey and accelerate access to our medicines. Those investments turned into consistent quarter-over-quarter growth for both IBSRELA and XPHOZAH and set the stage for what will be an important growth year in 2026. Let me start with IBSRELA. We reported an incredibly strong year in 2025, generating 73% growth over 2024. In Q4, we delivered our highest net revenue and strongest demand quarter since launch. Our strategy is sound and led to record growth in 2025. IBSRELA is a first-in-class medicine with a winning and sustainable position among patients who continue to experience symptoms despite treatment with the secretagogue. And there are many patients who continue to experience symptoms and need a different option. The IBS-C market is robust and continues to grow double digits with nearly 7 million prescriptions written in 2025, an increase of 11% compared to 2024. As much as 77% of patients on the secretagogue, report that they continue to experience symptoms despite treatment. Our strategy, increasing depth and breadth of writing, strengthening our engagement with patients and supporting prescription pull-through drove notable increases in new and total writers as well as new and refill prescriptions. In the fourth quarter, we finished the year with a record high number of total writers and new and refill prescriptions. We are confident we have the right levers to drive significant demand. To allow us to capture more of the IBS-C market in 2026 and well into the future, we are investing in 3 key areas. First, the prescriber continues to be a key focus. We continually optimize our field sales team to drive greater reach and frequency with our target, high-writing health care providers who represent approximately 50% of the IBS-C total prescription market. That optimization allows us to continue to grow the prescriber base and expand the depth of prescribing. Our in-market messaging remains focused on IBSRELA's differentiated mechanism of action and its strong clinical profile. Our message is resonating in driving HCPs to prescribe IBSRELA. Second, we're planning to double down on the high-impact investments we made last year to improve our prescription pull-through. We are increasing the presence of our field reimbursement managers to support patient access and brought significant value to our performance last year. We will also be encouraging HCPs to send prescriptions to the IBSRELA pharmacy network, a limited group of specialty pharmacies that offer a patient-centric, high-touch experience who are more equipped to handle prior authorizations and the payer hurdles that restrict patient access. When prescriptions go through a specialty pharmacy, fulfillment rates are higher, and we see on average an additional prescription per year for patients. This is a high-value opportunity that we will continue to invest in. And third, the patient. Patients with IBS-C are highly active in their health, well-being and condition. Our research has demonstrated that when patients are introduced to IBSRELA, our messaging of a different option to address their IBS-C symptoms resonates, and they are likely to ask their physician for IBSRELA. Taking that one step further, we also know that when a patient requests IBSRELA, the majority of the time, the health care provider is willing to write the prescription. This year, we are increasing our opportunities to engage directly with patients. Our plans are to educate, empower and mobilize patients to take control of their IBS-C by seeking new information and talking to their doctor about the symptoms and the treatment options that are available. We continue to drive significant volume at a rapid pace by activating patients, deepening and broadening, writing among target health care prescribers and continually improving our prescription pull-through. We have the opportunity to further strengthen the value of IBSRELA franchise with the addition of the investigational CIC indication. This label expansion, if approved, is expected to have a meaningful impact on our business and further strengthen HCP and patient confidence in IBSRELA. Not only can it unlock the opportunity to help patients with CIC, but it would also allow us to further grow adoption among patients with IBS-C. These 2 conditions are closely associated and the addition of CIC would allow HCPs to consider IBSRELA more closely aligned with how they typically manage patients. These efforts, along with the lack of novel competition currently in development, present a desirable market and an opportunity that can afford IBSRELA the ability to grow volume until we are faced with a generic entrant. I'm excited about the opportunities in front of us. We are united with a common purpose to help those impacted by IBS-C, and we are committed to act with urgency to reach our true potential. Moving on to XPHOZAH. In 2025, we had consistent growth quarter-over-quarter through the year. I'm proud of our team's ability to navigate the market while also improving patient access to its highest point since launch and increasing total dispenses by 9% and paid dispenses by 41% when excluding Medicare compared to 2024. We are pleased with the performance in 2025 and confident in achieving the growth we expect in 2026. XPHOZAH will continue to be a contributor for Ardelyx, and our primary focus remains on supporting and ensuring access for all patients regardless of insurance coverage. We will continue to drive clinical conviction among health care providers for earlier utilization while also growing the prescriber base and expanding depth of prescribing. With the majority of patients treated with binders not having fully controlled phosphorus, the high unmet need remains. We have an agile, high-performing patient-focused team who is committed to unlocking the full potential of XPHOZAH and bringing this important medicine to patients in need. We are focused on broadening reach by continuing to expand access, employing targeted sales initiatives and a cross-channel strategy to increase patient engagement. I have a tremendous amount of confidence in our ability to deliver on our priorities for this year. Everyone in the organization is executing at a high level and delivering our shared goals from our commercial team to our clinical development, medical, manufacturing and corporate teams. We are investing across the commercial organization to strengthen our position in the market, support patients along their journey and accelerate our growth momentum in the years ahead. I will now turn it over to Laura. Laura? Laura Williams: Thank you, Eric. I'm really pleased to join you today. In addition to all the great work Eric shared with you in support of IBSRELA and XPHOZAH, I'm excited to talk about the progress we've made to advance our pipeline of new medicines to help patients. While we've been conducting studies with tenapanor in pediatric patients with IBS-C as part of our post-approval commitments for IBSRELA since late 2022, our research and development teams have also been advancing 2 new programs, which signal an important inflection point for our company as part of our corporate growth strategy. As you know, IBSRELA and XPHOZAH were discovered and developed by scientists at Ardelyx. Their initial discovery efforts were aimed at treatments for IBS-C and began with evaluating potent, minimally systemically absorbed selective NHE3 inhibitors that block sodium absorption in the gastrointestinal tract. Inhibition of NHE3 produced an increase in intestinal luminal water content and improved intestinal transit time. These efforts culminated in the discovery of tenapanor, which was also shown to maintain intestinal barrier function and decrease visceral hypersensitivity in animal studies. The clinical effect of this NHE3 inhibition was improvement in constipation and abdominal pain as demonstrated in our clinical trial in patients with IBS-C, and that led to the approval of IBSRELA. Notably, it was also through these early studies with tenapanor that we uncovered the primary pathway for phosphorus absorption, the paracellular pathway and tenapanor's ability to block phosphorus absorption via that pathway eventually led to the approval of XPHOZAH. And our recent pipeline programs resulted from our knowledge and expertise around NHE3 inhibition with tenapanor. First, let's start with the planned CIC label expansion. As Eric mentioned, the addition of a CIC indication would better align IBSRELA with the standard treatment patterns that physicians use when diagnosing and treating patients with CIC and IBS-C, which represent a continuum of functional glut disorders, whereby patients present with overlapping symptoms of constipation and abdominal pain with the primary issue of having infrequent and difficult bowel movement. The main distinction between the 2 conditions is that in addition to constipation, IBS-C is also characterized by abdominal pain, often accompanied by other abdominal symptoms like bloating, cramping and discomfort. However, the reality for many patients is that they often alternate between the 2 conditions and therefore, might be diagnosed with either one over time. The need for treatments with different mechanisms of action has proven essential for the management of IBS-C, and we believe this holds true for CIC as well. We are confident in tenapanor's ability to manage patients with CIC, and we have designed a robust clinical trial to support this hypothesis. Why are we confident? First, in our clinical development program for IBS-C, the T3MPO study, we demonstrated tenapanor's ability to safely and effectively treat adults with IBS-C, which is typically considered the more challenging condition. Secondly, in a post-hoc analysis of the T3MPO data, looking at just the constipation component, tenapanor showed a significantly better durable, complete spontaneous bowel movement or CSBM responder rate compared to placebo. And finally, we've had very productive discussions with the FDA and are encouraged that the strong safety package from our IVF clinical studies when combined with the safety and efficacy results we expect to establish from a single Phase III clinical trial will be sufficient to support a supplemental new drug application or sNDA. Last month, we enrolled, randomized and dosed our first patient in ACCEL, the Phase III clinical trial that evaluates the safety and efficacy of tenapanor in adults with CIC. ACCEL is a randomized, double-blind, placebo-controlled clinical trial with a planned enrollment of approximately 700 patients across 110 sites in the U.S., of which more than half are already up and running. Patients will be randomized into 1 of 4 treatment groups, which include 3 different tenapanor doses and the placebo group with each active dose group randomized in a 3:1 manner versus placebo. The study is comprised of a 2-week screening period, a 26-week randomized treatment period and a 4-week follow-up safety period. Our primary endpoint is measured at week 12 and will be the proportion of patients who achieved a durable CSBM response defined as an increase from baseline of at least 1 in average weekly CSBM frequency and at least 3 CSBMs, both occurring during the same week. Additional information about ACCEL, including key secondary endpoints and evaluation of safety can be found on clinicaltrials.gov. We have a thoughtful comprehensive recruitment plan and expect to have the study fully enrolled by the end of this year. That time line allows us to complete data analysis and report top line results in the second half of next year with subsequent sNDA filing shortly thereafter. This is a well-designed clinical trial with a strategic regulatory path that will hopefully allow us to ultimately bring this therapeutic option to patients. Now moving on to our next-generation NHE3 inhibitor, 531. As leaders in entrepreneurs in this space, we are excited about NHE3 inhibition. And I'd like to first provide some scientific background. Sodium/hydrogen exchangers or NHE, are transport proteins called antiporters that reside on the membrane of cells and there are 9 distinct isoforms or subgroups. Their fundamental role is to maintain normal sodium, water and pH balance in our cells. NHE3 is an antiporter that is found in the gut, primarily the small and large intestine as well as the kidney. It transports sodium into the cell and hydrogen out of the cell, thereby regulating sodium absorption, maintaining body salt and fluid balance and blood pressure homeostasis. In preclinical studies, 531 was approximately 10x more potent and 30x more soluble than tenapanor. Those improvements alone not only support the potential for once-daily dosing, but may also provide more opportunities across different therapeutic areas. So where does that take us? Right now, we are focused on finalizing our preclinical studies to support an IND submission in the second half of this year with plans for a Phase I first-in-human safety trial to begin shortly thereafter. Additionally, we will continue to conduct preclinical research to further inform strategies for our clinical development programs, and we will continue to follow where the science and data lead. I am very excited about the potential for tenapanor as a treatment option for adult patients with CIC and the opportunities that 531 may offer across several therapeutic areas. These clinical development activities not only bolster the growth of our company, but equally and perhaps more importantly, they continue to expand our efforts to make a positive impact in the lives of patients, families and caregivers and the health care providers who help manage their care. I look forward to sharing additional updates in the months ahead. With that, I will now pass it to Sue. Sue Hohenleitner: Thank you, Laura. Four months ago, I joined Ardelyx as it was clear to me that I had a unique and incredible opportunity to become part of building a great company, helping patients and creating real value for shareholders. On one of my first days with Ardelyx, I heard Dr. Laura deliver a powerful message that resonated deeply with me, the patients are waiting. To me, that phrase reflects urgency, purpose and accountability. When we deliver with excellence for patients, shareholder value creation follows. Since October, my conviction has only gotten stronger that we are at a turning point for our company's future. We are turning our commercial momentum into a multibillion-dollar opportunity, a once sparse pipeline into a robust development portfolio and a strong organization into an extraordinary one by elevating our game and building the capabilities required to compete and win. Furthermore, we're turning a disciplined capital allocation into a clear strategic advantage and investing with purpose. This is more than progress. We are turning a critical corner as we drive towards profitability and meaningful cash flow generation, allowing us to strengthen our balance sheet, fund our ambitions and build long-term shareholder value. Now let me walk you through the financials. For 2025 results, I'll be focusing my commentary on the full year performance. However, you can see the fourth quarter results on the slide and in the press release we issued earlier this afternoon. We had significant year-over-year total revenue growth of 22% with full year 2025 revenues of $407.3 million compared to $333.6 million in 2024. That growth was driven by a significant increase in IBSRELA demand, which grew revenues to $274.2 million, an increase of 73% compared to the full year of 2024 and finishing 2025 at the upper end of our most recent guidance range. As Eric outlined, that growth was driven by increases in total prescription volume. We also reported $103.6 million of XPHOZAH revenue in 2025, compared to $160.9 million in 2024, a decrease of 36%. As you know, as of January 1, 2025, we no longer receive Part D reimbursement for Medicare patients, who represent roughly 60% of the total XPHOZAH patient base. However, our focus on protecting patient access, driving clinical conviction and supporting prescription pull-through drove year-over-year growth in total expenses by 9%, and we grew paid expenses by 41% when excluding Medicare. We are tremendously proud of the efforts made this year to advance our objective that every patient prescribed XPHOZAH, received XPHOZAH regardless of their coverage. Now turning to expenses. Research and development expenses for 2025 were $71.5 million, compared to $52.3 million in the prior year. This increase reflects development activities for our ongoing pediatric trials as well as the ACCEL trial for CIC, preclinical research activities for the 531 program and increased medical engagement with the scientific community. Selling, general and administrative expenses were $337.2 million for the full year 2025, compared to $258.7 million in 2024. The increase was primarily related to continued investments to drive demand and adoption of IBSRELA. Our net loss for the full year 2025 was $61.6 million or $0.26 per share compared to a net loss of $39.1 million or $0.17 per share for the full year of 2024. The net loss for 2025 includes $49 million for noncash expenses from share-based compensation compared to $37.4 million in 2024. We finished 2025 in a strong cash position with $264.7 million in total cash, cash equivalents and short-term investments, an increase from $250.1 million at the end of 2024. We now have had 2 consecutive quarters that we generated positive cash flow due to growing revenue. Now turning to guidance for 2026. First, looking at our revenue projections for IBSRELA, we continue to anticipate 2026 revenues for IBSRELA to be between $410 million and $430 million. That represents at least 50% year-over-year growth at the low end of the guidance range. Similar to 2025, we expect growth to be driven by quarter-over-quarter increases in demand, along with improved prescription pull-through. As for the phasing of revenue, we expect the overall market dynamics in 2026 to be similar to those we saw last year. As we've shared in the past, the IBS-C market historically contracts in the first quarter due to co-pay resets, insurance changes and prior authorization renewals, among other factors. We expect those factors to similarly impact Q1 of 2026 in addition to the recent winter storm burn that affected a large portion of the country. As in prior years, we expect the market to rebound in the second quarter. Using 2025 as a proxy, we recorded approximately 16% of the full year IBSRELA revenues in the first quarter, and we anticipate that 2026 will likely follow a similar pattern. 2026 growth will be supported by thoughtful investments that will also fuel continued growth to $1 billion in 2029, representing a CAGR of 38%. We expect growth to be driven thereafter by continued adoption of IBSRELA among IBS-C patients as well as growth from patients with CIC assuming approval and market launch of tenapanor for CIC. And to build on Mike's comments earlier regarding the new formulation patent, we recognize that there's an opportunity to see IBSRELA growth continue even beyond 2033 when our composition of matter patent expires. IBSRELA will have the same winnable position, and we anticipate volume growth to continue until we face generic competition. Now turning to XPHOZAH. We expect revenues to be between $110 million and $120 million in 2026. We're focusing on driving depth and breadth of XPHOZAH prescribing and investing at an appropriate level to ensure that XPHOZAH remains a financial contributor for Ardelyx. We expect that XPHOZAH will experience similar market dynamics in the first quarter as IBSRELA. We are reaffirming our expectations of $750 million before the expiration of the XPHOZAH method of use patent in 2034. And as is the case with IBSRELA, XPHOZAH growth is expected to continue until we face generic competition. Just a note on our gross to net deduction rate. We expect our future GTNs for IBSRELA and XPHOZAH to be similar to the results we saw in 2025, which were in line with our expectations. Two of our key priorities for 2026 are to deliver commercial growth and to advance our pipeline, which requires high-impact investments in R&D and SG&A. With that said, we expect overall 2026 operating expenses, inclusive of R&D and SG&A to increase by approximately 25% for a total OpEx of up to $520 million. We are continuing to fuel the pipeline, and with that comes increased investments in R&D, reflecting both the ACCEL Phase III trial for tenapanor and planning for a Phase I trial for 531, along with other expenses to support our engagement with the scientific community. We also expect SG&A to grow to support a disciplined investment approach to drive IBSRELA growth through commercial execution, improved prescription pull-through and patient engagement. These high ROI investments reflect areas of growth in 2026 and will generate momentum to deliver on our longer-term IBSRELA guidance expectations as well as our planned pipeline expansion. Our strong cash position of $265 million, supported by the significant revenue growth we expect is sufficient to cover all of our planned operating expenses and allow us to reach consistent positive cash flow with our current operations. We remain focused on thoughtful capital allocation throughout this year as we prioritize growing the top line and further advancing our pipeline. Before I turn the call back to Mike, I want to say how proud I am to be here representing Ardelyx for my first earnings call as our CFO. I am both excited and optimistic about the future and the tremendous value we will create as a team for patients and for you, our shareholders. With that, I'll hand it back to Mike. Michael Raab: Thank you, Sue, and I'm thrilled to welcome you to these calls. Your perspective further strengthens our confidence as we communicate the clear growth trajectory that we're on. As you heard from Eric, Laura and Sue, our priorities are focused and execution-driven, significantly grow IBSRELA, maintain XPHOZAH momentum, further advance our pipeline and continue delivering strong financial results. We are moving with urgency and discipline against these priorities, and we look forward to demonstrating continued progress as the year unfolds. With that, we'll open the call to questions. Operator? Operator: [Operator Instructions] And our first question will come from Dennis with Jefferies Company. Anthea Li: This is Anthea on for Dennis. Could you talk about your level of confidence on the underlying volume growth for IBSRELA to get to your $410 million to $430 million IBSRELA guidance? What's really driving that outside of big TAM? And how much of that guidance assumes improvements on the pull-through and the shift to specialty pharmacies? Michael Raab: Yes. First, I mean let me address that from a top line, we wouldn't give you the guidance. We have great confidence in reaching that number. As we've talked over the years, Anthea and with Dennis, is if you look at the size of this market, and the number of patients that are needing a new alternative versus what they have with secretagogue, there's a vast patient population out there to access this. So our confidence is significant and hasn't wavered, honestly. Eric, if you can go some of that, too. Eric Foster: Yes. Thanks very much for the question. As Mike said, we've got tremendous confidence in the guidance that we've given for 2026. In order to drive volume, we're continuing to optimize our sales force. Last year, the team did an excellent job in execution was able to drive the 73% growth. And we'll continue to optimize that so they can drive top of the funnel. As Mike said, 77% of the patients out there on secretagogue are currently continuing to experience symptoms. So we know that the market is there. As it relates to pull-through, we are going to double our field reimbursement manager team. We know that they provided significant value to us last year and relates to increase in approvals and resubmission rates. So we know that we can continue to improve there, and we've got a team that's going to expand and refocus there. With regards to the IBSRELA Pharmacy network, we're really excited about this opportunity. It's actually something that we started to work on towards the end of last year. And we know that these patients, they need high touch and a more patient-centric option to go to a retail pharmacy. So what we put in place is the opportunity for them to get the care that they need to work closely with them and the physicians to make sure that we get a higher rate of fulfillment. So when you think about all those 3 things together, we feel really good about 2026 and what we're going to be able to deliver. Operator: And our next question will come from Allison with Piper Sandler. Allison Bratzel: First, just for Sue. Following up on some of the prepared remarks on expenses, just could you provide any more color on the cadence of the RV and SG&A step-ups for '26? And just with those increases, how should we be thinking about the path forward or the path toward sustained cash flow positivity? And then just on the $410 million to $430 million guidance for this year and going to $1 billion for IBSRELA in '29. Do you feel your existing commercial infrastructure is sufficient for hitting that longer-term guidance? Or just how should we be thinking about incremental investments on that front? Sue Hohenleitner: Yes. Thank you, Allison. I'll start out with your questions around OpEx. So yes, we are going to be increasing our OpEx about 25% year-over-year based on the guidance, where our top line is going to grow more than 38%. So good news is we are growing the OpEx, but not necessarily as much as we are growing the top line momentum. In terms of what we're doing, these investments that we're making, this is really all about growth, growth not only in the commercial business, but also within the R&D pipeline that Laura talked all about. A lot of the sales and marketing that we're going to be investing in, these are not relatively new programs. These are things that are proven, high ROI programs that are really going to drive that growth. We are going to be and continue to be significantly disciplined and in all that we do. And the other thing I would like to note, too, is as the year has already started, we have already begun these investments. So the clip that we're on is a pretty good clip to get to do that. In terms of cash flow positivity, we have been cash flow positive. We're very proud of that the last 2 quarters, and we'll continue to do what we can to drive that. We're not really guiding to positivity at the moment, but stay tuned. Michael Raab: I guess the other thing I would note is, and I'll have Eric comment on it. As you've seen throughout -- when we started the IBSRELA program 3 years ago, we started with 30 people. We expanded to 60. We expanded to 124. We now see the benefits of the fans and the field-based folks out there. So understand that we always look at how to optimize and invest, and that's something we will continue to do as this program continues to expand. And certainly, you can imagine the future with CIC that there's other opportunities to continue to expand in this organization. Eric? Eric Foster: Yes. I would say in terms of really maximizing the return from the investment, we're recognizing that we do have an opportunity to improve on reach and frequency. So you may have seen we posted some positions online for the ABD role, where we're going to be going up around 15 to 20 roles. As I mentioned, we will be doubling the size of the field reimbursement team. And I feel pretty confident over that over the next couple of years. We are starting those investments now so we can maximize the return that we're going to be able to get in 2026, as well as into 2027. And so I don't anticipate too much changing there. But of course, we are always looking at -- always looking at the market and our performance and see ways that we can be better for patients. The other thing that I would just call out from a marketing standpoint, the team has really done a nice job of digital marketing and making sure that we're engaging with physicians, reaching that population that's out there. And so this year, you will see a concerted effort and focus on the patient. As Mike mentioned, you know that it's a sizable patient population out there, and we have an opportunity to reach out, engage with them. We know when they are aware of IBSRELA, they go into the office and the physician will write that prescription. So we want to make sure that we're pulling through not just on the sales side, but also on the marketing side, the team has already started that. And the investments that we're making in Q1, you'll see those will be fairly consistent throughout this year. Operator: We'll move next to Chris with Raymond James. Samuel Alexander Leach: This is Sam on for Chris. Just one on the CIC trial. Can you talk more about the 2 lower doses you're testing? If I recall correctly, these dose levels weren't quite as efficacious in IBS-C. So what are your expectations for how these dose levels will perform in this trial? And is having multiple dose options part of your strategy in CIC? Or are you trying to find just one optimal dose? Laura Williams: Yes. I think at the end of the day, we want to obviously make sure that as we evaluate safety and efficacy that we are able to actually look at a dose that we don't expect to provide as much, right? You typically want to look at the least effective dose. And so that is the lowest dose. We don't expect a lot from that. But I think as I said earlier, CIC seems to be the less difficult condition to treat. And so it makes sense for that middle dose of 25 milligrams BID. And then the 50-milligram dose is obviously the dose that we use and the data that we use in our T3MPO trials to actually provide us some probability of success for this trial. So it's a nice way to look at dose response in a single Phase III well-designed, robust study. Michael Raab: And I'll just highlight that, too, is we're going to follow the data, right? And what these 3 different doses tell us will tell us what we move forward with. Operator: And next, we'll hear from Matthew with H.C. Wainwright. Matthew Caufield: Great to see the successful quarter. So with IBSRELA offering its differentiated NHE3 inhibitor profile, what do you see being the greatest distinctions in the future for the CIC market when we think about the other GCC agonists or serotonin receptor agonist mechanisms, for instance? Really just any color on the unmet need and the differentiation there? Laura Williams: Thanks for the question. It's a great question. I think at the end of the day, what we talked about before was the fluidity, right, between these 2 conditions, IBS-C and CIC. And so just as we've seen with IBS-C, the need for a different mechanism of action, right, because a number of patients on other drugs are still symptomatic. And so that is important also with CIC. And I think that really speaks to the potential utility of tenapanor in that patient population. Michael Raab: And you look at the evolution of how CIC, functional compensation, IBS-C are characterized by the Rome Foundation, it is continuing to evolve over time. And notably, the CIC population is certainly larger, but many of those patients early on are well-treated by over-the-counter medications. And if you look at the prescriptions that we talk about where there isn't a differentiation in IQ or other data in terms of what is for IBS-C or CIC, you're seeing a mix between the 2. So that's why the continuum that Eric mentioned of how we can speak to IBSRELA and NHE3 inhibition as a different choice versus all the secretagogues, which is basically it. And the serotonin is a motility drug, completely different mechanism and impact on the patient. So this seems for us, and I think as we hear from the work that we're doing, that it is right for this to be going into CIC because there is such a continuum between CIC and IBS-C. Operator: Next, we'll hear from Roanna with Leerink. Roanna Clarissa Ruiz: So I was curious for CIC, what will prescribers focus on most in terms of the primary and secondary endpoints in the Phase III study? And is there an efficacy bar that you're thinking about for defining a highly successful trial in CIC? Michael Raab: One comment then I'll probably go too far with it, I'll ask Eric to comment [indiscernible] in the field. What's interesting is when you talk to gastroenterologists about this, they know how to make people have bowel movement, right? They know that they can do that. And if they're going to have a hard time succeeding with the different over-the-counter and other things that they do, they move to pharmacological intervention. And so those patients that are not getting relief this primary endpoint of CSBNs are ultimately in a durable response that Laura described in the endpoint, that's