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Operator: Ladies and gentlemen, thank you for standing by. I am Geli, your Chorus Call operator. Welcome, and thank you for joining the Public Power Corporation conference call to present and discuss the full year 2025 financial results. At this time, I would like to turn the conference over to Mr. Georgios Stassis, Chairman and CEO; Mr. Konstantinos Alexandridis, CFO; and Mr. Ioannis Stefos, Chief Investor Relations Officer. Mr. Stefos, you may now proceed. Ioannis Stefos: Hello, everyone, and thank you for joining today's conference call for PPC's full year 2025 results. We will begin with an overview of the group's results from our Chairman and CEO, Georgios Stassis, followed by a review of the financial performance for the period by our Group CFO, Konstantinos Alexandridis. After the conclusion of the presentation, we will open the floor for your questions during the Q&A session. The IR team will be available after the call for any follow-up discussions. With that, I will now turn the call over to Georgios. Georgios, please go ahead. Georgios Stassis: Hello, everyone, and thank you for joining us for today's earnings call. PPC had a strong performance for another year, in line with the strategic targets set in the business plan with adjusted EBITDA increasing to EUR 2 billion and net income at EUR 0.45 billion, demonstrating the extent of the transformation and the growth that has been achieved during the last years. This significant growth in profitability has allowed us to keep increasing dividend distribution in line with our plan, which provides for further improvement of shareholders' remuneration with a gradual increase of dividend to EUR 1.2 per share in 2028. Investments stood at EUR 2.8 billion, with the majority allocated to renewables, flexible generation and distribution projects, supporting a further step-up in profitability going forward. Despite high CapEx, our balance sheet position remains solid with a net debt-to-EBITDA ratio at 3.2x at the end of 2025, providing the necessary room to implement our investment plan in the next years. Moving to Slide 7. The last years have been directing capital towards renewable energy, flexible generation and distribution. As a result of these investments, we have been able to increase both the regulated asset base, as we will see later, but also the renewables and flexible generation capacity, which now represents 80% of our total capacity. In this way, year after year, we are increasing our renewables footprint, combining it with flexible generation assets, while at the same time, we have made significant progress in phasing out lignite, a process which is at the final stage, with the last unit of 700-megawatt plan to cease its operation by the end of this year. Deep diving now to Generation business on Slide 8. As you can see, we have increased the total installed capacity to 12.4 gigawatts, led by the continuous rollout of new renewable projects, which has outweighed the reduction of lignite capacity during the last year. Our total generation output has remained practically stable, however, with increased participation of renewables on the back of reduced production from lignite and oil. More specifically, renewables output increased to 6.9 terawatt hours, driven by wind and solar generation, reflecting the addition of new capacity, which outbalanced the weak performance of large hydro power plants for last year. As a result, renewables increased its share to 33% of our total output. On the flip side, lignite generation declined at 2.7 terawatt hours and oil at 3.6 terawatt hours, corresponding to 13% and 17% of total output, respectively. 2026 is a milestone for PPC generation activity since it marks the end of lignite-fired generation after many decades, making PPC coal-free. Last, gas generation had no change versus 2024, being, however, a very important component of our energy mix today, corresponding to 37% of our total output. As a result, CO2 Scope 1 emissions declined by 0.5 million tonnes compared to last year. And going forward, we expect further improvements since we will cease our lignite operations by the end of the year. Now moving to Page 9. Let me briefly describe the progress in renewable projects that we have achieved in the fourth quarter of 2025. Executing our strategic plan with discipline, we completed the construction of an additional 800 megawatts of capacity across Greece and abroad. The majority of these additions were solar projects, which exceeded the 700 megawatt in total, complemented by the first 59 megawatts of battery energy storage installed in Greece and Romania as well as 36 megawatts from a wind farm in Northern Greece. In summary, 546 megawatts of renewable projects across various technologies were completed in Greece, along with 272 megawatts internationally in the fourth quarter, leading to total additions for 2025 at 1.7 gigawatts, as we will see in more detail in the following slides. Going to Slide 10, let's see in more detail the additions that we concluded in the fourth quarter of 2025. First, in Greece, major projects totaling 550 megawatts were completed since the November Capital Markets Day. Specifically, we completed the last 30 megawatt of a 550-megawatt solar project located in the former lignite area of Ptolemais in Northern Greece. In the same region, in cooperation with RWE, we completed the final 623 megawatts of a 938-megawatt solar project. In the Ptolemais region, again, in the former lignite area, we completed the first 125 megawatt of a 490-megawatt solar project. The second 125-megawatt cluster is currently under construction, and the third cluster is scheduled to begin construction later this year. For wind, we successfully completed 36.4 megawatts in Central Greece in the region of Fokida. And last, an important milestone was also the completion of our first battery project in Greece in the former lignite areas of [ Ptolemais ] as well. Outside of Greece, in the fourth quarter, we added 272 megawatts of capacity from renewable projects, mainly solar across Southeast Europe, as depicted in detail in Slide 11. Starting with Romania, we completed solar projects of 215 megawatts in total in various locations, along with 9 megawatts of batteries, which will enable us to enhance dispatch optimization and capture value from balancing services and price arbitrage. At the same time, we completed 17.5 megawatts of photovoltaics in Italy and 30 megawatts in Bulgaria, increasing our footprint in these countries. Overall, as you can see, we keep a good pace of additions, delivering significant renewable capacity while continuing to expand our construction pipeline. All of the above are summarized in the next slide, Slide 12, which shows that we remain on track to achieve our 2028 renewables target of 12.7 gigawatt, as presented in our last Capital Market Day. We have added 1.7 gigawatt in 2025, standing now at a total of 7.2 gigawatts. And we have another 3.7 gigawatts that are either in construction, ready to build or in the tender process, having secured, in essence, 86% of the capacity that we target for 2028. There has been further progress in our pipeline also in terms of maturity, having moved during the fourth quarter -- last fourth quarter, approximately 600 megawatts into the under construction and ready-to-build stages from the permitting and engineering stage. And this process of adding new capacity, maturing additional projects is something that we have been doing many quarters now, and we will continue to do so as we advance multiple projects across Greece and internationally. Let us now move to Slide 13, which provides key highlights of our retail activity and the overall environment in Greece and Romania. Electricity demand was slightly decreased in both countries by minus 1.3% in Greece, reflecting milder average temperatures compared to 2024 and by 0.6% in Romania. Our electricity sales decreased by 1.9% compared to 2024, primarily driven by lower demand in Greece and a slight market share reduction in both countries. Deep diving in the retail activity in Slide 14, despite this intensely competitive environment throughout 2025, we successfully defended our market share while expanding beyond the commodity segment, demonstrating our ability to diversify and deliver impactful results. Customers remain our top priority. This is reflected in our strong top line performance across all customer satisfaction metrics and the continued improvement in the quality of our customer base. Notably, bad debt exposure decreased by 14%, as shown in the bottom right graph, driven by improved penetration and more effective management of higher-risk customer segments. On top of various targeted propositions that we launched during the year, SME, family and other and as artificial intelligence continues to shape market developments; we launched in Greece a virtual assistant support our customers. This is the first AI-powered digital assistant in the market, designed to elevate the customer experience by providing clear explanations of bill charges in simple language. For our activities in Romania, 2025 was a transitional year following the lifting of the price caps. As competition has been growing, we focus on protecting and strengthening customer relationships through targeted retention actions. Looking ahead, we expect 2026 to remain highly competitive. We will continue to focus on delivering value, strengthening customer engagement and maintaining resilience in an evolving market landscape. Just a few words for several synergy streams in the retail activity that we set up in 2025, we are in Slide 15. Kotsovolos has been key for this, providing the opportunity to launch a broad range of initiatives. Our collaboration has evolved from establishing a strong in-store presence and developing dedicated PPC shop-in-shop corners featuring our products to extending field services coverage that delivers essential energy solutions to customers and households, services that are fundamental to everyday living. Looking ahead to 2026, we plan to further strengthen our footprint within PPC shops while expanding our product and service portfolio to reach additional customer segments, addressing a broader spectrum of needs. Next, in Slide 16, a few words of certain KPIs of our Distribution business. We continue to invest significantly in 2025 with CapEx increasing by 2% year-on-year, in line with our strategy to enhance and digitalize our electricity distribution networks. The total regulated asset base now stands at EUR 5.7 billion from EUR 4.9 billion last year, mainly driven by the increase in Greece following material investments. The strong investment activity is also reflected in the improvement of the reliability indices of our networks in both Greece and Romania, while smart meters penetration continues its upward trend with further room to grow, especially in Greece. Turning to Slide 17. We can see how the implementation of our strategic initiatives, combined with active engagement have resulted to actual progress in several ESG ratings and scores within 2025. Specifically, our efforts have been recognized by S&P Global, EcoVadis, MSCI, ATHEX ESG and ISS, all of which upgraded PPC's ratings and scores. These improvements reflect tangible progress in several key areas such as environmental management, renewables portfolio expansion, corporate governance, ESG integration and transparent reporting. These advancements underscore our commitment to sustainability, mitigating business risk and fostering long-term value for all stakeholders. Let me now pass it on to Konstantinos for the financial performance analysis. Konstantinos Alexandridis: Thank you, George, and good afternoon to all. Moving next to Slide 19 for an overview of the trends for the main energy-related commodities. To begin with TTF, gas prices in early 2025 were initially strong, supported by reduced Ukrainian transit and cold weather conditions before easing as demand weakened and geopolitical concerns softened. Subsequently, prices declined under the milder weather conditions, strong LNG inflows and lower storage targets from EU with a brief rebound driven by firmer demand and tighter Norwegian supply. Later in the year, gas prices remained broadly stable before falling to their lowest levels towards year-end. Overall, gas prices recorded a moderate year-on-year increase of 5%. Turning to carbon. EUA prices opened the year sharply, but reversed after mid-February, pressured by declining gas prices and uncertainty around U.S. tariffs. Prices later recovered on the back of easing trade tensions and a U.S.-China agreement, although gains driven by geopolitical developments proved short-lived. The market remained relatively balanced for a period before a rally emerged towards September driven by compliance buying with prices peaking towards the end of the year. Overall, carbon prices also recorded a moderate year-on-year increase of 12%. Finally, looking at power prices, they spiked early in 2025, driven by higher TTF and EUAs, easing later in Q1 on the weaker demand and the higher solar performance. Prices rose in Q2, tracking TTF and EUAs, but stayed stable in June, though elevated despite geopolitical tensions, thanks to record renewables output. In the second half of 2025, weather-driven demand and lower renewable output led to a steady rise in prices. Moving now on Slide 20, where we can see the key financial figures for the period, showcasing the strong financial performance recorded in 2025 with increased revenues mainly due to higher power prices and the contribution of Kotsovolos. Adjusted EBITDA reached EUR 2 billion, up by 13% year-on-year, an uplift driven by higher contribution of integrated activities in our two key countries, Greece and Romania. Adjusted net income post minorities stood at EUR 0.45 billion from EUR 0.36 billion in 2024, up by 23% year-on-year. The proposed dividend for 2025 is EUR 0.60 per share from $0.40 per share in 2024, demonstrating our strong commitment towards the increase of distributable profits for our shareholders and in line with our commitment in the latest Capital Markets Day. A more detailed overview of EBITDA and net income evolution will follow later in the presentation. Investments at EUR 2.8 billion, focusing mainly on renewables, flexible generation and distribution. Free cash flow continues to be driven by elevated investment levels in line with our business plan. Net debt at EUR 6.5 billion at the end of December 2025, with net debt-to-EBITDA ratio at 3.2x as anticipated, given the progress in our investment plan. Proceeding to Slide 21 for the revenues evolution of the group, which recorded an 8% increase. The largest part of this increase is driven by energy sales, which are up by approximately EUR 0.5 billion as a result of higher power prices we experienced both in Greece and Romania for the full year. The rest is mainly driven by sales of merchandise coming from the operations of Kotsovolos, which have a full year effect in 2025. These two factors have been able to more than offset the impact of our revenues from volume decline related to market share reduction and a slightly reduced electricity demand in both countries, as George mentioned before. All this resulted to a total revenue of EUR 9.7 billion in 2025, up by EUR 0.7 billion versus 2024. Moving to Slide 22 for the EBITDA performance by business activity. As you can see in the left side of the slide, EBITDA has recorded a 13% increase year-on-year with the integrated business being the key driver for this growth. I will provide more color on this in the coming slides. International contribution at 22%, mostly driven by Romanian operations, which stood at EUR 440 million. Next, on Slide 23, a few words on the evolution of the integrated business. The improvement that has been recorded versus last year has been taking place on the back of improved performance in the retail business and green and energy mix throughout our footprint as we increase renewables capacity. In addition, this improvement has been also supported by the reduction of fixed costs associated with lignite activity as we progress with the phasing out of the relevant units. All these factors have been the basis of our commitments in our Capital Markets Day some months ago to improve our profitability in the integrated business by EUR 0.2 billion year-on-year. Now proceeding to Slide 24 for a view of the distribution activity. With regards to Greece, the demand decrease of 1.3% versus 2024 negatively affected the approved network usage revenues that will be compensated in 2027. In Romania, the Distribution business marked a slight decrease versus full year 2024, but this was driven by seasonal effects. Adjusting for construction works that have already been included in the 2026 allowed revenues, the 2025 performance would be higher than last year. Proceeding to Slide 25 for a deep dive on the EBITDA-to-net income bridge. The improved performance in terms of EBITDA that we've discussed in the previous slides has also been reflected in the bottom line with adjusted net income after minorities standing at EUR 448 million, that is a 23% increase versus last year. In terms of EPS, the year-on-year increase is slightly higher, reaching the 24% given the ongoing share buyback program. Adjustments included in the net income includes special one-off items with the largest being the provision for incentives for volume direct exit schemes that we implemented, the PPAs revaluation as well as the incremental depreciation from the asset revaluation of December 2024. Moving on to Slide 26 for the analysis of the investments. We continue to keep a high level of investments reaching EUR 2.8 billion in 2025 despite the reduction of 9% year-on-year. Importantly, 87% of our investments are directed to our distribution networks, renewables and flexible generation in line with our strategic priorities. Distribution has been the largest component, reflecting our focus on network utilization and resilience in both Greece and Romania. At the same time, we are significantly expanding our renewables footprint along with increased investments in flexible generation to support the stability and monetizing the surplus of generation. Geographically, the majority of investments are concentrated in Greece, accounting for 72%, while Romania represents a growing share of 23%. Overall, our investment program is clearly aligned with the energy transition, strengthening our asset base and supporting long-term earnings visibility. Let's now move on to Slide 27 for the free cash flow analysis of the group. The strong operational performance, combined with the positive working capital resulted to a significantly positive FFO of EUR 1.9 billion. The change in working capital had a positive impact of EUR 161 million over the period, supported mainly by CO2 and our hedging activities. With regards to CO2, we had a positive impact in 2025, which is mainly attributed to timing of payments and the overall working capital management. With regards to our hedging activities, initial margin requirements related to new positions declined, mainly as an effect of lower and less volatile gas prices towards the year-end, while at the same time, prior periods positions continued to wind down. Looking at the trade receivables and excluding state-related entities, we had a positive change in working capital by EUR 70 million, partially offsetting the increase of trade receivables from the state-related entities. We have been working with the state to reduce the overdue amount, and we expect in the first half of this year to have positive results. Finally, within category Other, we had a negative impact of EUR 92 million as a result of last year's overperformance in December '24, where some payments were shifted to 2025. Overall, free cash flow is in line with our estimates, given the significant capital deployment that we are doing throughout Southeast Europe and across technologies. Turning to Slide 28. Let me walk you through our debt profile and liquidity position. Despite the acceleration of our investment program, liquidity remains robust, supported by a well-balanced mix of fixed and floating rate debt. We also maintained strong liquidity headroom with $4.6 billion of undrawn committed credit lines as of year-end 2025. At the same time, ongoing refinancing initiatives and favorable interest rate trends have contributed to a reduction in our average cost of debt, which stood at 3.8% by the end of 2025. Our debt maturity profile remains well spread with no material concentration risks. Over the next 3 years, maturities amount to $2.6 billion, including $500 million related to our sustainability-linked bond maturing in July 2028. In October 2025, we successfully issued a EUR 775 million green bond due in 2030 priced at 4.25% coupon with strong investor demand and 3.4x oversubscription. The proceeds were used to redeem in full the aggregate principal amount of sustainability linked senior notes due in 2026 and support eligible green investments in line with our financing framework. The remaining maturities primarily relate to long-term loans and committed facilities, which we expect to refinance in the normal course of business. Finally, our credit profile remains at BB- with both rating agencies with S&P recently revising the outlook to positive, while Fitch affirmed the stable outlook. Next, on to Slide 29 for the net debt evolution and our leverage position. Net debt and consequently, net leverage increased in 2025 as anticipated, reflecting the acceleration of our investment program in line with our business plan. Net leverage currently stands at 3.2x and is expected to evolve in line with our plan. We remain fully committed to our financial policy, including the 3.5x ceiling we have set. Let me now pass it on to Georgios for his concluding remarks. Georgios Stassis: Thank you. Now moving on Slide 31. Before I conclude my presentation, let me reaffirm our guidance on key figures for this year. Our expected