what you want to see in a patient that's having these challenges with bowel movements. And that's what you look for. Secondary endpoints, quality of life benefit. But at the end of the day, someone with chronic idiopathic constipation, you want them to be able to have bowel movement. Eric Foster: Yes. I would just add, these patients are chronically constipated, as Mike said, and it has a significant impact on their life. So first and foremost, from a primary endpoint, we want to make sure that it can work in constipation and have a lot of confidence there. From a secondary endpoint, as Mike mentioned, quality of life, patient-reported outcomes, those are areas that we're going to focus on to be able to show that we can treat not just the CIC, but the patient as a whole and feel really good about being able to do that. And lastly, as Laura mentioned, with a differentiated mechanism of action, these are multifactorial conditions and patients need options. And so we want to be that option for them just like we are with IBS-C. We've got a good position there and feel like we will be able to create a similar market and opportunity for CIC. Operator: And next, we'll hear from Yigal with Citigroup. Jin-Wook Kim: This is Jin Kim on for Yigal. Congrats on the progress. Maybe just a quick one from us. Any additional color you can provide on additional patents or other layers of protection you could -- you're thinking about building up in the future? Michael Raab: Yes. I mean I think as I said in my opening comments, our job in this business is to continue to strengthen our intellectual property position for products like XPHOZAH/IBSRELA and that's what we're continuing to do. I think this patent on the formulation is really important, the fact that it's listed in the Orange book exactly what you would want to see. And needless to say, I think without any specifics of what we're going to file or have filed, there are other things that we are working on to further strengthen that position. Jin-Wook Kim: And maybe just one more, if I could. How are you thinking about long-term XPHOZAH growth post 2026, given potential adjustments in Medicare base rates for phosphate binders? Any additional color you can provide on that? Michael Raab: I remind you, Medicare base rate and phosphate binders, we do not benefit from that. We made the decision, as I noted in my opening comments that 18 months ago, we made a determination not to participate in that. So our business is focused on in terms of the revenue-generating business, Medicaid and Medicare -- Medicaid and commercial, excuse me. And the Medicare segment is what Sue referenced to as well is to make sure that any patient that is appropriate and needs XPHOZAH for our label has access to it. And that's what we're extremely proud of, where you saw both the non-Medicare segment, 41% growth during that first year of the tenapanor period and an overall growth of dispenses of 9% in the face of all that's going on. So we're extraordinarily proud of that and certainly a longer answer than I think your question, but the base rate increase is not relevant to this business. Operator: Our next question comes from Laura with Wedbush Securities. Wing Yip: This is Thomas on for Laura Chico. So perhaps one question for IBSRELA. So historically, you've positioned IBSRELA for later lines of treatment for IBS-C. But as you're now projecting over $400 million in revenue for this year, just wonder if there might be more leverage to reengage with payers and reexploring how frontline use can fit into the picture. And to that end, I wonder if frontline utilization, how much if at all factors into your 2029 peak revenue target? Michael Raab: Sure. No, thanks for the question, Tom. And it's interesting. We've talked about this before is it's 50,000 new patients coming on to IBS-C indicated therapies a month. There is over 7 million prescriptions written last year for IBS-C therapies. We need a small fraction of that in order to get to our aspirational numbers. So we're extremely confident in the market opportunity there that's for our indication without having to go to frontline. Notably, however, our clinical work, our package insert is a first-line therapeutic. The payer dynamics, which continue to be the fuddling to me in this industry and the challenges to get good medicines to patients are the challenge that we all face. I think the work that Eric and our market access team and the leadership that we have there is having us be very thoughtful about how we ensure appropriate market access and lessening as many hurdles as possible. Going after frontline is not an objective that we have and is not factored into the numbers. Although as we've noted in other calls, there is some organic growth in first-line use because I think people have conviction the benefits this product is providing their patients. You want to add, Eric? Eric Foster: Yes. I would say last year, one of our priorities on the commercial side was building out our payer and market access team. We've done a nice job of bringing in the right team. These individuals are engaged with payers, and they continue to put hurdles in place, and we are working with them to make sure that patients can have access to our products. So we don't aspire to have first-line therapy at this point in time. You mentioned kind of later line utilization. And I would say when we look at our internal market research, it's typically around second in third line. So our goal is to be the first branded product post the brand or generic utilization. And so that's the team what they're messaging out there. And based on the tremendous amount of success that we saw last year in 2025, we continue to feel that that's the right position. But yes, we continue to work with all of the stakeholders that are out there to make sure that patients have access to our products. And again, we'll continue to invest in those areas and feel good about the direction we're at. Operator: And we'll move next to Julien with BTIG. Julian Harrison: Congrats on the progress. First, can you talk about how the recently issued 299 patent contributes to your overall IP strategy for tenapanor? Wondering if the patent covers unexpected effects or any other features that you believe help strengthen the patent. And then I thought I heard in prepared remarks that CIC labeling could potentially bolster your ongoing efforts in IBS-C. Just wondering if you could expand on that some more, what dynamics would you expect to be at play there? Michael Raab: Sure. Just a brief comment on the intellectual property. This is a formulation patent, very clear and straightforward. It's now Orange Book listed. It goes back to 2042. And that's the important thing to focus on is building that sort of [ bulwark ] of support as we continue to build this business. So feel good about it and ultimately, other IP that we will pursue. But this is a strong formulation patent for the commercial formulation of the 2 products. Eric Foster: Yes. And I'll take the second part of that question as it relates to CIC and IBS-C. So as Laura mentioned, I mean, these 2 conditions are closely related, and we know that physicians use the screening docs in both indications. And so as we gain experience and if approved, an indication in CIC, we know that it will improve physician confidence across both CIC and IBS-C because we feel like we can be the product of choice for those physicians. So when we did our research, not only did we see improvement in the CIC, but we also saw increased confidence in the IBS-C side, and that's what continues to feed into our optimism as we think about really the true value that IBSRELA can provide for those patients out there with CIC and IBS-C. Operator: And we'll move to our next question from Aydin with Ladenburg. Aydin Huseynov: Congrats on a great quarter. I've got a couple. So first, IBSRELA question. So you guide now 2029 $1 billion plus. So you consistently got $1 billion, but we previously assumed I think that would occur in 2033. So do you have any comments, any forecast, any sort of guidance as it comes to 2033, how -- what should we expect for that year? And when do you think that PPA actually may happen for IBSRELA? And the second question I'll ask is about the CIC trial. So those -- as you mentioned, those are -- those have always been interrelated indications. And so you decided to start the trial. Just curious to understand how the things changed over the past several years. So was it previously you didn't start the trial because of financial constraints? Or what are other potential reasons that sort of simulated. Michael Raab: Sure. I mean I'll answer the second part first, but then actually ask Laura to address it as well. [ I'm cheap ] and wanted to make sure that we had enough capital to do the work we need to do. Honestly, that's the very simple calculus that got us to where we are today. The fact that we ended last year with more cash than we did the year before gave me the confidence that we can do this and invest appropriately into the pipeline. And then for your first question, the fact that we gave you the numbers, $1 billion in '29, I would argue that our internal projections might have been close to that, and we were not yet -- we decided to not yet provide that. We will continue to grow thereafter. LINZESS continues to grow, has not peaked. So this business, this patient population where there's a huge, huge need continue to come to therapy and more innovation that comes, the more patients that are going to evolve. So what peak ultimately looks like, we're all going to get there together and starting where we are now with the kind of growth of 73% over '24 and a 38% CAGR to get to $1 billion, the math is pretty straightforward. So I would urge you to take a look at that and the kind of growth that you see in the IBS-C marketplace where we see the kind of growth with only one mechanism of GCC agonist before us, should give you some perspective as to what the market through LOE would look like before [indiscernible] Operator: And we'll move next to Peyton with TD Cowen. John Peyton Bohnsack: This is Peyton on for Joe. I guess just a quick one for me. Could you talk about how the CIC trial is powered? And then what proportion of patients need to be CDSM responders and that you're targeting? Laura Williams: Yes. So the powering, it's a pretty robust sort of sample size calculation. We powered it at 95%. So we feel really comfortable there. And when you couple that with the data that we saw in our T3MPO studies, it gives us a lot of confidence in terms of the probability of both technical and regulatory success. So as I said before, the sample size is about 700 patients, and obviously, that reflects the 4 sort of treatment arms, right, 3 active doses and placebo. And again, that's about 173 patients per arm. John Peyton Bohnsack: And the proportion of patients that need to be CDC responders per arm? Laura Williams: Yes. Our initial -- when we looked at the data in terms of our T3MPO studies, we saw about at least a 20% difference between placebo and tenapanor. And so our sample size calculations are such that we're looking really about around the same sort of difference, 18% to 20% difference between placebo and active drug. And that is for the 2 that for the 25-milligram and 50-milligram dose. Operator: And our next question comes from Jennifer with Cantor Fitzgerald. Jennifer Kim: This is Jennifer on behalf of Prakhar Agrawal from Cantor. I wanted to ask about IBSRELA. Can you talk about the IBS-C market where you're finding the greatest opportunity? And what is driving the market growth of double digit? And how long do you think this is sustainable? And on XPHOZAH, you shared that the peak opportunity being at $750 million. Can you talk about how you get to that number based on the current trends? Michael Raab: Sure. IBSRELA market, I'm sorry, if you could repeat the question. I didn't hear you clearly. Jennifer Kim: So with the IBSRELA drug on IBS-C, I wanted to understand where is the greatest opportunity? And what is driving the market growth of double digit? And how sustainable do you think it's going to be? Michael Raab: I think in the previous question that I answered with 50,000 patients coming in every month from the GCC agonist already, there is a -- and 7 million patients already on therapy. There's a very small percentage of that, that ultimately we need to get to $1 billion. So confidence in there is high, particularly given our clinical differentiation. And with the XPHOZAH very much the same kind of dynamic, right? I mean if you look at the Medicare population that we lost, the original numbers I've gone to before is 550,000 patients on dialysis 60% of those are Medicare. You lose those 330 -- 220,000 patients that are Medicaid and Medicare. Those are revenue-generating patients for us. It's less than 100,000 patients closer to 50,000 that you require in order to get to the guidance that we gave. Operator: And this concludes our question-and-answer session. I'd like to turn the conference back to our host for any additional or closing remarks. Michael Raab: Thank you, operator. To our investors, our employees and really especially our patients, thank you for your continued engagement and support. We're encouraged by the progress we've made and excited about the opportunities ahead. We remain focused on discipline execution and long-term value creation and we appreciate your continued confidence as we move forward. With that, we can now end the call . Thank you operator. Operator: And this does conclude today's conference call. Thank you for attending.
Operator: Good morning. This is the conference operator. Welcome, and thank you for joining the Imerys 2025 Annual Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Alessandro Dazza, Chief Executive Officer; and Pierre Lebreuil, Chief Financial Officer of Imerys. Please go ahead. Alessandro Dazza: Good morning to all of you. Thank you for joining us today to review Imerys Q4 and full year 2025 results. I think the first word is dedicated to Pierre Lebreuil, our CFO, next to me, our new CFO. Pierre is not new to Imerys. He has been with us for more than 20 years, new in his role. I'm very proud of this promotion because Pierre will bring strong leadership to the team, experience and will guarantee continuity in this business. Pierre, welcome. Pierre Lebreuil: Thank you, Alessandro. Alessandro Dazza: And as usual, let me start by giving you some highlights of the year we just closed. 2025 revenue amounted to EUR 3.385 billion, broadly in line with last year. Q4 at EUR 800 million, also broadly in line with last year, both on a like-for-like basis, reflecting, I would say, solid pricing in a market with subdued industrial activity and construction demand in North America and Europe still lacking. Full year 2025 adjusted EBITDA landed at EUR 546 million within our guidance despite currency headwinds impacting EBITDA for the full year for EUR 22 million, and this was particularly evident in Q4 given the devaluation of the U.S. dollar. Year-on-year performance, EBITDA-wise, was also broadly in line with last year at minus 0.4% at constant exchange rates and excluding, of course, perimeter and joint venture effects. So all in all, very resilient for our core business, supported by disciplined pricing and ongoing continuous cost management. Q4 '25, also very similar to the rest of the year. The group generated free operating cash flow for the year of EUR 127 million before strategic CapEx and expenses and around EUR 80 million as reported. Strategic CapEx in 2025 were relating only to our lithium projects, and I will return on the topic a bit later. Imerys structure remains sound, investment grade confirmed. Current net income was EUR 146 million, and the Board of Directors will propose an ordinary cash dividend of EUR 0.75 per share at the shareholders' meeting on May 12 of this year. The payout ratio is consistent with all last previous years. Last important topic, the group did a noncash goodwill impairment of the solution for Refractory, Abrasive & Construction business for an amount of EUR 467 million. We will return on this. This impairment has no impact on the group cash position or financing capacity. It purely reflects an accounting adjustment necessitated by changed market conditions and assumptions do not call into question the soundness of this business, and I will further elaborate on this. Here, we see a little bit our sales performance by geography for the full year and Q4. Europe, main markets posted a light recovery in Q4, which is -- gives us good hope for 2026, improving construction and improving industrial activity. Positive sign for the future. For the full year, however, as we see here, the business is still behind 2024, fundamentally due to low construction, industrial and automotive activity, partly only compensated by good and solid performance in consumer markets. North America, we had a very differentiated picture throughout the year, solid first part and a weaker Q3 and Q4, the trend that we have seen already in the last 6 months, fundamentally impacted by weak industrial construction. Should be noted that a further impact on this activity is the devaluation of the U.S. dollar, which is affecting sales in euro as we report of -- at the level of 5% compared to last year, so very significant. Asia sales continued to grow nicely, not only in India, but also in China, which remains quite dynamic, especially around new technology, electric vehicles and, I would say, strong exports. South America, after a strong first half, slowed down a bit in the second part of the year, partly in relation to U.S. tariffs on Brazilian products. Let's now look rapidly at our main underlying markets and their trends, which, of course, partly reflect already what I just described. But overall, I would say Q4 in line with Q3 in terms of trends, maybe with some signs of recovery in Europe and continuous strong growth of electric vehicles and energy storage. Construction was not a great year, especially in the U.S. In Europe, where we see, however, a reverse of this negative trend, so positive signs for the future. Consumers remains very resilient in all geographies. Automotive, poor in Europe, a bit more stable in the U.S. and a very strong China, very strong EVs as well. And industrial activity normally follows the other markets. So I would say, in line -- I would almost say in line with the average of the others. Imerys does not only rely on underlying markets, we proactively target growth. And in order to give you an idea of some solid avenues of future growth, you see on this slide some of the recent business developments of the group. We start, of course, with our conductive additives business. It's continued to grow, thanks to capacity expansion. You remember in the last 3 years in Belgium as well as in Switzerland, same for our investments, in China, in automotive, lightweighting on polymers in India for refractories and construction. And last example, which we have not publicized a lot, but also because it is still ongoing, a capacity increase for our high-purity diatomite filter aid called Celpure, which is used widely in the pharma business with strong growth, which we will accompany with new CapEx. Together, they are contributing more than EUR 30 million revenue in '25 with further growth ahead as we ramp up sales. Similarly, on innovation, launching new products takes time. That's why it's important to have a pipeline, but it is the basis for future growth. I will not enter into the many details. Here are only a few examples. There is a lot more. Some are already generating commercial sales, some are under qualification and will be the engine of future growth. The fact that specialty minerals have unique and varied properties, this creates new ideas, new applications every year on a continuous basis. And we know, as you know, Imerys has the widest portfolio of specialty minerals in the world. If you look at our -- the development of our EBITDA in this slide, you see the robustness of our business model. On the left side, you can see the evolution of the full year adjusted EBITDA year-on-year. We do have a significant impact of perimeter coming from the divestiture, as you remember, of our assets serving the paper market in July '24. Joint ventures, which did an exceptional year in '24, especially the first part of '24 and exchange rates, FX. If you remove these, let's say, external factors, what is most important, the core activity of Imerys delivered a very resilient EBITDA basically in line with last year despite what we all know was a challenging context in 2025. On the right side, you see the balance between price and costs, which highlights the good and continuous work done by the group, especially on cost reductions, first and foremost, but also on agility to react to market changes in terms of pricing when situation change. This remains and will continue to be a key factor for future success and profitability of this company. An important topic we mentioned today and we go in more detail, we already announced in October with our Q3 results, an improvement program. So here, finally, more details on it. We are launching a cost and performance improvement program named Project Horizon, which aims at restoring our targeted profitability, will consolidate the group's competitive edge, so our competitiveness, will drive efficiencies and facilitate the agility needed in this ever-changing environment. It focuses on simplifying and streamlining the organization of the group. Structurally is important because these savings are here to stay, structurally lowering our cost base, adjusting our industrial footprint and rationalizing our capacity worldwide when possible. The program is ongoing. It is subject, of course, to the completion of the required social and legal processes. On the financial side, on the right, Project Horizon targets annual cost savings of at least EUR 50 million to EUR 60 million run rate per year versus a starting point 2025 cost base. And we do expect to have benefits of at least 50% of the program already in 2026 with the rest coming in 2027. We expect the cash cost of implementing such a program at approximately 1 year of saving, which makes it particularly attractive. Let me now give you a short update on the 2 key -- other 2 key topics for the group, lithium. First, announcements have preceded this call. So you are aware on EMILI in February -- on February 11, we announced that the French state has acquired a minority stake in the project. It is a key milestone for the future of the project. It's an investment of EUR 50 million in the equity of the company, which will support and finance the EMILI project in finalizing the definitive feasibility study until the end of '26 and probably in early '27. As far as our second project, Imerys' British Lithium is concerned, the scoping study, which is the step before the pre-feasibility study, was concluded and finalized in early '26, confirming at the end, a high value and a strategic relevance of this project. However, the group has decided to place the project on maintenance and care. And consequently, there will be no further investments in this project in the nearby future. With regards to the Chapter 11 process of the North American Talc entities, another milestone, the confirmation hearing as planned, started on February 2 and was concluded on time on February 6 at the Court of Bankruptcy in Delaware. We anticipate the court to issue its ruling in the following weeks. The potential confirmation, if positive, will then need to be subject to -- or subject to an appeal will need to be reviewed and affirmed by the U.S. Federal District Court. We remain confident in a positive outcome of this process. Moving to our sustainability performance. I'm pleased to share that we have successfully completed our '23-'25 SustainAgility road map. You see here some indicators. Of course, I will not read them all, but 14 out of 16 have been overachieved. This demonstrates how deeply we have integrated sustainability in the core industrial strategy of this group. And knowing that it is a topic of particular interest, if we focus a bit more specifically on CO2 emissions and climate change, we can look at the next slide. Our Scope 1 and 2 emissions amounted in 2025 to 1.8 million tons of CO2 equivalent. This is a 28% reduction versus 2021, the starting point, which puts us well ahead of the pace required to reach 42% reduction by 2030. On Scope 3, we have already achieved 22% reduction against 2021 baseline, nearing our 2025 target for 2030. This performance is great and derives fundamentally from actions and investments in several areas, in particular, energy efficiency, heat recovery, switching to low-carbon energy. This achievement also confirms that we have met our sustainability performance targets for our 2021 sustainability-linked bond with a positive effect on the interest rate. We've done well in the past. We move on to the future, and we are launching our third road map to building on the experience of the last 8 years and this continuous progress. We've taken the opportunity to strengthen and simplify our midterm objectives and focus really on what stakeholders expect while being, of course, fully aligned with the latest CSRD guidelines. I will not go through the list, but I assure you that our targets are both ambitious but also reachable. I now hand over to Pierre for a detailed analysis of our financial results. Pierre Lebreuil: Thank you, Alessandro. Good morning, everyone. It is a pleasure to be there with you today for the first time. So let me recap some of the key aspects of our financial performance, starting with revenue. Group sales were EUR 3.4 billion for the full year 2025. This represents a 0.7% decrease at constant exchange rates and perimeter compared to last year with volumes slightly down and prices holding well. As a reminder, the perimeter effect includes a negative impact of EUR 165 million from the disposal of our assets serving the paper market in July '24. It is partly offset by the EUR 50 million of sales generated by the Chemviron business acquired at the beginning of 2025. Currency had a negative effect of EUR 82 million, mostly coming from a drop of the USD versus euro from the second quarter onwards. You can see Imerys performance for the fourth quarter at the bottom of the chart. Trends in sales volume and prices were similar to what we saw for the full year. The currency impact was, however, much more negative. It represented 4.2% of sales and was driven by impact of the weak USD. Let's now have a look more in detail at our 3 business segments. Beginning with Performance Minerals. This business generated EUR 2 billion of revenue in 2025, representing 60% of Imerys group sales. Overall, the business remains very resilient given market circumstances, showing just a slightly negative organic growth compared to last year at minus 1.3%. Full year 2025 revenue in the Americas was down by 1.3% at constant scope and exchange rates versus last year and stood at EUR 841 million. Sales were impacted by a weak residential market in the U.S., suffering from high interest rates, unsold housing inventory and by a soft consumer market. Prices held well. Full year 2025 revenue in the Europe, Middle East, Africa and Asia Pacific region decreased by 1.7% at constant scope and exchange rates compared to last year. Volume were down by 2.8%, driven by muted construction and automotive markets. This decline was partly compensated by a good level of activity in the consumer market. In Q4, the performance was in line with previous quarters. Despite lower volume, Performance Minerals adjusted EBITDA is above last year by 4% like-for-like, a strong achievement, driven by price discipline and cost management. The EBITDA margin was resilient at 17.8%. It is worth noting that performance on the Chemviron, the diatomite and perlite business acquired in January '25, was ahead of expectation, thanks to quick synergies implementation. Let's now look at our solution for Refractory, Abrasive & Construction business. Full year sales to the refractory market were impacted by the low industrial activity in Europe and in Asia, while the U.S. market resisted better. Pricing remained steady. It is worth flagging that organic growth was positive both in third and fourth quarter of 2025, driven by commercial actions and strong sales of advanced ceramic products. Full year 2025 adjusted EBITDA declined by 9.8% at constant scope and exchange rates due to lower volumes, which were partly offset by a positive price/cost balance and cost savings initiatives. Let's now have a look at Solution for Energy Transition to complete this segment review. Starting with Graphite & Carbon. Full year 2025 revenue increased by 11% like-for-like, driven by solid end market, primarily electric vehicles, along with new product launches and robust conductive polymers business. Fourth quarter revenue was stable as some external and temporary factors delayed sales by a few million euros. Full year 2025 adjusted EBITDA increased by 41.2% over the previous year. This substantial improvement is primarily attributable to significant volume increase. Adjusted EBITDA margin reached 25%, a gain of 5.5 percentage points. Let's now focus on TQC results. As a reminder, TQC is our 50% joint venture in high-purity Quartz business. Full year 2025 revenue amounted to EUR 167 million, a significant drop from a record-breaking previous year. Performance was affected by disrupted solar value chain, even if inventories are now at healthier levels. Revenue improved in H2 '25 at EUR 85 million, outperforming both H1 2025 and H2 '24. Full year 2025 net income dropped to EUR 35 million. TQC delivered for the full year a solid 36% EBITDA margin. Now let's look at the group's profitability. For the full year, adjusted EBITDA reached EUR 546 million, corresponding to a 16.1% margin. Looking at Imerys' direct operational performance highlighted in the box in gray color, you can see that EBITDA was very resilient with just a slight decrease of 0.7%, a great achievement given the economic context and supported by price discipline and cost management. On a reported basis, EBITDA decreased 19% in comparison to 2024. This reflects the lower contribution of joint ventures by EUR 74 million, perimeter changes for EUR 30 million and an unfavorable exchange rate effect of EUR 22 million. The picture is similar for the fourth quarter, where adjusted EBITDA matched prior year levels once adjusted for currency fluctuation, changes in perimeter and joint venture performance. Let's now move to the bottom of the P&L. Net income group share is a negative EUR 409 million. As detailed on this slide, it is impacted by other operating income and expenses amounting to EUR 555 million. This EUR 555 million are mostly related to 2 items. The first one is a noncash goodwill impairment charge of EUR 467 million related to the solutions for Refractory, Abrasive & Construction business. This impairment reflects a lower performance of the business plan than anticipated 1 year ago and the fact that antidumping measures on Fused Minerals import from China finally implemented by European Union are less protective than initially anticipated. It is important to flag that markets have eventually stabilized, and we do expect a progressive recovery of this business from 2026 onwards, as already noted in Q3 and Q4 '25 when RAC posted positive organic growth. Savings expected from the Project Horizon should further support recovery. The second items are noncash write-offs related to Project Horizon for EUR 41 million and to the decision to place Imerys British Lithium on maintenance and care for EUR 31 million. Let's now have a look at the cash flow generation. Current free operating cash flow amounted to EUR 78 million in 2025 or EUR 127 million before strategic CapEx. In comparison with 2024 year, free cash flow generation is primarily impacted by a decrease in dividend received from joint ventures, with no dividend received from TQC in comparison with approximately EUR 70 million received in 2024. You will note as well the EUR 26 million increase in working capital, primarily driven by higher inventory in the RAC business area, where we had anticipated a stronger impact on sales of antidumping measures in Europe, which finally did not materialize. Inventory and more generally working capital will definitely be an area of continued focus in 2026. Lastly, paid capital expenditures amounted EUR 317 million. New CapEx booked in 2025 amounted to EUR 297 million, including EUR 47 million related to our strategic investment in the lithium projects. The remaining EUR 250 million recurring CapEx were well below historical level of more than EUR 300 million and below our estimate provided in H1 2025. We do expect that capital expenditures in 2026 will continue to be limited and in the EUR 200 million to EUR 270 million range. This should allow us to achieve a robust cash generation in 2026. To conclude this financial review, let's now look at net debt. It slightly increased in 2025 as a result of strategic CapEx spend and dividend paid. I will highlight a couple of additional points. First, net financial debt went down in H2 2025, confirming the positive trajectory of our net cash generation. Second, we do not expect any significant strategic CapEx in 2026 as the financing of the definitive feasibility study for the EMILI Lithium project will benefit from the contribution of our partner in the project. I would also like to remind you that we successfully placed a EUR 600 million senior unsecured notes last November. The average maturity of our bonds is consequently extended to 4.3 years from 3.4 years at June 2025. Lastly, Imerys' investment grade was confirmed both by S&P and Moody's in second semester 2025. Net debt represents 2.5x the adjusted EBITDA, reflecting the solid financial structure of the group. On this positive note, I will now hand back to Alessandro for the outlook. Alessandro Dazza: Thank you, Pierre. So let me summarize this presentation by saying 2025 was a challenging year, but I think the group, especially in its core activity, did quite well. We have managed to keep sales flat, our overall EBITDA flat, excluding external factors, FX, perimeter, all JVs. Performance Minerals increased its profitability. Graphite & Carbon was exceptional. And RAC, which was negative compared to last year, posted growth in the second part of the year, which makes me quite optimistic for the future. How do we see '26 going forward? Don't expect a guidance as we -- as in the past, we will not do this. We release it typically after having seen the outcome of H1. Personally, I'm optimistic, but I've learned to be prudent as markets have been slow in recovery. Yes, we expect good construction in Europe, but we are still uncertain on the speed of recovery in the U.S. and automotive, which is a big market for the group, remains difficult to interpret. For sure, electric vehicles will continue to grow strongly in Europe as well as in China. So with this prudence, which is I think needed so early in the year, what I know is that the group will deliver what is in its hands, and I'm talking about our restructuring program, Project Horizon is ramping up capacities that we have built. So they are available. The markets are there. We don't need to invest further. We need to ramp it up as we showed in '25 and will continue, and we'll continue with our innovation efforts because we need to build the future. So thank you very much, and I would like now to open to Q&A. Operator: [Operator Instructions] First question is from Sven Edelfelt, ODDO. Sven Edelfelt: Yes. Welcome to Pierre. So I will have a couple of questions. Alessandro, I quite understand the usual view of not giving any guidance, but this year is a bit more complicated to understand because there is a cost cutting, construction of somehow improving in Europe. You mentioned that you managed to the core business, you managed to make it stable this year. So if you add up the number of EBITDA for '25 plus the cost cutting, it's probably a minimum. Hello? Alessandro Dazza: Yes, we hear you well, Sven. Sven Edelfelt: Okay. Sorry, I've got another call. And secondly, on asbestos, it seems that it's going extremely well since the last hearing. I see a lot of certificate of no objection being published. So there is a hearing on the 24. Can we consider a positive outcome as early as next week? And the last question is on CapEx. I think you mentioned EUR 250 million. Is it a maximum? And can we expect CapEx to be a little bit below this level? Alessandro Dazza: Thank you, Sven. Many questions. I'll try to address them all. As I said, we don't give a guidance. Therefore, I will not comment what '26 looks like. Yes, we will do the cost-cutting program because it's in our hands. I trust that construction will rebound, especially in Europe, but it's not in my hands. That's the market. And we know we have seen construction in the U.S. rather slowing down in the second part of '25. So we do need construction in the U.S. also to be solid before we can say, yes, it's going to be a good year. And that's why my prudence, which is really we are exposed to markets. If you remember a year ago in this room, I said '25 will be a good year, volumes will go up. And then we had tariffs and then we had interest rates that did not drop fast enough, and we ended up with a slightly negative volumes. So for me, prudence is the minimum that is required in this very challenging and rapidly challenging world. But we will deliver what is in our hands. And you mentioned CapEx. you've seen the agility of the group. Typically, we invest EUR 300-plus million. We saw that this year volumes are -- sorry, in '25, we saw volumes are not coming, so we could reduce rapidly our CapEx, and we ended up for, let's say, running rate for the core business with EUR 250 million. What will be '26? We will adjust. We will adjust as volumes grow. But I expect in a normal year to be maybe EUR 260 million. Don't forget, there are CO2 rights that now need to be booked as CapEx. So I think in the region, EUR 250 million, EUR 270 million could be a realistic number, and we will really adjust it based on what we need. We have good invested assets. I think it is the new normal to go down to these levels. The EUR 300 million plus is the past. And I remind you that, as Pierre mentioned, in '26, we will not have strategic CapEx because our strategic CapEx was the lithium projects. We have paused the U.K. We have found a partner that contributed capital in France. So for '26, there will be no further expenditures. And I can continue to comment on other cash items, but we'll do it later. Lastly, Chapter 11. We have always been confident. I think it was important to start this confirmation hearing and to conclude it. So it went on time. No surprises. We can remain confident. We shall remain confident, but now it's in the hands of the judge to issue the ruling. It's the final hearing, the confirmation hearing. So it will be a very comprehensive ruling. So I expect several tens of pages, maybe hundreds of pages. So it's something that will take time. I'm convinced because of the complexity of the case and the requirement of the law. Frankly, this 24 date, 24 that you have mentioned is not known to me. We have no outstanding deadline. It's really waiting for the issue of the ruling. So we remain confident, but we can only wait for the ruling. And I think I addressed all your questions, Sven. Operator: Next question is from Auguste Deryckx, Kepler. Auguste Deryckx Lienart: I have 2 questions. The first one is on the lithium project in the U.K. The decision to end this project contrast with the positive momentum on prices. What should we conclude from this? Is this project failing to achieve the targeted cash cost? Or is it linked to the French stake in the EMILI project? So basically, what are the reasons for this decision? And the second question is on the cost-cutting plan. A large part of it is for 2026, but there is also costs associated with this plan. So should we expect a net impact close to 0 for 2026? Alessandro Dazza: Thank you, Auguste, for the questions. The lithium project in the U.K., so British Lithium is a good project. We have finished the scoping. So we know roughly the potential of the deposit, the cost of the CapEx and the cash cost of production tomorrow. It's a good project. Of course, scoping means you have less certainty on these numbers than you have when you do a pre-feasibility study, which is complete in France and/or a definitive feasibility study, which is exactly what we are doing in France. So the project is good and it's not ended. It's paused. Maintenance care means you have something, it's of great value, but at the moment, you decide not to pursue. So we paused it. So we could restart it. It will depend on several things. One of them is do we find investors that join us. I always said we need investors to join us. These projects are too big in size for Imerys alone. So we need investors to join us. So -- and secondly, the project in France is way more advanced. We are at least a year, 1.5 years more advanced in terms of studying engineering pilot plant. So we prefer to go full steam on this one today and focus all our resources on this one and accelerating rather than running 2 in parallel, which would have been complicated. So this is the analysis. Lithium prices, you're absolutely right, jumped. In December, November, when we spoke last time, they were around $10. They are today around $20 per kilo. So they doubled. I remind you, as we always said, we believe the mid-, long-term price of lithium should be between USD 20 and USD 25. That's what all expert studies show. At that price, EMILI Lithium project is more than EUR 1 billion NPV. So we are talking about a fantastic project. Yes, this level of price will raise new interest of investors. So we do expect to receive and we are in discussion to further consider partnering, first of all, as I said, for France, and we will see in the future for the U.K. On the cost cutting, I think your analysis is roughly okay. Costs will go -- cost of implementation -- cash cost of implementation will go with savings. Typically, you will have social plans, redundancy. So the moment you exit people, you will have -- you will incur the cost, but you will have the savings. So I would say, if we manage to achieve at least half of the savings in '26 and a full scale in '27, we will probably have a bigger part of costs in the first year and a bit less in the second year since the overall cost, which I think at 1 year of savings max is very competitive, I would say, because I think we will manage well this cost spending. I think cash-wise, yes, you might be more or less at 0 in year '26. I think it's a fair assumption, whereas we will have the full benefit then recurring from '27 without costs. Operator: Next question is from Sebastian Bray, Berenberg. Sebastian Bray: I have 2, please. One is on the level of interest charge. Is the full year '25 level now recorded a good proxy for what to expect in future years? I appreciate that there was a step-up in the cost of interest because of the successful bond refinancing, but I suspect there might be 1 or 2 one-offs in the '25 interest charges. Are we now at a stable good level as we look forward? And my second question is on the Quartz company. It looks like things are getting better. Can you talk a little about the pricing and volume trends as we've moved into the half year of '25 and into '26? Is this business returning to positive pricing territory or is the improvement simply the result of better volumes? Alessandro Dazza: Thank you, Sebastian. I'll let Pierre comment on the expectation of '26 financial charges compared to '25. Pierre Lebreuil: Sebastian, so as you rightly pointed out, and as you know, we refinanced in last November, a EUR 600 million bond. Basically, the coupon for the new bond is 4%. Where the coupon for the bond we refinanced was around 1.5%. So it's easy to do the math, as you can see, just mechanically you can expect in 2026, a finance charge increasing by roughly EUR 15 million, all other things being the same. Alessandro Dazza: And on the Quartz company, your comment is correct, the business is stabilizing and returning to a more regular path of progressive -- slow progressive recovery growth. Inventories are stabilizing in the value chain. Of course, the competitive pressure is there when volumes are lower. So there is more competition that has caused a reduction in pricing in the market. We don't comment specifically on volumes nor on future prices because it's a very small market and therefore, we should be extremely careful. But I would say, overall, a positive -- gradual positive trend to be noticed going forward. Sebastian Bray: Helpful. Just to clarify on the finance costs. There are no one-off items or anything else in the interest charges for '25, that would mean that the actual level is different to what was reported. Pierre Lebreuil: That's correct. Nothing worth mentioning here. Operator: Next question is from Ebrahim Homani, CIC. Ebrahim Homani: Pierre, congrats for you new position. I have 2 questions, if I may. The first one is on the Q1. The comparison basis will be a bit more challenging. Do you expect the continuing improvement of the organic growth sequentially in the Q1 2026? And my second question is on the impairment. Could you give us more details behind this impairment? And on the EUR 1.3 billion of goodwill in the balance sheet, are there still elements at risk? Alessandro Dazza: Ebrahim, sequential for me is Q1 on Q4. Typically, Q1 is stronger than Q4. So sequentially, yes, there will be an improvement. If you compare to last year, too early to say because we only saw January. As I said, markets are not rebounding rapidly, as I stated in my outlook. So difficult today to guess. What is for sure still there in Q1 is an FX impact. So the dollar was in Q1 last year, 104. So a very strong dollar a year ago. Then from Q4 -- sorry, from Q2 onwards, similar to where we are today. So we will still have an FX impact in Q1 of 2026 compared to last year, and then it will basically fade away because we will be more closer to current levels with last year levels. Other than that, too early to say. I said, some market share recovery, Construction Europe, paint, others are still in the middle. Automotive, for sure, we will see growth in EVs and battery materials in general. U.S. for me remains still a question mark, so to be seen. On the impairments, it's very simple. The business RAC carries a goodwill, which derives from old acquisition. And the assessment of today's market conditions, and we can discuss basically is an acknowledgment that there is a new normal, especially in Europe after the energy crisis and increased competition from Asia. The value in the books did not -- the goodwill did not represent the real value. So we took this accounting entry. As I said, it's noncash. It has no impact on the company itself. It's a correction. It's an exercise you do every year at the end of the year, which automatically means for all other businesses, we see no need for this. Otherwise, we would have done it. And I think what is important to note is that the business, which suffered in '24 and in '25, as you have seen, if you look back at our previous communication, finally stabilized and even is starting to recover. We had organic growth in Q3 and in Q4. The antidumping measures are in place. They were temporary before. They are in place. Yes, they are less than we expected because there are free quotas for some volumes, but they will bring some relief to this industry in Europe in the future. So I think this business remains solid and should probably post some positive news going forward. I think we addressed... Pierre Lebreuil: Let me add as well, the RAC business area in addition, as our other business area will benefit from the horizon plan, which you need as well to factor in Europe. Alessandro Dazza: Absolutely. Competitiveness of the group will be improved, thanks to our cost and performance improvement program, so that will give us an extra competitive lever going forward. Operator: Next question is a follow up from Sven Edelfelt, ODDO. Sven Edelfelt: Yes. It's me again. Sorry to come back. I want to better understand this question for Ebrahim on the goodwill. So this EUR 467 million is coming from Kerneos. But I don't think actually Kerneos profit is lower than 10 years ago. I know you bought it in 2017, but I'm not sure Kerneos profit is lower than 10 years ago because of the current EU-ETS on the clinker price surge across Europe. So is it because the Kerneos goodwill has been spread across the RAC business unit? Or is it because Kerneos exposure to China? Just to clarify. And then I would have a follow-up on the lithium project. I'm a bit surprised by the valuation of the project, EUR 150 million or EUR 160 million, if you take into account how much the French state has invested. So is there a commitment from the state to fund more of the project in the coming year? Can you perhaps elaborate on this optionality? Alessandro Dazza: Sven, I'll let Pierre comment on the concept of goodwill on the business. Pierre Lebreuil: Yes. Indeed, as you rightly pointed out, goodwill are tested only at business area level, so at RAC level. So the fact that we are now booking an impairment for RAC, you are correct when stating that this goodwill originated from Kerneos acquisition in 2017. But still, we are testing globally the goodwill for RAC. And it does not mean whatsoever that this goodwill impairment is related to a weak Kerneos business. As you understood and as previously mentioned, we are far more suffering from Chinese competition in our Fused Minerals business than in our cement business. Alessandro Dazza: Correct. Thank you, Pierre. And the -- let's say, the acknowledgment of this change in market condition is really after the spike in energy in Europe, which did not happen in Asia. So the market has changed in competitive terms between Europe and Asia, and that's mostly the high energy intensity products like Fused Minerals. On EMILI, we did not disclose any value, and so I do not comment on the value. And I can confirm that there is no commitment in any form of any of the partners to continue, just a will to work together to develop this project, and we will take decisions when they come. Maybe, Sven, what you correctly noticed is I believe the state today enters or entered at a time where lithium prices were very low and therefore, probably did a good deal joining the project in early stages. Today, I think our project has a higher value. So we will try to find new partners because we want to rapidly ramp it up and do it. So we will need new partners, as we always said. But I am convinced that the cost of joining the project will change given the much better expectations that the market has developed. And you see also in the value of companies producing and selling lithium that have really increased significantly over the last few months. So -- but we will, with our partner, go step by step as we have decided. Sven Edelfelt: Okay. So -- but can you confirm that the EUR 150 million price roughly is based on the lithium price of $20, not $10? Alessandro Dazza: No, no, because I don't confirm neither the value nor -- betting on future prices is complicated. So everybody can do his own guess. So there is -- but a deal closed now started for sure, several months ago. And therefore, the starting point was a lower lithium price for sure. That's why I'm saying going forward from now on, I believe the EMILI project has a much higher value because people believe in $20 today. When you are at $10, it's difficult to -- I always believed in $20 per kilo because I think that's the price that the world needs to allow projects to start, to be profitable. Not too expensive, it cannot be $50, $100 or $80 as it was because then cars, batteries will become too expensive, but you need a minimum price to allow projects to exist, to be profitable and therefore investors to invest. And for me, it's anything between $20 and $30. So that's where we are now. It's good for the future. And based on this, we will value the projects going forward. Operator: [Operator Instructions] Gentlemen, we have no more questions registered at this time. Alessandro Dazza: Thank you. I see on the screen, we have a question on cash generation for '26. I'll answer it quickly. I would like to compare rather to '25. I believe '25, we had an alignment of events that were fundamentally negative or impacted negatively our cash generation. We spent more than EUR 50 million on the lithium projects on strategic -- what we call strategic CapEx. It will not recur in '26. As we just said, one project is paused. The other one is financed to move forward. We had an increase in working capital, EUR 26 million, as Pierre showed in the previous -- in one of the previous slides, mostly because we expected a strong sales development in RAC when the duties were introduced, the antidumping duties. It didn't come. So we will reduce this inventory. So first, there will be no growth of inventories. On the contrary, this effect should even reverse because we will adjust to the new market, and therefore, it will help significantly '26 cash generations. We did not receive dividends from our main joint venture. I remind you that TQC invested in capacity expansion in '24 and '25 in the U.S. first and in Norway afterwards. As said, therefore, we decided with our partner in 2025 to pause dividends. But the capacity is concluded. The capacity expansion is concluded. Ahead of us, we have a business that will continue to deliver solid net income, solid EBITDA above 30% as we have seen in '26 -- in '25, sorry. So there will be solid cash generation and therefore, pending, of course, agreement with our joint venture partners, but I do believe there will be room to restart paying dividends from this fantastic business. We will pay a lower dividend in '26 compared to '25, which again will generate cash generation for the group. And as you have seen and somebody of you asked, CapEx -- running CapEx day-to-day are under control, and I do not expect a significant increase next year. Therefore, in terms of paid, we will see this level coming down to a more what we book you pay, whereas we are still coming from higher booking and therefore, higher paying than booking. So in general, I think we will see a significant positive improvement in 2026. And I hope I have addressed the question. If there are no further questions, we will close. Let's allow our room to confirm, please. Operator: We have no further questions registered at this time. Alessandro Dazza: Thank you very much. Then thank you again for dedicating this hour to Imerys, and we wish you all a good day. Thank you. Pierre Lebreuil: Have a good day.
Operator: Good afternoon, ladies and gentlemen, and welcome to the Rimini Street Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, February 19, 2026. I would now like to turn the conference over to Dean Pohl, VP, Treasurer and Investor Relations. Please go ahead. Dean Pohl: Thank you, operator. I'd like to welcome everyone to Rimini Street's Fiscal Fourth Quarter 2025 Earnings Conference Call. On the call with me today is Seth Ravin, our CEO and President; and Michael Perica, our CFO. Today, we issued our earnings press release for the fourth quarter and fiscal year ending December 31, 2025, a copy of which can be found on our website under the Investor Relations section. A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables following the financial statements in the press release. An explanation of these measures and why we believe they are meaningful is also included in the press release and our website under the heading About Non-GAAP Financial Measures and Certain Key Metrics. As a reminder, today's discussion will include forward-looking statements about our operations that reflect our current outlook. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today. We encourage you to review our most recent SEC filings, including our Form 10-K filed today for a discussion of risks that may affect our future results or stock price. Now before taking questions, we'll begin with prepared remarks. With that, I'd like to turn the call over to Seth. Seth Ravin: Thank you, Dean, and thank you, everyone, for joining us. Fourth quarter and full year results. Our fourth quarter results reflect solid execution and continued accelerating sales growth adjusted for the Oracle PeopleSoft support and services wind down. We grew our core Rimini Support subscription billings and launched our next-generation Agentic AI ERP solutions. Overall sales bookings and billings continue to improve, and we delivered strong ARR subscription renewals as well. We closed 19 new client transactions over $1 million in TCV and totaling $58.1 million compared to 22 transactions totaling $51.9 million last year. We added 73 new logos that included household global and regional brand wins. We saw accelerating momentum in bookings, pipeline and RPO throughout the second half of 2025, reinforcing our confidence in delivering growth in 2026. ERP software is dead, the rise of Agentic AI ERP. ERP software is peaking technically, and we will deliver new ERP capabilities and ERP process execution faster, better and cheaper with more agility and speed to market, leveraging Rimini Street's Agentic AI ERP solutions. Meanwhile, we will keep existing ERP software releases delivering value for many years to come at significant savings. Our Agentic AI ERP solutions can be easily and quickly deployed over the top of existing ERP software without the cost or risk of unnecessary ERP software upgrades, migrations or replatforming. Rimini Street can reduce operating costs by up to 90% for existing ERP software landscapes, allowing clients to bank the savings or reinvest the savings into Rimini Street's Agentic AI solutions to modernize rather than replace their current ERP infrastructure. We're positioning Rimini Street as the bridge between existing traditional ERP software infrastructure and the capability and benefits of modern AI innovation, and we expect growing subscriptions for both Rimini Support as our core service offering and our new AI for the real-world service offerings to fuel top and bottom line growth in 2026. Key benefits of Rimini Street's Smart Path vision, model and offerings include funded innovation model. Rimini Street's support model frees up capital that organizations previously spent on mandatory software vendor upgrades, allowing them to reinvest in AI-driven high ROI projects, layering over existing ERP systems. Instead of migrating to new software products, releases or platforms, Rimini Street promotes layering AI and automation on top of existing, customized and stable enterprise ERP software. Strategic partnerships and alliances. Collaborations with AI platform companies such as ServiceNow allow Rimini Street to offer advanced AI-powered agentic solutions that automate business processes without requiring any upgrades, migrations or replatforming such as having to buy and implement a new SaaS subscription. Innovative support services. Rimini Street uses its own proprietary AI applications, including reductions of more than 23% in case resolution time. Risk and cost avoidance. Clients can avoid the risks and cost of unnecessary ERP upgrades, migrations and SaaS implementations while receiving support for existing, stable and highly customized code that ERP software vendors often refuse to include in their standard support contracts. Introducing Rimini Agentic UX solutions powered by ServiceNow. Also during the fourth quarter, we announced the release of our first 20 Rimini Agentic UX solutions developed through our partnership with ServiceNow and designed to deliver Agentic AI ERP capabilities over existing Oracle, SAP and other ERP systems without requiring upgrades or migrations. These solutions are already in production and are helping clients achieve significant operational gains, including 50% to 60% faster approvals, 70% to 80% reduction in order cycle times, improved audit readiness and greater than 95% data accuracy. Each solution targets a specific ERP process challenge, spanning sales, procurement, logistics, faster data, finance, maintenance and compliance and delivers ROI in days or weeks compared to the months or years required for traditional ERP upgrade or migration projects. For example, our client Molida Group reported meaningful streamlining of SKU master data creation using Rimini's AI-assisted workflows, validating the platform's ability to simplify historical manual processes. Rimini Street positioned Agentic AI ERP as the next evolution of enterprise systems, arguing traditional ERP software is peaked in value and lacks the agility organizations need. Instead of costly vendor-mandated upgrades, the company's Rimini Smart Path enables clients to redirect existing budgets towards rapid automation and innovation. Agentic AI ERP transforms ERP from a system of record into a system of action, enabling exponential efficiency gains and empowering organizations to modernize processes, reduce costs and accelerate growth, all without disruption. Partner and alliance ecosystem progress. We continue strengthening our ecosystem of global partners and alliances, including technology, service and channel relationships. These partnerships extend our reach, bring complementary expertise and help clients execute modernization strategies that combine Rimini Street support with world-class platforms, cloud services and AI tooling. This ecosystem is becoming a strategic multiplier for us, accelerating adoption, expanding influence and enabling shared go-to-market opportunities. Summary, we will build on our 2025 investments, success and momentum and help clients navigate business and technical complexity in the age of AI, reduce costs, reduce labor requirements and improve operational performance across ERP and enterprise software landscapes, establishing and protecting competitive advantage without software vendor-driven cost, risks or constraints. Now over to you, Michael. Michael Perica: Thank you, Seth, and thank you for joining us, everyone. Q4 and fiscal 2025 results. Our fourth quarter results reflect solid execution and early signs of momentum, highlighted by record remaining performance obligations, RPO, growing 11.1% year-over-year. Full year 2026 billings, excluding support services for Oracle PeopleSoft software products, increasing 4.2% and annualized recurring revenue, ARR, increasing 3.1% year-over-year, excluding support services for PeopleSoft products. We ended the year with a strong cash position and a stronger balance sheet. Our capital allocation actions included ongoing share repurchases. Regarding client retention, as our full suite of support becomes increasingly integrated with our Agentic AI solutions, we are enhancing client retention while providing clients with what we believe is a clear lower risk path to innovation and modernization of their existing ERP environments. Revenue for the fourth quarter and the full year 2025 was $109.8 million and $421.5 million, respectively, a year-over-year decrease of 3.9% for the quarter and a decrease of 1.7% for the full year. Excluding support services for PeopleSoft products, revenue decreased by 0.4% for the quarter and increased 1% for full year 2025. Fourth quarter 2025 included a onetime $2.1 million revenue recognition, while fourth quarter 2024 included a onetime revenue recognition of $5.4 million. Excluding all the aforementioned items, Q4 revenue grew 2.6% for the quarter. Annualized recurring revenue was $411.4 million for the fourth quarter, a year-over-year decrease of 0.8%. Our revenue retention rate for service subscriptions, which makes up 96% of our revenue, was approximately 88%, with approximately 86% of subscription revenue noncancelable for at least 12 months. We note that for the full year 2025, FX movements negatively impacted our total revenue by 0.01% compared to a negative impact of 1.3% for 2024. Billings for our fourth quarter were $171.3 million, relatively flat year-over-year and full year 2025 billings were $427.9 million, an increase of 1.2%. Full year billings, excluding billings associated with support services for PeopleSoft products, increased by 4.2% on a year-over-year basis. Gross margin was 60.4% of revenue for both the fourth quarter and the full year 2025 compared to 63.7% of revenue for the prior fourth quarter and 60.9% for full year 2024. On a non-GAAP basis, which excludes stock-based compensation expense, gross margin was 60.8% of revenue for the fourth quarter and 60.9% for full year 2025 compared to 64.0% of revenue for the prior year fourth quarter and 61.3% for full year 2024. As previously mentioned, both the current and prior year fourth quarters included onetime revenue recognition of $2.1 million and $5.4 million, respectively, which positively impacted revenue, gross margin and earnings. As noted during our Investor Day presentations last December, our use of innovation and other analytics deployed on top of our existing systems of record provides us with confidence in our ability to build from this current gross margin level. Operating expenses. Reorganization charges associated with optimization costs for the fourth quarter were $2.6 million and for full year 2025 were $4.5 million. Sales and marketing expense as a percentage of revenue was 37.7% for the fourth quarter and 36% for full year 2025 compared to 32.8% of revenue