adjusted EBITDA is at EUR 2.4 billion, and we anticipate more than EUR 700 million in terms of adjusted net income after minorities, leading to an EPS of EUR 2.1, demonstrating a 58% increase versus 2025. We are on very good track to achieve these targets for several reasons, as we saw at the right-hand side of the slide. First, we have been experiencing mild weather conditions in the first quarter of 2026 so far, which have led to improved margin in our retail activity. Second, wind conditions have been quite strong from the beginning of 2026, benefiting our assets both in Greece and Romania, which combined with better hydrological conditions in Greece, contribute to a good start of the year. And third, we are at a quite advanced maturity stage for the 1.8 gigawatts of new renewables that we are targeting to conclude in 2026, being already at an approximately 50% readiness. Moreover, we feel very comfortable in delivering our targets for 2026 as well. Once again, we highlight our strong commitment for our dividend policy that is expected to reach EUR 0.80 per share from $0.60 per share in 2025, an increase of 33%. In our concluding slide, Slide 32, let me now wrap up with a few final points. Overall, we are delivering on our strategy with strong execution across all key pillars. Our 2025 performance reflects the benefits of our integrated business model. We continue to deploy capital in a disciplined manner with EUR 2.8 billion invested in renewables, flexible generation and distribution, supporting our future growth. We have made significant progress in our renewables installed capacity, adding 1.7 gigawatts in 2025. And at the same time, we are building strong visibility on our targets going forward, with 86% of the capacity that we target for 2028 being already secured. Our transition away from lignite is progressing as planned with full phaseout expected by end of this year, further improving our environmental footprint. This shift is strengthening the resilience and flexibility of our portfolio, enhancing our position in a challenging and evolving energy landscape. We are very confident in delivering our 2026 targets, and we prepare ourselves to be able to meet our targets beyond this year, aiming at sustainable value creation for our shareholders, our customers and the market in which we operate. Thank you all. And now looking forward to get your feedback and your questions. Operator: The first question is from the line of Di Vito Alessandro with Mediobanca. Alessandro Di Vito: I have three. First question is on the general energy outlook. I wanted to understand which could be the implications for PPC in case the current escalation in Middle East extends for a longer period of time? And on this matter, if you could remind us the sensitivity you have to power prices. The second question is around the political debate to lower power prices in Europe. I wanted some color on your contribution to this debate. And if you see the risk some political intervention, both at national and at European level? Third question is on your procurement strategy. I wanted to understand if the current disruption in LNG supplies could affect the procurement for your CCGT plants or for your gas supply clients? And maybe just the last one, a clarification during the explanation of the guidance, I heard 2026 net income above EUR 700 million. So I wanted to understand whether this is confirmed or not. Georgios Stassis: Okay. Thank you very much for the questions. Now let me start from the general outlook. Of course, we cannot estimate how this will end and when it will end. And nobody is able to do that right now. However, there are -- because we have some experience now and our experiences from 2022, where we had a major energy crisis and impacting very much also our continent. I want to outline some points. First of all, we do not have any physical delivery issues because we are not procuring from that area, from the Strait of Hormuz. While in 2022, you remember when the pipe was interrupted, we had to handle physical delivery problems as well, which was really a big mess. But we are not in this situation. Therefore, and as far as I understand, this is the situation of Asia, in particular, or some other companies, maybe in Europe, but not ourselves. And then, of course, you may understand that then we need to handle the issue of prices. Today, we think that -- I mean, if we take the today news, every day is a new situation, of course, it is at 60 -- around 60, 62, 63 in the gas TTF. Gas is of our interest. So if you remember, 2022, we handled prices of 350. So I hope we will not see these prices, of course. But still, it is -- we have the experience and the management to handle the situation, first point. Second point, we are -- I mean, we are -- we have an overall portfolio that has -- part of it is fixed. Our fixed customers is already fully hedged. So there's no impact in that situation. And of course, one could question if things go really high, how this will pass into the market. I believe that starting from as you know, from 2023, there was a European directive, which defined when Europe will be considered on crisis and has the limit reaching gas prices at 180. So we are far away from that level, thankfully. And I don't think we will be needed right now to handle any situation like that. In any way, however, this, because of our vertical integration is not -- has been proven also in the past that we never had a problem into managing this situation. If even in the scenario of infra marginal caps, it simply means that we will not have, let's say, huge windfall profits. And those will be used by the governments of Europe to be -- to supporting the citizens of Europe. So what I'm trying to say is that point one, right now, we are not in this situation at all. I'm not sure if we will be. And if and if we will go in a very extreme situation, the tools are available to be used also at the European level, have been used in the past, and we proved that we were not affected by that, and we don't believe we'll be affected as well. Now the other thing is that the timing of this crisis is coming in a period of time, which is spring. And this is very important because we just closed winter. And this is a period of time where renewables are boosting very much. We are mostly of low prices. So I think that there is time in front of us before we move to the heart of the summer where we will have another peak or when we will reach the point that the European storage facilities will start to be having the need to be, let's say, filling up. And that would be possibly an issue which will impact 2027. We don't believe we will have a major impact in 2026 also in such a situation right now. So we wait and see how the situation will develop. But I think we are extremely protected as PPC right now, having worked in our overall vertical integration and our own capability to manage our overall customer base. Now going -- to the second part of your question about the discussion that has emerged in Europe about the energy prices, this is a valid point, I believe. It is a concern for everybody. And I believe it is also a valid point for the industry, which is an important parameter. I have the impression that -- I mean, we will know today, tomorrow, how things will develop in the council, but I have the impression that mostly the discussion will focus around an ETS reform for the future. As you may be aware, ETS is supposed to be formed in July, and there is today already taken decisions from the past to remove quantities from the ETS market from the quote that would tighten the market further and would result in a price increase in ETS. I see personally that there is room in the discussion of the European leaders to make this transition smoother and not so steep in the coming years. And I think, and this is the most important thing, that this is exactly how we were forecasting the development to happen even before this discussion becoming relevant. If you look on our slides on the Capital Market Day in November, you will see that the kind of path we have for ETS prices are reasonable because we were assuming from that time that we don't believe that the current situation will be activated in the sense that we don't believe we will see crazy prices of the ETS market. So we have already budgeted with a very smooth pattern from 2026 to 2028, even beyond 2030. And I think the conclusion of the discussions in Europe will more or less go in that direction. And then having said that, there is another element as well, which is very important, which is our region, because we put all this into a perspective, but we need to think of our region as well because every geography is different. In the Southeast European region, the corridor between Italy, Greece, Bulgaria, Romania, Hungary, Poland, up to Ukraine, Moldova, all these kind of countries, Croatia; this is a corridor which is very tight from the capacity point of view. And on top of that, it has very old fleet. So because you have a sensitivity, even in our calculations with a lower EPS from our projections, we don't see the dam changing significantly because the assets that will be activated are quite mature and old fleet and into an area which is having a very old fleet. For all these reasons, I believe that we have been very prudent in managing our assumptions. And I think gradually, we are going in that direction. So we feel that not only for 2026, we are absolutely certain that we will deliver properly, but also for the coming years, we will be in line with our projections. Last, procurement. I didn't quite understood the last part of your question, but I can tell you that we don't feel any procurement issue as a result of the crisis right now in the rate. But if you can elaborate more of what you meant, I will be able to answer. Alessandro Di Vito: Yes. No, I think you already answered. I was asking about your procurement strategy and whether you would be affected by the disruption in the Middle East. But you already said that the fixed portion of supply is secured and you have no procurement from Middle East. The last question was on the net income for 2026, whether it is going to be around EUR 700 million or above EUR 400 million during the presentation, I had above, but I just wanted to make sure about the detail. Georgios Stassis: Okay. Listen, we just closed the year at EUR 450 million net result. I can tell you certainly that we will be in the area of 700. I could even tell you that we're having a good year today. So I would be most probably able to verify a number higher than this. But of course, we have -- we are in an environment of huge volatility. So the only thing I can confirm is the 700 level right now. Operator: The next question is from the line of Nestoras Katsios with Optima Bank. Nestor Katsios: Congratulations for your great set of results. So two questions from my side. The first one has to do with the data centers. Is there any update with your discussions on the data center front? And the second one is about [ Ptolemais ] 5. I understand that you will shut down this year. Are there any final investment decision for the future of [ Ptolemais ], I mean, some gas plant? Georgios Stassis: Okay. Let me start from the last because I think it's the easiest. I mean, for [ Ptolemais ] 5. I think we have already announced that we will convert it to gas, and we are already working in that direction. I think we will see it already in operation in gas from 2028 because we are already working in that direction. We have already secured the equipment we need. And I think we have sufficient time to do this transformation by 2028 early. So this is for [ Ptolemais ]. Now for the data centers, for those of you who are following our company, you may remember that we have announced our intention to develop a data center last April. It's almost a year, not even a year yet. And I told you from that day that I would expect -- I was expecting end of '26 to have some sort of real development. And this is our vision right now. However, we are in discussions with hyperscalers and those discussions are going a little bit better from what I thought. So I mean, we have progress. We have significant progress, but we are not there yet. This is the thing I can say right now. Operator: The next question is from the line of Karidis John with Deutsche Bank. John Karidis: I have four quick ones on just the telco business, please. The first question is, what was the CapEx in FY '25 in millions rather than billions? Secondly, how many customers did you have at the end of 2025? And how many do you have now? Thirdly, during the CMD, I asked you about the timing of the launch for voice services, and you said very soon. Could you please update me on that, hopefully, give me something like a date? And then lastly, a year ago, I asked you whether you were interested in mobile, and you said you were not. Has your view changed there at all? Georgios Stassis: Thank you very much for the questions. I can tell you that we have spent around EUR 200 million until now on this project. We have delivered more or less a network of 1.7 million, but only 1 million is commercially available. First, you create the backbone and then you make the remaining pieces. So very recently, we launched at the end of last summer, the service with a footprint of 500,000, let's say, households passed. And very recently, we opened from 500,000 to 1 million. I can tell you that we are currently connecting around 200 customers per day. This is the current pace we have. So you can calculate. I think we are quite happy with that because in that level, I think this in the coming months because it's too young, not even 6 months that we are working on that. In the current pace, we will probably reach a level of 250,000 in the coming months. And when we will open the remaining 500,000 and so on and so forth, I mean, going gradually as per our plan to 3.5 million; this means that with this trend, we will be reaching a level of around 700, 800 customers, maybe more per day. So we are very happy. We are learning as well from that. As you might have noticed, we are not pushing a lot advertising because we want to have a very good service on our customers. But very shortly, we will start pushing more commercially. So I'm expecting these numbers to pick up. But so far, so good. I mean, we are doing very well. We are very happy, and we will reach the target -- the number of target customers we have in our mind by the end of '28, beginning of '29. About voice, I think we are ready to launch it probably in June, June, July, we will launch voice. About mobile, we are not investing in mobile because our project is a very specific project. That's why we are so relaxed. I mean we are doing this -- we found this opportunity to roll out this fiber project only in Greece. It's not a big project for us versus our total CapEx. And we are in line exactly with the numbers we want to have day by day. So we will go gradually. We are not investing in the mobile. I can verify this 100%. Thank you. John Karidis: I'm sorry, could you please tell me how many customers you had in total at the end of 2025? Georgios Stassis: We have more than 12,000 customers. Operator: The next question is from the line of Walker-Hunt Ella with Citigroup. Ella Walker-Hunt: My first question relates to hedging. So in terms of power price exposure, could you tell us what's your hedge position at the end of the year? So how much in terms of terawatt hours have you sold forward and what duration? And then my second question is about the full-year results. So if you -- if we look at it on a quarterly basis, so the fourth quarter earnings were actually down almost 20% if you compare to the last year. So I was just wondering, what was driving that earnings contraction in the fourth quarter? Georgios Stassis: Okay. The first part -- what was the first part? The hedging, the hedging, we are at a level of more than 40% to 45% right now for the year for everything, all our position, not accounting the fixed customers, of course, that we have 100%, as I told you, on our fleet. Now for the fourth quarter, I mean, we navigated -- I mean, we have a sort of -- every year a sort of seasonality, and we are trying to govern the company also taking into account the market in general. So we chose to support more our customers at the end of the year. And -- but still, we brought our results. So -- but this has happened in many of our years, I mean, in the past years. There is a thin line where you need to keep the pace of growth in a reasonable level. And from quarter-to-quarter, we have and we have had differences like that in the past. This is normal. In the contrary, you will see that if you will compare this quarter, this current quarter when we will announce it because it's going well. With the quarter of last year, you will find exactly the opposite. But it is part of our -- the nature of our business. Operator: The next question is from the line of Pombeiro Mafalda with Goldman Sachs. Congratulations on the results. Mafalda Pombeiro: I only have two left, if possible. The first one would be any indication or guidance on the net debt levels for 2026, if you can share at least the main moving pieces? And the second one is just a clarification. Out of your retail sold volumes, could you please -- I understand that the part that is fixed contract fixed customers. So what percentage is that of the overall sold volumes? Georgios Stassis: Our fixed part is around 20%. And now Konstantinos will take the first one. One second, give us. Konstantinos Alexandridis: Yes. So the way we have set up the business plan that we discussed back in November is asking for additional investments. So we do expect that the more we are progressing, of course, leverage ratio will remain at the area of 3.3x to 3.4x. So that would be at an area in terms of net debt close to EUR 7.5 billion to EUR 7.7 billion. Operator: The next question is from the line of Anna Antonova with JPMorgan. Anna Antonova: Just a few from our side. So first, on the CapEx outlook for this year for 2026. I see that last year, you spent just a little bit lower than you guided below the EUR 3 billion. Is the CapEx for this year still expected around your target, which I think from the end of last year was EUR 3.8 billion? That's the first question. Georgios Stassis: Yes. We -- of course, from last year, the big deliveries of renewables started to arrive in our company. On the other hand, last year, we did our CapEx also with an acquisition. as we have noticed. But the last quarter, we brought 800 megawatts. So it's ramping up. And right now, we are going to deliver 1.8 gigawatt, and it's going fantastic. So we are able to confirm exactly our CapEx for this year. Anna Antonova: The second question is on the outlook for hydropower this year. I remember you commented during the call that in Q1, the weather conditions were quite favorable. So if you could maybe comment where you currently see the upside for hydro generation for this year compared to last year's maybe level, which was, I think, 3.4 terawatt hours. Georgios Stassis: Yes. Finally, we are having a good year on hydro after several years. We had the 3 bad years on hydro levels, and this is coming back this year. So I mean, I cannot predict exactly, but it's going to be for sure, more than last year. Operator: We have a follow-up question from Anna Antonova, JPMorgan. Anna Antonova: Just a quick follow-up question. So with all the events happening this year and higher power prices and kind of regulatory debate in Europe, can you comment if you see any downside to your targets for this year from the current conditions, both on the financials and on especially the lignite phaseout? You mentioned earlier the event of 2022, and I remember that at that time, the lignite decommissioning was a bit delayed due to everything that has been happening. So do you expect kind of any potential risks to the targets for this year? Georgios Stassis: Yes. And what was the lesson in 2022? We kept lignite because why? Not for economic reasons, because of lack of physical deliveries at that time in 2022. And what was the lesson? It was still more expensive than anything else. So we are not intending to keep it back by no means, especially now that we don't have any physical delivery issues. Other than that, I mean, knock wood, this is going very well this year. If it wasn't the Iran conflict, we would be able to be more optimistic, but we stay at this level right now. Operator: Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Stassis for any closing comments. Thank you. Georgios Stassis: Maybe we have a question. Operator: Yes. We have one more question from Mr. Alderman Richard with BTIG. Richard Alderman: Can you hear me? Georgios Stassis: Yes, please go ahead. Richard Alderman: Just one follow-up question on the hedging there. Just so we don't misunderstand what you're saying about the gas element of the hedging within your retail book, are you essentially hedged for what you see would be your average demand through the rest of the year from your retail book at this point? And then obviously, if there are variations within that and that costs you more, you would pass that through to customers who are not on fixed contracts. I'm just trying to understand... Georgios Stassis: This is indeed -- this is exactly correct what you said. Richard Alderman: Okay. Because there's been some discussion in the market as to whether you had exposure to that, but that's reassuring to hear. Operator: Ladies and gentlemen, there are no further questions now. I will now turn the conference over to Mr. Georgios Stassis for any closing comments. Thank you. Georgios Stassis: I think 2025 has been an important year. because this company proved that it reached a level of significant net result versus the past years. 2026 will be another year like that. Our growth is very important versus last year. And we feel confident we are exactly on target, maybe a little bit more. We will see how the year will develop. But so far, so good. So we are excited with the development of the company. We are already working very much for 2027, 2028. I believe 2026 is secured. And I think the coming years will be very interesting. Thank you.