for the prior year fourth quarter and 34.9% for full year 2024. On a non-GAAP basis, which excludes stock-based compensation expense, sales and marketing expense as a percentage of revenue was 36.8% for the fourth quarter and 35% for full year 2025 compared to 32.2% of revenue for the prior year fourth quarter and 34.4% for full year 2024. General and administrative expenses as a percentage of revenue, excluding outside litigation costs, was 15.8% of revenue for the fourth quarter and 16.6% for full year 2025 compared to 16.3% of revenue for the prior year fourth quarter and 17% for the full year 2024. On a non-GAAP basis, which excludes stock-based compensation expense and litigation costs, G&A was 14.7% of revenue for the fourth quarter and 15.4% for full year 2025 compared to 15.1% of revenue for the prior year fourth quarter and 15.7% for full year 2024. Outside litigation cost was $21,000 for the fourth quarter and for full year 2025 was $4.8 million compared to $675,000 for the prior year fourth quarter and $6.1 million for full year 2024. During 2025, as part of the Oracle litigation settlement, we received $37.9 million of the $58.7 million in legal fees we previously paid to Oracle during 2024. Going forward, we do not expect litigation expenses to be material and will be included in the G&A line item moving forward, obviating the need to disclose these expenses separately in our income statement. Net income attributable to shareholders for the fourth quarter was $724,000 or $0.01 per diluted share compared to the prior year fourth quarter of $0.07 per diluted share. Full year 2025 net income was $0.39 per diluted share compared to a net loss of $0.40 per diluted share for full year 2024. On a non-GAAP basis, net income for the fourth quarter was $6 million or $0.06 per diluted share compared to the prior year fourth quarter of $0.12 per diluted share. Full year 2025 non-GAAP net income was $0.23 per diluted share compared to net income of $0.48 per diluted share for full year 2024. Our non-GAAP operating margin, which excludes outside litigation spend, reorganization costs and stock-based compensation, was 9.3% of revenue for the fourth quarter and 10.5% for full year 2025 compared to 16.7% for the prior year fourth quarter and 11.1% for full year 2024. Adjusted EBITDA, as defined in our earnings release, was $11.5 million for the fourth quarter or 10.4% of revenue compared to the prior year fourth quarter of $20 million or 17.5% of revenue. Full year 2025 adjusted EBITDA was $49.8 million or 11.8% of revenue compared to adjusted EBITDA of $53.1 million or 12.4% of revenue for full year 2024. Balance sheet. We ended the fourth quarter of 2025 with a cash balance of $120 million compared to $88.8 million of cash for the prior year fourth quarter. On a cash flow basis, for full year 2025, operating cash flow increased $60.2 million compared to the prior year 2024 decrease of $38.8 million. The results include litigation settlement proceeds of $37.9 million during 2025 and litigation-related expenses of $58.7 million during 2024. Additionally, the effect of foreign currency translation was favorable by $2.8 million and unfavorable by $8.2 million for full year 2025 and 2024, respectively. Deferred revenue as of December 31, 2025, was $288 million compared to deferred revenue of $281 million for prior year 2024. Remaining performance obligations, RPO, which includes the sum of billed deferred revenue, contract assets and noncancelable future revenue was $653 million as of December 31, 2025, compared to $588 million for prior year 2024, an increase of 11%. When excluding RPO related to support services for PeopleSoft products, the year-end balance increased 12%, reflecting our building momentum with both new bookings growth and longer duration commitments. PeopleSoft support wind-down update. As we discussed during last quarter's earnings conference call, our settlement agreement with Oracle provides, amongst other obligations and terms between the parties that the company will complete its previously announced wind down of its support and services for Oracle's PeopleSoft software no later than July 31, 2028. We have made progress in reducing both the number of PeopleSoft support clients and related revenues since announcing the wind down. Revenue from PeopleSoft Support services was 4% of revenue for the fourth quarter and 5% for full year 2025, down from 8% of revenue when we began the wind down during the second half of 2024. Business outlook. The company is providing first quarter 2026 revenue guidance to be in the range of $101.5 million to $103.5 million and reiterating full year 2026 guidance as communicated at our Investor Day for revenue growth in the 4% to 6% range with adjusted EBITDA margins in the 12.5% to 15.5% range. For additional information, please see the disclosures in our annual report on Form 10-K filed today, February 19, 2026, with the U.S. Securities and Exchange Commission. This concludes our prepared remarks. Operator, we'll now take questions. Operator: [Operator Instructions] Your first question comes from the line of Brian Kinstlinger from AGP. Brian Kinstlinger: The implied revenue change in the first quarter of '26 is about a 1.5% year-over-year decline, plus or minus. the obvious math is that the year-over-year comparisons are going to have to grow more than 4% to 6% for the remaining 3 quarters in 2026. So I'm curious as to the visibility of this, not only return to growth, but exiting the year close to 6%. Is it supported by expected new business wins or already signed business wins? And then remind us, once a contract has been awarded to Rimini, whether it's traditional maintenance or your new Agentic AI offering, how quickly does it begin and then ramp? Seth Ravin: Sure, Brian. Good to hear from you. We expect that the Q1 numbers will obviously be a component of what was signed in Q4 because these are subscription contracts rolling into Q1 and of course, business that we would expect is already closed. So given that and where we report versus Q1, we do expect that these numbers are very solid. That's why the range is pretty tight. I'll let Michael go ahead and add on top of that. Michael Perica: Yes, Brian. would keep in mind, of course, that there is the PeopleSoft component in that guidance. This is on a GAAP perspective, right? So when excluding into Q1, the PeopleSoft component, which will be down year-over-year and expected down sequentially as we run off we would -- we do expect it to be a growth period. Now for the remainder of the year, the answer is certainly, we do expect an acceleration. And we have, I would say, improved visibility relative to entering the year in the last couple of years. So certainly a higher confidence factor in our top line guidance. Brian Kinstlinger: What gives you that visibility? Is it a backlog? You've already won contracts? Is it you're excited about the new product and new salespeople? What gives you that improved visibility, particularly? Seth Ravin: No, go ahead, Michael. Michael Perica: Certainly highlighting, as we noted, the momentum. We've had a few quarters in a row here with our growing TCV, obviously laying down the foundation, giving us a higher base. The sales momentum that has been built by Mr. Hershkowitz, and with Seth as well. That, as well as our expanded suite of offerings, the conversations that we're having with our clients with regard to alternate road maps are giving us the combined increased confidence in this year. Seth Ravin: On top of that, Brian, was the -- if you look at the close rates in the fourth quarter, we actually increased our close rates to over 30% of pipeline. So I think we saw, again, a better visibility, as Michael was saying, not only around the pipeline, but a better confidence in the future ability of the close rates based on growing win rates against those pipes. Brian Kinstlinger: Okay. Just the last part of the question. Suppose you win one of these Agentic AI projects, if you will, or contracts, how quickly does that contract start? And how quickly does it ramp? And are these very sizable contracts that will move the needle? Or are they going to start small? Seth Ravin: Well, I think they're going to be all different sizes, Brian. I mean we've been doing projects already on Agentic AI. We've already been doing them for several months. Those projects have bringing -- they're bringing in both professional service revenue, which you get right away because we're delivering the service, being able to take that revenue. And then there are subscription components, which could then take a little longer to ramp in terms of the revenue. So I think you're going to get a mix of services that come in with each of these projects. And that means we should see accretive capabilities faster than you normally would just under the subscription agreements. Operator: Your next question comes from the line of Richard Baldry from ROTH Capital Partners. Richard Baldry: We look at both the COGS line and the sales and marketing lines, the absolute dollar spending came in pretty well above recent trending levels. Are there any onetime items in there? Or do you view this as sort of a new level to hit ahead? And then maybe more specifically in the sales and marketing, how much of that is maybe new heads being brought on or as a result of better billings? Seth Ravin: Sure, Rich. I think you're seeing an investment in both points. I think you're seeing us ramp up a little bit in the sales and marketing because we have new products and services to bring to market. So you're definitely going to see that. And when you look at 2026, we're looking at going from roughly mid-70s in terms of number of sellers at the company in 2025. We're in the process of hiring roughly 20 new sellers to get us into the early 90s so that we can be in a position to meet the demands that we see coming down in the pipeline. We also took a step of raising quotas for our sellers around the world, averaging 12% to 15% increases across the board. So we're doing several things to increase quota-carrying capacity. We also increased our marketing spend a bit just because we're launching the whole Agentic line. that, of course, takes some money to go out there and get the customer base moving to get the pipelines built. Those are not new levels that we're expecting to keep. We have always said that we expect eventually at scale, which we've described in the past as being somewhere around $1 billion of annualized sales that we're going to be in a position to see somewhere around the mid-30s, 33% to 35%, somewhere in that range. As far as G&A, we're going to continue to drive down costs. The litigation costs have come down substantially. We've even reduced the size of our internal litigation team, but there are still costs of compliance and wind downs of PeopleSoft, et cetera, that will continue on for at least the next couple of years. Richard Baldry: And then when you look at any preliminary evaluation of the sales pipelines or win rates in the early stages of litigation being behind you, are there any changes or like top of funnel new logo trending that is you think you can sort of tie to the exit from the litigation past? Seth Ravin: I definitely do, Rich. I think, again, it's more anecdotal. It's very hard to statistically tie it. But I think if you look at the fact that we reached a settlement in July of 2025, and you look at the increase in pipes, you look at the increase in win rates, the fact that we're making these additional moves and making investments in growing the sales team, I think that we're seeing win rates that are some of the highest we've ever seen. We expect those to continue to rise based on our analysis. And I think you're seeing us win deals that I truly don't believe we would have won on the support side, for example, even a year ago. I think we're bringing in some brand names, and we're seeing those cycle times of getting the deals done much faster because we're not having to answer and go through the normal diligence cycles around the litigation. And we're seeing that meaningfully reduce the cycle time to get a deal closed. Richard Baldry: Last for me, if your typical seasonality of collections holds, you could end next quarter with well over $1.50 in cash per share. But contrast that to the severe valuation pressure small-cap tech seen due to the emergence of generative AI. Can you talk about how aggressive you'd be willing to be on the buyback side of the table? Because it seems like you're gaining momentum on the market valuations across the board, not just you specifically, but have seen some pretty severe pressure. It seems like you're in an unusual opportunity where you could get pretty aggressive on that front. Seth Ravin: Sure, Rich. I think that as we've said before, I think everybody knows we're very focused on shareholder value, shareholder return. Post litigation settlement, we've been in a position to rethink what surplus cash looks like. And I think we're continually looking for opportunities that we believe will drive that shareholder return. But as you know, when it comes to stock buyback, it's a little bit complicated. You're limited by the share volumes. You've got calculations, you've got covenants from lenders, et cetera. All those things weigh in, including MMPI and if we have any restrictions. So it is not as simple as saying we would love to put as much money in cash as we have in surplus towards buying stock if it's truly an undervalued asset. We have to look at multiple ways to define shareholder value. And I think, Michael, you probably want to talk a little bit more on that on some of the recent moves we've made. Michael Perica: Yes. We're certainly -- we do share that sentiment, right, that there is value here, as Seth noted, with regard to our surplus, we do evaluate all of the factors around capital return, which you do very well know we have done the last couple of open windows. We did recently earlier this month, pay down another avenue that we assess deployment of our surplus our term debt by $5 million earlier this month. So we look at all these opportunities to utilize our surplus. But of course, we are highlighting our confidence entering this year. We also do feel comfortable and are looking at reinvesting in the business to continue our momentum and really drive the growth. Operator: Your next question comes from the line of Derrick Wood from TD Cowen. Andrew Sherman: It's Andrew on for Derek. On your -- Michael, RPO was a strong 12% ex PeopleSoft that accelerated from 9% last quarter. Any specific drivers of that? And this is well above your revenue growth guide? Is this just conservatism? Or is there any reason why it would take longer to translate into a higher revenue number? Michael Perica: No particular trend that altered from last quarter with regard to the constitution on the duration of our RPO. We believe, again, this is giving us increased confidence, right, in being able to at least achieve and potentially beat on the top line our expectations. But again, 2 quarters doesn't make a long-term trend, but we are encouraged by the momentum. Andrew Sherman: Yes, that's great. And then, Seth, on the go-to-market front, it would be great to hear how you're feeling about sales productivity. You talked about adding a lot of sales capacity. And how is the hunter farmer model progressing in North America? And do you think you can get the North American business back to stronger growth this year? Seth Ravin: Sure. We definitely saw increasing sales across North America in Q1 and Q2, Q3 and topping it in Q4, setting the stage again for a much stronger '26. I think as we all discussed on the Analyst Day, the bigger challenge has not been the new client invoicing growth. It has been the retention. We had higher retention losses in '25 than we expected. And of course, that flowed through the revenue numbers as well. So from our point of view, we're watching, we believe, a stabilization in North America. I don't think we would have raised quotas across the board on the sales team, all the way up through sales leadership, all the way up through Steve Hershkowitz number himself and that we have to deliver. So we're definitely feeling bullish enough to raise quotas. We're feeling confident enough to add another 20 sellers into the mix so that we have the capacity coming into the back half of the year, which, as you know, is our strongest sales quarters. So I think we're doing the things and making the investments based on that confidence that we will drive higher numbers all through the year, but of course, especially in the back half of the year. Operator: Your next question comes from the line of Alex Fuhrman from Lucid Capital Markets. Alex Fuhrman: Curious, do you expect the return to growth this year to be driven more so by increasing acceleration growth of new clients or better retention? Or is it really more about higher spend per customer as more clients adopt the new Agentic AI offering? Seth Ravin: Alex, I think we have a combination of them. We expect to see, as we already talked about for the fourth quarter, we have growing support sales. And the reason for that is the software vendors are creating environments that are really pushing customers to do new versions, to go to new releases, to switch over to SaaS and subscription licenses when they've already paid for their perpetual license. You have a lot of things going on in the mix. And our ability to come in and stabilize that environment and guarantee support through 2040 and beyond for existing software and then to be able to show them the path forward with the Agentic AI on top, this is a combination that's giving them a road map and a visibility to go decades into the future and that is creating a lot of comfort from the customers to be able to move forward with our total vision and solution. And so yes, I do think it's going to be a combination of those services. But as you saw in the Investor Day, we're about 87% of revenue comes from support, about 13% from our optimized services. And now we have the entirely new accretive innovation services. And I think we're going to start putting those numbers on the board, of course, in '26, and you're going to see those numbers start to grow in all categories. I think this is a fact that customers are coming to us for all different services, even including our security services, which are well known as well as our interoperability, all these things that are coming in and are required in order to connect big ERP systems and core transactions to the rest of what's going on in AI, and we intend to be the leaders in AI for the ERP systems. Alex Fuhrman: Great. That's really helpful, Seth. So as revenue growth accelerates after Q1, do we expect to see that growth in active customers also accelerate at a similar pace throughout the year? Seth Ravin: I would expect to see, again, growth both on the new customer line where you're going to see more logos, new logos coming on. I do think that the hunter farmer model in North America is generating results. It took a little while. I think we all know every time you switch customers around with new sellers, you reorganize your sales operation, those operations always, always have some lag time, always are slightly disruptive. And I think we're seeing the disruption end. I think we're seeing the results start to improve. And we're confident that we're going to see good results from that model, not only across North America, we're using that model now in Latin America as well. So all of the Americas is using the Hunter Farmer model, and we're looking at other deployments in different countries around the world. Operator: Your next question comes from the line of Daniel Hibshman from Craig-Hallum. Daniel Hibshman: This is Daniel on for Jeff. Seth, maybe just starting off on the adoption to date on Rimini Agentic UX. I know that came out in December, and then we had the GA here in January of the 20 additional solutions. You talked on this call about a few specific adopters. If you could help us understand the scale of that adoption. Are we talking about a handful of early adopters? Are we talking dozens? Just what stage those are at as well, whether we're talking pilots or full-scale production? Seth Ravin: Sure. I think you start off with the walk before you jog before you run. I think customers, as you well know, are so overwhelmed with the pace of change between whether there's an anthropic release or something is going on at ServiceNow or there's an acquisition, they can't keep up. This is why we've been focusing on this concept of AI for the real world. These are tools that we use when they're appropriate. The highlighting of our 21st solutions of our Agentic UX solutions really was about saying we are focused on solving business issues. We are not focused on trying to get customers to adopt a particular platform for AI. There's a lot of confusion within customers and competing platforms. So we're focused on here's the solution to a particular business problem. And oh, by the way, you can choose your platform. Of course, our preferred platform is ServiceNow. We have a close partnership with Bill McDermott and the team over there. And so I think you're watching customers very interested, very interested in the path I think they're still learning and they're getting their heads around what are we doing here. This is a different architecture. And if you look at even SAP is advocating the same architecture as we are, which is don't make changes to the software code itself, do your changes above the software code in the new Agentic layer. So we're in alignment with that architecture. The customers have never seen this before. And so this is going to take a little bit of while for everyone to really understand how these technologies work together, look at the architecture. They have their people on the ground, their technical people, try to review them. But from a business perspective, the fact that we are able to solve these problems faster, better, cheaper, get the cost of operations for an ERP system covering the world down by reducing the amount of labor required, increasing the speed to market, increasing agility in a world that's very, very disruptive right now. Those things can make a real difference in competitive advantage. So they're very interested in what we're bringing to the table. We just got to give them a little bit of time to digest them. We'll start getting these projects installed. You'll start building a reference-able customer base as we're already doing. And then that will, again, allow you to get more into that hockey stick mode, which I think is more towards -- starts more towards the back half of this year. But I think everyone needs to understand AI is such an overwhelming component of change for the business world that it's going to take a while for all this to get adopted. Daniel Hibshman: And then, Michael, on the model, just the $5 million beat very nice. I know -- I think you called out that was $2.1 million, if I heard correct, that was onetime. Just anything else to call out in terms of the sources of strength on the quarter? And then also your thoughts on why that didn't flow into the -- I believe EBITDA was around the midpoint. Just your thoughts on the flow-through. Michael Perica: So no other elements up and down the P&L that I would call out or worth noting that would be onetime-ish nonrecurring in nature of any size. The drop-through to the bottom line, both this year, the $2.1 million and the last year from a revenue was fairly significant as these were longer-term commitments where we performed on our end and were released on our ability our need to perform in the future. So that revenue got pulled into this period versus 1 to 2 years out. So yes, there was contribution to the bottom line. Operator: There are no further questions at this time. I'll go ahead and turn the call back over to Seth Ravin for closing comments. Sir, please go ahead. Seth Ravin: Great. Thank you very much, and thanks, everyone, for joining us. We will be back and talking to you about Q1 earnings pretty fast and look forward to having you all join then. Thank you very much, everybody, and have a great day. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.
Operator: Good morning, ladies and gentlemen, and welcome to the Air Liquide Full Year 2025 Revenue Conference Call. [Operator Instructions] I will now hand over to the Air Liquide team. Please begin your meeting, and I will be standing by. Aude Rodriguez: Thank you, and good morning, everyone. This is Aude Rodriguez, the Head of Investor Relations. Thank you very much for attending the call today. Francois Jackow and Jerome Pelletan will present the performance of the full year 2025. For the Q&A session, they will be joined by Emilie Mouren-Renouard and Adam Peters, both Group VP overseeing, respectively, EMEA and North America. Adam is on the phone with us from the U.S. In the agenda, our next announcement is on April 28 for our first quarter revenue. Let me now hand you over to Francois. François Jackow: Thank you, Aude, and good morning to all of you. It is a real pleasure to be with you today for this earnings call. This past year, Air Liquide has reached new heights in both operational excellence and financial performance. The inherent strength of our operating model, coupled with the transformation momentum driven by our teams, has delivered robust performance across all key metrics. This is particularly significant, given the ongoing macroeconomic and geopolitical headwinds. Let's look at the specifics. Sales grew plus 2% on a comparable basis. This proves our ability to capture growth even in a complex environment. Our focus on operating discipline is delivering clear results. It reflects more and more the visible contribution of the transformation momentum throughout the organization. We achieved a record Gas & Services OI margin improvement of 130 basis points, excluding energy pass-through. At the group level, the 100 basis point improvement keeps us firmly on track to meet our 2026 commitment of plus 460 basis points in 5 years. This operational leverage translated directly to the bottom line with recurring net profit growing by plus 10%, excluding currency impact. Our recurring ROCE continues to rise above 11%. Sustaining this momentum while simultaneously scaling up our investments is a testament to our disciplined capital allocation and, of course, improve performance. Our ability to generate cash has again improved. Cash flow is growing at plus 8%, excluding currency impact, providing us with significant strategic flexibility. Our performance is equally strong on extra financial fronts. We achieved record safety levels. We also further decoupled growth from carbon with CO2 emissions now 13% below our 2020 baseline, and the carbon intensity had been reduced by 46% in 10 years. Finally, our investment backlog remained at a record high of nearly EUR 5 billion in spite of the exit of the ExxonMobil Baytown project. This is more than 15% above last year. These are committed, signed projects already under construction effectively locking in our future growth. Our investment portfolio of 12 months opportunities is also at a record high level of EUR 4.6 billion. As these results demonstrate, Air Liquide is steadfast not only in delivering profitable growth regardless of the macroeconomic conditions, but also preparing for the next phase of growth. This is a structural strength of the group. 2025 marks the end of the 4-year strategic ADVANCE plan. You see on Slide 4 that we have successfully delivered on all 3 objectives of our ADVANCE strategic plan: Growth, first, with over 6% average annual sales growth on a comparable basis versus 2021, we have exceeded our midterm ambitions. Returns, our recurring ROCE has remained consistently above 10% since 2022, hitting this target a full year ahead of schedule. Decarbonization. Finally, with 3 consecutive years of absolute CO2 emissions reduction, our emissions are now 13% below 2020 level. We have officially reached the inflection point we projected for 2025. In summary, the ADVANCE plan has met its objective across all horizons. In the current supply environment, this track record demonstrates our ability to deliver consistent results. It is the foundation upon which we build our next chapter with confidence. On Slide 5, you see one of the reasons to be confident. The acceleration in margin improvement you see here is a direct result of our evolving culture of operational excellence. Looking at the graph, the progression is clear. We shifted gears during 2017, 2021 period, stepping up our performance to plus 240 basis points versus 50 basis points in the previous 5 years. Under the ADVANCE plan, we have accelerated once again. With a national 100 basis points delivered in 2025, we are now fully on track to reach our record-high target of plus 460 basis points by the end of 2026. This momentum proves our ability to structurally enhance our profitability year after year. And there is more to come. And the reason why there is more to come is that our margin expansion is underpinned by the structural transformation program we launched in mid-2024. In 2025, we shift from design to full-scale execution, leveraging data and AI to drive structural efficiency. Here are some examples across each of our 4 pillars. First, streamlining the organization. We have simplified our structure, reducing by up to 3 management layers. In the past 18 months, we have reduced our global headcount by 5%. This is without taking into account the new restructuring projects announced in 17 European countries this past December. This will secure midterm synergies as they are fully implemented. Second, industrial excellence. Our new performance management system is now 100% deployed, creating a unified global standard for operation benchmarking. It is designed to continuously boost our performance across more than 400 industrial sites and covering the full value chain. Another example is our end-to-end optimization for liquid gases, which is already rolled out at 45%, significantly reducing our industrial and supply chain costs. Third, Global Business Services, GBS. We have eliminated subcritical smaller GBS and expanded our reach with a fourth state-of-the-art GBS center located in India. GBS headcount has grown by plus 35% as we migrate tax from local operations to specialized hubs. We have now secured 25% of our targeted savings from this initiative. As you see, there is more to come. Finally, commercial initiatives to transform customer care to AI-driven automation. Five major projects are now in the rollout phase, including the AI powered streamline processing of over 17,000 daily customer e-mails and orders in Europe and in the U.S. This transformation program is still in its early stages but the momentum is clear. Leveraging our customer-centric and employee engagement culture, we are building a leaner more disciplined, more standardized, more data-driven and more agile Air Liquide. On Slide 7, as a matter of fact, I want to highlight the strength of our human and social commitments, which are foundations of our long-term success. Safety excellence. We achieved the lowest lost time accident frequency rate in our history. It represents a 60% reduction over just 2 years. Why? I am personally proud of this progress by our teams. Safety remains an absolute priority. And our ambition remains unchanged, 0 accident. Social impact. Under the ADVANCE plan, we have reached several milestones in our social commitment. We have significantly increased the representation of women in management, leading the industry by example. I am also pleased to announce the full deployment of our common social care coverage across every country where we operate. Finally, community engagement. We have successfully scaled our global program to support local communities, ensuring our growth, create a positive impact wherever we are present. These achievements are the tangible evidence of Air Liquide's commitment to combining financial performance with a positive impact. All-weather growth is a unique strength of Air Liquide. Moving to Slide 8. We have clear evidence of our 4 growth engines in action delivering both immediate and long-term value. First, asset optimization. We continue to unlock low CapEx growth by leveraging our existing pipeline networks and infrastructure. This allows us to secure new sales with minimal investment. Then core business leadership. Our technological edge remains a major differentiator. As such, in 2025, we secured several long-term contracts in electronics across Asia and the U.S., alongside a landmark project in Europe. Then, energy and industry transition. The industry transformation, which implies carbon reduction, but also electrification and automation is ongoing. It is a long-term trend shaping the manufacturing industry for years to come. Here, we are solidifying our leading position in many ways being at the forefront of our customers' needs. Key milestone this year includes the signing of second 200 megawatt electrolyzer in Europe and the electrification of 2 air separation units in China. Then, of course, strategic acquisitions. Beyond the targeted 13 bolt-ons to increase local density, we reached a major milestone in 2025 with the acquisition of DIG Airgas in South Korea. This is highly strategic, providing us with a leading position in the world's first largest industrial gas market, a market expected to double over the next decade. In summary, while the first 3 engines fueled our growth by EUR 5 billion of investment backlog, the addition of the DIG acquisition and our bolt-on strategy brings our total capital deployment to nearly EUR 8 billion. Every euro of this is dedicated to securing future growth with return on investment remaining our absolute priority. Turning to Slide 9. Let's look at the exceptional positive momentum in our Electronics business. This is a key structural growth driver where Air Liquide is uniquely positioned. Over the past 24 months, we have converted demand into a record of EUR 1 billion in CapEx through new projects signed worldwide, accretive on margin. But the pipeline ahead is even more significant. We are currently tracking EUR 2 billion in active opportunities targeted for signature in the upcoming year. To give you a sense of scale, Electronics now accounts for over 40% of our 12-month investment opportunities, with a heavy concentration in the high-growth markets of Asia and the U.S. These recent wins powered by our leading-edge technologies do more than just grow the business. They firmly reinforce our position as the global #1 in electronics. On Slide 10, we are committed to converting this increased performance and growth pipeline into value for our shareholders. These are not just words. Supported by our Board of Directors, we will propose to increase the dividend to EUR 3.70 per share at the next general assembly. This represents a significant increase of 12% compared to last year. It continues our long-term track record of almost 8% average annual growth in dividend per share over the last 20 years with a clear acceleration over the past 3 years, reaching almost a 40% increase. In addition, the Board has decided to propose to proceed with a 1-for-10 free share attribution in June 2026, subject to the authorization of course, of the next general assembly. These new shares will be eligible for dividends starting in 2027 further compounding shareholders' return. This balanced approach has delivered an average total shareholder return of 11% per year over the last 2 decades. Our original model and our focus on performance continue to turn operational success into sustainable return for shareholders. Turning to Slide 11. Let's review our outlook. On the left, you will find our formal guidance for 2026, which remained centered on our commitment to performance. For 2026, we reiterate our objective of delivering an additional plus 100 basis points of margin improvement. In addition, to provide you with greater visibility into our long-term trajectory, we have decided to further raise and extend our margin ambition. This extension through 2027 implies an additional 100 basis points of improvement for the 2027 fiscal year. With this, we are now increasing our total target to 560 basis points over a 6-year period. By expanding our ambition today, we are demonstrating our strong confidence in our ability to drive further performance. This is a clear commitment to delivering sustainable, long-term profitable growth and value for our stakeholders. We look forward to hosting a Capital Markets Day in the second half of this year, where we will outline our strategic road map and long-term financial ambitions. Thank you very much for your attention. I now ask Jerome to drive you through the details of our financial performance. Jerome? Jérôme Pelletan: Thank you, Francois, and good morning, everyone. I will now review our numbers in more detail. So coming back to the full year now on Page 13, group sales delivered sustained resilient growth in a still uncertain environment. Energy pass-through turned into a slight tailwind, and there was no significant scope effect in 2025. DIG being closed in January 2026. So overall Gas & Services sales achieved a plus 2% comparable increase as did our newly consolidated Engineering and Technologies activity. Thus, overall group sales were also up plus 2% on a comp basis for the year with a slight uptick for Q4 at plus 2.5%. So zooming into Q4 2025 on Slide 14, all business lines as well as all geographies delivered sales growth. Let us now review the Q4 activity for each of main geographies. I am now on Page 15. So sales in the Americas remained strong, up plus 5% on a comp basis. Large industry were strong and benefited from additional hydrogen volumes in the U.S. as well as solid Airgas and Cogen. In Merchant, sales were driven by an improved pricing effect of plus 2%, supported by active pricing management at Airgas. Volumes were resilient with regards to gases, while hardgoods remained soft. Growth in Healthcare was very strong driven by sustained high pricing in the U.S., including U.S. proximity care and our intel core -- Intelli-OX service cylinder development. Growth was further supported by the increase of home health care patients in LatAm, together with solid pricing. Finally, in Electronics, the very strong growth in carrier gases for new project start-ups and ramp-up was offset by high 2024 base in equipment and installation. Overall sales in EMEA were up plus 1% with continued very solid growth in Healthcare. Large Industry was flat. Solid airgases in Italy and South Africa and a favorable mirror effect on the customer turnaround in Q4 '24 in Saudi Arabia offset low hydrogen and Cogen sales, especially in Benelux. In Merchant underlying sales were resilient, excluding transfer activity from GM&T. Pricing was positive at plus 0.8% despite the impact of the indexation on decreasing energy prices in bulk contracts and low pricing in Helium. Finally, Healthcare growth was robust at plus 4.3%. Sales have been supported by strong home health care activity, notably in diabetes, community care in Germany and sleep apnea. Mix Asia posted positive growth in Q4. In Large Industry, low demand offset positive contribution from start-up and ramp-up in China and Korea. Sales in Merchant were flat. China posted growth despite helium headwinds. Sales in the Rest of Asia were somewhat mixed, but mostly low. Electronic sales improved by plus 5%. Growth in carrier airgas came mainly from start-up and ramp-up, in particular, in Taiwan and strong growth in materials were only partly offset by the equipment and installation comparison to a very high level in 2024. I will now comment on our Q4 activity by business line on Page 16. In Merchant, we saw increased pricing at plus 3.2% in Q4. So overall volume were resilient in a subdued industrial environment. Large Industry benefited from start-up contribution, mainly in Americas and Asia and from a solid base activity in the Americas. EMEA and Asia saw overall low demand. Page 17 now. There was a strong underlying momentum in Electronics at plus 6%, excluding E&I. Sales benefiting from a strong contribution from carrier gas, mainly start-up and ramp-up, in particular, in Taiwan and in the U.S. as well as solid materials performance in Korea and Taiwan. This growth was tempered as E&I sales normalized following a record year in 2024. Finally, in Healthcare, we pursue strong trends despite a high comparable in Q4 '24. Home Healthcare was again robust, supported by diabetes, sleep apnea and community care. In medical gases, sales growth was strong with steady pricing addressing inflation, especially in the Americas. On Page 18 now, as Francois mentioned, the success of our structural transformation program has been again demonstrated by our improved operating margin. Results were even more impressive regarding Gas & Services OIR margin, which improved by plus 130 bps. Getting into the detail, purchase were down minus 3.6%, though stable, excluding the currency impact and the reclassification effect and the increase in energy price, particularly natural gas was offset by the decrease in purchase of material and equipment due to a decline in sales and goods. Personnel expense were down minus 1.5% and showed a limited increase of plus 1.5%, excluding the currency impact in an inflationary environment that benefited from the reduction in headcount of around minus 5% since the beginning of 2024, supported by the rationalization plans across all geographies. Depreciation is aligned with the level of start-up and ramp-up. This has resulted in group operating margin improvement at plus 100 bps, excluding the impact of the energy pass-through. On Page 19, now this margin improvement was supported by a structured execution plan based on the 3 pillars. First, Industrial Merchant pricing remains solid with adapting to inflationary pressure and amid pressure in the Americas and to lower energy cost in Europe. We have and we will continue to focus on price management above the cost curve. We have also executed a record level of efficiencies, delivering EUR 631 million in 2025, which is significantly above our yearly advanced objective of EUR 400 million. Thirdly, we're active in portfolio management. We closed indeed 13 acquisitions in 2025 and executed 3 divestitures with a continued focus on strategic, profitable and margin accretive opportunities. Let us now review quickly the bottom of the P&L. I'm now on Page 20. Operating income ratio increased plus 3.5% as published. Excluding the currency impact, it goes by plus 7.7%, which is significantly higher than comparable sales growth, highlighting the strong leverage effect. Nonrecurring operating income and expense account for EUR 300 million, including restructuring costs for approximately EUR 200 million with the main parts in Europe. Net financial costs were down slightly with a decrease in average debt outstanding and in factoring. The cost of debt now stands at 3.3%, slightly down from 3.4% in 2024. The income tax rate was at 25.2% and compared with 24% in 2024, impacted by an exceptional stock tax surcharge in France in 2025. Net profit growth was up 6.4% and recurring net profit, excluding FX, increased significantly by around plus 10%. I am now on Page 21. We generated a record EUR 6.8 billion in cash in 2025. As you can see, our strong cash flow finance increased CapEx at EUR 4.1 billion gross value or EUR 3.7 billion net of asset divestiture as well as EUR 1.9 billion in dividends, which represents another record level for us. We are also able to reduce net debt, while net debt-to-equity ratio stood at 31.2%, highlighting the strength of the cash flow. Keep in mind now that this ratio will increase by more than 10 percentage points with the DIG acquisition, which closed early 2026. On Page 22, you can see that recurring ROCE continues to ramp up well above our 10% advanced objective and this despite continued large investments to fuel our long-term growth. On Page 23, although the DIG acquisition closed in January '26, in order to give you a complete picture with regards to the full project development, I will present the 12 months portfolio of opportunities and backlog, including the opportunities and site projects acquired with DIG Airgas. So industry and financial decision for the year remain at a high level of EUR 4.2 billion. Strategic financial decision of DIG Airgas will appear with our Q1 2026 decisions. Our investment backlog now remains very strong at EUR 4.9 billion, which is now the fourth year in a row above EUR 4 billion. The backlog is very much and well diversified, including more than 70 projects across all geographies with approximately 40% of the backlog now being dedicated to electronics projects. Finally, our 12-month portfolio opportunities at a record high, EUR 4.6 billion. The removal of the Exxon Baytown project is now compensated by the entry of new projects in Electronics and Large Industry as well as opportunities from DIG Airgas. The current 12 months portfolio now consists of more than 40% project in Electronics. And bear in mind that the portfolio beyond 12 months remains dynamic and totals above EUR 10 billion. On Page 24, as mentioned by Francois for 2026, we're strongly aligned with our ambition to improve operating margin by plus 100 bps and confident in our ability to deliver recurring net profit growth at constant exchange rates. We now commit to a further expansion for OIR margin improvement in 2027 to reach plus 560 bps of cumulative improvement over 6 years 2022-2027. Thank you for your attention. Back to you, Francois. François Jackow: Thank you very much, Jerome. I believe we can start the Q&A. Operator: [Operator Instructions] The question comes from the line of Alejandro Vigil from Santander. Alejandro Vigil: Congratulations for the '25 results. The first question is about the organic growth. In the fourth quarter, we saw some acceleration of 2.5% from the previous quarter. How you are starting this beginning of the year? If you can give us some indication of the level of activity in the beginning of the first quarter? And the second question is about the remuneration, there's a whole distribution. You increased double digit the dividends for '26. My question is about your considerations or your thoughts about the buybacks. At the end of the day, the level of leverage is still low. Looking at the opportunities, probably you have room to fund these acquisitions through the balance sheet. If you can elaborate on why to increase double-digit dividends instead of considering buybacks instead? François Jackow: Thank you very much for all the questions. I will take the first one and Jerome will comment on the second point. So indeed, I mean, we have seen a pickup in the activity at the end of the year. This being said, I think in the current environment, we believe that we will be probably, and that's the main assumption, in the same kind of trend for 2026. So this time probably a soft growth. But if we just look back a little bit, we tend to see a more positive sign that could definitely, I mean, give us some uptick during the year, maybe not in Q1, but as we go during the year. What are those? I mean, clearly, we mentioned electronics. And you remember that there has been a very strong comparison effect where the activity of E&I was extremely strong in 2024. So you have not seen the underlying trend. But clearly, we see the volume and the carrier gas contribution clearly picking up. We start also to see, I mean, some signals in some subsegments in the U.S. industrial activity. So again, we have to be cautious, but those could be positive signals coming later on during the year. Even in Europe, and maybe Emilie will have the opportunity to talk more about that later on, we clearly, I mean, see that some sectors like chemicals are still in the middle of difficult time with some restructuring. But in the past few weeks, we have heard positive news regarding the steel industry, especially with new announcements for new plants, but also the start of some of the production lines. So I think all those could definitely contribute. Again, our best assumption for our financial projection is that it will be basically the same kind of trend for 2026 as what we have seen for 2025. And we do consider that anything better than that would be an upside for us. And regardless of the environment, of course, we are absolutely committed to deliver the margin improvement. And finally, on the outlook and the momentum, I think we have to keep in mind that we have a super high level of business development activity. We mentioned electronics, we mentioned also a large industry. We start to see, I mean, project popping up in the U.S., which is probably the effect of the reshoring. So all this should be good opportunities and potentially also further M&As of different sizes. So this is the outlook for 2026. Again, confident in our ability to continue to deliver the improved performance, I would say, regardless of the environment. Jerome, do you want to talk about the increased dividend and our thinking behind that? Jérôme Pelletan: Yes. Thank you very much for your question. So you're right to point that plus 12% increase of dividend is a very good and a strong sign of confidence, and that's really the state of mind that we are today. We have also to bear in mind that when you come back to the different I would say, parameters, we can see that we have delivered nearly EUR 7 billion of cash flow. So this is strong. And the level of gearing today is quite low at slightly above 31%. So we have the means to distribute, and that's why we have decided, which is very much the result of our, I would say, improvement of our performance trend and the overall performance over the last year. So that's why we have decided. And you know this is also a sign that Individual shareholders like as well. But to come back on your second question, our policy has always been very clear. Given this very strong cash flow improvement in the last years, our order of, I would say, allocation is first, and we want to continue to finance the CapEx and that's important because that's where when we earn projects, we want also to allocate on that. The second point is M&A and significant M&A and that's why we have also the means to accelerate and to acquire DIG at the beginning of the year. And the last thing is on distribution on dividends, which again is a very strong one. So as it related to buyback, no, our current status is very clear. There is no taboo, okay? And this is something that we are looking. We basically continue to monitor the performance on the cash. And we have no specific announcement to make today, but we are looking at all options. Operator: Now we're going to take our next question. And it comes line of John Campbell from Bank of America. John Campbell: I will ask 2, if possible. So coming back to one of the points you made. You talked about potential positive signals in the U.S. in terms of activity. Can you perhaps elaborate on what those potential signals are? And maybe to give you an example, your U.S. peer recently discussed they see packaged gas volumes as a leading indicator of activity. Do you agree with that assessment? And perhaps how are those activity levels trending? That's my first question. The second question, I noticed there was a big meeting in Antwerp, I think it was last week, to discuss economic competitiveness in the EU, and they have been caused to review the CO2 emissions levy that is placed on industry. Maybe perhaps in light of this, how do you see the level of engagement with potential customers, particularly in Europe when around the energy transition? And perhaps you mentioned that electronics is a large opportunity. Would you say that sort of electronics potential orders can match the scale of potential previous hopes for energy transition projects? François Jackow: Thank you very much, John. I will ask Adam who is in the U.S. to comment on the merchant, but also the large industry and the electronics business probably. And Emilie will talk about the CO2 situation in Europe and how we see this. Adam? Adam Peters: Yes, absolutely. Thanks, Francois. Thank you, John. So if I look at activity levels in the U.S. and kind of building off of some of Francois's previous points about what we see, we definitely see some positive signals. So if I go kind of sector by sector and take the merchant business, we continue to see resilient gas volumes and we see in the merchant business where it's buoyed by the pricing effect that we have. We also see on the hard goods side, some potential tailwinds coming in 2026 around sectors like defense, for example, like space and the like. So we see activity coming in various areas. We're still a bit cautious in that regard because, obviously, this depends heavily on certainty around tariffs and certainty around interest rates and the like. But overall, when we look forward, we see positive signals. I would say on the really positive side, what we see is, a strong shift towards more traditional investment opportunities in business development. So when we look at business development, we can probably talk a little bit about this later, we see a shift from energy transition more towards the examples that Francois mentioned earlier around core investments and existing assets, where we see a lot of interest from clients and a continued very strong business development effort on the electronics side and in large industries going forward. So I would say we have definitely not seen a slowdown in the activity for business development. The customer engagement remains very high. And I'm quite optimistic about 2026. And I think this feeds into the backlog comments that Francois and Jerome talked about earlier and also the portfolio that we see. François Jackow: Thank you very much, Adam. I cannot resist, I mean, to build up on what you mentioned about the space because there has been a lot of discussion recently about the opportunities in the space area. And indeed, we are very excited and positive on this because we are today in the space business, and we are probably the only player with covering the full chain from the oxygen-hydrogen supply, but also, I mean, krypton, xenon for satellite and all the technology from the launcher to the satellite. So as you may know, I mean, we have a strong position in Europe and also a presence in the U.S. In the U.S. alone, we have more than 180 customers in the space ecosystem. So we see the momentum, clearly, and we benefit from this. And there are indeed a lot of opportunities. What we have to keep in mind, and I don't want to pull down, I mean, the excitement about this new opportunity is that some of the bigger opportunity may end up actually being a sale of equipment. So it's not, at this stage, traditional over-the-fence business. So there again, I mean, we are very well positioned. But let's not -- I mean, it's not necessarily comparable with the rest of the large industry or the electronics business. It may be a onetime sale of equipment for some of those projects. But again, very well positioned and ready to take the opportunities as we have done in the past years and months. I turn over to another area, Emilie. Do you want to speak a little bit about Q2 and Europe and what we hear and see from customers? Emilie Mouren-Renouard: Absolutely. Thank you, Francois, and good morning, everyone. So yes, we followed this Antwerp meeting last week carefully, and we were actually present in Antwerp. The chemical industry really did some strong speeches about competitiveness of the European industry and also on ETS, the CO2 tax Europe. So that created a bit of confusion. Just to remind everyone, a revision of the ETS was anyway due and flat for the second half of this year. So this is not new. But of course, the ETS price is impacting some of our customers positively or negatively. For us also, I want to remind everyone, our own emissions are subject to ETFs that are covered by our long-term contracts and the cost of the ETF is passed through to our customers the same way energy is. So definitely, chemical industry is suffering right now from structural competitiveness gap, like was said last week in Antwerp. But there are also positive signs in Europe. Francois mentioned one on steel industry. So on the steel industry, we see positive signs of picking up volumes picking up in January, in particular, more than we had seen in the overall 2025 year. This is helped by quotas and limiting imports to Europe and of course, the CBAM as well. We also see some positive signs in Germany, so not necessarily on the chemical industry, but in Germany overall with a bit more volumes and also a bit better business mood. Remember, we are very committed to Germany. We've announced investment of a large basin in electronics last year in Dresden. So this is positive. And overall, we continue to have a strong backlog of projects in Europe as well. So we'll continue to work with the European Union, with governments to improve the competitiveness of the industry in Europe, but there are also positive signs that I just mentioned. François Jackow: Thank you very much, Emilie. I think, John, you had kind of also a side question, which was the share of electronics versus energy transition. I think with what was mentioned by Emilie and also what we see in other regions like China, the energy transition is still alive. So there is still a pipeline of projects, a very robust project. Again, it's a long-term trend. So it's not by any means disappearing, and we are very well positioned there again. What we see, and that was your point, clearly, is the pickup in the electronics projects driven by the AI and the rate for capacity in chips, but also in memory. And this is clearly accelerating in the past few weeks even and the need for sovereignty. That's why, I mean, we see most of the major region of the world, a very, very strong momentum. As of today, there is 40% of our backlog, which is the electronics projects. So you see there is a shift. They are gaining importance. We do expect this to continue to grow. This being said, again, there are some energy transition projects that remain. So I think the takeaway probably from this is to have in mind that in the current time, having a very diversified portfolio and being able in terms of footprint and segment to be agile and to capture the opportunities wherever they are is really a differentiating factor and as of now, leveraging our #1 position in electronics is clearly the strength. Operator: And the question comes line of Tony Jones from Rothschild & Co. There is no answer from Tony Jones' line, and we're going to the next question. And the question comes from the line of Alex Sloane from Barclays. Alexander Sloane: Two for me, please. The first one, just on Baytown. I mean you've been clear, that's contractually protected, no financial impact. But stepping back, do you see any broader risk of customer-led causes or deferrals across decarbonization projects in your backlog or opportunity pipeline? And what are you seeing in terms of customer decision cycles? And is your '26, '27 margin trajectory, assuming any change in conversion rates? That would be the first one. And secondly, on electronics. Clearly, up to 40% now of the backlog and opportunity pipeline driving outsized growth. Can you comment on whether we should expect any material mix effect on margins from the outsized growth of this segment over the next 2 years? Are you seeing any change in the competitive dynamics in this segment as clearly it's driving most of the opportunity at the moment? François Jackow: Alex, thank you very much. So briefly on the first one, no, we don't see projects which are at risk today in the portfolio, in the backlog. Again, I mean, all the projects have secure contracts, secure customer, secure fundings when they are registered in the backlog. You remember, we have been extremely prudent in the way we were accounting for the Exxon project. So there may be projects, which appear or disappear in the portfolio, but not in the backlog, so no incidents on our financial performance for 2026 and 2027. On the second one, on the electronics, what we see are mostly carrier gas projects, which today represent 50% of the electronics business activities. So you see gradually, it's moving. And those projects in terms of margin should be accretive because in some of those projects, the energy is included. But in others, the energy is not included. So the margin ratio is higher. So when they will come on line and keep in mind that those project takes 2, 3 years to build, yes, they will have a positive margin contribution. At the end of the day, what is very important for us is the return on the capital employed, and that's how we are making a decision. Yes, it's a competitive area. Many people are fighting for those projects. The good news is that given the volume of the projects, we can be selective and we are selective and we choose the battle basically where we have a competitive advantage and we can really create value for our customers. And when you look at 2025, we get more than our share of the new projects, and we are committed to continue in that way. Operator: And the question comes from line of Martin Roediger from Kepler Cheuvreaux. Martin Roediger: Thanks for taking my 2 questions, please. First, on energy supply. In case several energy suppliers within the European Union have a problem in providing you with energy, to which extent are you protected against that shortfall in energy supply? How is the compensation scheme? Is there any difference in the compensation scheme between the energy resource electricity and the energy resource natural gas? And the second question also related to energy, on energy costs. I recall that a few years ago, you had EUR 3.5 billion energy costs on a global basis. Is that still the case? Is the split in energy still 60% electricity and 40% natural gas? Or did that change? And is that also a good proxy for the individual regions? François Jackow: Martin, thank you very much for your question. I will ask Emilie who is a specialty of energy in Europe to speak about it. And probably, Jerome, you take the global view on the energy costs. Emilie? Emilie Mouren-Renouard: Absolutely, thank you. So briefly, of course, energy is a very large part of our cost stack, especially in large industry. So it is important for us. We monitor that quickly on a regular basis, and we are protected by our contract with the pass-through clauses to our customers. And in case to answer more precisely to your question of a problem of energy supply, then it falls under the force majeure type of clauses we have in all our contracts with our customers. François Jackow: Thank you very much. Jerome? Jérôme Pelletan: Thank you very much, Martin, for your question. So when you refer to EUR 3.6 billion, it was very much at the time where the impact after the beginning of the war in Ukraine started to have significant high prices on the energy cost and mainly in Europe and mainly on natural gas. So today, I would say that it is coming still above the level of pre-war. But the mix is related to the share between natural gas for hydrogen business, HyCO business, and electricity for other should be relatively close. And those, as said by Emilie, are fully secured and fully pass-through to the customer. So no big change in terms of the weight of those energy or consumed and presented in the cost stack. Operator: And our next question comes from line of Georgina Fraser from Goldman Sachs. Georgina Iwamoto: It's one question, but I think it might be 2 or 3 combined. You have this EUR 200 million in onetime costs related to European restructuring measures for 2026. Could you please put some context around this number? What percent of European sales will be impacted? Are there any networking effect implications? And are these measures in line with existing customer plans? Or is Air Liquide moving independently? François Jackow: Thank you very much, Georgina. So Emilie, do you want to talk a little bit about how you want to transform and to adapt our footprint in Europe and what you have launched? Emilie Mouren-Renouard: Absolutely. Thank you. So in Europe, we've well embarked on the structural transformation launched at the group level since 2024, so we are adapting our cost structure to the level of activity into the volumes, and we are restructuring. So maybe I'll give you some elements. First, on the organization and processes. So streamlining our organization. That is what we are doing, removing layers of management, simplification of our organization. And for instance, we moved from 4 clusters to 2 in Europe. If I include med gas that we integrated and merged into the merchant activity to create synergies, so we now have all the med gas activities under the same operational and management team as merchants in Europe. So this restructuring effort is taking place in all parts of Europe. The idea, like I said, is really to adapt the cost structure to the activities, moving some tasks to the GBS as well. This is an important part of our transformation and also really restructuring to be prepared for the long term to be more profitable over the long term. So this is structural. We're also streamlining our processes and tools, having the same way of doing things across Europe, one single state-of-the-art ERP across Europe. And finally, also using more and more AI to automate, to optimize our operations in all domains, customer care, call centers, in sales, in safety, in industrial part of the activity. François Jackow: Thank you very much. So