Operator: Ladies and gentlemen, welcome to the Drägerwerk Full Year 2025 Earnings Call. I'm Moritz, your Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Stefan Drager, CEO. Please go ahead, sir. Stefan Dräger: Very good afternoon, and thank you for joining our conference call on our financial results for the fiscal year 2025. I have with me today Gert-Hartwig Lescow, CFO, as well as Tom Fischler and Nikolaus Hammerschmidt, both Investor Relations. We would like to take you through the results with the presentation that we made available on our web page this morning. Following the presentation, we will open the floor to your question. Let's get started on Page 5 with the business highlights. In 2025, we continued our successful course and generated the highest net sales in our company's history. Both divisions and all regions contributed to this. At around EUR 3.5 billion, net sales were slightly above our last forecast and around EUR 25 million above the level of the exceptionally strong coronavirus year 2020. Unlike during the pandemic, this is a new record that we achieved entirely without a special economic situation. Thanks to the operating momentum, our earnings before interest and taxes also developed very well. EBIT rose by more than 20% to around EUR 233 million despite difficult conditions. The EBIT margin increased by roughly 1 percentage point to 6.7%, also exceeding our last forecast. This shows that we are making progress in improving our profitability. Order intake also developed very well as with net sales, both divisions contributed to growth. This underlines the continuing demand for our Technology for Life and gives us a positive outlook for the future. Positive is also the key word with regard to our cash flow development, which Gert-Hartwig Lescow will explain later. We have also performed well on the stock market. Last year, our common shares rose by more than 1/3, while our preferred shares even increased by almost half and were included in the TecDAX. This means that we are once again one of the 30 largest listed technology companies in Germany. This listing increases our visibility on the capital market and could make us even more attractive to investors. In mid-January, we published our preliminary business figures for 2025 and our forecast for 2026. Our shares then rose significantly again and reached their highest level since July 2017. This shows that investor confidence in Dräger is higher than it has been for a long time. Our first goal remains to increase profitability such that our EBIT margin is the same as the last digit of the calendar year as we have more goals that are strategic to steer the company. We are strengthening our innovative power and expanding our competence in the systems business and further expanding our services and recurring business. In our Medical division, we are particularly driving forward the marketing of network solutions. To this end, we launched a large marketing campaign in 2025. Our goal is to strengthen Dräger's position as the leading provider of connected solutions in the hospital sector. That said, we are also launching a big wave of SDC-based solutions. That is service oriented device connectivity, the new standard for interoperability of medical devices according to IEEE 11073. It creates new functionalities and therefore, added value. With our new Silent Care Package, for example, we contribute to solving one of the biggest problems in the ICU by reducing the alarm noises. In the Safety division, connectivity is becoming more important, too. Our fire ground monitoring system, for example, helped us to win the Paris Fire Department as a new customer in 2025. Speaking of firefighting, we also received the important approval for our PSS AirBoss SCBA, in North America, reaching a milestone for strengthening our position in this key market. In addition to our core business, we are consistently investing in new business opportunities in areas such as clean tech and defense. Last year, our defense business grew significantly. We are well on track to triple our defense sales to more than EUR 300 million by 2028. I will talk about the other highlights on the past fiscal year, the dividend and the outlook at the end of our presentation. I would first like to explain in more detail on Page 6, what challenges we had to overcome last year. So Page 6, headwind compensated. Ladies and gentlemen, 2025 was a very successful year, particularly in light of the difficult condition. In 2024, we have benefited from positive one-off effects from the sale of a nonstrategic business activity that was the smoke and fire alarm systems in the Netherlands and some real estate loss in the United States. This has boosted our EBIT by around EUR 22 million. In the past year, we missed these effects and also faced strong headwinds from tariffs and currency. The tariffs imposed by the U.S. government had a negative impact of roughly EUR 26 million on our EBIT. Around EUR 21 million out of this was attributable to the Medical division and around EUR 5 million to the Safety division. In addition, EBIT was impacted by currency effects initiated from the White House and propagated over the world totaling to around EUR 45 million. Thereof, EUR 28 million were attributable to the Medical division and around EUR 16 million to the Safety division. So overall, we had to compensate opposing effects of more than EUR 90 million. The fact that we even overcompensated these effects is a clear proof of our resilience. We were, therefore, able to improve our profitability even under difficult conditions. Let's take a look at the margin development of recent years on Page 7. Following the significant loss in '22, we have shifted our focus from net sales growth to earnings growth. We have thus set ourselves the goal of increasing our EBIT margin by an average of 1 percentage point per year from 2024. The focus on profitability in accordance with our corporate objective #1 has worked well so far. After the strong turnaround in '23, we were able to improve our EBIT margin by roughly 1 percentage point in both '24 and '25. While positive one-off effects, in particular, contributed to the improvement in '24, the improvement in '25 came mainly from the operating business. This is a development that we very much welcome. And we have our strategic, our corporate objective 2 is innovation and our corporate objective 3 is systems business and recurring business. Now I would like to hand over to Gert-Hartwig to explain our business development further. I will then turn back with the dividend and the outlook. Gert-Hartwig? Gert-Hartwing Lescow: Thank you, Stefan. I would also like to extend a warm welcome to everyone joining this conference call for our results for the fiscal year 2025. Please turn to Page 6 for a view on the Dräger Group. As usual, I will be stating currency-adjusted figures, and I will be referring to growth rates. As Stefan mentioned, demand for our Technology for Life remains strong. Overall, orders increased by 7.7% to around EUR 3.6 billion. In Q4, orders rose by 5.6%. Both divisions contributed to growth in both reporting periods. Net sales climbed by 5.3% in the full year and by 8.7% in the fourth quarter. This was due to good development in both divisions and all regions. Like for orders, the Americas region and the EMEA region were the biggest growth drivers. At around EUR 3.5 billion, net sales -- reached 2025, the highest level in the company's history. In addition to the high order intake, this was mainly due to the strong year-end business. Benefiting from the record net sales in December and the margin improvement in the Medical division, our group's gross margin rose slightly by 0.3 percentage points to 45.2% in the full year. Functional expenses rose by 4.6% in 2025 after they had been positively impacted by one-off effects of around EUR 32 million in the prior year. These effects included the net sale of a nonstrategic business in the Netherlands and the sale of real estate in Spain and the U.S. Excluding these one-off effects, the increase in functional expenses in 2025 was only 2.5%. This increase is attributable to higher personnel expenses, which went up due to collective wage increases in Germany and higher number of employees, among other things. Despite the missing positive one-off effects in '24 and the negative currency and tariff effect in '25, our EBIT increased by more than 20% to around EUR 233 million. Consequently, our EBIT margin rose from 5.8% to 6.7%. The mentioned headwinds were overcompensated by the high order intake, the strong net sales momentum and the improved gross margin. In addition, the strong year-end business contributed to the resilient development. Our EBIT improved by around 37% in the fourth quarter, while the EBIT margin declined to 13.7% from 10.6% in that period. The full year EBIT development is in line with our medium-term goal to increase the EBIT margin by 1 percentage point per annum on average. Guided 2026 EBIT margin includes an additional margin improvement on the higher end of the guidance range. The result of the strong increase in earnings, our DVA in 2025 improved by roughly EUR 36 million to around EUR 9 million. Let us now take a closer look at the development of the 2 divisions, starting with the Medical division on Page 10. Following a slight increase in the prior year, our order intake in the Medical division rose by roughly 9% in 2025. This was primarily due to the high demand for our anesthesia machines, ventilator services and consumables. In addition, we received a major multiyear order for hospital infrastructure systems for Mexico, which significantly supported the above-average growth in the Americas region. Demand also developed positively in the other regions, particularly EMEA. In the fourth quarter, order intake rose by 2.2% as the decline in APAC and EMEA was overcompensated by significant growth in Americas and a high demand in Germany. Driven by growth in all regions, net sales in the Medical division increased by 7.4% in 2025 after decline in the prior year. In Q4, net sales rose by 13%, thanks to considerable growth in EMEA, Americas and Germany. Net sales in the APAC region were around 3% below the prior year level. Our gross margin in the division rose by 0.6 percentage points to 43.6%. The negative currency and tariff effects were overcompensated by the favorable product and country mix. In Q4, on the other hand, the gross margin decreased by 0.6 percentage points due to higher inventory write-downs. Functional expenses climbed by 5.7% in 2025, having been positively impacted in the prior year by one-off effects of around EUR 15 million from the sale of real estate and the adjustment of the product. Without these effects, the increase in 2025 amounted to only 3.7% with higher personnel expenses being the main cause. The EBIT of the Medical division doubled to EUR 57 million after a decline in the prior year. Consequently, the EBIT margin rose from 1.5% to 2.9%. In Q4, the EBIT increased significantly to by around 40% to roughly EUR 80 million, thanks to the strong year-end business. As a result of the strong increase in earnings, our DVA in the Medical division improved considerably in 2025 from around minus EUR 50 million to minus EUR 23 million. I will now turn to our Safety division, which delivered another good performance. We are now on Page 11. Our Safety business continues to grow. Order intake rose by more than 6% in 2025. This was primarily due to the high demand for engineered solutions and gas detection devices. In addition, respiratory and personal protection products as well as alcohol and drug testing devices contributed. The EMEA and Americas regions recorded a significant increase in orders, while the APAC region also developed positively. In Germany, demand declined after we had received a major order for NBC protection filters in the prior year. However, industrial demand in Germany is also generally restrained at present. Net sales increased by 2.6% in the fiscal year, driven by positive development in the EMEA and APAC regions. In Germany, net sales were roughly on par with the prior year, while the Americas recorded a decline. In Q4, net sales rose by just under 3% as the decline in the Americas and Germany was overcompensated by the growth in EMEA and APAC. Our gross margin in the division remained stable at 47.3% in 2025 with the negative currency and tariff effects being offset by the more favorable product mix and price adjustments. In Q4, the gross margin slightly decreased by 0.2 percentage points. Functional expenses went up by roughly 3%, having been positively impacted from the prior year by one-off effects of around EUR 17 million from the sale of a nonstrategic business area and from the sale of real estate. Excluding these effects, functional expenses fell by 0.4%. The capitalization of development costs led to a reduction in functional expenses in the reporting year. The EBIT of the Safety division increased in 2025 by 6.4% to around EUR 176 million, while the EBIT margin rose from 11.3% to 11.9%. In Q4, the EBIT climbed by around 33% to roughly EUR 77 million as a result of the strong year-end business. The EBIT margin also improved significantly by 4 percentage points to 16.5%. Our DVA in Safety division increased by around EUR 9 million to around EUR 113 million, coming from around EUR 104 million in the prior year. All in all, a very positive development in our Safety business. Let's move on to some key ratios on Page 12. Thanks to the strong growth in earnings, our cash flow from operating activities improved significantly by around EUR 71 million to around EUR 238 million in 2025. At the same time, outflow from investing activities rose from just under EUR 55 million to around EUR 98 million. Among other things, this was due to a supplier loan granted and the purchase of further shares in an investment. Moreover, the sale of our fire alarm systems business in the Netherlands and the sale of the property in the U.S. have led to a considerable inflow in 2024. All in all, our free cash flow amounted to around EUR 140 million, which is a considerable improvement of around EUR 60 million compared to the prior year. Since free cash flow was on par with net profit, the cash conversion rate amounted to 100%, the level we also expect for the current year. As a result of the decrease in free cash flow, cash and cash equivalents rose significantly by about EUR 22 million to EUR 282 million. This led to a considerable decline in net financial debt by around 25% to EUR 123 million. That said, the ratio of net financial debt to EBITDA declined from 0.5 to 0.3, keeping our leverage at a very healthy level. With regard to net financial debt, we expect the figure to increase in the current year. A large distribution center is currently being built in Lübeck where we intend to consolidate various logistics warehouses in the future. Dräger will rent the property on a long-term basis, which under IFRS results in a higher lease liability. This, together with higher investments is in turn a key driver for the higher expected net debt in 2026 with an increase of around 4% to EUR 1.7 million capital employed -- EUR 1.7 billion capital employed rose much lower than our EBIT. Therefore, our 12 months return on capital employed went up from 12.1% to 14.2%. Net working capital was around 2% higher than in the prior year at around EUR 755 million. Due to the good business development, in particular, our equity ratio stood at around 52% as of December 31, coming from roughly 50% at the end of the prior year. Let's take a closer look at our EPS on Page 13. With the increase in earnings since 2022 that Stefan Drager mentioned at the beginning of his presentation, our EPS has also improved continuously over the past years, coming from around minus EUR 3.50 per share in 2022, earnings per common share climbed to more than EUR 7.40 in 2025. At the same time, earnings per preferred share rose from around minus EUR 3.40 to roughly EUR 7.50 per share. Again, this clearly underlines the progress we are making in improving our profitability. Now I hand back to Stefan Drager for the outlook, starting with our dividend proposal on Page 14. Stefan Dräger: Thank you, Gert-Hartwig. Well, in line with our dividend policy, we intend to distribute around 30% of our net profit to our shareholders. Since our net profit has increased significantly, we will also increase the dividend significantly again for the third time in a row since 2023. We intend to propose a dividend of EUR 2.21 per common share and EUR 2.27 per preferred share for our Annual Shareholders Meeting in May. Our equity ratio is clearly over 50%. Provided that the equity situation remains as positive as it is now, we will continue to distribute at least 30% of our net profit in the coming years. That said, let's move on to our outlook for 2026 on Page 15. Ladies and gentlemen, with good demand, record sales and significantly improved earnings, 2025 was a very successful year. This is even more apparent when you consider the headwind from a difficult economic environment. Our operating business is showing good momentum. Both order intake and order backlog are at a high level. We, therefore, want to increase net sales again in the current fiscal year. In 2026, we expect an increase in net sales from 2% to 6% of net of currency effects at an EBIT margin between 5% and 7.5%. Both divisions are likely to contribute to net sales growth and a positive EBIT. We will continue to counter the U.S. import tariffs by raising prices. In the past fiscal year, we developed a package of measures to compensate for some of the customs duties. We expect this compensation to be more effective during the course of the 2026 fiscal year than before. For '26, we expect the level of custom duties at group level to be similar to the prior year overall. The burns in the Medical division are likely to be significantly higher than in the Safety division where we have more possibilities to concentrate and forward with improved prices. The corporate planning, therefore, the net sales and EBIT forecast for '26 are based on the assumption that custom duties will remain at the level of the reporting date for the annual financial statements. However, when we recall the Greenland discussion over a certain weekend in this spring, this is not guaranteed and it motivates us to further pursue increased profitability to be able to live through the challenges and uncertainties. When it comes to the war in Iran, we do not see any material impact on our business so far. We are present in the Middle East with our own Dräger people in Saudi Arabia and Dubai. Our local employees are doing well so far. In general, the region remains a growth market for us. Risks from the war depend heavily on its duration and regional extent and its impact on the global economy. We are able to mitigate this through our high level of diversification. We are very broadly positioned in terms of markets, products, geographies, business mechanics and customers. This strengthens our resilience and gives us a positive outlook to the future. With this, I would like to end the presentation and hand over to the operator to open the floor for your questions. Operator: [Operator Instructions] And the first question comes from Oliver Reinberg from Kepler Cheuvreux. Oliver Reinberg: Firstly, just on the Middle East situation as you just confirmed that you don't expect any kind of larger impact. Can you just confirm that there's also not any kind of expected impact from the developments basically in terms of supply chains and inflation? That would be question number one. Secondly, can you just provide an update on the ventilation market? We have seen quite some changes basically with Mindray -- I am sorry, with Medtronic and Bayer actually exiting the market. And I think Mindray is now entering in the U.S. market. I mean it's also a high base. Do you continue to expect actually significant growth in this market segment? Any update on the developments here would be helpful? And then thirdly, as you called out corporate objective #3 to increase the kind of recurring business at Dräger, can you just provide some kind of flavor where do you stand these days percentage-wise? And any kind of targets that you can share in that regard? Stefan Dräger: Well, on the Middle East, yes, I confirm that we do not see a material impact of the war on our business at the moment in the foreseeable future. Including the supply chain, there is no -- not to our knowledge, a significant impact on any specific component of production that we can see so far. We have taken some measures in the past to work with our suppliers more carefully with whom we work and have some reasonable stocking levels for our inventory for components. So we, of course, cannot compensate for all seasonal effects, and we will remain interdependent from the world and the supply chain. However, I confirm there is no impact that we can see from the current conflict in the Middle East. What I do see though is that the energy prices will remain worldwide on the current level and not return to the level they were like 6 weeks ago, including the electricity gas and fuel at the gas station. However, our sensitivity to energy in real is quite limited. So that has no material effect on our outlook and prognosis. Your second question, Mr. Reinberg, on the ventilation. So yes, there are 2 major players have exited the market. And, yes, Mindray is there. We, on the other hand, we do not see a significant effect or even, I would say, threat from Mindray having a more comprehensive offer in the U.S. Where we see more and we see they are more active is in Africa in remote regions where they have also political -- Chinese government has political influence in financing some of the African