that's for Europe, which is the bulk of the EUR 200 million. I mean I think this is 70% of that. There are other things which are similar in other parts of the world. What is absolutely key is that in this world, which is transforming, we want to anticipate. So part of it is to adapt the footprint, and that's what Emilie has mentioned. And we want to do that with courage, with determination in a respectful manner for our employees and for our customers because those are the values of Air Liquide, but we have to do it, and we have started and already done that in several cases, and we will continue to do that. At the same time, and that's the positive news, we continue to invest in leading segment and to support and to drive this transformation, as we mentioned before. And as a matter of fact, in the past 3 years, we have invested more than EUR 3 billion in Europe, showing that we are positioning ourselves to be able to be a key partner and key supplier for the transformed Europe industry that is being built. So thank you very much, Georgina, and good to hear you. Next question, please. Operator: And the question comes from line of Chetan Udeshi from JPMorgan. Chetan Udeshi: The first question, I was just -- sorry my first question is on your investment opportunities and backlog. I think you have included the part from DIG now in those numbers. And I was just trying to see the underlying shift if I remove DIG. And it seems for the first time, maybe in many quarters, sequentially, the backlog and investment opportunities are actually down versus Q3. And I'm just curious, is this all because of the removal of the Exxon project? Or do you actually see that the incremental opportunities are probably slowing? And just second associated question. You got this compensation from Exxon project in 2025 because it's been terminated. Did this have a positive impact on your second half margins? Because I see there's a big jump in the other income in the second half of '25, and I'm assuming almost all of that is associated with this project. If that's the case, if you can quantify? And last question, simple. I don't see any guidance on start-up revenue this time. So maybe if you can just help us what do you think we should have in mind? François Jackow: Thank you very much, Chetan. Thank you for your questions. I think Jerome will be pleased to answer the 3 questions. I may complement if needed, but go ahead, Jerome. The first one on the DIG and the contribution of DIG and the backlog. Jérôme Pelletan: So it's very simple. When you took the backlog of EUR 4.9 billion today, you have about EUR 200 million of backlog coming from DIG, okay? So EUR 4.7 billion plus EUR 0.2 billion. And you recall, Chetan, it's very much aligned with what we said last time during the call when we made the announcement of DIG, that there was some CapEx underlying. So that's very much aligned which is showing that basically a very good trend on this opportunity. On the portfolio of opportunities, you have a total of EUR 4.6 billion, a record. And that does include about EUR 800 million of DIG. So I hope it's quite clear. François Jackow: And just Chetan, on this one, on the backlog from one quarter to another one, in my point of view, there is no worries. Basically, this is a normal life of a pipeline of the project. You have the projects which are exiting because the projects are starting up. So it's normal that depending on the timing, they go up and down. So the general trend is a very solid backlog, which is continuing to increase. If you look at a year-to-year basis, it's plus 15%, as I mentioned. So from that point of view, absolutely no worries. Exxon contribution for the year? Jérôme Pelletan: So I hear what you said. So basically, it's neutral on margin because the compensation we had from the customer as basically covering our consolidation costs and so on. So that's basically neutral on margin for 2025. That's what you have to bear in mind. You have also to bear in mind that we have no financial exposure on that, that's basically it, okay? And your last question, start-up guidance for 2026. So we have not disclosed this contribution for 2026 for a few reasons, Chetan. First, Francois explained that many times, there is shift today in contract structure. The fact that we have some energy transition projects, which have increased, which are going more and more into a tolling style contract, basically is polluting the fact on this contribution. So that's the very first point. The second point is, as you know, there is geographical energy volatility, and disparity in energy pricing. So basically, as we are showing this number with energy contribution, it's create artificial difference in sales contribution from the same level of CapEx, which gives difficulty to estimate future sales contribution, the second reason. François Jackow: And the last reason, by the way, if I may, Chetan, none of our competitors currently disclose its contribution from start-up and ramp-up. So all these different elements make us the conclusion that it was not super relevant at this stage. We are looking potentially as other indicator review. We see maybe on EBIT level and so on, but it's a bit early to say. But the main reason, clearly, Chetan is that it's becoming a proxy, which is less relevant to predict the growth overall for the reason mentioned by Jerome, but you mentioned energy transition. But as a matter of fact, it will be the same with the electronics project because some of the current sales, it has energy included, others do not. So again, the traditional way of looking and predicting the sales with the amount of investment does not work anymore. We'll try to find a way to help you to do your forecast, but that's why today we are dropping this proxy. All right. Thank you very much. I think we still have time for 1 or 2 questions. We have many more questions. So go ahead. Operator: Now we're going to take our next question. And it comes from Jean-Luc Romain CIC CIB. Jean-Luc Romain: It relates to the cement industry. When we look at some of your clients or partners in the industry, there are several projects to decarbonize the cement plants And your CryoCap technology is all over the place on their website. Could you give us an idea of what's moving towards a decision? What's still a long way ahead? François Jackow: Thank you very much, Jean-Luc. Emilie, do you want to speak about this? Emilie Mouren-Renouard: Jean-Luc, on the cement industry, this is one of our key growth opportunities for the future, like you said, around our CryoCap technology, proprietary, and we are really the leader in the carbon capture technology. So the discussions remain active with our potential customers in the cement industry. They are continuing on their journey, knowing that they have all the commitment towards carbon neutrality by 2050. There's no way they can achieve that without carbon capture. So we continue the discussion with all of them. Of course, it depends now on FID to answer precisely your question. It depends on ETS price, on the regulation subsidies in place, and also on the whole chain, it's not just about the capture, but the capture, the transport and the sequestration that need to also be ready and also missing a few still mechanisms like CCSD to really make it to the final investment decision, that again, momentum is still there with all our cement industry players. François Jackow: Thank you very much, Emilie. So we'll take 2 quick questions, 2 more questions, please. Operator: And now we're going to take our next question for today. And the question comes line of Sebastian Bray from Berenberg. Sebastian Bray: Can I ask about the backlog composition? Because leaving aside the question of how much is electronics and how much is associated with other end markets, have there been any changes relative to what Air Liquide has done historically in terms of contract length and the split between large industries and on-site that include parts of electronics in that and merchant gases. The reason I ask this is that Linde has pretty high backlogs close to record. Their products looks fairly healthy, excluding the new energy parts and Air Liquide is at record levels. And if we hit 2 to 3 years' time and everybody is bringing online new projects, does that pose an issue for merchant pricing, given that a lot of these large on-site projects are going to be adding capacity to merchants? François Jackow: Well, thank you very much, Sebastian, for your question. So as you know, we are extremely disciplined in the way we are evaluating projects. So every time there is a project, we look at, of course, the merit of, I would say, the anchor customer when it's a large industry or electronics customer. And if there is a potential upside with the merchant, we do consider that after careful consideration of the market potential and the local situation. And what you have to take into account here is clearly that the merchant market is a local market. So it depends on the situation. And with those new investments, you can bring very effective new source of products in regions where we are lacking products, and there are still quite a bit of those globally. So today, I don't see a threat at least from the Air Liquide point of view, I cannot speak for our competitors. But are extremely careful and disciplined in the way we justify new merchant investment. And again, it's based on the local situation. So that's how we are looking at things for the backlog, again, mostly driven for us by large industry and electronics. Thank you very much. Last question, please? Operator: And now we're going to take our last question for today. And it comes line of James Hooper from Bernstein. James Hooper: I've got a couple, please. First one is on the 2027 margin target. Great to hear the extension of that target. Are there measures that will deliver this going to be the same as the ones driving 2025 or 2026 or they may be different? And then a second question. I'd like to pick up on some of the -- about lower demand in Asia in large industries. Can you give us an indication of what's happening on the ground in Asia, particularly China? Is there any effect from overcapacity and anti-involution? And also a quick update on the helium market, please? François Jackow: I will start with the last one maybe on Asia because we didn't talk so much about Asia. Right now, again, we see a clear momentum in electronics across the board, and this is for a new project, but we see also picking up, clearly. So that's a very positive one. When you talk about overcapacity, mostly, it relates to what we have seen in the manufacturing in China. And we see some slowdown or maybe extended turnaround from some of the customer in China. But I would say on average, we are probably less impacted than other players because of the quality of the portfolio of companies we have. We have been extremely discipline in selecting over the years, I mean, the top-tier customers, which are the ones typically who have the best competitive situation. This being said, we do expect a further consolidation in some sectors, which overall should bring benefit to have cleaner, more efficient manufacturing capabilities for China and to export. Regarding the helium situation, again, globally, I mean, we are in a situation where there is low demand compared to the supply for helium. Keep in mind that for Air Liquide, and that's not necessarily the case for all our competitors, helium is only 3% to 4% of sales and 80% of our business is based on long-term contracts, both in electronics, which is still growing and Industrial Merchant. So yes, we are impacted mostly in some regions. China is clearly one market where we see a decreasing volume and decreasing pricing. But overall, our helium business is still strong and well resilient. Regarding the 2027 margin objective, I think really what you need to take out of that is the confidence that we have in our ability to continue to provide margin improvement. And the reason that we are confident it's because this is based on the structural efficiencies, which are the results of the transformation program. If you step back, you have seen that 3 years ago, I mean, a lot of the margin improvement was coming from the pricing. The pricing is still there, and we have really moved up our capabilities to secure pricing whenever it's possible. But with the lowest inflation, the pricing contribution is decreasing everywhere. But what we see is a pickup of the efficiencies, again, almost 30% more this year compared to last year, and we do expect this to continue. As I mentioned today and previously, we are at the beginning of the journey for many of the transformation initiative. So there is more to come in '27, '28 and so on, maybe not always at the same rate, but for 2027, we are very confident with this margin improvement. So thank you very much. This concludes our session. Thank you very much for all your insightful questions for sure. In conclusion, I would like to say that after a strong performance in 2025, Air Liquide entered 2026 with a proven model, record backlog, momentum in transformation and clearly, extended horizon for profitability. And we are all ready to build on this momentum. Thank you very much for your attention. I wish all of you a very good day. Operator: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.
Operator: Ladies and gentlemen, thank you for standing by, and welcome to the SEEK Limited Half Year Results Call for 2026. [Operator Instructions]. I will now hand the call over to SEEK Limited CEO, Ian Narev. Please go ahead. Ian Narev: Thank you. Good morning, all. We are here on the lands of the Wurundjeri Woiwurrung people of the Kulin Nation. I'd like to pay my respects to the elders past, present and emerging. We've got the usual crew here, Kendra, Peter, Simon, Grant, Dan and Pat. And thank you all very much for joining us. I'd only to tell you that these results happen at a pretty volatile time in terms of equity markets and today is not a sales job. The numbers are going to speak for themselves. And we'll add to that our perspective on the main drivers of the numbers and what that means for the future. In terms of our take, I've been generally encouraged by our Board to overcome my natural conservatism and talk about the business. So let me say that over the next hour and in the course of discussions we'll have with many of you over the coming days, I think it will be clear that as a management team, we have a very strong sense of confidence in the position of the business today and in its prospects for the future. We've got a combination of market leadership positions, brand strength, customer trust, technology backbone, product depth and breadth and perhaps most importantly, the data that come from all of those strengths. And that puts us in a unique position to continue and accelerate years of innovation. That takes a lot of hard work, but we've got as good a starting point as we could want. And the momentum, as I said, is clear from the results. As you can see from Slide 6, shares up, yields up, operating leverage is clear. We've got a record dividend. The balance sheet is strong. We know that the translation to the bottom line still needs to come a bit more. And particularly, we can answer questions about the Zhaopin write down in Q&A if people want to know more, but we are well on the way. This is the latest in a series of results we've delivered exactly what we said we would and probably a bit more. This is the best of that series of results. And as we discussed at our Board meeting yesterday, it's probably as good a set of operational results as SEEK has ever delivered. So the momentum is accelerating. I won't go into the detail on Slide 7 and 9, but the message there is very clear. Short-term results are as planned. Progress against our core strategic priorities is very strong. More important than that are the drivers of those results, and I'll just spend a minute on Page 10 because those drivers of the result are the connection between the strength of the results and the confidence in the future. On the top box, put very simply, we are 1 decade on from the establishment of our AI function with that name. We're 2 years on from elevating the function to my direct reporting line, and we can see the benefits of years of doing that investment right through the results. And you can see hundreds of product releases in the last 6 months using AI capability, placement share and yield growth, not prospects, but delivered these results. A high proportion of the benefits come from the data advantage we have. And a very important part of, again, not what we think, but what we've learned is that in this environment, and we believe in the period ahead, competitive advantage doesn't come from AI models. It comes from the extent to which the models can access unique proprietary data that other models can't, and that translates into tangible benefits for customers who, as a result, choose you and will pay for what you offer. You understand SEEK well enough to know we run a marketplace with very complex preferences, not on one side, but on 2 sides of the market. So using data to help elicit those preferences and more significantly to match them creates the value that, as I said, makes people choose us and pay, and that's not a thesis. The evidence is right through the results. It's evident in placement share, it's evident in yield growth, and we've got a long way to go. And you can see that in the second box there, we talk about having roughly 0.75 billion data points, most of which can't be replicated and scraped. And we know from daily experience how to translate that into the products that matter to customers. The last thing I'll say before handing to Grant is that the matching that we're seeing is better than ever, and we really feel we are still only at the start of what we can do. And I just want to dwell on one point, particular words in that first bullet point where we say the most obvious benefits from proprietary data, not just what customers want, but how realistic is it. And I think there's one thought to keep in your head here. There are many models, interfaces that can do a good job of having conversations with people to decide what they want. The big question is what do you need to show people how realistic that is and where they should target their attention. Likewise, on the hirer side, great to have the tools, and we're building them and to elicit what the hirer needs. The question is who are the people out there, how do you target them and how do you get the best person possible. That depends on marketplace data, not on conversational interfaces. You need both. But with the interfaces without the data, you just cannot deliver that experience. The last thing I'll say and that Kendra will talk about this more a bit later, because we've learned so much over a long period of time, we know which investment works. We do more of that less than the other stuff, and we retain our confidence that we continue the investment we need within the target cost envelope. With that, I'll hand over to Grant to carry on for us. Grant Wright: Thanks, Ian. So Slide 11 speaks in a bit more detail to what Ian mentioned about how unique data and our AI capability is driving our 3 strategic priorities of placements yield and operating leverage. If I start with placements, our marketplace, as Ian said, is fundamentally about facilitating 2-sided trusted connections. The candidates trust us to deliver relevant results, but also provide realistic feedback about competition and their chances of getting the role. Hirers always want to understand what's out there, but also who's available and interested right now. That distinction between what looks good on paper to one side versus what's real and agreed to on both sides is critical to reducing wasted effort creating placements. And as AI noise increases in the market, this becomes even more important to generate placements. That's where we have unique data that cannot be scraped to DMZ. We see close to 1 billion and decisions on our marketplace every day. So that's candidates becoming active and being open to looking at opportunities. It's the jobs they review and save. It's what they apply to and then the jobs that they prioritize as their preferred applications that they're very interested in. It's the criteria that hires want to target on. It's who they search for, who they review, who they shortlist and who they contact. That data drives better matching, which leads to more activity, which leads to more data and therefore, drives better matching. So these actions that reveal people's real availability, intent and priorities drive those placements and create even more activity on our platform. That same 2-sided data also enables us to sustainably grow yield because we see real hiring activity and competition. We can predict, understand and manage performance and price. Our pricing system monitors supply and demand for about 45,000 labor market segments across APAC. That data enables us to provide attractive options for hirers to pay for more performance and the choices they make between those options and the performance they want gives us data on willingness to pay, which allows us to then further improve our pricing models. Lastly, on operating leverage, as Ian said, we've been investing in for over a decade. So we're not starting from scratch here. We've got advanced capability in building, deploying and optimizing AI models as well as a strong focus on responsible AI to make sure that we manage risk and retain trust with our users. And we're continuing to experiment and test to ensure that the innovations and algorithms we deliver have real customer impact. So that combination of existing capability, including applying AI internally for efficiency and then the experimentation to make sure that the innovation we're delivering is delivering real customer value enables us to deliver placement and yield growth while maintaining our operating targets -- operating leverage targets. Slide 12 then demonstrates how our proprietary data and AI capability are creating real value today, particularly through personalized matching and AI targeting. Our key inputs on the slide speak to the proprietary data that I talked about previously on both sides of the marketplace. The conversational AI products, live tracking of actions on our platform, verification through CPaaS and reputational products like reviews and reference checks give us a complete view of the requirements, preferences and importantly, the trade-offs and willingness to pay that both sides are willing to make a match. We then use that data in a wide range of AI models. So that includes proprietary ML models that we build in-house. It's LLMs fine-tuned on seat data and it's new technology emerging like sequence models, which is essentially the concept of a large language model that applied to behavioral data. So rather than predicting the next word, aims to predict the next action. We're also experimenting with agentic search systems to further advance our search capability. These prediction models are then used across the marketplace to deliver capabilities, including recommending targeting criteria to hirers based on what we know matters, to predict and manage performance outcomes and set our prices, to deliver highly personalized matches to candidates that manage both what they're interested in and what they're a good fit for. Our increasing ability to predict fit also allows us to target high candidates through exclusive outreach products for advanced and premium ads. And then we explain those matches using generative AI on both sides of the marketplace to increase confidence and encourage people to engage with the opportunities that will drive a placement. And it's this combination of the unique 2-sided data and our AI capability that's continuing to show up in increased value for customers. So candidates are now 1.5x more likely to see and apply for relevant jobs due to the quality of our matching and explanations, and that's underpinned our placement share growth of 7 percentage points over the last 3 years in ANZ. On the hirer side, hires are seeing the benefits of increased performance in advanced and premium ads by high targeting and they're opting to pay for increased performance, increasing depth adoption, which has grown 2.7x over 3 years and underpinning our ability to grow yield sustainably at 15% compound over the last 3 years. So we're seeing these results really show up for customers in our investment in AI. I turn to Simon on Page 13 to talk about how that shows up across our product suite. Simon Lusted: Thanks, Grant. Moving to Page 13. I want to take this opportunity to drill into a little bit more detail on how this AI and data capability is showing up in examples of actual features delivered on SEEK over the last few years. We've broken this into the candidate side and the hirer side. What we're going to talk about is all live product in market that's been delivering for candidates. I want to give you a bit more flavor of the type of impact we're seeing from these capabilities. And our long-run investment in AI infrastructure, we were pretty really to integrating LLMs and natural language search into our core job search discovery experience. That delivered immediate uplift, which continue to compound as Grant and his team retrain models on our data today. But perhaps more important, it put us in a position to experiment pretty aggressively over the last few years with a range of different conversational experiences. We have 2 pretty exciting experiences in market right now, and we plan to use this learning to evolve and improve our candidate search and discovery experience over the next few quarters. While we were doing that, we also saw the opportunity in these capabilities just to do more of the work on behalf of candidates. So we launched our intelligent career feed, which uses candidates profile data, their behavior, all the data Grant talked about to do more of the reasoning on behalf of candidates. And that's given us a really big lift in the number of applications that come from this very low effort engagement experience. In fact, it's less than half the effort to find a relevant job through using our career feed than it is in manual job search. In addition, as our recommendations have become more precise, it's putting us in a position to talk to candidates off our platform with much higher fidelity, much higher cut through. We've really driven huge improvements in our -- the way we notify candidates, and that's allowed us to tap into monitoring job seekers who perhaps aren't active enough to be on SEEK at that time, but are willing and open to engage in new opportunities. That's delivered a 2x growth in channel performance in just a couple of years. And as Ian mentioned, it's not just whether the job is available, it's whether that job is right for you and whether you're a fit and whether the person on the other side is likely to want to shortlist you or progress you. And so we've been doing a lot to help explain to candidates how and in what ways they might be a fit. This has been particularly pleasing because what we found is that many candidates are a little bit hesitant to step outside their frame of reference. And when we can share with them that they actually are potentially a strong and high fit for this role, we're driving much greater levels of engagement and application, which is driving placements. And as mentioned, we've been investing in trust for a long time now. We've always thought that the labor market was sort of noisier than it had to be. And we've got a big team in [ APAC ] over 100 people now. We're in every market across APAC, and we're really scaling our ability to verify trust with new AI models that allow us to add authority, check identity and really deeply understand who is real and whether what they're saying on our marketplace is a genuine claim. And as Grant mentioned, the new products like Strong interest where candidates are able to nominate a few jobs that are their particular priorities. That's all underpinned rather by our trust infrastructure. On the hirer side, we're becoming more of an adviser through the job ad posting process. We're using our market data to explain the marketplace, help hirers build more quality ads, reducing effort, and that's driving up conversion of new hires to job posting. We've made big step-ups in our dynamic job ad pricing accuracy. And what that means is we're better able to understand whether a candidate's actions and the ad they're buying will lead to a placement. That's given us a lot of confidence to align prices to value. Grant mentioned our AI targeting. That's really been central to our ad ladder refresh. We've got an AI targeting feature that's bundled into the advanced ad and the premium ad, which really delivers a material difference in placement outcomes. And similarly, we're explaining to hirers why a candidate might be a great fit. So we're not only saving them time, but we're improving the chances that they make a placement by connecting them with candidates that they might not have considered otherwise. We're also getting further into the placement process. We launched in the last half our reference checking product, which is a full voice agent, a voice agent will interview a referee. It cuts the time to give a reference in half. It generates higher quality data, and it takes what was previously a messy offline event and brings it into our platform in a structured and actionable way. And this is the kind of data and the kind of trust that an intermediary can leverage to help both parties in a way that we don't think many can. So as individual features, I've tried to give you a flavor of how we're applying these capabilities to improve in many different places. But taken together as a system, I think I'm hoping to give you a flavor of how these benefits compound in each other. They lead to stronger, deeper understanding of our candidates and hire preferences, better matching not just more placements, but higher quality placements that drives ROI for hirers and that drives up their willingness to pay. So we're really excited about the progress we've made. But as Ian mentioned, we do still feel like we're just at the start, and we've got more opportunity opening up over the next few years, and it's an exciting time for us. Peter Bithos: Thanks, Simon. I get the privilege of talking about how the data and products that Grant Simon just talked about, pull through into the actual numbers in each of the regions. And just a reminder, kind of the system that we're trying to build here is great data plus great products equal more jobs. And then you combine that with a great brand and great on-ground execution in every single country, and you hopefully drive results across APAC. And actually, that's what I get to talk about here today. So I'll start with ANZ. For those of you who remember last time, I kind of noted last time was actually first time where in a down market, we were able to drive ANZ growth and gain share. This time, actually, the results are even better. So it remains a down market, we were able to drive double-digit revenue growth, gain share, highest share in recent history in ANZ with a 17% yield uplift. So volume is slightly down due to macro, but share up yields and revenue growth well into the double digits. How that happened is explained on the bottom right-hand side of Slide 15, which I won't go into the details, but essentially, it was product driven. So a large chunk of the revenue and yield performance you can see is a dramatic shift in the types of products being offered and taken up by our customers. And those are the products that Grant and Simon just talked to. So you see a dramatic step-up in depth penetration, driving both placements and yield. If I go to Slide 16 and talk about the macros for a minute, it still remains a slightly down market. But I would say the biggest news positive on Slide 16 is the dash on the upper left, where we're seeing New Zealand turnaround after a period of substantial decline over 2 or 3 years. So we're pleased to see New Zealand volumes up on PCP. As for the rest of the slides, you can see the macro kind of stabilizing across ANZ from the previous few years. So good to see a relatively stable macro environment in an area where we can really drive share and drive the business pretty hard. That translates to now not just an increasing share, but importantly, an increasingly large gap in ANZ between us and the second largest competitor. So not only is it at record levels, but the delta between us and competition is now at record levels. And so whether it's the core variable pricing, the depth, the AI products, we're really pleased. It's a very strong result for ANZ. For those of you who have been following the Asia journey, would know we're going through quite a lot of commercial transformation, launching and rolling out freemium, which I'll talk to in a couple of slides. This half continued that journey. We had a full 6 months of Singapore, which we launched late in the second half, and we launched Hong Kong, our largest market. And I think if you kind of took a step back and you said if we were able to generate real revenue growth and launch 2 of our largest markets in freemium as well as have a full year effect of all the emerging markets and produce the results we have, we'd be very, very pleased. So we think it's a really strong performance. You can see paid volumes down. I'll talk to that in a little bit. Revenue up. Placement share as the survey calls it slightly down. But the survey, it's within the statistical variability and noise. We're kind of pleased with the long-term trajectory and all the other indicators that we crosscheck are really strong. And so we're pleased with that result. Paid ad yield, very similar story, and this is very consistent with what we've been doing since unification. Any benefits we're able to launch, we roll it out across APAC, and we seek to get those benefits across APAC. So you can see the advanced and the depth penetration equally shifting in Asia, just the same. You can see Slide 19 and then a few slides later on Slide 20 and 21, really tell the story of freemium as we go. So if you look at Slide 19, you can see the monthly ad volumes on the right-hand side. You can see the total ads increasing as we roll out the markets. You can see the mix shift slightly changed between paid and free between the pink line and the purple line. But then you can start to see now the monthly unique hires, which we've called out as a leading indicator that we need to get right longer term, now 18% up PCP, very pleased. So -- and then as we get more ads on the platform, the marketplace strengthens, we get more unique visitors, and you can see that in the bottom left. So strengthening of the flywheel in the Asian markets is occurring, and you can see it in multiple metrics on Slide 19. Slide 20 just talks to the placement and yield, which I talked to you previously. I'd note across APAC, for those of you that follow the placement over time, every 2 to 3 years, probably 3 to 4 years, we reset the sample size and also supplier. We'll be doing that. That's kind of a normal part of the cycle, and we'll reset the survey in the next set of results. So that's just a note for those of you that follow that. And then last, Slide 21 just talks to the progress in the rollout of freemium. Two weeks ago, we launched Malaysia. It was our last market. So we are now freemium in all markets. So when we get to FY '27, it's a clean full year. We're excited about that, but we're right now, I'm just happy with the results that we've gotten and shows the strength of the business and everything Grant and Sean spoke of. So I'll hand over to Kendra. Kendra Banks: Thank you, Peter. Good morning, everyone. I'll begin with Slide 23 and talk to how all of this you just heard results in our finances for the first half. So we reported revenue of $601 million. That's up 12% compared to the same period last year or 11% when you exclude Sidekicker, which was not included in our prior period results. We delivered again on our commitment to operating leverage as total costs grew 8%, excluding Sidekicker, 3 percentage points lower than the revenue growth rate. This operating leverage is going straight to earnings growth. EBITDA was up 19% and adjusted profit of $104 million, up 35% for continuing operations. We reported, as you know, a $356 million impairment charge against our investment split across continuing and discontinued ops. The appendix slide outlines the details showing how the Zhaopin investment as accounted in our books went from $529 million in June down to $182 million this period. This is a noncash impairment and reflects changes in the last 6 months, which will help set the business up for a stronger future. Back to our core business. Our financial performance and trajectory are strong, and this provides the Board confidence to announce a record dividend amount of $0.27 per share. That's an increase of 13% from the prior year. Turning to Slide 24. Our commitment to operating leverage is clearly evident in these results. As I mentioned, excluding Sidekicker, revenue of growth of 11% exceeded total cost growth of 3%. We primarily focus that increased expenditure on our ongoing and growing investment in AI product and tech and the IT infrastructure and compute costs, which support the product experience. We fund this increased investment by being efficient with our run-the-business costs so that the total cost growth continues to be contained in our mid- to high single-digit total targets. As a reminder, we think about costs as a management team on total cost of OpEx and CapEx to create the right incentives. But of course, we do account for it split into OpEx and CapEx according to the accounting standards. The result for this half is a 7% increase in OpEx and 24% increase in CapEx, and that weighting isn't really a surprise with the prioritization towards grow the business activities, particularly the AI-focused product development that's delivering tangible results. Slide 25 talks to the drivers of adjusted profit, up 35% from last year. The growth was led by strong EBITDA performance, partially offset by a few below-the-line factors. The D&A was higher in line with the increase in CapEx over the platform unification years. Share-based payments expense increased. This included a one-off share grant to all employees and also includes the accounting standards requirement to value share payments on the date of grant, which happen to be close to a recent peak in our share price. Partly offsetting these were lower interest costs and a partial reversal of the Zhaopin performance fee following the impairment. Slide 26 is cash flow performance. I won't go through the detail here other than to say there's nothing unexpected. And as I said earlier, strong cash flows enabled higher dividend returns to shareholders. On Slide 27, our debt position was broadly stable. Our net leverage ratio continues to improve. It's down from 2.3x a year ago to 2 and is well within our target of less than 2.5x. And of course, that's driven by growth in EBITDA. Slide 28 outlines the performance of the SEEK Growth Fund. A reminder, we look at total portfolio value, including the portfolio valuation plus distributions from the fund. As of the 31st of December, this value was up 1% year-on-year. The fund's return on invested capital since inception is now about 33% with an IRR of 8%. There's more detailed appendix on the fund's 4 largest businesses as always. Also considering the fund, you'll have seen in the press today their announcement that they are commencing a process to sell their stake in Employment Hero. On Slide 29 is our capital management framework, which remains unchanged. Strong operating cash flows providing capacity to execute on our strategic priorities and provide dividend growth. Looking ahead, as you know, the fund opens a liquidity window in the 2026 calendar year, following which they must use reasonable endeavors to fulfill a liquidity request within the next 12 to 24 months. In the lead up to this, the Fund's Trustee Board is in active discussions on the optimal approach to maximize long-term value, and we will update you as the year progresses. Finally, briefly on Slide 30, our sustainability commitment continues to be a priority. Employment platforms like SEEK are uniquely positioned to drive fair hiring, and we're continuing to evolve our strategy and approach to expand our impact, strengthening platform controls using AI, working with other experts and organizations to continue to elevate fair hiring standards. Perfect. Ian to touch on the outlook. Ian Narev: Thank you, Kendra. I'll be quick because we want to get to questions and I've learned over time, stick to what's on the page where we talk about guidance. The headlines are here, as you would expect in the half, we tightened the range. And as you will see on the right-hand side, that means for those of you who like to work to the midpoint, which we know many of you do. The guidance is a range, but it gives you a sense of where the midpoint ends up. And the only additional commentary on that, as you can see here is that the revenue and EBITDA is expected to be in the top half of the original guidance. So range contracted. We've done some on the midpoint for your benefit, but it remains a range, but we expect to be in the top half of the original guidance for the revenue and the EBITDA. So look, I think you heard here, I mean, I'll just quickly summarize a very strong result for us. There are no guarantees of success in this business, and we're going to need sustained hard work to maintain the momentum and to make the most of the opportunities. But we've got the foundations we need. And to come back to where I started, I think you'll hear a very strong sense of confidence from the management team based on the results we've seen and the assets we know we've got. And now it's up to us to continue executing. So with that, I'll hand over to Q&A. Operator: [Operator Instructions] Your first question comes from the line of Eric Choi from Barrenjoey. Eric Choi: So my 2 questions. The first one is just on monetizing placement share. So your placement share has obviously gone up to 36% now, but I think SEEK is probably only still doing 15% to 20% share of total placement costs in Australia. So my question is, can SEEK evolve its revenue model to be less reliant on total job ad volumes, but instead more on placement outcomes? Because I guess that might make you less impacted from any AI disruption of job volumes and it kind of still suggests there's plenty of scope to grow your yield over a long period of time. Ian Narev: I'll quickly answer that, Eric, and then hand over to see if Simon wants to add anything. The short answer is if you -- this is quite important for the business. If you look top down at the amount any business is paying for successful placement, all our research shows we have plenty of room to move. Every bit of research shows that what we get for a placement is at the very low end of people's propensity to pay if it's a good match. That gives us a lot of confidence as long as we deliver the match. So we are nowhere near what we would consider to be a ceiling. At the moment, you can also see from here the combination of placement share and yield growth means there's a lot of money value we can create and value we can share through our current model. So we don't see an enormous need to evolve urgently, but we keep looking for ways to share the value with the customers. The team spend enormous amount of time on that. And at the moment, we're happy with what we've got, but we've got other things in the pipeline that we can experiment with and see how they go. I don't know, Simon, whether you want to add to that? Simon Lusted: Yes. Yes, I do. I think we obviously think about this a lot, Eric. The key unlock for us for so much of our marketplace is knowing that a placement happens. I mean the real -- what we want to earn as much or generate as much value as we can when our customers make a placement and less when they don't. And so a lot comes down to our ability to predict whether a placement is going to occur given all the factors. And there's really 2 ways we're coming at that. We talked a little bit about that today. We've got great prediction engines. We've got the opportunity to play further down in the selection process. So we see more about how far candidates get. And that allows us to understand, well, how much value are we creating? And then the other way is just to play directly in the placement. We're doing that with guaranteed hire with SmartHire, which we talked about. Sidekicker is obviously in the placement. So we're thinking about these things. But the real unlock is the degree to which we can drive up our confidence in that placement probability. And we feel like we're making really good progress there, and there's a lot more to do, opportunities opening up for us in lots of different areas. Eric Choi: Lusted, quick follow-up. I'm dumber than you. So can I just ask something a follow-up in dumb terms? Like everyone is worried about AI agents connecting employees and candidates directly. Just listening to your reasoning, like if there's a noisy world where employees are getting spammed thousands of applications by AI bots, it's -- you seem to be suggesting you're going to be giving higher quality matches probably because you've got, I don't know, intent availability data. So are you sort of saying your placements become more valuable in that world? Simon Lusted: Yes. I mean I think what the matching is about sending strong signals of intent and quality. And if that gets easy to imitate at scale, then the role for an intermediary who can reinforce the rules, add trust and help candidates and hirers negotiate in a high-trust environment. That goes up, not down, granted. Operator: Your next question comes from the line of [ David ] from [ Fabris ]. Unknown Analyst: Can I firstly ask about the ad ladder pricing model and strategy? I mean I appreciate you touched on it through the presentation. But can you help us understand whether you're running periodic price increases and then augmenting this with dynamic pricing? Or you're leaning much harder on dynamic pricing now and have moved away from those periodic price rises? Peter Bithos: Yes. So actually, that's a really great question that gets to the heart of this result. This particular result, whether it is both Asia or ANZ, on about half of the yield uplift is being driven by product take-up of new products, right? So it's customers reacting to the probability to place expressed in, say, the advanced ad, saying, "I want that, I'm willing to pay for it," and they're making that decision by themselves. And our job is to educate the customer on the choices that they have. So this is not -- we continue always on the journey of variable pricing and making sure we price to the value we're creating. But this particular result is actually the strongest led by the products that we've actually created. Ian Narev: I'll just add one point to that. Those of you who have been following since we did the dynamic pricing in 2019 know that the probability to place is a driver of the dynamic pricing model. So in the nonproduct-driven parts of it, the more confidence we've got in the propensity to place, the more the dynamic pricing model creates more value when we share in it. So even the nonproduct part, don't think of that as blood price increases. A big part of that is the data on the marketplace utilizing the dynamic pricing model to increase the value and the price because of the confidence in the placement. And that is a really important part of understanding the confluence of investments we've made over a long period of time. Unknown Analyst: Yes. Got it. And then just continuing on, I guess, with the products here. Just that ANZ ad ladder penetration, I mean, if you look at the advanced tier, it looks like it's settling around mid-teens. And I think it was there in July, it was there in December and it was there through the period. Can you share with us where you think that optimal level of penetration may be and how you get there? Or on the flip side, what levers do you have to improve that penetration? Peter Bithos: Yes. So that uplift -- so there's 2 things. One, we think there's further upside. Simon and Grant are working on new stuff, and we look forward to the customers taking that up, too, right? So like increasingly, depth is kind of part of the core revenue. It's not the thing on top. So -- and you can see that in the results. Advanced Ad in particular, pleasingly, we saw growth through the half, driven as our sales channels and marketing channels educated the customer and the product tweaks that we presented. So it's not a one-off. It's something we're driving into the business, and then we're looking forward to further improvements in to come. So this is kind of a -- we can do more of this, and we have very high confidence in that. Ian Narev: Can I just add another thing for the benefit of a bit of historic context for questions you've asked for years? We've had questions for years, if volumes go down, do you get a procyclical effect on yield. Page 15 shows volumes down to yield up 17% and a really very strong performance from what we called the depth products. Now what does that tell us? Even when the volumes are coming down in this kind of economy, what we've learned is when these products transparently show a hirer that they've got a greater chance of a good placement more quickly, they pay for it. And we don't think that's anywhere near exhausted. And we're learning and there's more to go that it's probably less dependent on the economic cycles than we thought, and that's a really good message for everybody to a question we've all been talking about now beyond the 7 years I've been around. Operator: Your next question comes from the line of Bob Chen from JPMorgan. Bob Chen: Two questions from me. I mean just firstly, a clarifying one. Just looking at your cash flows, especially on the free cash flow line, it's obviously sort of come off a little bit. It looks like there is a bit of seasonality in there. Do we expect that to sort of normalize into the second half? Kendra Banks: Yes. So cash conversion is always lower in the first half than the second because -- primarily because we pay out our employee bonus in the first half and revenue seasonally is slightly higher in the second. So that's what we expect to see. And the shift year-on-year is because we did pay a slightly higher bonus that came out of cash in this half than we had the previous year. Bob Chen: Okay. Cool. And then maybe a more sort of general question around AI as well as that investment and monetization. Are we to sort of expect that the monetization of this investment in AI is largely through your depth of tiering as opposed to additional AI products on top? Simon Lusted: I'll have a go at that. I think largely, we think, as Peter outlined, we launched a new ad ladder, and we said at the time, there's a lot of room for us to build new features, especially AI-driven features and enhance those ad ladders and drive more depth. So that is a big part of our future. In the last half, we launched a new add-on called assist. That add-on is really focused on monetizing the value we plan to deliver through things like automating reference checks, better ranking, helping people complete the hiring process more efficiently. I think that's more a long-term product lever, but we are trying to create a frame through which to monetize the efficiency elements of the AI work that we plan to do over the next little while. Operator: Your next question comes from the line of Lucy Huang from UBS. Lucy Huang: I've got 2 questions as well. So firstly, just looking into FY '27, how should we be thinking about the contribution from some of the growth drivers on yields, given like this year, we've had advanced ads, new product like next year, there won't be new advanced ads. So will we be leveraging more on dynamic pricing? Or do you think advanced ad penetration could still be a larger component of the growth there? Peter Bithos: Yes. Lucy, it's Peter. I'll pull you up one level, which is instead of advanced ads specifically, the profit growth, which is we have new products and new constructs that allow buyers to get placements in various high confident ways. And we take those products and constructs and drive it into the base through our sales channels and our brand and our presentation through the product. That is a formula we want to continue. So advanced ad will be complemented by other things over time. But the underlying dynamic that you now have a system of for base price, we have sophistication in the way we price to value as we increase the probability to place. And we now have a system across 8 markets to produce products that are taken up in a very aggressive and fast way. And we're bullish that system will continue. Lucy Huang: Understood. And then also recently, we've noticed you've got a people search tab on the SEEK Australia website. Just wondering if you can talk through how that feeds into the strategy for the company moving forward? And any early kind of statistics you can share on how many profiles there are, how often people are tapping into this database? Simon Lusted: Great question. So we've got within the APAC Group, 45 million candidate profiles until now largely been only accessible to hires who purchased our premium talent search product. We've made the decision that a candidate profile should very much be at the core of the SEEK experience, and we can add trust to that. We want to make that profile more useful for candidates all through the hiring process. They should be able to share it with others, find each other, et cetera. So we made the decision to make candidate profiles free and publicly searchable for candidates who opt into it. We're really pleased with the rate at which candidates are opting in. It's really encouraging. And we think overall, it will not only strengthen our flywheel, candidates be more likely to keep their profiles up to date, invest in adding trust to it. It will drive and improve their job-seeking experience. But we also think that will drive freshness and depth, which will allow us to monetize through a more premium talent search offering, which we plan to launch in FY '27. So it's part of a broader strategic play to put the candidate much more at the center of our marketplace, not just the job, but the candidate, and it's going very well. Operator: Your next question comes from the line of Entcho Raykovski from E&P. Entcho Raykovski: So my first question is around the cost base and your comment that there are efficiencies in the cost base that are enabling greater growth investment. I wonder if you're able to quantify the extent of those efficiencies. I may be difficult, but is it sort of thinking 10%, 20% savings, sort of what that does to the velocity of product rollout. And I'm curious whether there's been a further step change over the past 6 months in those efficiencies with the developments we're seeing in AI. Kendra Banks: Sure. Thanks, Entcho. So when we talk about efficiencies in the cost base, I'd point to a few things. The first is still seeing the benefits of the APAC unification, particularly in the commercial areas, where Peter's teams now run APAC sales and service marketing and all the kind of associated tools and corporate costs that support APAC, still seeing that benefit coming through in terms of tighter functions. The second is across the business in every function, we have very high take-up of AI as a core -- the AI tools internally as a core part of people's workflows. And we are seeing there -- it's a few points of efficiency in lots of different areas that's driving cost efficiency and allowing us to reinvest in the grow the business areas. And then in the grow the business areas, so product tech and AI, we certainly are seeing accelerated product development velocity. We haven't kind of disclosed a particular number there. But certainly, you can see it in the kind of pace of AI product rollout, while we are getting efficiency in terms of that product velocity flow and reinvesting it in continuing to develop our products. Entcho Raykovski: Okay. And my second question is around the employment sell-down. Are you able to talk about the rationale for it given it's obviously a fairly weak underlying market for high-growth stocks in theory, might have been a better time 6 months ago. And then is the fund running an open process or do they have a buyer lined up already? I'm conscious that KKR was the buyer 12 months ago. So not sure if they're the ones who are looking to up their investment. Ian Narev: I'd just say a couple of things. The decision to sell is entirely the funds. We don't control it. When asked our opinion, it's consistent with our goals as an investor to get liquidity over time, so we're fully supportive. Number two, the assets, terrific business done very well for the fund. It's obviously subject to value. And after this long and with this degree of understanding, they will sell if and only if they get a price that they think is good value. But number three, there's really no evidence at this stage that what we've seen in public markets, which has got all sorts of other drivers has translated into private markets. If it really has to this extent, that means the process wouldn't be successful. There's no evidence of that at the moment, and they'll find it out. In terms of who the likely buyers are, et cetera, that's something we have no visibility over. Operator: Your next question comes from the line of Fraser McLeish from MST Marquee. Fraser Mcleish: Great. Just a couple. Just firstly, on SME volumes. I don't think you've given your normal update on what percentage of your volumes are coming from the various customers? Have you got update on that? And then my sort of related question is to what extent, particularly in your SME volumes, do you think they are -- you've got unique listings that aren't going on to other platforms? That's my first one. And then just also, you've obviously outperformed -- you're going to outperform your high single-digit yield target again this year. You're just confirming that sort of over the cycle, high single-digit yield growth is still the target? Peter Bithos: I'll let Kendra speak to the second question of the long-term yield growth. On the first question on SME, actually, when you get into the details, you're right, we didn't disclose it here, but partly because actually, there's nothing distinct or different in SME volumes to what the overall story in ANZ is. I'm assuming you're talking about ANZ. Actually, if anything, the depth penetration was a little bit stronger in SME. And the volumes are pretty consistent with the overall market. So share is up in SME, yield is up in SME, and we're very pleased with the results and SME wasn't differentially performing in any notable way. Fraser Mcleish: Do we have unique ads? Peter Bithos: In terms of our unique ads position, very similar to the flywheel, slightly strengthening, but again, not uniquely against our other segments. Kendra Banks: Fraser, thanks on your question on high single-digit medium-term outlook for yield. We are still maintaining that as our medium-term outlook. We remain very confident, as already discussed, in the ongoing fast to future yield growth and that core dynamic that our customers are not that price sensitive when they're making a solid good placement, and we've talked a lot about how we plan to continue improving that delivery. However, as you know, we will always manage our pricing and yield to ensure marketplace health alongside. And therefore, despite delivering double-digit yield growth now multiple periods in a row, we're maintaining our high single-digit yield growth medium-term guidance there. Fraser Mcleish: Great. Sorry, can I follow up very quickly just on that unique ads? I guess where I'm coming from is just with AI proliferation and having unique listings is potentially going to be more important. So I'm just wanting to try and understand the extent you have unique listings that aren't necessarily on other platforms. Peter Bithos: Yes. So what we look at when we call unique listing, we then double-click and say, is it a unique listing that is directly on our platform versus pointing to a different place. So anybody can scrape and point to a different place and do that. Having said that, the large competitors in the marketplace don't scrape the direct ads from each other. And so we have a large corpus of unique ads that are available on SEEK, and that's remaining constant and consistent over the past few halves. Operator: Your next question comes from the line of Tom Beadle from Jarden. Thomas Beadle: Just my first question is just a follow up from [ choice ] on the cost side. I mean it's obviously nice to see that you've got your costs well under control and the positive [ choice ]. I mean if we take the breakdown of your cost base that you provided at your Investor Day, that growth in BAU bucket, I mean, what level of growth did you see in each bucket? And I guess I'm interested to hear any commentary you have around AI-related cost growth and just any other cost pressures in areas that are worth highlighting? Kendra Banks: Sure. Thanks, Tom. So if we look at that run the business, grow the business split, I sound run the business for very low single digits, and then you can kind of do the math on the rest in terms of high single, low double in terms of our grow the business investment. And that includes all of the AI cost that we're facing into in terms of the cost of the team, the models we use, the compute cost, et cetera. So we still feel confident that the AI cost growth that probably is noticeable in the coming years, we can, at this point, confidently say is within our total cost growth target. Ian Narev: And the other thing I think is your question, I'm looking at Grant here. We have under Grant's leadership, a protracted long-term piece of work just on using the same understanding of technology that drives our customer-facing platform to look for productivity opportunities inside SEEK. I mean you might want to just talk about a couple of areas, Grant, that we're really focused on. Grant Wright: Yes. So Kendra mentioned supplying and encouraging AI tools for everyone at SEEK through their individual processes. We have an internal AI tool for that. We also use Glean, which provides enterprise search and agents and our staff are running about 5,000 agents a month at the moment to help with those individual tasks. The bigger opportunity we see is really reengineering the big processes in the business. And so we now have a team going into those core processes to help people map define them and do good process excellence work as well as bring those AI tools into that. So that's in train as well as then looking at our big opportunities for transformation in sales and service and product development and AI coding. What you tend to find in AI coding is that you can get big efficiencies today in writing the code, but writing the code is only a proportion of that cost base. So we're also looking at how we reinvent that process to become more efficient. Some of the examples of things we're doing sales meeting prep agents to drastically lower the time to pull the information and have a high-quality conversation. So raising the quality of conversation across the board and reducing time and effort. Real-time customer feedback monitoring and products. So we just get much more insight to all our product managers about what's happening over time, which previously was a big time sink and also meant that you couldn't get all that feedback synthesized. So this is showing up all over the business in these sort of processes. We've automated credit checks for our external things through agents. So there's lots of examples of more a process opportunity, and we really want to, in the next year, take that to our big processes and think about how we reengineer them with AI. Ian Narev: The other thing I'd do just to add to that, our beloved Head of Engineering, James Ross, this is what I did in the holidays video that he sent to a bunch of us was a 1-hour video showing him experimenting with the latest developer productivity tools. They're very meaningful. So all these evolutions and revolutions on coding productivity, which the market is sort of looking at a gas and wondering whether they will disrupt our business. Well, we've made clear on the customer side that the data is the advantage. On the internal side, we've got people experimenting with these things as they come out. And as Grant said, we now want to map that to a really good process capability, but we think the opportunity is very meaningful. Thomas Beadle: Great. And just, I guess, the second question just on volumes. I realize there's a little bit of caution in your commentary. I mean, can you just give an update on what you're seeing on volumes over the first 6 or so weeks of the second half across your markets? Kendra Banks: Well, our January SEEK employment report will come out, I think, in a couple of days' time, and we'll give that insight. But as you can see from our guidance, at least on AU, it's very likely that volumes stay about where they are for the foreseeable future, and that's built into our guidance. Operator: Your next question comes from the line of Nick Basile from CLSA. Nicholas Basile: First question on placement share in ANZ. I think there was a stat there that SEEK now has a 4.9x lead versus the nearest competitor, which is, I think, up nicely on some more recent data points. So I'm just interested if you can sort of help us crystallize what you think the key to that result is and how we think about the sustainability of it going forward, I guess, particularly given you're telling us you're going to reset the data points or the survey data you collect, would just be helpful to understand how you're thinking about it. Peter Bithos: Yes. So the key is actually everything that Grant and Simon talked about in their part of the presentation. So effectively, the product and the platforms and you can kind of look at it as a line item product like Advance where the platform overall as the system all of it is getting better. And it's getting better differentially against all other options in the market. And pleasingly, in our recent results, it's getting better against our next largest competitor and so all of that is happening. And it's happening because of the underlying data and AI and the capabilities. And because it's happening because of that, there is nothing that we would see would change that trajectory. Ian Narev: I would just add with the normal point that we make, look at the placement share over a number of periods. And particularly now we're going to refine the methodology, we'll see what happens. It's a great story, both in Asia and ANZ. We probably are concerned less about movements half-on-half, more over 3, 4, 5 periods. That's what we'll continue to look at, but the signs are very good. Nicholas Basile: Okay. Great. And a second question, just on the growth fund. I guess curious how you are sort of rating the performance of the growth fund. I think the IRR of 8% perhaps wouldn't necessarily suggest it's adding a huge amount of value relative to other investment alternatives. But of course, interested to know how you think about perhaps the intangibles associated with this strategy that investors need to consider, for example, playing in the start-up space is an important strategic consideration for SEEK and/or somewhat of a cost of doing business. Ian Narev: Yes. Look, I think the IRR in and of itself looked at in the absence of anything else, is probably less than many people might think it would have been against the benchmarks of what other like funds have done over that period of time. It's actually not bad at all. And we have the capability inside, the team is very strong. So that is what it is. Interestingly, and I'll just remind people, in 2021, we were fielding calls about the valuations that the assets have gone to the fund, the fund is going to have a windfall and we said no. These are very fair market prices at the time. It was always going to be hard to earn the carry, and it's been hard to earn the carry. But we feel that the team is doing a very good job of it. And as a major investor, we're very confident in them. I don't think the informal connections are in and of themselves a rationale to be in the fund or not in the fund, but we talk a lot, and there's a very helpful and healthy 2-way dialogue on that, which I think is good for both us and for the fund. Operator: Due to time constraints, we will now end our Q&A session. I will now turn it back to Ian. Please continue. Ian Narev: Yes. Look, again, thank you all for your time. I think you've heard the main messages. The only thing I'd like to say just at the end is that there are a couple of people who have contributed to this result, who will be departing. Number one, Graham Goldsmith has done an absolutely outstanding job for all of our shareholders as Chair of SEEK and from a management team has provided a really great balance of challenging us and supporting us, and we will really miss him. Luckily, the Board has done a very good job in finding a successor. And likewise, as much as people know, it will pain me to say so, Dan McKenna has really done a great job as our Head of IR, and you've all interacted with him. This is his last result, and he's been a terrific contributor. So we want to thank him before he heads off overseas. And again, in Pat, we've got a ready successor standing in. So I just want to acknowledge the 2 of them. Thank you all again for your time, and we'll no doubt catch up with many of you over the coming days. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