governments or very obvious direct influence and control on government and purchasing decisions. There, we are out. On the more developed markets I won't say it is a significant new development or a threat. On a global scale, yes, it is a good copy of Dräger with similar offerings and a similar portfolio on both the geographical scale and portfolio. So it is a very viable market companion, not only on ventilation, but in many modalities to watch geographically mostly in Africa. Your question on our corporate objective #3, which is developing the business model further from transaction-based device selling towards interoperability and systems business competence and actually doing, including recurring businesses, services based on contracts instead of transactions. Yes, we can say that last year, we crossed the EUR 1 billion threshold in services and some countries in Europe, our sales, the majority already is in services more than in devices, including our home market in Germany, but some other European countries as well, services sales is greater than devices. Oliver Reinberg: And can you share any kind of targets like where you want to go with this kind of offering? Stefan Dräger: Yes, the goal is to grow this further as it is a good way to defend our business over a business that is purely on cost like some of the business mentioned from Mindray in Africa where the decision is not alone, they have a larger share of mind, they are more deeply entrenched with the customer in offering the service. It is -- we have a better understanding of the customer needs and it's more challenging to replace the assets on a pure device that is -- the trend is that it may become a commodity. Operator: And the next question comes from Harald Hof from mwb research. Harald Hof: As we talked about the Iran conflict already, just 2 questions left from my side. The first one is talking about the tariffs. The situation has changed significantly. So what does this mean for Dräger? And will you apply for reimbursements? And the second question is how has the defense activities developed so far in 2026. Gert-Hartwing Lescow: Happy to. So firstly, there is a couple of developments firstly, the court decided that the tariffs that the Trump administration has put in place is not legal. And we have, in fact, also filed for a reimbursement. As of today, it is open, how fast the courts will decide and when or if we will in fact be paid out. And secondly... Stefan Dräger: It's not part of the plan. Gert-Hartwing Lescow: It's not part of the plan at this point. So if there was a significant payment that would be upside, so to speak and the signals have been mixed, how quickly that can happen. I think you've read the news, to courts as far as I remember, have decided they are not allowed to delay it, but so far, nothing has happened. So there is a chance that we can recollect some of our tariffs. Having said that, given that the previous tariffs have been declared illegal, the Trump administration has put in place another set of tariffs which are a little bit lower by 5 percentage points, but there are in fact for full year instead just 2/3 of the year. And if that is -- when those run out after 150 days, there are other potential tariffs to be enacted the one that may run. The so-called Section 122 tariffs may be replaced by Section 301 and Section 222 and we would expect that, that will actually take place in the second half of the year. So when it comes to effective tariff burden, we still assume that they will remain in place. And as we have seen earlier this year, and as Stefan Drager pointed out, sometimes, there is even a discussion about additional Greenland tariffs or not. But so far, we expect actual tariff burn to be of the same magnitude as last year. Stefan Dräger: Okay. And your other question on the defense business. Well, in general, we benefit in both divisions. The medical also benefits if there is the need, for instance, to additionally serve 1,500 wounded soldiers that come per day from the Eastern front. They're currently preparing and planning for that needs capacity in the German hospital system or the field hospitals or hospital war ships. But that is regular medical equipment. But we say we would not directly classify that as defense business. What we do call such is part of the safety portfolio that can be specific products for personal protection like the classical gas mask for a soldier or gas detection equipment, filters for military vehicles to protect those who protect us in our freedom to operate our democracy. And last year, around the same time of the year, we predicted that would actually more than triple until the year 2028 to approximately EUR 300 million. Well, already last year, we saw a good development, and we crossed the EUR 100 million threshold with these elements of the portfolio. And we confirm that we think in 2028, it can be EUR 300 million because there are quite some opportunities out there. Harald Hof: Just a quick follow-up. When talking about tariff reimbursement, do you communicate volume? How much is the figure that could be reimbursed? Stefan Dräger: We communicated that we paid the EUR 26 million. Gert-Hartwing Lescow: That's actually the net effect. So to the degree that it will be the net effect, it will be in that order. The gross effect is in turn higher runs around EUR 30 million, and that would be the impact if we get full reimbursement without the need to pass on anything to customers in that context. And as I said, at this point, we view that as perhaps not speculative, but we have not received a clear indication that we should account for that in the near future. But we'll keep you posted, obviously, when that situation changes. Operator: And the next question comes from Pierre-Yves Gauthier from AlphaValue. Pierre-Yves Gauthier: My question relates to your capital spending. You had quite a big surge in '25. Is that likely to last? Or is it some sort of a bump that we will not see in '26, '27? Gert-Hartwing Lescow: The part of the higher investment are due to a loan, which actually has to be accounted for to one of our suppliers, which have to be accounted for under IFRS as an investment. I'm not sure whether that is -- that actually was one of the reasons for the bump. And that we do not expect in '26 nor later. We do, however, as I pointed out in the presentation, have to account for an investment for a rental agreement. Again, that's due to the statement. So all in, we expect an increase in the investment volume from around EUR 103 million to EUR 110 million to EUR 130 million. And the substantial portion is, in fact, the long-term rental agreement, which is as these things are not cash effective for the full amount in the period of '26, but over the course of the rental agreement. Operator: And we do have a follow-up question from Oliver Reinberg from Kepler Cheuvreux. Oliver Reinberg: Three, if I may. One on China. Can you just provide an update what you see there on the ground? I mean, it's not a huge market, but any kind of pickup would be helpful to just get the latest dynamics here. Secondly, I think Q1 nearly comes to an end. Any kind of light you can share how you started into the year? And then last question, just on currencies. I mean, if -- I think in the last call, we guided for quite a significant impact. If currencies stay where they currently are, can you just give us any kind of flavor what kind of isolated margin impact you have? Stefan Dräger: I can -- Stefan speaking. I can pick the start in '26, where we started with a good order backlog after the order intake at the fourth quarter was also very good. And so with this, we had a good start in '26 and the order intake and sales at this moment is according to our expectations and planning. So it's on the way to deliver on our forecast and prognosis. Gert-Hartwing Lescow: And with regards to the FX development, in addition to the headwind that we had in '25, we overall see a further deterioration, but not by another similar amount. Our currency headwind when we look at net sales is around 1 percentage point. And when it comes to the EBIT margin, it's between 30 to 60 basis points. Stefan Dräger: I think Mr. Reinberg, this is important to figure in when you compare our actual '25 result, in particular, the EBIT margin and the prognosis for '26 because the prognosis for '26 and the whole planning for '26 is based on less favorable exchange rates. So if these develop and they would be the same as last year's actual exchange rates, then the outcome, of course, would be better than the current forecast and prognosis. But it's -- from our perspective, not safe to assume that it would be the same. So we have our best guess included into the planning. And that is the major reason if you wonder why our forecast does not show a stronger improvement because our goal is to improve our profitability by 1 percentage point per year. So on average, that is unchanged. Oliver Reinberg: China? Stefan Dräger: Yes, China, we didn't touch China. There is no relevant news on that. That is relatively stable and continues to be on a much lower level than it used to. Operator: [Operator Instructions] So it looks like there are no further questions. So I would like to turn the conference back over to Stefan Drager for any closing remarks. Stefan Dräger: We thank you very much for all of you being with us today during our annual results conference for '25. Thank you for your questions and the interaction. We look forward to meeting you again either online or preferably at some point in time in the not-too-distant future in person. Have a pleasant afternoon and evening. Operator: Ladies and gentlemen, the conference has now concluded, and you may disconnect. Thank you for joining, and have a pleasant day. Goodbye.
Operator: Ladies and gentlemen, welcome to Nexteer Automotive Group Limited 2025 Annual Results Conference Call. [Operator Instructions] I would now like to turn the conference call over to Investor Relations Director, Mr. Tony Wang. Please go ahead. Tony Wang: Okay. Thank you, Jamie. Again, welcome, everyone, to our earnings call for the full year of 2025. We made the announcement of our annual results this evening, Hong Kong time. Before we begin today's call, I would like to remind you that this presentation contains a safe harbor statement. For additional information, please refer to the content in the second page of our slides. The presentation accompanying today's call are available on our company's website. Please visit nexteer.com to download slides if you have not done yet. Joining us today are Robin Milavec, Executive Board Director, President, CTO and Interim Global COO; Mike Bierlein, Senior Vice President and CFO. Starting the presentation, Robin and Mike will provide the business and financial highlights, respectively. And then we will open the lines for your questions. Please follow the limit of 2 questions per person. With that, let me turn the call over to our President, Robin. Robin Milavec: Thank you, Tony, and hello to everybody online today. I'll begin with an overview of our business performance and strategic progress, and then I'll hand it over to Mike Bierlein, our Chief Financial Officer, and he will walk you through our financial results and 2026 outlook. So starting with Slide 4 in our deck, let me start with a high-level overview of our full year business highlights. This reflects 5 key milestones demonstrating Nexteer's focus on long-term profitable growth. First is revenue. Our total revenue reached nearly $4.6 billion increasing 7.2% compared to 2024. And as a result, we achieved record revenue for a third consecutive year. This reflects sustained above-market growth driven by new and Conquest business wins. Second is program launches. We successfully launched 57 customer programs with particularly strong momentum in APAC, reflecting our deepening engagement with both global and Chinese OEMs. Third is new business bookings. We achieved customer program bookings totaling $4.9 billion, including new Steer-by-Wire wins with 2 leading Chinese NEV OEMs. The business development on Steer-by-Wire is well on track, along with the solid execution by our team in 2025. Fourth is revenue in our Asia Pacific division. APAC revenue reached a record of approximately $1.5 billion. This represents a 9.8% increase year-over-year, making the fourth consecutive year of record revenue in this region. This milestone highlights a remarkable organic growth trajectory with revenue surging from about USD 1 billion to USD 1.5 billion in less than 3 years. In 2025, Nexteer China and Nexteer India, each achieved record revenue, reflecting continued growth and strong regional execution. And finally, enhancing shareholder returns. We are glad to announce that the Board of Directors has approved a $46 million dividend subject to the approval of the shareholders in the upcoming Annual Shareholders Meeting. This dividend amount is more than double that of last year and represents a total of 45% payout ratio of the 2025 net profit attributable to equity holders which is an increase from 35% we had in 2024. These milestones collectively demonstrate Nexteer's ability to grow above market, while maintaining financial discipline. As I mentioned earlier, we successfully launched 57 customer programs across multiple product lines, regions, customers and vehicle segments. 42 of these were new or conquest wins and 36 were for electric vehicle platforms, demonstrating strong executions as bookings convert into revenue. Today, rather than walking through a detailed launch list line-by-line, this slide simply highlights the selection of major program launches that illustrate our new bookings wins that are translating into tangible growth. First, we achieved the initial launch of our Modular Column EPS or mCEPS in the EMEASA region. While Nexteer's mCEPS was first introduced in China, leveraging our industry-leading EPS building blocks. This successful EMEASA launch further enhances our competitiveness and our regional footprint. Second, we delivered the first Dual Pinion EPS program launch with a leading Chinese OEM. Following the inaugural Dual Pinion EPS launch in EMEASA, we have secured additional orders from multiple Chinese domestic OEMs and other European OEM over the past year. The customer demand for this product is strong, driven by the need for cost-effective speed-to-market solutions combined with Nexteer's proven steering, reliability and performance. At the same time, despite the emergence of Dual Pinion EPS, we have built a very solid and growing Rack EPS business foundation in China. Nexteer Technologies have been adopted across numerous mainstream and premium EV models with customers, including Xiaomi, XPeng, Li Auto, Zeekr, Chery, Changan, and others. Overall, the strong launch momentum across gear-based EPS platforms, including our single pinion, dual pinion and Rack EPS products continue to reinforce Nexteer's market leadership, particularly in the China market. Out of the 57 program launches, 48 of those were in APAC, supporting both Chinese and global customers. This, again, is another proof point of Nexteer's strategic targeting and capitalizing on the region's growth opportunities. This robust launch pipeline reflects increasing diversity across products, across customers and regions which is critical to our long-term success. Looking ahead, we are particularly excited about 2 Motion-by-Wire related product launches beginning in 2026. Turning now to new business awards. We secured $4.9 billion in customer program bookings in 2025, reflecting strong commercial momentum across products, regions and customers. These wins include several breakthrough awards and important first, underscoring our leadership in advanced steering technologies. Most notably, we secured Steer-by-Wire program with 2 leading Chinese new energy vehicle OEMs. And these cover both the handwheel actuator as well as the roadwheel actuator applications. These awards further reinforce Nexteer's leadership in next-generation Motion-by-Wire technologies. Let me expand a little bit more on these 2 customers. So building on our first Steer-by-Wire win with a leading Chinese OEM in the second half of 2024, we successfully secured a second award with this customer in 2025. This follow-on win demonstrates growing customer confidence and an expanding adoption of by-wire technology across the OEM's upcoming vehicle platforms. In addition, we secured our first Steer-by-Wire booking with another leading Chinese OEM, including, again, both the handwheel actuator and roadwheel actuator applications. This program is expected to launch as early as next year, reflecting a short lead time from a business award to production and strong execution capabilities. Beyond Steer-by-Wire, we continue to expand our dual pinion and rear wheel steering business across APAC and EMEASA, deepening relationships with existing Chinese OEMs, while also securing a new European-based OEM. These wins highlight not only the scalability of our dual pinion product technology, but also our ability to deliver cost-effective, lightweight rear wheel steering solutions that enable up to 12 degrees of rear wheel steering turning angle and supporting a broader growth pipeline. We also earned our first Column Assist EPS win with a market-leading OEM in India. This marks an important milestone for Nexteer in 1 of the world's fastest-growing automotive markets. This win demonstrates our ability to localize proven global electric power steering technologies and compete effectively on cost, quality and reliability in a highly value-focused market. Another important first is that we earned the first high output Column Assist EPS win with a leading Chinese OEM. This represents an important expansion of our Column EPS portfolio into higher performance and load applications. This win highlights our ability to extend Column EPS technology beyond the traditional output range to meet more demanding vehicle requirements. We continue to capture the global expansion of Chinese OEMs as they grow their presence in Europe and South America, by leveraging our strong China relationships and global footprint to support customers with consistent scalable steering solutions across regions. Importantly, this trend allows Nexteer to extend China originated wins into incremental global revenue opportunities. And lastly, we successfully conquested a new Power Column business for full-size truck platform in North America, strengthening our leadership position in this region as well. Looking at bookings across product lines and regions, over 75% of Nexteer's bookings were in our EPS product line and nearly half or 45% of our bookings were secured in the APAC region. Overall, this diversified portfolio indicates our technology is becoming the product of choice by many domestic and global OEMs. On the next slide, this highlights that customer diversification remains a core growth pillar for Nexteer. We partner selectively with OEMs to align with the long-term industry mega trends, including electrification, autonomy and connectivity. And today, we serve more than 60 OEMs globally. Over the last year, we've expanded our customer base by winning programs across a broad range of customer models from leading domestic OEMs in China to the market leader in India, to premium EV manufacturers in North America as well as an emerging autonomous mobility company. Importantly, these wins span a wide mix of technologies, including our Rack EPS, Column EPS, Dual Pinion, Rear Wheel Steering, Driveline and Columns and Intermediate Steering Shafts. This demonstrates our ability to deploy the full Nexteer portfolio. It positions us to capture growth from established volume leaders, while also participating in the emergence of new mobility players which are reshaping the industry. While every competitive situation is different, our success consistently comes down to a few core strengths. We bring world-class product and process technologies. Our quality and reliability performance as measured by our customers remains strong and continues to improve. We listen carefully to understand what each customer truly values. And as the Tier 1 in our space was experienced as a global OEM in our early history, we truly understand how critical speed, agility and mindset are in responding to those needs. And finally, flawless execution from development through launch remains a defining differentiator. Together, these capabilities underpin our ability to win, scale and grow profitably across a diverse and evolving customer base. We also continue to make disciplined progress in expanding our manufacturing and technical footprint across Asia Pacific to support long-term growth and localization. This slide shows the time line on how APAC steering production and validation has expanded in the past 5 years. In January of 2025, we opened our state-of-the-art Changshu Manufacturing and Testing facility in China, strengthening our ability to support the growing demand from Chinese OEMs, while aligning with China's focus on high-end intelligent and sustainable manufacturing. That expansion is complemented by our Asia Pacific technical center in Suzhou, which brings comprehensive engineering, validation and corporate functions together in 1 location, enabling faster development cycles and closer proximity to our customers. We have also expanded our India Technical Center near Bengaluru with additional physical validation capabilities, enhancing localized engineering support in that region. Looking into 2026, we've opened our first manufacturing facility in Rayong, Thailand, which has begun production with an initial focus on Column Assist EPS to support growing demand across Southeast Asia. And finally, we broke ground on new smart manufacturing facilities in both Liuzhou and Suzhou, further expanding capacity for advanced steering technologies, including EPS and Steer-by-Wire. Together, these initiatives reflect our disciplined approach to scaling capabilities and supporting customers across the region. On this next slide, I'd like to update the status of 1 of our most important Motion-by-Wire development portfolio products, which is electromechanical breaking or EMB. Nexteer publicly debuted EMB at the 2025 Shanghai Auto Show. We leveraged our technology building blocks to create a modular high-precision braking system to strategically expand into Motion-by-Wire chassis control. Following the Winter Test on EMB 1 year ago, a second round of winter vehicle tests were completed in Yakeshi, China during the period between December of 2025 and March of this year. In this event, we had more than 17 OEM customers that were engaged and had given very positive feedback on the vehicle performance through the on-site test driving and technical review. Meanwhile, our customers were surprised by the rapid pace of our EMB product development progress. Right now, we're developing highly automated production line to accelerate our industrialization process. And we also will continue to optimize the function, performance and durability of the EMB product. We're looking to secure our first business booking of EMB with the Chinese OEM in the course of this year. This next slide highlights how we are capitalizing on Motion-by-Wire and MotionIQ to enable Intelligent Motion in the vehicle. First, we're integrating smart chassis technologies, including steer-by-wire, rear wheel steering and brake-by-wire, with the electric powertrain architectures. This system-level integration allows us to deliver precise coordinated motion control across the vehicle, while supporting OEMs efforts to simplify platforms and scale advanced architectures. Second, we're embedding software-defined vehicle and AI capabilities directly into motion control. Through MotionIQ, we combine proven safety critical algorithms with flexible software tools enabling OEMs to develop, tune and update motion functions more quickly, while retaining control over vehicle differentiation. And third, these capabilities support autonomous vehicle applications, including Robotaxi and ADAS Level 3 Plus. Our Motion-by-Wire, hardware and software foundation enables the redundancy, the precision and the control required for higher levels of automation. Now I'll hand it over to Mike Bierlein for the financial review. Michael Bierlein: Thanks, Robin, and good day, everyone. Nexteer delivered a record year in 2025 with full year revenue reaching $4.6 billion. On an adjusted basis, excluding foreign exchange and commodity impacts, revenue increased 6.9% year-over-year outperforming the market by approximately 320 basis points. Importantly, all 3 regions delivered growth, supported by strong production schedules. Profitability continues to improve. EBITDA grew 11.2% year-over-year, with margins expanding by 40 basis points. We generated positive free cash flow of $124 million, and our balance sheet remains strong, ending the year with $414 million of net cash. From a growth and visibility standpoint, we secured $4.9 billion of customer program bookings during 2025, including 2 Steer-by-Wire program awards reinforcing our long-term growth outlook. Finally, reflecting our confidence in Nexteer's financial strength, our Board approved a $46 million dividend representing a 45% payout ratio, up from 35% in 2024. This confirms our commitment to disciplined capital allocation and increasing shareholder returns. This slide highlights our key financial metrics for 2025: revenue, EBITDA, net profit and free cash flow, and demonstrate solid improvement across our core earnings profile. Revenue reached $4.6 billion in 2025, up 7.2% year-over-year, reflecting favorable volumes and execution on New and Conquest program launches. EBITDA increased to $472 million representing an 11.2% increase versus 2024, with margins expanding to 10.3%, driven by favorable volume and improved operating performance. Net profit attributable to equity holders was $102 million or 2.2% of revenue compared to $62 million in 2024. This includes a $24 million of net impairment costs driven by customer program cancellations. While we recognized a similar net impaired cost of $23 million a year ago. Adjusting for these onetime items, our net income would be $126 million or 2.7% for the year of 2025. Free cash flow was $124 million in 2025 compared to $166 million in 2024. Improvements in EBITDA were offset by a onetime favorable tax benefit received in 2024 and by net investment in working capital to support growth. Overall, 2025 represents a year of improved earnings quality, supported by stronger volumes and operating performance. This slide shows a walk of 2024 revenue to 2025 revenue. Favorable foreign exchange increased revenue by $15 million, driven by the euro strengthening compared to the U.S. dollar. As noted here, the largest driver of the year-over-year increase in revenue was represented by volume, pricing and others, which provided an uplift of $293 million, driven by strong customer schedules and above-market growth in all 3 segments. APAC continued to lead with revenue growth, mainly with the China OEMs. Finally, commodity prices reduced slightly, causing a year-over-year revenue decrease of $1 million. This slide shows our year-over-year revenue growth versus the market in 2025, adjusted for foreign exchange and commodity price changes. On a global basis, Nexteer delivered 6.9% adjusted revenue growth year-over-year, outperforming the market by approximately 320 basis points. Looking at the regions. North America revenue increased by 4.4% year-over-year and 5.4% above market as our customer programs continue to perform well in the market. APAC continued to lead with 10.2% year-over-year growth and 3.1% growth over market, underscoring the strength of our regional execution and customer portfolio. EMEASA delivered strong growth with 8.5% year-over-year revenue increase and 9.5% above market, supported by program ramp-ups. This slide summarizes our 2025 revenue performance by region and highlights both the mix and growth dynamics across the business. Starting on the left. Total revenue increased from $4.3 billion in 2024 to $4.6 billion in 2025. From a mix standpoint, North America remains our largest region at 50% of total revenue, with APAC at 32%, and EMEASA at 17%. Overall, the regional mix remains balanced with continued structural growth in APAC. Turning to the regional growth performance on the right. North America revenue of $2.3 billion increased 4.4% year-over-year. APAC delivered strong growth of 9.8% or 10.2% excluding FX and commodity impacts supported by sustained momentum from New and Conquest program launches over the past several years and our leading position with the Chinese OEMs. EMEASA revenue increased 11.4% year-over-year or 8.5% excluding FX and commodity impacts driven primarily by Conquest program volume ramp-ups. This slide walks through the year-over-year change in EBITDA from 2024 to 2025. EBITDA increased from $424 million in 2024 to $472 million in 2025, representing an 11.2% year-over-year increase with margins expanding from 9.9% to 10.3% of revenue. Starting with the key drivers. Volume and mix contributed $59 million, reflecting higher revenue and improved operating leverage across the business. These gains were partially offset by $10 million related to troubled supplier costs as well as $10 million of net tariff impact, both of which pressured year-over-year performance in North America. Restructuring cost was $9 million in 2025, which was equal to our restructuring cost in 2024. Restructuring costs were primarily to support a further 15% reduction in U.S. salaried employment in 2025, as we continue to focus on optimizing our cost structure to improve margins and costs related to the transfer of the Columns operation from the U.S. to Mexico, which is nearing completion. All other performance factors contributed $9 million, reflecting continued improvement in manufacturing and material performance more than offsetting price reductions and economics. This slide highlights our EBITDA and margin performance by region in 2025 compared with the last year. Starting with North America. EBITDA was $174 million in 2025 compared with $178 million in 2024. EBITDA margin declined from 8.1% to 7.6%, as margin improvement initiatives were more than offset by troubled supplier and net tariff costs. APAC EBITDA increased to $243 million up from $230 million in the last year, driven by continued strong revenue growth, EBITDA margins remained robust at 16.6%. APAC continues to deliver solid earnings growth and margin performance supported by increased scale and operating execution. In EMEASA, EBITDA increased significantly to $69 million, up from $36 million in 2024. EBITDA margins expanded from 5% to 8.6%, driven by improving operating efficiency and revenue growth, reflecting meaningful year-over-year progress in the region. This slide shows our EBITDA to net profit walk for 2025. Overall, the year-over-year $48 million in EBITDA increase is driving the net profit increase from $62 million to $102 million. Depreciation and amortization totaled $309 million in 2025, broadly flat versus last year. D&A includes depreciation of plant, property and equipment as well as amortization of intangible assets. The results include a $24 million net program impairment charges recorded in 2025. And $23 million in 2024, primarily related to North America EV program cancellations and volume reductions. We continue to work with our customers on cost recoveries related to these programs. Operating profit increased to $163 million, up from $115 million last year, reflecting the stronger EBITDA performance. Below operating profit, JV earnings increased modestly, driven mainly by contributions from our Chongqing operations. Income tax expense increased to $55 million compared with $42 million last year. This increase was primarily driven by improved profitability. Our U.S. operations remain in a valuation allowance position, driving our effective tax rate to be elevated at 33% for 2025 compared to 36% in 2024. As our profitability continues to improve in the U.S., our effective tax rate will continue to reduce. For 2026, the forecast for effective tax rate is slightly below 30%, and our long-term effective tax rate remains in the high teens. Moving to the balance sheet and cash flow. On the left of the slide, you can see our full year 2025 cash flow performance compared with 2024. Cash from operating activities of $405 million in 2025 was $41 million lower than 2024, as increased EBITDA was offset by a onetime favorable tax benefit in 2024 and by a net investment in working capital to support growth. Cash used in investing activities totaled $281 million in 2025, largely in line with the last year. Overall, free cash flow was strong at $124 million. We ended 2025 with $501 million of cash on hand and gross debt of only $50 million with finance leases of $37 million, resulting in a net cash position of $414 million at year-end. Total liquidity stood at $833 million comprised of $501 million of cash and $332 million of committed credit facilities, providing significant financial flexibility. Turning to our 2026 operating considerations. Despite expectations for modestly lower global OEM production in 2026 we remain on track to deliver another year of record revenue. We expect above-market revenue growth in 2026 of approximately 200 to 300 basis points, driven primarily by continued growth in APAC, particularly in China as we continue to expand with both global and domestic OEMs. From a profitability perspective, we expect continued margin expansion benefiting from net performance improvements and increased volume leverage. Our Motion-by-Wire portfolio continues to build momentum with additional order opportunities anticipated and initial revenue recognition expected to begin in 2026, marking an important milestone in the commercialization of this technology. At the same time, geopolitical risks persist, including ongoing conflicts and trade tensions, we remain vigilant and continue to actively manage these risks through close engagement with customers, suppliers and our global operating footprint. Nexteer's long-term investment opportunity remains compelling, supported by above-market revenue growth, continued margin expansion through operational efficiency and execution, our leading position in Motion-by-Wire technology and a strong balance sheet, enabling strategic investments and increasing shareholder returns. In closing, Nexteer has a well-defined strategy focused on technology leadership, portfolio alignment with megatrends, disciplined cost management and targeted growth in China and emerging markets. Thank you for joining us today. Operator, Jamie, please open the line for Q&A. Operator: [Operator Instructions] And our first question today comes from Shelley Wang from Morgan Stanley. Shelley Wang: I have 2 questions. The first is about our new products. And it's good to see the progress on the Steer-by-Wire project wins. And then, I was wondering, like, in the long term, are we more focused on the Steer-by-Wire itself or we target to provide like the integrated solutions, maybe including the Steer-by-Wires like EMB. And then if it's the integrated one, then what's our advantage if comparing to other chassis suppliers and the start-up? So this is my first question. And my second question is about the impairments and the compensation. And because from the financial statements, we see we booked $54 million customer compensation in 2024, but only $8 million last year. So are we expected to receive more compensation this year? Or the $8 million is for the project installations last year? Yes. So that's my second question. Robin Milavec: Okay. Thank you, Shelley. This is Robin. I'll take the first question that you had, and then I'll turn it over to Mike to address your second question. So in terms of the new product strategy, certainly, we've been developing our Steer-by-Wire product for a number of years now, and we are beginning to see traction in the market, especially in the China market with Steer-by-Wire, new business wins, production launches that will start this year. And as a part of this by wire technology, our intention is to be a chassis Motion-by-Wire supplier. So that is the reason for the recent development of our electromechanical braking system. And that is a critical milestone in the Chassis-by-Wire system that we need to fulfill. So I would indicate that the advantage that we will have in this market, obviously, when you think about braking, we don't have a long history of braking as a company. However, we are very experienced in safety-critical vehicle systems, and the EMB product has -- shares a lot of commonality with electric power string in terms of the electric motor, the actuator, the electronics, the software, all of that is very scalable, and it builds on those critical technology building blocks with the EPS. So we see a lot of potential to increase our scale and really drive competitiveness by having both the Steer-by-Wire and the EMB products together. In addition, we don't have a lot of legacy investments in hydraulic braking. So we're really free from the past legacy of this older technology that will be phasing out and we are entering in this technology shift in the industry to electric braking. So we believe that is also an advantage for us. And the third advantage I would highlight is the close partnership that we have developed with the China OEMs. I noted that we had 17 customers evaluating our Brake-by-Wire vehicles in our Winter testing. There is significant interest from many of the China OEMs to support Nexteer, and we believe that relationship will lead to business sourcing for both Steer-by-Wire and EMB, and that will enable us to enter the braking market globally at some point in the near future. With that, let me hand it over to Mike for part 2 of your question, Shelley. Michael Bierlein: Thanks for the question, Shelley. So in terms of the impairments, it's certainly a challenging situation in North America with the changing, say, demand and support from government programs to support the electric vehicles. So each of our 3 major customers within North America determined to cancel or significantly reduce volumes on their EV truck and SUV platforms. And that happened towards the end of the year of 2025. We did record $32 million of impairments between write-offs for our engineering intangible assets as well as write-offs for some specific, say, machinery and equipment. We did recover $8 million that netted us down to $24 million on a P&L impact for the year. And because these program cancellations happen toward the end of the year, we were not able to fully negotiate the recoveries with our customers, and we do expect to receive recoveries yet in 2026. Now we also have to deal with challenges across our supply chain. And certainly, we have costs that our partners and our supply base have incurred relative to these program cancellations as well. But to answer your question, yes, we do expect to recover this further cost to offset these write-offs in 2026. Operator: And our next question comes from [ Jiayi Shi ] from Guotai Haitong Securities. Unknown Analyst: And I'm just wondering how much would you estimate the growth of revenue of each area in 2026 and the EBITDA margin of each area? Michael Bierlein: Thanks, Jiayi, for further questions. And certainly, considering the dynamic environment that we're facing in 2026, there has been certainly a mix of impacts on our revenue outlook forecast. As I mentioned, we are expecting our revenue to grow on a year-over-year basis, above market by 200 to 300 basis points. And with that, we are, at this point, anticipating a global market volumes to be lower by about 1% for the year. And I think that the 1% really depends on how this geopolitical conflict between the U.S., Israel and Iran ends up playing out over the years -- over the year. Hopefully, the conflict ends sooner. Our forecast is, of course, assuming a short-term conflict with that. So from a volume perspective, we are seeing that most of our growth over market will be in Asia Pacific. So you can think about, the 200 to 300 basis points growth being largely in Asia Pacific. From an earnings profile. We do see a continued margin expansion. And if you think about breaking that down then by region, I continue to challenge our Asia Pacific region to maintain profit margins in around the 16% to 17% EBITDA range. And we continue to see improvement and momentum in our EMEASA segment. So you can expect added improvements in EMEASA as well as we see improvements in North America as we have these onetime charges related to troubled suppliers and net tariff costs within North America. Operator: [Operator Instructions] And at this time, I'm showing no additional questions, we would like to thank you for the questions and today's participation. If there are any further queries, please contact us at investors@nexteer.com. The conference has now concluded. We do thank you for attending today's presentation. You may now disconnect your lines. Robin Milavec: Thank you, gentlemen.