Operator: Hello, and welcome, everyone, to the TBC 4Q and FY 2025 IFRS Results Conference Call. My name is Becky, and I will be your operator today. [Operator Instructions]. I will now hand over to your host, Andrew Keeley, Director of Investor Relations to begin. Please go ahead. Andrew Keeley: Thanks very much, Becky, and welcome, everybody, to TBC Group's 4Q and Full Year 2025 Results Call. It's great to have you with us today. As usual, I'm joined on the call today by our Group CEO, Vakhtang Butskhrikidze; our Group CFO, Giorgi Megrelishvili; and we'll also be joined for Q&A by Oliver Hughes, our Head of International Business. We'll also start with a presentation from Vakhtang and Giorgi and then go to Q&A. And with that, I'll hand over to Vakhtang. Thank you. Vakhtang Butskhrikidze: Thank you, Andrew. Hello, everyone, and thank you for joining us today. I am pleased to present our results for the fourth quarter and the full year of 2025. Overall, we had a very good final quarter, bringing 2025 to a successful conclusion. For the full year, the group delivered over GEL 1.4 billion net profit, up by 9% year-on-year with 24.2% return on equity. As for the final quarter, it was a record quarter in which we also printed our highest return of equity of the year with almost GEL 390 million net profit and 24.9% return of equity. It was an excellent final quarter for our core Georgian franchise with net profit up by 15% year-on-year and 25.7% return on equity, driven by a strong combination of robust loan growth and net interest margin and low cost of risk and strong cost controls. The quarter was more mixed in Uzbekistan as the changes in regulations that I have previously discussed meant the slight contraction in lending, impacting revenues and earnings. That said, taking the year as a whole, the team made a huge progress in scaling up the business, including 45% loan growth year-over-year, 67% revenue growth and almost 1 million daily banking Salom card issued and digital MAU topping 6 million. As a result of our strong operating performance and the solid capital position, the Board has declared a final dividend of GEL 3.87 per share, bringing the total 2025 dividend to GEL 8.87, which is a 10% increase year-on-year. I won't dwell too long on this slide, but the main point I want to get across is that 2025 is another example of the TBC's long-term track record of delivering a nice combination of growth, profitability and returns. Moving to our 2025 targets. Overall delivery against most of the -- overall, delivery against most of these targets has been good. Our digital monthly active user numbers have almost doubled over the past 3 years to 7.3 million. We have also consistently maintained return of equity above our 23% target level. Similarly, we have been paying out at the top of our guided range. As we discussed at the third quarter results, unfortunately, net profit in 2025 came in lower than targeted due to some challenges in Uzbekistan. That said, taking the past 3 years as a whole, we have still grown our group's earnings by over 40%. We also delivered 90% loan CAGR in Uzbekistan above our target and comfortably surpassed our 5 million monthly active users target. Turning now to Georgia. As you can see, the Georgian economy remains strong with the real GDP growth standing at 7.5% in 2025. We see growth starting to normalize, but our economies and IFIs like Monetary Fund and the World Bank still expect around 5% growth in 2026, which is not a bad figure at all. The inflation rate is slightly above NBG's 3% target, driven by the combination of a low base of effect from 2024 and elevated domestic and global pressures on food prices. That said, we expect the NBG to resume cutting rate this year as inflation trends back down. 2025 was a strong year for our business in Georgia. We had a number of good operational achievements through the year. This included our flagship daily banking TBC card hitting almost 1 million cards in issuance, a doubling of our retail brokerage customer base to over 100,000 and 50% growth in our market-leading affluent product, TBC Concept. We also saw a number of tangible developments driven by AI with our mobile application chatbot launched in September and already handling over 100,000 iterations a month with a 50% of floating rate. I like the next slide as it shows the highly consistent performance of our Georgian Financial Services business over the past 3 years as we continually delivering mid-20% return of equity. We continue to be a leading player across most of the key banking segments in Georgia. In 2025, our gross loans were up by 11% year-on-year. I'd like to highlight particularly strong performance in cash loans, a key focus area for us, where our loan book portfolio grew by 36%. Meanwhile, our Georgian customer deposits decreased by 12% over the same period. Digital engagement among our retail customers in Georgia continues to grow. Having brought our core banking technology platform in-house, 2025 was a year when we started to clearly see the benefits of having full control over all aspects of our digital banking. With faster deployments and the revamped customer experience, we have been strongly increasing our digital customer base. We added over 250,000 customers during the year, growth of 24% year-over-year. Engagement levels also remain very high with a 47% DAU to MAU ratio, and we continue to see very high levels of digital unsecured loans and deposit issuance. Now let's turn to our Uzbek businesses. Starting with the economy. The Uzbek economy remains highly dynamic with real GDP growth of 7.7% in 2025. Inflation continued to decline to 7.3% in December. Importantly, seasonally adjusted annualized monthly inflation is now below the CBU's 5% target, which we think will help enable interest rate cuts this year. Next slide highlights some of the key milestones in our Uzbek business in 2025. We scaled up our business in a number of areas during this year. In business lending, we have issued over 130,000 loans, while our BILLZ acquisition gives us access to more than 3,000 retail merchants, processing over $1.4 billion of transactions. At the same time, payment volumes have increased over 60% year-on-year to $9.2 billion. We have also had a great take-up of our daily banking products such as Salom and Osmon cards. We also now have an excellent 600,000 Payme Plus subscribers as we deepen engagement with our ecosystem customers. On the next slide, we have an overview of Uzbekistan's progress over the past 3 years. During this time, we have more than doubled our registered users to 23 million, and we have hit 6 million monthly active users. As I mentioned earlier, our loan book has grown at 90% 3-year CAGR, while our retail deposits have increased at 65% 3-year CAGR to around $550 million. As mentioned previously, we saw a softening of operating income and the net profit in the final quarter. But for 2025 as a whole, operating income grew at excellent 67%, while we returned our 18% return of equity. Next slide shows Uzbekistan increasing market share and the material contribution to the group. By the end of 2025, our market share of our retail loans and deposits stood at 4.2% and 3.8%, respectively, as TBC established itself as a top 10 bank in both retail loans and deposits. In 2025, Uzbekistan contributed 9% of the group's net profit and 20% of the total operating income. Before handing over to Giorgi, I'd like to mention a couple of other important pieces of recent news. As you may have seen, we recently announced some changes to our management team. I have decided to commit my time fully to my role as the Group CEO, which will enable me to focus more closely on overall group strategy, including our business in Georgia and Uzbekistan as well as exploring international opportunities. As a result, Goga Tkhelidze will take over from me as the CEO of TBC Group Georgian subsidiary, Joint Stock Company TBC Bank, effective from the 1st of March, subject to the regulatory approval. Goga has been Deputy CEO for 12 years, the last 10 years of which he has been running CIB and Wealth Management. During this time, he has built these businesses into a dominant franchise player today. I'm very confident that Goga will be a great leader for our Georgian business. The other news, as you probably already know, is that we will be holding our Strategy Day next week in New York on Tuesday, 24th of February. I very much like forward to welcoming you to this event. And for those who are unable to join in person, there will be a live webcast as well. With that, I hand over to Giorgi. Giorgi Megrelishvili: Thank you, Vakhtang, and thanks, everyone, for joining our call today. Now I'm going to take you through our full year and Q4 results. Andrew, if we move to the Slide 20, that shows our strong profitability. So the first quarter was a record quarter, again, where we delivered GEL 387 million net profit, up by 16% year-on-year. That translated into a very solid 24.9% return on equity and full year profit exceeded GEL 1.4 billion, up by 9%. And again, our return on equity was about 24%, precisely 24.2%. Now if we move to the next slide, Slide 21, that actually shows one of the key drivers of our solid profitability. Our top line increased by 15% in Q4 year-on-year. That was mainly driven by excellent performance in our net interest income. It was up by 23%. Our noninterest income remains flat, but that was mainly driven by very high FX revenues in Q4 last year, as you may remember. And on a full year basis, we also have a great 20% increase year-on-year, and that was driven both by net interest and fee and commission income. So now if we move to the Slide 22, like I'm very glad to see NIM actually retains at a very solid level, 7%, broadly stable quarter-over-quarter. That was supported by 6% Georgia NIM that actually stood its ground. And on a full year basis, we saw NIM increasing by 30 basis points. That was mainly driven by increasing share of TBC into our portfolio. So moving now next slide, Slide 23. So we are very much focused on our cost. As you can see, growth was very well contained both for the quarter and for the full year. In Q4 on year-on-year basis, it increased just 10% and on a full year basis, 18%. That translated into a decrease in cost-to-income ratio, both for the quarter and full year. On a full year basis, it landed at 37.5%, down by 40 basis points. Now moving to the Slide 24. I would like to touch on our credit risk. It's like we saw our cost of risk declining by 50 basis points to 1.1%. We saw this decrease in both Georgia and TBC Uzbekistan. That's a very nice dynamic to see. I would like to comment a bit on the Georgian cost of risk that was below our normalized level. The better risk profile was supported by model recalibration and higher recoveries. In '26, we do expect Georgian cost of risk to be at the lower end of our normalized range, around 80 basis points. Now move to Slide 25, our balance sheet growth. We see that also we had great growth into both our loan and customer funding side. Loans increased 12%, customer funding 13%, both on constant currency basis. However, the Q4 was also exceptionally strong by 5% up year-on-year and driven by Georgia an increase of 6%. Now next slide, Slide 26, our capital positions. And despite the high growth, we do maintain very healthy capital levels, well above regulatory limits in both countries. And now moving to Slide 27. Exactly the strong capital position allows us to distribute a decent level of capital to our shareholders. As Vakhtang mentioned, our Board has approved GEL 387 final dividend that brings full year dividend to GEL 8.87, 10% up year-on-year, bringing dividend payout ratio to 35%. However, we also completed -- just completed GEL 75 million buyback. And with this, we returned 40% capital back. On this note, I would like to thank you and open for Q&A. Andrew Keeley: [Operator Instructions] And yes, the first question is from Alex Kantarovich of Roemer Capital. Alexander Kantarovich: My first question is on OpEx. It was kind of flattish in Q4, which is fairly unusual given that normally banks have elevated OpEx in Q4 and so did you historically in the previous years. So can you comment on that? Second question is, can you give us a bit more color on cost of risk? It seems like NPLs were sort of steady and a bit elevated. And in Uzbekistan, cost of risk, whatever it was in the quarter, 8%, 9%, and you obviously guide higher cost of risk for 2026. So suddenly, you have this drop in Q4, which kind of caught my eye. And third question is on capital restrictions on cash loans. And clearly, your loan portfolio actually dropped quarter-on-quarter in Uzbekistan. If you can comment on the details, how cash loans compared to SME as kind of substitute and what we can expect going forward? Giorgi Megrelishvili: So Oliver, I'll take the first question on the cost and probably you can cover Uzbekistan cost of risk and cash loans. So to start on OpEx, it increased in Q4 10% year-on-year for Georgia, 18% for the group. But as I mentioned, we managed our cost very consciously. We spread our costs throughout the year. So it is what it is. It actually indicates our strong control of the cost that results in our very strong profitability. Oliver Hughes: Alex, it's good to speak again. Yes, on cost of risk, as you said, NPLs ticked up throughout the year. But in terms of cost of risk, if you compare third quarter to fourth quarter, as we previously signaled, it was -- it topped out in quarter 2, quarter 3 and then started to come down in quarter 4. So that was exactly as planned and communicated. So basically, we had a lot of tests that we've done in the latter part of, let's say, the second half of 2024, early '25 as we pushed into thin file segments, stuff that we've communicated thoroughly in the past, and that started to mature and come through the numbers in -- from quarter 2 onwards in Uzbekistan. So that topped out, started to come down. And the trend when you look at all of our leading indicators, means that, that will continue. There is some volatility for sure. Some of it is seasonal. So for example, in quarter 1, you always see a bit of an uptick, so numbers can be softer in quarter 1 for seasonal reasons, and that will be true again this year, but it will still be within our range, the corridor that we've provided of 7% to 10% in terms of cost of risk, and that trend will continue throughout the year. However, it has to be said that we are moving, pivoting during the first half of this year, as again previously communicated. So the loan book in terms of what we call ICL, instant cash loans, which is called micro loans in Uzbekistan is running off on the bank side, and I'll come on to that in a second when I answer your third question. And we are scaling up other products. So credit cards, business loans, and we'll be launching secured loans, hopefully, second quarter going into the third quarter, starting with auto loans. So the mix of the loan book is changing. Some of those are products which have been around for a while, but we're scaling. Others are new products, which we'll be learning and there'll be a different loan book mix and therefore, stuff moving around a little bit on the cost of risk side as we build and scale those businesses. But as I say, we expect our cost of risk to come in within the corridor as previously guided of 7% to 10%. On the third question, so we had some regulatory changes as obviously, we discussed a lot over the last couple of quarters in Uzbekistan. The Central Bank for a number of different reasons, including tackling inflation and bringing that down, including stimulating the growth of SME lending, including preventing the longer-term buildup of potential risks in consumer lending in the country, decided to cap the portfolio shares of various unsecured asset classes. So that covered auto loans, which have been -- the portfolio cap of 25% have been in place for a while. That added to that portfolio cap 25% caps on micro loans, credit cards, and that happened in April last year. And then in November, they decided to accelerate that by announcing risk weights, which have been reintroduced, also based on portfolio shares, and they come into force the new risk weights from the 1st of July this year. Again, we talked about this on the last call. So we are basically pivoting. So we've done a few things in order to make sure that we climb into the new structure of our loan book that the Central Bank wants to see in the medium term. So the share of ICLs, micro loans has been declining as we run off our loan book in that particular class on the bank's balance sheet. We have been ramping up credit cards. We've been ramping up business loans, and there's a couple of different products in terms of business loans. We'll be adding more during the course of this year. And as I said, we'll be launching secured loans in the next couple of quarters. So this means that the loan book is changing. That also explains what you saw coming through in terms of the numbers on the loan book, which dropped in quarter 4 last year. We expect that in the first half of this year, it will be -- maybe diminishing, maybe reducing a little bit more, the loan book or flat. And then as we go into the second half of the year, that will pick up again and we'll go back into growth. And we expect growth to be, maybe around 20%, maybe more for this year in total for the year of the gross loan book. Alexander Kantarovich: Okay. That's actually quite positive. So 20% for the year is positive. Andrew Keeley: Next question is from Piers Brown of Investec. Piers, can you hear us? Can you go ahead. Giorgi Megrelishvili: We can't hear you, Piers. Andrew Keeley: We can't hear you. Giorgi Megrelishvili: Yes, we may take another question and... Andrew Keeley: Yes. We'll come back to you, Piers, because we can't hear you. Can we have Dmitry from Wood. Dmitry Vlasov: Congrats on the results. I have 2 general questions, if I may. The first one is at this moment of time, I mean, at least in the end of the 2025, how many percentage of deposits in Georgia are still opened by Russians, Ukrainians and Belarusians? And since we are in the process of the negotiations, how much would that close if we would see a ceasefire or the end of the war? That's the first question. And the second one, I noticed that on your macro forecast for Georgia, specifically, you are a bit more conservative than IMF and World Bank and [indiscernible], you are more bullish. I was just wondering why is that? What are the main reasons for that? Vakhtang Butskhrikidze: Giorgi, please answer the first question and the second question, I will take. Giorgi Megrelishvili: Okay. So generally, before the war, our total share of nonresident deposits were around 35%, 40%. Nowadays, it's around 60%, 70%. Therefore, we don't have any major concentration to the deposits from migrants as we call them, and we don't have any dependency on the liquidity. Therefore, even if suddenly like whoever put deposit with a minimum number decides to kind of walk away, we won't have any liquidity. So that's -- hopefully, that answers your question. Vakhtang Butskhrikidze: Yes. To answer on the second question about the growth for the GDP. So as I mentioned already in my part of the presentation, our internal target 5%. I agree, probably it looks pessimistic assumption. And just to remember in 2025, 2 times we made upgrade of the forecast for 2025. But what we see, we are already February, probably it looks that economy will grow more. But for the budgeting purposes, we prefer to have a more pessimistic assumptions for our targets and for our guidance. Andrew Keeley: Next question is from Rahim at Cavendish. Rahim Karim: Three questions, if I may. The first was just to get a sense on the outlook for NIMs, if I can, in the 2 jurisdictions. I mean, Oliver, you talked a little bit about cost of risk movements in Uzbekistan because of the loan book shift. So it would be useful to understand that from a NIM perspective and then obviously the same for Georgia. The second question was just on Uzbekistan in terms of the regulatory changes. I was just wondering if there was any remorse from the Central Bank or any other emotions that came out as a result of the changes that they've implemented, any regret or how have they received the changes to the industry's or the response to the industry's activity there? And then just third, Vakhtang, thanks for your comments with respect to your evolving role. Just a sense on how you see opportunities with respect to M&A in the international business as well and how your increased focus on that is, how we should think about that over the next year or so? Giorgi Megrelishvili: Thanks, Rahim. Good to see you again on the call. So now I'll take the first question on the NIM. So Georgia NIM, we expect to remain at the same level as it is around 6%, high 5s. We don't expect material changes. On Uzbekistan side, generally, we've seen like high teens in Q4. That's the level probably we may continue in Q1, Q2, but it will gradually start picking up to high -- to around 20s, high teens, that would be our expectations as gradually funding costs will tick down over the period. There is a timing lag and that will be kind of will be caught up. That's on the NIM side, and I'll hand over to Oliver to go on the exchanges. Oliver Hughes: Sure, yes. Maybe just to spell out the outlook for Uzbekistan as we see it today. And again, please bear in mind that things are still moving around in an environment which is a little bit fluid, as we've said. So as Giorgi just explained, we expect to finish the year with NIMs recovering to around 20% for the year. We expect the loan book to grow by 20% plus, and that will be backloaded in the second half of the year, as I said earlier. Thirdly, we expect our ROEs to be at least what they were last year, if not higher, and we'll see how it goes in the rest of the year. In terms of the regulatory backdrop, so it's pretty busy, let's put it that way. So there's a lot going on as the regulator implemented varying new policies. So there's actually been more regulation coming out since we had our last call. Some of it in payments, some of it in consumer lending on secured and unsecured, including the introduction of DTI, so debt-to-income ratios on top of payment-to-income ratios, PTI. There's lots of stuff happening on the anti-fraud side on cybersecurity. So it's busy. In terms of emotions of the regulator, I'm not sure if the regulators are supposed to have emotions, but they obviously have an agenda. The agenda is quite a forthright one. This is the environment in which we're in. This happens in different markets, especially markets that are learning and adjusting and let's say, frontier/emerging markets. Again, this goes with the territory. So organizations such as ourselves, which are high growth and high adaptation do well in these environments. We deliberately chose this country because it has some challenges, which makes it interesting, but also lots of upside when you get it right. And we have a very good execution track record. We adapt this year. We've talked about this a lot. And we're already doing lots of stuff to respond, get ourselves back on the front foot and launching tons of new products and services, and we like the direction of travel. But it remains a little bit interesting, let's put it that way. Vakhtang Butskhrikidze: Yes. And to take -- I will take the last question, what are our plans for international expansion? We don't have any specific timing in mind. But on the other hand, we are open and looking at different international opportunities. And we believe that we have our competitive advantages, taking digital, retail, SME and other type of competitive advantages. Andrew Keeley: And we'll go back to Piers at Investec. Piers. Let's have another go. Piers Brown: Yes, I've got one probably for Giorgi and one for Oliver. Maybe just on the question for Oliver. Just a clarification on Uzbekistan. You've given a very helpful slide on Page 27, which gives the current breakdown of the loan book as per the Central Bank methodology, and you've got sort of 71% there in micro loans. Is that the number that we need to look at that needs to move to 25%? And as I sort of understood it from your earlier answer, you sort of think you can get there by just rebalancing the book, i.e., growing the other businesses rather than shrinking necessarily the absolute level of outstanding micro loans. So if you could just clarify if that's the right understanding. And the second question for Georgia on the Georgian business. Just on the retail cash loans progress, I mean that's 36% growth year-on-year. The book is now at GEL 2.4 billion. How should we think about the future opportunity there? What sort of market share have you got? What's the size of the market? Where do you think the market share could get to? And is that GEL 2.4 billion number going to get a lot bigger? Is it still got a lot of growth potential ahead of it? Oliver Hughes: Thanks for the questions, Piers. So I'll start. So on that slide, which you referred to, I think, is 27, there are 2 parts to it. On the left-hand side, you can see the consolidated numbers, which is very important. So that's the group-wide -- Uzbekistan group-wide numbers, which I'll come back to in a second. And on the right-hand side, the text at the bottom is what you're asking about, which is the Central Bank view because that's -- they look at the bank's balance sheet. So we got our -- the share of our micro loans down to 70% by the end of the year from what was over 90% at the beginning of the year. The direction of travel is downwards because it has to be. And we believe we will be below 50%. That's what we're aiming for on the bank's balance sheet by the end of the year. And thereafter, it will decline more because obviously, we have to get to the 25% target by the 1st of January 2029, if not before. So that's the bank view of the answer to your question. However, we have a group. So we have lots of -- well, not lot of, but several other balance sheets. We have the microfinance organization. We have TBC Nasiya, which is installment loans or installment finance. And we also have a new company that we're using for BNPL. So there are different balance sheets that we can deploy. And we've actually restarted micro loans or instant cash loans, as we call them, on the MFO balance sheet. We're doing this in a very gentle way, just building it up and restarting the machine, which means that you will see one of the sources of growth coming back into the overall consolidated balance sheet view this year from the microfinance organization's balance sheet off the bank's balance sheet. So I think the short answer to your question is on the bank's balance sheet, this is our way of climbing into the structure below 50% ICL share -- micro loan share by the end of this year. But the growth will be coming from other non-micro loan asset classes that we're building in the bank or we're scaling up, example, credit cards, which is already 7% of the bank's balance sheet and stuff which is off the bank's balance sheet. So there's plenty going on. Giorgi Megrelishvili: Now to go to your cash loan side. Probably I will hold back the answer on these questions for 2 days. When during Strategy Day, my colleagues will cover it in more details, our strategic goals and directions. I don't want to put a spoiler. What I can say we have a big focus on cash loans. It will be a big driver of our profitability, and we are very comfortable making a great progress. How and exact targets to come in 2 or 3 days' time, 24th, on Tuesday. And I'm pretty certain you will be pleased with what you hear. Andrew Keeley: Thank you, Piers. It doesn't seem like there's any further questions in the queue at the moment. Becky, do we have any on the phone line? Operator: We currently have no questions on the phone line. Andrew Keeley: Okay. Then all it remains for me to say is thank you very much for joining our full year call. It's great to see so much interest. And just to reiterate, we hope we will meet again shortly next Tuesday in New York and via the webcast for our Strategy Day. So thank you very much. And with that, it's goodbye from us. Thank you. Giorgi Megrelishvili: Thank you. Vakhtang Butskhrikidze: Thank you. See you see you next week. Bye. Operator: This concludes today's webinar. Thank you, everyone, for joining. You may now disconnect your lines.