Walter Hess: So good morning, everybody, here in Zurich and at the webcast. It's a pleasure for us to present our full year results 2025. With me today is Daniel Wuest, our CFO. My name is Walter Hess. I'm CEO. Let's go straight to the highlights of 2025. We delivered on our promises, and we met the financial targets 2025. We achieved 11.1% of revenue growth and minus 48% adjusted EBITDA. And with that, we achieved our guidance. The growth of Rx was 33.2% and of non-Rx, 7.1%. The digital services with a growth of 110%, so a remarkable growth rate again and a significant profitability contribution, it's a contribution margin free, which is more than 50% already of the total company. Our AI Health Companion, which we have started to launch in October last year as a beta version in our app has been adopted really very fast. Already every third app user is utilizing this AI health assistant. And with the strong liquidity position of CHF 160 million by end of the year, we are very confident to execute in 2026 and 2027 according to our plans. We are fully aware of the challenging and also critical market environment. However, we today focus on the future on our successful transition and on our path to breakeven and to cash generation. We do that by giving you an update on our strategy first, followed by a business update and then the financial update and outlook given by my colleague, Daniel, before we come to the Q&A session. There are some real important megatrends in health care, which have a big impact on our business. And we see us at the sweet spot of the 3 major megatrends. One is the demographic change, which gives a structural shift towards prevention and longevity, but mainly also towards a higher chronic care demand. It's the growth of the pharmaceutical market, a market which is not dependent on the business cycles as we see right now in this difficult environment worldwide. Last year, the market size in Germany of pharmaceuticals reached already EUR 62 billion. It's a huge potential for us being captured with electronic prescriptions. And the third megatrend is the digitalization in health care, which is even accelerated now by AI. And also there, we are at the forefront with our digital and AI health platform. How our response to these megatrends looks like, we would like to show you with a short video. It's a video about our health companion, which is live in the app already since last October. [Presentation] Walter Hess: As you can see, we are evolving from a transaction-led retail business into a health platform that orchestrates and covers the full customer and patient journey. By merging the online pharmacy with a marketplace not only for products but also for health services, digital health services and telemedicine orchestrated by the AI Health Assistant alongside with a state-of-the-art retail media business, we have created a platform which is unique and it's a novelty in Europe. This trustworthy and integrated platform with more than 12 million active customers, more than 1,000 marketplace sellers and more than 6,500 established doctors in Germany allows us to capture the full value of the entire journey. It makes our business fundamentally more defensible and less dependent on linear retail market growth. With the structural foundation now firmly in place, we are ready to ignite the platform flywheel and accelerate our scale at low marginal cost. And with that, let's move to the business update now. And of course, starting with Rx. What you see here is the sustained quarterly growth of our Rx business. And I can already confirm now that this will continue in Q1 2026. Last year, we achieved a growth rate of -- a growth of 33%, which leads to a 1.8% higher revenue in Q4 last year compared to the first quarter in '24, just when eRx started in the German market. If it comes to the quality of the eRx customers, I have to mention that the European and the German Court of Justice last year they confirmed -- reconfirmed that we are allowed to give bonus to our customers and patients. Therefore, we have restarted to do it in July last year with the result of increased retention and higher order frequency of new and of existing customers. And this led to a 3x higher retention rate and order frequency of customers that they are getting now also bonus with eRx compared with the customers, the previous customers that sent to us the paper prescriptions. Also, the average order value is growing quarter-by-quarter. In Q4 last year, the average order value of an eRx order was already at EUR 128. And just a few days ago, we have waited a long time. The doctors and insurance associations communicated that they have agreed now on a chronic care flat rate for doctors, and they will start 1st of July. But it's limited to a few diseases and to specific customer segment groups. In our view, it's a good start. It's a start in the right direction, in the direction of a more efficient and a more customer-centric health care in Germany. And it's a start of a catalyst, which is called repeat script, which we have already integrated in our product as we speak right now. It was important that in the first 5 to 6 quarters, we could -- we invested in creating awareness for the CardLink solution, the solution that customers, patients can read in prescriptions digitally. We have seen that the incremental cost of new customers that we had to find and to acquire via upper funnel channels like TV, out-of-home or radio were ineconomic with regard to the relation of customer acquisition costs to customer lifetime value. Therefore, we have started to shift, and we have done it in Q4. We have shifted and we have reduced the marketing spend into the Rx acquisition. And we have started to prioritize on performance marketing channels to ensure that we remain in the economic zone, which you see on the slide, it's the green zone with our customer acquisition costs in relation to customer lifetime value. But in addition, we have a growth lever, which is the direct bonus and the exemption from co-payment, which in combination, gives us the right mix to continuously grow with our eRx business. Let's come to the non-Rx business now. Here, you see we grew by 7.1% last year. If we talk only about the OTC and BPC business, the growth was 4.8%. But this growth came with the discontinuation with Zur Rose brand, which accounted for 2% to 3%. So effectively, the growth of the OTC and BPC business last year with the remaining brands was between 7% and 8%. It also came with an improved marketing performance, leading to higher customer retention and better customer lifetime value of our OTC and Beauty Personal Care customers. The digital services continue to grow remarkably with 110% on revenue growth with continuous really attractive margin. Both will go on also this year and beyond. On Slide #13, you see that our core brand, DocMorris, accelerated really rapidly last year and grew by more than 20%. So this shows a clear proof point for the successful execution of our brand strategy that we have defined at the beginning of last year. At the same time, our sub-brands, Medpex and Apotal were managed well and kept at a slight growth, contributing positively to the overall platform performance. Let's deep dive a little bit in the 2 parts of the digital services, as a TeleClinic, the telemedicine platform and the Retail Media business. TeleClinic first. The number of treatments in 2025 was 2 million, which is a growth year-over-year of more than 50%. A patient in an average had a doctor on the screen, in the app within 5 minutes. That's amazing. Imagine how long it takes until you have an appointment and you see a local doctor if you have an emergency. TeleClinic is available 24/7 with GPs and specialists. And almost half of all the treatments have been done outside the opening hours of the doctor practices that shows the importance of this telemedicine pillar as part of the health care of the standard health care in Germany, but also in other countries. As said before, so the number of doctors already reached more than 6,500 and is continuously growing. But the most important and the key success factor for TeleClinic is the strong partner network, which is secured by long-term contracts. It's with insurance, digital health providers and doctor associations. To expand this partner network is the most important key strategic priority in TeleClinic also for this year and the years after and also expanding the services they give to these partners, be it insurance companies or doctor associations. In 2025, TeleClinic achieved a revenue of EUR \26 million. But please be aware, this EUR 26 million, that's not comparable with retail revenue. Retail revenue with relatively low margins. Here, we talk about take rate revenue with much higher margins and a complete different value. TeleClinic is the leading platform for statutory and private health care in Germany. And telemedicine is a key pillar also for the new ministry in Germany. It's part of the coalition agreement. And now as they are preparing the digital -- the new digital strategy, so TeleClinic is part of the primary care, but also of the emergency care solution of the future regulation. You see it's still a huge potential for telemedicine in general. The market penetration of telemedicine is still below 0.5%. So we are still at the very beginning and already now EUR 26 million of take rate, mostly take rate revenue. In '26, we expect a mid-double-digit revenue growth and a further increase of the EBITDA margin. Our Retail Media business, we started with it 3 years ago, and we are meanwhile the leading retail media health care platform in Germany. We could prove to the advertisers and their brands, the brands you all know that by using our retail media platform, they can strongly increase engagement and strongly increase conversion and achieving really attractive RAS metrics. Last year, -- with Retail Media, we generated a double-digit euro million revenue with really high margin, even higher than with the telemedicine platform. And also in the upcoming years, '26 and further, we expect continued strong and profitable growth of our Retail Media business. So let's come back to the health companion, where we have launched our AI Health Assistant in last October in the app. Right now, we are rolling it out in all our web applications. So during March and April, you will see more and more visibility of the assistant also in our web. The health assistant is the central intelligence of our platform. Here you see on this slide, Slide #17, 3 specific use cases of our health assistant. In the area of the transactional AI commerce, we integrated conversational intelligence in our search bar in order to give personalized responses and recommendations to every customer and patient using our app. In the center, you see the AI assistant, providing AI-generated advice-oriented insights and becoming more and more a trusted health adviser for our customers and patients. And on the right-hand side, -- the assistant acts as proactive health orchestrator, seamlessly guiding the user, for example, from having a symptom to a doctor, be it the local doctor or a telemedicine doctor from TeleClinic, of course, or guiding them to a skin check service. And there, by the way, within only 2 months that we have this service live, we could detect already more than 200 skin tumors and melanomas with our service and our digital health assistant. So by managing health in one place as we do, the AI assistant helps to maximize the patient and customer lifetime value and accelerates our transition to a digital and AI health platform. So on Slide #18, we are really very proud that today, together with Google, we could announce an incredible strategic partnership. We have chosen Google in order to leverage on their cutting-edge AI capabilities and infrastructure. Google has chosen us in order to combine their most advanced technologies with our deep digital health care and pharmaceutical expertise. Together, -- in this partnership, we are defining and delivering new seamless health products in the future in order to make health care better and more accessible. One point which was really important for us and which we secured is that we keep the full sovereignty of our data while meeting also the highest requirements for data privacy and security. Let me conclude this first part with the strategy and the business update. We have spent the last few years in building this platform engine. Now we have started to drive it. Our strategy is set. Our positioning is unique, and our priority is on relentless execution, just to unlock the full value of our DocMorris platform. And with that, I would like to hand over to Daniel for the financial update and the outlook. Daniel Wüest: Thank you, Walter, and also a very warm welcome from my side to the people here in the room and the ones on the webcast. First of all, I want to provide you with some further insights on the financial performance of '25, but then much more important also to provide you with the outlook and the guidance and specifically how we will achieve EBITDA breakeven in the course of '26 and then subsequently, free cash flow breakeven in the following year, meaning in '27. Let's start with a quick look back on the financial year '25. As Walter already have mentioned it, we could secure comfortable and good top line growth of 11.1 percentage in local currency. And I'm very proud that all the business lines have contributed to this growth. Of course, Rx and Digital Services had the lion's share of the growth with Rx growing more than 33% and digital services above 110%. Reported revenues, which are the revenues without Apotal showed even a better performance and grew with 12.4% in local currency. There, you already see that the growth of Apotal was below the average of the group and also to a small part, also the growth of the segment EU. I'm very proud also that the gross margin of the group increased by 90 basis points to 22.2% despite the reallocation of marketing expenses from marketing into bonus and co-payment, which had an impact that will be directly deducted from sales and therefore, has a negative impact on the gross margin. And therefore, the 90 basis points are even more remarkable. As you know, we only started with the co-payment and the bonus basically from Q4 onwards and until Q3, we did a lot of additional upper funnel marketing spend. Let's quickly deep dive into the 2 segments, where I will focus on segment Germany because that's the lion's share of the contribution. You see segment Germany a growth rate excess of the group of 11.7% also fueled by Rx and digital services. Even here, the gross margin is even developed a little bit better, 10 basis points more with 100 basis points in addition and that also with the reservation that the payment of bonus and the co-bonus will have a negative impact on gross margin, but will then be reversed on the CM3 level contribution margin 3 level because it's just a reallocation of direct marketing spend to bonus and co-payment. Segment EU, a modest growth. I think we would have expected a little bit higher growth, but they managed also to improve the gross margin by 40 basis points. But unfortunately, given the low growth and the indirect cost base that didn't manage then to have a positive effect on the EBITDA level, while that's the reason why that segment EU is still slightly EBITDA negative. With that, let's come to our KPIs, which all look very promising and which kind of pleasant in our view. Let's start with the active customers. For the first time, we have also included the TeleClinic customers because that's a significant number of customers. But let's, first of all, stick to the online pharmacy customers, which showed a substantial increase of 700,000 from 10.3 million to CHF 11 million. You remember Walter said told you that the discontinuation of the Zur Rose brand, and you can assume that a few hundred thousand customers have been lost. We have not adjusted for that. And without that, the number would even look better. But we are very pleased what we see here. Also, TeleClinic increased the customers on the platform by 300,000 from 0.9 million to 1.2 million, and both numbers are on an ongoing basis, increasing. Also in relation to the app downloads, I think there's an active tracking of the app downloads. I think it's an indication, but definitely not the one and only. But also here, you see a decent increase of 200,000 app downloads compared to '24, and we reached 2.1 million app downloads in '25. Now let's come to the average order values or the basket sizes. First of all, on Rx, you see an increase of EUR 4, which is by itself already a remarkable increase. But you have also seen a few slides before that in Q4, the average order size was EUR 128. And you see really that in the first 3 quarters, the average basket size was much lower compared to Q4, where we really started our efficient and dedicated marketing, and that also tells you something about the quality of the newly acquired customers. One remark, please note that our basket size is calculated excluding VAT -- just for reasons, if you compare other baskets, you always have to make sure that if it's with or without VAT, given that the VAT in Germany is 19% that makes pretty some difference. If you gross it up our basket, then it would be much higher than the [ EUR 114 ]. On OTC, Walter mentioned it, we focused also on economic and customer lifetime value and the economy of the customers. Therefore, slight decline from 42% to 41%, but basically almost stable and nothing to worry about it. The order frequency also here, good development from 3.9 to 4.0x. OTC remained flat with 2.0 orders per year. The repeat order rate, which was already extremely or very high and decently high at 76%, further increased to 77%, which is also a very good value. And just all in all, shows the quality and the quality of our existing, but also of our new clients, which we have acquired during the last year. Now let's quickly talk about a few highlights or perceived lowlights based on the first reactions. I do not want to go you through line by line through the whole P&L. I think the top line and gross margin, we have discussed. Let's focus on the different cost pillars. Personnel expenses, there, I'm very pleased we could lower the respective ratio by 50 basis points. That's the first -- showing the first positive impact on our managing the indirect costs, which are basically to 100% personnel costs, but also shows the improved efficiency where we really go through the processes and kind of automatize and also using KI to better allocate resources, and that has already a very nice impact in '25 on the personnel cost ratio, and there will be some much further leverage in the coming years. Marketing expenses, as mentioned, rose by over CHF 11 million. And there, we are talking only direct marketing expenses. We have said we shifted basically from direct marketing, not completely, but partially to indirect marketing, which you see as a decline or lower revenues. And therefore, it's not only the CHF 11 million, but you have to add a small single-digit million to really see the full additional marketing impact, which has been done in '25. Distribution expenses, there, the ratio unfortunately went into the wrong direction. On an absolute level, that shows the increase of the -- the orders, which come with higher distribution costs. But on top of that, we have seen a substantial increase of logistic costs, transport costs, given kind of the high demand for logistic services, but we think that, that should be come to an end. And otherwise, if it will be ongoing, and we have already started with that, that we have to pass it to the clients with different models that either they pay for earlier delivery or other models just to kind of compensate for any potential further distribution and logistic cost increases. I think reported EBITDA was CHF 1.6 million lower than the adjusted EBITDA, where the adjustments come from. We have a net restructuring cost with the closure of -- that's net minus CHF 1 million because we could also sell the property, and therefore, it's only net minus CHF 1 million. We also adjusted CHF 2 million positive EBITDA contribution through the sale of the Swiss properties. And then we made additional provisions for legal cases in the magnitude of CHF 2 million. I think in our business, that's business as usual and nothing to worry because you notice that every second week there, someone is kind of putting a claim against the online pharmacies. And therefore, we have kind of just for the corporate practice some legal provisions in the amount of CHF 2 million. On the net financial result, that also seems to be kind of going completely into the wrong direction with CHF 12 million additional net financial result. But just to call you down, it's the CHF 12 million are all noncash. It's CHF 5 million FX impact on our intercompany loans. You know we fund those in Swiss francs and give the intercompany loans in euro to our companies. And at the end of the year, we have to kind of compare it then with the actual euro value. And as you all know, the euro substantially devaluated against the Swiss franc. There, CHF 5 million from that side. And last year, we had a positive effect of CHF 4 million. If you add it up, then you are at CHF 9 million. And the other CHF 3 million, which would then add up to the CHF 12 million, and that has a cash effect, but it will level out. That was the early repayment and repurchase of the '26 convertible bond because, as you remember, the offer was 103.5%, and we had to take that as a financial expenses. But on the other hand, we will save more than the CHF 3.5 million in this year because we do not have to pay the coupon of 6.875% of the '26 convertible bond anymore. So therefore, if you deduct the CHF 12 million, basically exactly the same net financial result. And just for your information, going forward, we have now redeemed the CHF 26 million fully 250 million outstanding, 3% coupon, 7.5% and then you have to add CHF 4 million to CHF 5 million of IFRS 16 financial expenses, and that brings you to roughly CHF 12 million of real cash out interest financial expenses for the coming future. Also on tax, you have seen we have not paid, but recorded CHF 12 million tax -- negative tax burden. Also there, no cash at all. There's 0 cash has gone out. It must be also somehow logical because we have recorded still a loss. The reason for that is that the deferred tax assets where we have tax loss carryforwards of several hundred million. And given a little bit lower growth in Rx and in some of our subsidiaries, that's just a manual thing, and we had to devalue the deferred tax asset, the positive ones, and that was this booking of this CHF 12 million, no cash effect at all. And given that it's based on a 5-year plan, the next year, we most likely have to do it the other way around, and then you will see there a positive contribution, but also with no tax effect. So far to the P&L, the balance sheet, I keep it very short. I think as a CFO, I'm very relaxed with this balance sheet. It has been substantially strengthened in last year with the rights issue in May, but then also with the partial refinancing of the '26 convertible bond so that we now have a very strong liquidity base of CHF 160 million. The net debt has been reduced to CHF 138 million and the equity ratio, which was strong already before, is now even stronger and amounts to 50%. As you may have read, we had redeemed the remaining CHF 22 million of the '26 convertible bond by beginning of March. And that's what I said as from now on, we only have the CHF 50 million and the CHF 200 million convertible bond outstanding, which are the only financial and interest-bearing debt besides the CHF 4 million to CHF 5 million lease payments, which we have also to pay on an annual basis. Let's have a quick look on the indirect cost and the net working capital. Indirect cost, everything goes into the right direction. From my view, not -- the arrow is not yet steep enough, but it will definitely steepen 7.2%. That's nothing you can be or I as a CFO can be proud of. But as I said in the past, you can be assured that this ratio will become significantly below 5% in our midterm plan, and you will see on an annual basis, further improvement on that area. Net working capital, also there, maybe -- that's because the liquidity position was so comfortable or is so comfortable, maybe not that focus by the end of last year. We had some overstocking of CHF 11 million, but that was based on a very strong Q4, which already started by the end of Q3, and we had really to overstock and the flu season also was kind of skewed towards the end of the year. We have done it a little bit too much. I think definitely CHF 5 million could have been less stocking. And then what's kind of -- I do not like very much is the CHF 9 million accounts receivable there, let's call it, sloppiness and I take it on my part, but that is also a nice asset to reverse in this year and the coming years. So far, everything on the cost, net capital and indirect cost side on track. And now let's go into details how we will achieve EBITDA breakeven in '26 and then subsequently free cash flow breakeven in '27. And we heard some complaints that we have now introduced CM3 contribution margin 3. I would say, okay, maybe the analysts have not yet in the spreadsheet, but I think it's the highest transparency you can really get from our end and what is CM3? CM3 is the last line of operating profit. You only have to deduct indirect costs and then you are at EBITDA. And I think that's definitely kind of, in our view, how we steer the company and how we -- and that's really the basis and the fundamental of our target and our mission to become EBITDA breakeven, and that's the reason why we want to share that with you. As you can see in '25, and you see the value of digital services, basically 3/4 or even more than 3/4 of CM3 contribution came from digital services, while the online pharmacy, that's Rx and OTC, BPC, including EU are keeping up substantially in the second half. That's the green part of the bar. For '25, we are very open and nice and even put the number on it, slightly grounded, but nevertheless, a very good indication. And then you see where -- why we are so confident that we will reach EBITDA breakeven. There will be a substantial contribution from digital services. As you know, they grow top line. And as Walter said, it's basically take rate equals gross margin, more or less the slight reduction equals EBITDA. But also the online pharmacy is substantially keeping up in '26. You see that the green bar, and they are almost on an equal level in absolute terms with digital services with the CM3 contribution, okay, they are on the top line much bigger, and that should not be a surprise. But having said this, in '26, even Rx, and that's really exceptional, will be CM3 positive. That's due to our very focused and increased marketing efficiency, which has been substantially double-digit negative still in '25. And you see the same pattern goes on for the first half in '27 and the first half '22. We will increase the CM3 margin by more than 300 percentage by 3 percentage points and more than double the CM3 contribution in absolute terms in 2026. And you see there will be -- there's not the end that will be ongoing also into '27. I think that's really important because if you now have CM3, you deduct the indirect cost and then your EBITDA level. And how that looks, we go even further into the detail on the next slide. That's the -- that's really kind of to the heart of what the CFO usually not any longer in Excel, but in sheets keeps and does not share with anyone. But here, you see the phasing of our EBITDA ramp-up. The basis is Q4 '25. In Q4 '25, we had still a negative EBITDA, but it was in the area of minus CHF 7 million, which is a huge positive development due to the rights issue, we had to report Q1 '25 EBITDA, which was minus CHF 16 million. Q4, we were down at minus CHF 7 million. And Q4 is really the run rate for our journey -- EBITDA journey in '26 with Q1 being somewhere in the area of Q4 because we see the same trends, the same patterns, the same dynamics, improvement in Q2, which is usually the first 2 quarters are not the best ones. It has some seasonality in our business, but not too much because there is additional measures included. Then Q3, we are, at this point in time, confident that we will reach EBITDA breakeven and Q4 will then be EBITDA positive. And this altogether, you will see first half the lion's share of the negative EBITDA contribution and the second half of the year, there we will hopefully see kind of a positive EBITDA contribution. And that leads us -- that's a little bit that will come now later to our guidance, but you see that it's minus CHF 10 million to minus CHF 25 million is our guidance for the EBITDA. As I said, -- it's CM3, that's the bridge, the minus CHF 48.2 million. Then the CM3 contribution, I said more than double. That's -- we haven't put the numbers there, but you also have something to calculate. And then the indirect costs where we are really working hard and try to bring them down, but that's according to budget, still some negative contribution, and that will lead us to the EBITDA guidance, which you see on the screen of minus CHF 10 million to minus CHF 25 million. I think CM3 is a very important pattern to get there, but also in combination with operational and marketing efficiency. And then we will also very tight CapEx management and also on the indirect costs. You see we have many layers where we can play and really optimize to get -- to achieve our target, first of all, in '26 to become EBITDA breakeven in the course of '26. But then with the same patents and instruments, we will become free cash flow positive also in the course of '27. That brings me now to the guidance for First of all, for '26, the short-term guidance, we have pretty broad guidance on the top line, mid-single digit to low teens. Reason for that is that we achieve EBITDA breakeven also with relatively modest growth, which is more the left side of the mid-single digit. But we also see patterns that we could even become EBITDA breakeven with accelerated growth. And that's the reason why we just want to keep the flexibility to play EBITDA versus growth, especially on the marketing side, and that's one explanation for the rather broad guidance. And as you know, we try to definitely come out at the right end of the guidance. But given, let's say, the different patterns, we will then have to narrow it during -- in the course of the financial year '26. As a soft guidance, how does that translate into kind of the business segments? Rx will be around 20%, which is kind of basically in line what Walter showed before. We cut the 20% noneconomic customers that comes with kind of a little bit lower but much more profitable growth on Rx. OTC, we stick to the mid-single digit as we have been before and as we have demonstrated that, that's possible. And digital service, there we will see mid-double digit growth as digital service combined and with a substantial increase of the EBITDA margin of the already very high EBITDA margin, but there will be further appreciation of the margin. I talked about EBITDA, minus CHF 10 million to minus CHF 25 million. That's kind of -- that also needs to be said an improvement of 300 basis points or 3 percentage points of the EBITDA margin. That's coming from the wrong direction, but I think it's still substantial, such kind of relative increase. And then CapEx, roughly CHF 30 million, maybe rather at the high end and we are positive that could be maybe slightly lower as we have seen in '25 with CHF 27 million. That will lead us to our ultimate goals, EBITDA breakeven and free cash flow breakeven in '26 and '27. And with this 2 years, taking into consideration that we have to really drive profitability, maybe a little bit against growth. The midterm guidance, we are very pleased that we basically can confirm the midterm guidance, which we put out in -- ahead of the rights issue. Of course, it's not 20% CAGR anymore. It's 15% CAGR anymore. But I think the most -- the best or the most impressive thing in my view is that we can keep the 8%. We can even stay more behind it because given that the relative growth of Rx goes down, and that makes the relative weight of digital service even bigger at the back end. And therefore, the business mix is really in favor of us with kind of having OTC, which is very important also for customer acquisition for Rx, but also for our TeleClinic and Retail Media business. Rx, which is decently growing and then digital services with high EBITDA contribution and high growth, which will have a higher relative share at the back end of our 5-year business plan, meaning that this is true for 2030, basically covering 5 years. CapEx has also been reduced by CHF 5 million. I think we are comfortable with CHF 30 million average CapEx rate. And I think that's basically the guidance where we are -- what we are aiming for and where we are kind of being measured to. And before I hand over to Walter because he's already jumping up, just 2 subsequent events, which you have seen on the convertible bond, I've already talked about. The closure of Ludwigshafen, which we announced also today, just some -- I cannot say, highlights, but some financials to that. We will have onetime restructuring costs between EUR 3 million to EUR 4 million. If you take the midpoint, then you should be at the right spot. But these are we are talking euros. Out of this [ EUR 3 million ] to EUR 4 million, EUR 2 million have an impact on EBITDA because these are severance payments and the remaining part is below EBITDA. That's kind of onerous contracts because we have lease agreements which we have to -- due to IFRS immediately to write off, but that will be an impairment between EBITDA and EBIT. We will adjust for that, roughly EUR 2 million. But I think the very positive effect is that we will have at least from '27 onwards, EUR 2 million -- in excess of EUR 2 million annual recurring savings because we are moving the 3.5 million parcels from Ludwigshafen to Heerlen, where we have ample of capacity. There will be better capacity utilization in Heerlen. The handling and packaging is 2x more efficient than in Ludwigshafen because we are in Helen fully automated. And therefore, I think the EUR 2 million is a baseline annual savings, but there is definitely potential for more to come. And then last but not least, current trading, I said, we have seen the positive trend from Q4 ongoing in Q3. Everything is according to plan, meaning budget. And also, I think that gives us a lot of comfort to kind of handle and managing this challenging but very exciting times ahead of us until we are free cash flow breakeven. Thank you very much for your attention, and I'm happy to hand over to also again. Walter Hess: Yes. Thank you, Daniel. So just before we close and open the Q&A session, -- in the last 2 years, we have not only built the platform engine, as shown before, we have also built a high-performing leadership team, as you can see here on the slide, a leadership team that bridges the gap between traditional retail excellence and disruptive health tech and AI innovation. And I can assure you also in the name of the whole team that we are fully committed to execute the defined goals and to transform our platform into tangible shareholder value. It's not only at the level of the management, it's also a change which is mirrored at the Board of Directors. And therefore, we have informed that we nominate 3 new members of the Board that we will present to the AGM. It's Thomas Bucher, a well-known, seasoned CFO with a lot of experience in listed and private companies. It's Nicole Formica-Schiller. She's an expert in AI and digital health transformation, but also regulation on a European and the German level. And she has also a wide network in Germany, in the health care sector and a deep understanding of the regulatory landscape in Germany. And it's Thomas Reutter, an experienced corporate and capital markets lawyer. So these board nominations ensure that management and Board is perfectly synchronized with the company's vision and AI-first platform strategy and also shall provide the necessary stability to the company. And with that, we are at the end of the presentation. We had to tell you a lot to give you a lot of information. But now let's immediately move to the Q&A session. Operator: [Operator Instructions] Walter Hess: Okay. We will share the mic. Laura Pfeifer-Rossi: Here is Laura Pfeifer, Octavian. I have a question on your sales outlook for this year. So what is the primary swing factor within your guidance range? Is it mainly driven by uncertainty around Rx growth? Or is it rather related to OTC performance? And maybe specifically on OTC, could you elaborate on what you are currently observing in terms of competitive dynamics? Walter Hess: To the first and second part. Daniel Wüest: No, I think, Laura, the swing factor is definitely Rx, which -- and as I said, we have kind of -- we play operating profit against growth. And given that the co-payment and the bonus, which have been developing not in the entire group because we only did kind of a pilot with some selected Rx customers developed very well in Q4, and we rolled out kind of this concept to the whole DocMorris just recently. That really is kind of the swing factor and also the reason for the wide range of the guidance. I think you can assume that OTC, BPC, that's the mid-single digit, meaning something between 3% and 7%, not much deviation. Also, the absolute volume is high. The digital services, double-digit -- mid-double-digit growth and -- but on a relatively low revenue -- absolute revenue level and the swing factor is really Rx, whether that's kind of let's say, 10% or 40%. But that's not that you take that as just to show you what kind of the volatility could be on Rx. Walter Hess: Yes. And you mentioned the competitive landscape and the price pressure. I guess you meant there, in the course of last year, we have adapted our pricing strategy, improved our strategy. You have seen the improvement in the gross margin. That's a result of it. But in general, we don't see now a change on prices or price levels in the market. In our market, pricing, the pressure is always on, but not now a big change with new market entrants coming in. Urs Kunz: Urs Kunz Research Partners. Regarding midterm, is that around 2030. And then on your midterm growth target of 15%, I still find that a little bit high, the OTC part is growing at mid-single digit, I guess, in your outlook in midterm. And I guess on the digital service side, I don't know if you can have this mid-double-digit range also percentage range all the way in the midterm future. So that -- if I then go back to the Rx that should be higher than 20% Rx growth to reach this 15%. Am I right about that? Daniel Wüest: Yes, you are perfectly right. And I think what you need to really consider given EBITDA breakeven and free cash flow, as said that we have to limit the growth and really play on our marketing efficiency. And that's also why we stated in the guidance that the fine print in the [indiscernible] that it's back-end loaded in '26 and '27, you will definitely see lower Rx growth than what will then come again from '28 to '30 onwards. And if you said it's substantially about 20%, and I will -- I can sign into that. But it will be 20% in the first 2 years, but then we will substantially be keeping up again. Urs Kunz: And where do you take how this belief that it's higher than 20%. It's just that you put in more marketing again then or you see the market growing faster after 27% in online? Daniel Wüest: Yes. I think it's really kind of the -- that we then have other or once we are free cash flow positive, we can then really also not that we fall back in the old patterns that you won't see then kind of us spending all of a sudden CHF 30 million in TV again. But I think with the bonus and the co-payment that's a very strong instrument. But as said, at some point in time that you are in balance with growth and profitability, we have, for the time being, still certain limitations and there, you can definitely kind of play that even more aggressive. Walter Hess: And sorry, what we also will see is a platform dynamic kicking in. So you have seen the partnership also with Google. So where we have joint development teams also with them, developing new services, adding services to the platform. And this will drive traffic, will drive engagement, will drive loyalty. So we will see the effects there definitely within even 1 to 2 years already. Urs Kunz: Midterm is 2030 or? Daniel Wüest: 2030. Sibylle Bischofberger Frick: Sibylle Bischofberger, Bank Vontobel have 2 market questions. First, I remember the market share of online pharmacies was about 5, 6 years ago, about 1.3% in Germany. How has it developed? How much is the market share now? And how much do you want -- how much growth do you expect in the next couple of years? And the other interesting market, telemedicine, you mentioned 0.5% market share. Where do you expect it to be in the next couple of years? Walter Hess: So on the Rx, yes, it was 1.3 5, 6 years ago. It went down before eRx started to 0.75%. And since eRx was available now also for online pharmacies, it went up to roughly 1.7%. And where will it go? That's the 1 million question. So we have, for our assumptions, taken a really conservative view in our midterm plans of 5% to 6% in 5 years. But frankly speaking, we think it will be more. It will ramp faster. But in our plans, we did not go now more aggressive than 5% to 6%. And on telemedicine, so yes, the share as shown, the penetration is lower than 0.5%. TeleClinic is roughly at 0.3% so has about 60%. And where will it go? So it depends on how fast the digital strategy of the ministry will be defined and will go live and how prominent telemedicine will be in this different kind of future care pillars. And it's too early to say where it goes. But anyway from 0.5, it will definitely go northwards, definitely. And remember, it's -- we have 2 kind of businesses. We have a retail business, but we also have a digital service business with completely different metrics, valuation, et cetera. And there is a strong growth really already going on and will continue. Daniel Wüest: And I think if you are interested, I recommend you to read Page 175 of our financial report where all the details in relation to the goodwill impairment is, which we honor past. But there you have kind of the assumption, the current market share of telemedicine and Rx and what our underlying assumptions are. It's in Rx 1.7% and in 2030, 5%, 1.7% to 5%. And that's the overall market share. I think then for the whole market. And telemedicine, it's even more astonishing, 0.5%. And in 5 years' time, the penetration should be 1.6% -- that's what we base our goodwill impairment test, and you could also assume that, that's basically then somehow reflected in our business plan. Walter Hess: So no more questions here in the room in Zurich. So let's move to the webcast and adding questions from there. Operator: We have one question from Gian Marco Werro from ZKB. Walter Hess: Yes. Hi, Gian Marco. Please go ahead. Gian Werro: Hello. Thank you. I hope there's no echo on your side. So first question is the growth outlook for TeleClinics. You mentioned mid-double-digit revenue growth. Why not 80% or 90% again this year because the penetration is still so low? Do you not do more marketing also there? Because in my view, it's really so such a comfortable way to get a doctor appointment in Germany, and there must be a huge demand from the doctor and from the patient side. So from a top line perspective. And then the profitability of the overall services business, is that still fair to assume that you are meaningfully above the 55% EBITDA margin for this business? And you mentioned you want to increase the margin for TeleClinic, but can you give us a bit more detail about your margin improvement target also for the whole services business, that would be interesting. And then just a third question, if I may, if I have the opportunity, the logistic cost is just something -- I mean, you already elaborated on it. But don't you see risk of patients ordering then less or if they have to pay really then for even more for the delivery services, especially considering your growth expectations in Rx and OTC. Walter Hess: To the first question, the growth rate. So you can consider that the growth in absolute values remains at more or less the same level. And then you have to take in consideration that you always have to integrate new network partners, larger ones. And once you integrated them, the growth curve starts to slow down and then you integrate new ones. At the moment, the regulator is justifying the new digital strategy. And for example, the doctor associations -- we talked to several of them. They are ready, but they just want to wait until they know now what the regulator regulates -- and so this is the dynamic of the growth that we have predicted for this year. If it comes to the margin, you mentioned 55%. So some of the services are even higher. Some of the services are below this 55%. And I think -- yes. Daniel Wüest: I think on the margin, not sure where this 55% are coming from. I think as of currently, TeleClinic has margins in the low 30s that will substantially increase over time over the next 5 years to the figure you -- you mentioned, I would say that's kind of 45%, 50%, that's kind of a reasonable run rate. And on the other hand, Retail Media, that's also very highly profitable. That one is already on higher EBITDA margins, but will also kind of in a balanced model will be somewhere around 50% EBITDA margin. And I think that's the mix. You will see this year an overproportional increase of EBITDA contribution given that we do not have a triple-digit growth at TeleClinic. And I think it's always kind of 1 year, a little bit less growth, but then substantial improvement of profitability. The next year, strong growth, maybe a little less profitability than 1 year of consolidating everything, increasing margin. And I think that's -- but the overall pattern and growth pattern is very strong, but it's not a linear line. It's kind of some years with a little bit hold back on the top line, but push the bottom line and therefore, even faster. Walter Hess: And your third question about logistics, do you refer to what to the closing of Ludwigshafen or... Daniel Wüest: No, to the logistic costs. And I think there, Gian-Marco, it's not that we say, I think we do it a little bit more professional, not saying that you have now to pay EUR 2 more. I think you have definitely other measures. First of all, kind of not reducing, let's say, the order that you can say, okay, if you order until 5, you get it next day, you can even lower your logistic cost if you say, okay, if you order until 4, then you get it next day because that has already another price tag on the -- with the carrier. And you could also play then with the basket size, which is kind of then free of shipping just to balance this logistic cost. And we see it in the whole market. You see, for example, DM free of delivery charge is EUR 60, our friendly competitor and -- and thus, we are much lower. But I think you have many things to play and to optimize your logistic costs. And it's not a problem of DocMorris, it's kind of the whole online and not even Rx and OTC online, but the online industry, and we will just follow the market and to not getting -- being hit by higher logistic costs. Operator: And we have one more question from Jan Koch from Deutsche Bank. Jan Koch: Two questions. The first one is on your 2026 guidance, which essentially only implies less than 4% sequential growth per quarter. Why is this the case? And given that your group guidance is quite wide this year, is there a scenario where you accelerate Rx growth in 2026? And then secondly, you mentioned a strong liquidity position of CHF 160 million. But if I take the CHF 160 million at the end of 2025 and consider that you paid back the CHF 20 million convertible and consider a negative free cash flow in probably in the mid- to high double digits in 2026, you will start 2027 with probably less than CHF 100 million. Free cash flow is still expected to be negative next year, and you might have to refinance your 2028 convertible next year as well. So how do you plan to achieve this? Are you open to sell a minority share in TeleClinic? Walter Hess: Yes. Let me take the first question and then Daniel, the second one. So on the sequential growth, as we have shown before, the guidance, we have given us some space so that we can maneuver between growth and marketing spendings. And this is also what we see in the first quarter that it goes in a really good direction already. And -- if it continues like this, so we can go more to the upper end, but we want to be flexible in reacting. And for us, the priority this year is completely on becoming breakeven in the course of the second half year, possibly on the second half year in total. And therefore, we need this flexibility and we take for us this flexibility. And on the second question. Daniel Wüest: Yes. I think just to start top down, you're right with the CHF 160 million, you have to deduct the CHF 20 million or CHF 22 million, but let's deduct the CHF 20 million, that makes it easier for calculation. That's CHF 140 million. And you are also right that you can assume for this year and next year, negative free cash flows, but they will be substantially even already this year lower than last year and in '27 that the indication that in the course, of course, we aim for as low as possible negative free cash flow, but that should be not kind of the 2 figures added up should still leave us with a very comfortable remaining cushion of liquidity until we will become then for the full year free cash flow positive in '28. In relation to the refinancing of the '28 maturity, I think once we have demonstrated and shown that we are on the right path, -- that's then something which we will tackle by then. It's clear that we do not fully redeem the CHF 200 million, and it's also clear that it does not make sense from just -- at least that's what I learned at university, okay, acknowledging that was some time ago, but that the fully debt financed balance sheet is definitely not an efficient balance sheet. And I think let's take it one step after the other, and we have ideas. And you referred to kind of -- if I'm right, selling a minority stake of TeleClinic. And I think, of course, that it's a very valuable asset, which we have in our hand, but it's extremely valuable within our platform and therefore, definitely not any or the first priority to monetize TeleClinic at this point in time. Jan Koch: Understood. And one follow-up, if I may. Are you going to report EBITDA in Q3 and Q4 this year again so that we can track your progress? Daniel Wüest: Let's see. I think could well be. I think that -- and I think it would be important that at least we give you a very good indication where we are heading to. And I think this nice picture, which we draw in our presentation, you can basically on a quarter-by-quarter basis, track us and see whether the 2 guys in front of you have not only overpromise, but also deliver on that. But we have to see, but most likely, yes. Walter Hess: Okay. Then we come. Daniel Wüest: I just want to say that's the benefit of lunchtime. Walter Hess: Last question. Unknown Analyst: Not going to look. No. On the AI companion digital assistant. As I understand, you're not getting any money for it. Marketing and any plan that on later stage you get some money out, because you mentioned these 100 people they got saved from cancer. At the end, I think somebody is happy to pay something.. Walter Hess: Did anybody say we do not get any money out of it? I cannot remember. No, it's what we see and we measure very carefully, of course. We see an impact -- a positive impact on traffic already. We see a positive impact on engagement already. We see the conversion rates going up as soon as we can take someone by the hand and guide through the platform. And we see a significant increase of conversion rate. And this brings us already additional money. And as you have seen on the platform, the marketplace, this marketplace is a marketplace also for health services. And on a marketplace, you want to earn money. And we are filling this marketplace also with health services, and we will get additional margins, revenues and margins from there as well. Okay. So with that, we come to the end. Thanks a lot. It was a little bit long. Sorry for that, but we had a lot of information for you. Thank you for joining, and we wish you all a pleasant and happy day. Bye-bye. Thank you.
Operator: Thank you for standing by, and welcome to the Tuas Limited Half Year Financial Year 2026 Results Call. [Operator Instructions] I would now like to hand the conference over to Mr. Richard Tan, CEO. Please go ahead. Richard Tan: Good morning, and thank you for joining us. I'm Richard Tan, Chief Executive Officer of Simba Telecom, the principal operating entity of the Tuas Group. Also on the call today are Mr. David Teoh, Executive Chairman of Tuas Limited; and Mr. Harry Wong, Chief Financial Officer of Simba Telecom. It's a pleasure to present the financial results for Tuas Limited for the half year ending 31st January 2026, covering the period which started 1st August 2025. Let me briefly outline today's agenda as shown on Slide 2. We'll begin with Harry, who will walk through the financial performance and key metrics for the year. I'll then provide an update on our operational progress, status of M1 acquisition and outlook for FY '26. We'll conclude with a Q&A session to address any questions you may have. Please note that all financial figures discussed today are denominated in Singapore dollars. With that, I will now hand over to Harry to take us through the numbers. Harry Wong: Good morning, everyone. My name is Harry Wong. CFO of Simba Telecom. I'll be presenting the financials of the Tuas Group. On Slide 3, you'll see that we achieved a notable improvement in the financial results during the first half of FY '26 when compared to that of FY '25. Revenue for the half year is $91.9 million, up from $73.2 million for the same period last year. Pre-acquisition costs amounting to $10.5 million was incurred. Excluding this, the underlying EBITDA increased 27%, up from $33.1 million to $42.1 million. We achieved a half year positive statutory net profit after tax of $8.2 million, which is a significant improvement on the prior period's profit of $3 million. Next, we look at the revenue and EBITDA on Slide 4. Revenue for the half year ending 31 January 2026 increased 26% compared to that of FY '25. With increased scale of the business, EBITDA margin has improved to 46% of revenue. Gross mobile ARPU for the year was 9.61%. The key driver of the EBITDA uplift is the increased subscriber base for both the mobile and broadband products. Our mobile plans include generous roaming data at every price point and broadband plans provide exceptional value including premium Wi-Fi 7 routers and home phone lines as part of the package. Slide 5 shows our sustained mobile subscriber growth since FY '23. As of 31 January 2026, we had about 1.412 million subscribers, representing a 13% increase over the past half year. Slide 6 shows the broadband subscriber base. As of 31st January 2026, we had approximately 46,000 active services. We have gained traction in this segment, and we have added 20,000 subscribers over the past half year. We proceed on cash flow on Slide 7. We continue to show positive cash flow. Opening cash and term deposit balance was $80.7 million. Net cash generated from operating activities was $50.1 million. The main cash outflow comes from acquisition of plant and equipment and intangible assets of $18.9 million, largely mobile network and some fixed broadband infrastructure. We raised funds from capital markets of $260 million in support of the M1 acquisition. This brings the ending cash and term deposits to $478 million as of 31st January 2026. Again, positive cash flow after CapEx for the year is a welcome achievement. I should note that pre-acquisition costs that have been accounted for in this half year has not become liable for payment during the first half or since then. This explains a good portion of the positive cash flow outperformance compared to EBITDA. With this, I will let Richard proceed with the business updates. Richard Tan: Thank you, Harry. Singapore's mobile market remains highly competitive. And over the past financial year, Simba has continued to focus on delivering stronger value across all price points. This strategy has clearly resonated with consumers, as reflected in our robust subscriber growth. We have further enhanced our mobile offerings by adding 2 popular roaming destinations, Japan and Australia as inclusions in the APAC tier to our higher-value plans. This enhancement is an important part of supporting our continued growth in the mobile segment. To serve our expanding customer base, Simba continues to invest in network coverage and overall user experience. I am pleased to share that we have achieved another significant milestone. We have surpassed IMDA's regulatory benchmark of 95% 5G outdoor coverage, well ahead of the 31st January 2026 deadline. Slide 9 highlights the reasons behind the strong momentum in our fiber broadband business. The accelerated growth is driven by a clear, simple and compelling value proposition through 10 gigabit per second symmetrical speeds complemented by a premium Wi-Fi 7 router, modem and the home phone line included as standard. We are also proud to share that Ookla has awarded Simba, both the fastest download speeds and most reliable speed titles for the second half of CY '25. Most listeners would have used Ookla to do a speed test on your connectivity and they are widely regarded as an accurate global leader in Internet testing and network intelligence. This recognition is a testament to our engineering excellence and our unwavering commitment to delivering the best possible service experience for our customers. Moving to Slide 10. We appreciate shareholders' patience as we await IMDA's decision on our proposed acquisition of M1. This is a significant transaction involving critical national infrastructure and on a combined basis, it will create Singapore's second largest mobile customer base. Both Keppel and Simba continue to work diligently through the regulatory process and we remain fully committed to securing the necessary approvals. And finally, the business outlook. The first half of the year has established a solid platform for us with sustained growth across both our mobile and fiber broadband segments. In line with this expansion, Simba's stand-alone CapEx for the full year is expected to range between $50 million and $55 million. We will continue to prioritize margin optimization and maintain disciplined cash management as we scale. I'll now hand back to the moderator for the Q&A session. Operator: [Operator Instructions] Your first question comes from [ Raj Ahmed ] from Citigroup. Siraj Ahmed: It's Siraj Ahmed. Can you hear me okay? Richard Tan: Yes. Siraj Ahmed: Just I have maybe 3 questions. The first one just on the -- maybe a multipart question on subs momentum. Pretty strong pickup in momentum in the half. Just keen to understand what drove that from your perspective, especially given your advertising and marketing spend is actually down year-on-year? Richard Tan: Okay. So obviously, the momentum has been strong for the first half. And in part, I think, it was -- you could say that it was due to our announcement of the M1 acquisition because people are seeing us in different light. They know that we are a serious player and we are here to stay, and we have been delivering very good value for -- across all of our service plan. So this has resonated obviously across the -- our customer base as well as people who have not come aboard yet. So we saw a very strong momentum for the first half of the year. Siraj Ahmed: And Richard, just because I'm into the stock as well, just in terms of first quarter versus second quarter, is there some seasonality or some sort of events that supports 1Q? I know 1Q is quite strong. 2Q is strong as well, but it was down quarter-on-quarter. Is this something that impacts from like a seasonality perspective? Richard Tan: This is the typical seasonality effect because, as you all are well aware, the November and December traveling period is always very strong in terms of people leaving Singapore for their holidays. So a lot of people will sign up prior to that. And then they will return. Everyone goes back to work and school back in January. So you are obviously noticing the seasonality effect. Siraj Ahmed: Right. Actually, that's a good segue for my question on -- just in terms of the current environment with fuel and everything like that. And given that traveling is a big part of your value prop as well. Are you seeing any sort of -- anything that you can call out based on current trends that you're seeing on that impacting... Richard Tan: The trends will be very similar to previous years. And we expect second year to -- second half of the year to continue to exhibit good growth as well subject to the usual seasonality effects that we have seen over the past 3 to 4 years. Siraj Ahmed: All right. Helpful. Last one. In terms of just the gross margin, it seems like the network, the COGS has gone up quite a bit. Gross margin is down year-on-year. And is there some one-off in that, that we should be considering? Richard Tan: Well, the -- what we have been focusing on more is the EBITDA margin and the EBITDA margin has actually grown by 1 percentage point. So I think that's the main thing to focus on. Operator: Your next question comes from Darren Odell from Peloton Capital. Darren Odell: Congratulations on a strong result again. Just in relation to -- on the cost, the $10.5 million one-off cost in relation to M1 acquisition. I was just wondering -- it was quite large. I was just wondering if you're able to break that down in more detail, please? Richard Tan: We are not providing any breakdown as of now, but it is a mixture of legal due diligence, tax due diligence, financial due diligence and financial advisory. So I think in the -- considering the size of the transaction it is actually very, very reasonable. Darren Odell: And just in relation to just broadband connections, which have obviously been very strong in the last half. What's the sort of backlog look for that? Or do we expect the same sort of momentum to continue in number of subscribers or to be increasing? How should we be thinking about that in the future? Richard Tan: What I can say right now is that we are working very, very hard to build on the momentum that we have established and the fact that Ookla has given us the award, puts us in a very, very good position to build on that momentum. Operator: Your next question comes from James Bales from Morgan Stanley. James Bales: I guess I'd like to build on those questions about the acceleration in mobile and the strength in broadband subs. You talked about it being a question of brand awareness, durability, value that is in the consumers' mind. Should we extrapolate that the acceleration that you've seen in the first half is sustainable throughout the year and into FY '27. Richard Tan: So to be specific, are you referring to mobile or fiber broadband? James Bales: Well, I'm referring to both. So I guess I'm a bit surprised on broadband, where there's a 2-year term. It's a commoditized product, all selling the NetLink service. How you've managed to scale that so fast and whether we should expect that, that continues in the same sort of way. Richard Tan: So I think you will have seen that our value proposition is very strong. We have included a lot of value and the router that we are offering, it's a really good relative product, no compromises because, for example, it has a true 10 gigabit a second Ethernet port. And we have also added home phone line as well. So with the awards that I've mentioned from Ookla, that puts us in the very good position and people have been signing up through word of mouth. They have experienced very, very good service from both Simba, and the performance has been great. And obviously, we've been spending on marketing as well to ensure that the awareness is built up across the board. So with that with that foundation laid, that has put us in very good standing in terms of continued growth for broadband. Mobile, I think we are very well established across all segments. And we have seen good gains in these different segments, which I have alluded to, and these include, for example, the mass market and foreign [ router ] segment is something that we have always been very strong in. So without a doubt, our penetration is now deeper. Our growth is more broad-based, so that gives us also a good foundation for continued mobile growth. James Bales: That's really good context. And then I guess the other question I had was around M1 deal completion. This has taken a lot longer than you thought. Can you help us understand the -- in your mind, what's changed? And you would have expected that this deal completed last year or in January when you first announced it. Can you help us understand why it's taken longer and whether your confidence in closing it has changed at all? Richard Tan: Well, as I've indicated in my presentation it is an important transaction. What I did not say for example, is that this is the first time that the market is undergoing consolidation. So obviously, there are all aspects of the matter that IMDA will need to weigh upon. So I'm not surprised, and we are -- both parties, meaning Keppel and Simba are working diligently to gain regulatory approval as we go through the process. Operator: [Operator Instructions] Our next question is a follow-up from [ Raj Ahmed ] from Citigroup. Siraj Ahmed: It's Siraj again. Just, Richard, just on a follow-up to James' question on the time line. Is there any sort of indication that's been given to you on potential completion time lines? Or is it just open-ended from your perspective? Richard Tan: I don't think it's appropriate for us to set any expectations with regards to the time line. All I would say right now is that the engagements on a joint basis with the regulator, they are ongoing. So I think that's very important in terms of keeping the dialogue going. Siraj Ahmed: Okay. Got it. On that as well, there was a -- I think there's a 6-month sort of agreement with Keppel in terms of the deal completing. Is that -- I'm guessing that's -- I think that in sort of end of March, I think, I'm guessing that's been extended. Is that fair, given both of you are talking with IMDA? Richard Tan: We are aware of it, and both parties are working to extend it. Siraj Ahmed: Okay. Last one, just on CapEx. I know that sometimes there is seasonality. I think first half was only $19 million. You're reiterating the CapEx guidance. I'm just wondering whether -- is it sort of -- you're keeping the second half seasonality because of the deal -- impending deal? Or is it just timing related? Richard Tan: A lot of it is timing related because we initially spent more on CapEx, for example, building out our 5G coverage. But obviously, we are keeping in mind the need for us to continue to support our growth, and that is why we're keeping to the $50 million to $55 million CapEx expectation for the financial year. Operator: Thank you. There are no further questions at this time. I'll now hand back to Mr. Tan for closing remarks. Richard Tan: Thank you all for your time and for engaging in our business update. The Board and management of Tuas Limited deeply appreciates your continued support. We look forward to delivering further value and growth in the months ahead. Thank you. Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.
Operator: Good day, and thank you for standing by. Welcome to the Transgene 2025 Annual Results and Prospective for 2026 Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Lucie Larguier. Please go ahead. Lucie Larguier: Well, thank you, Nadia, and hello, everyone. So I'm Lucie, Chief Financial Officer at Transgene, and I'm with Dr. Alessandro Riva, our Chairman and CEO today. We will review the progress over 2025 and answer any questions you may have. Before I turn the call over to Alessandro, I'd like to remind everyone that today's discussion contains forward-looking statements which are subject to multiple risks and uncertainties. [Operator Instructions] With this, I now turn the call over to Alessandro. Alessandro Riva: Thanks, Lucie, and good morning, good evening, good afternoon, everyone. So 2025 has been a year of meaningful clinical progress for Transgene. As you all know, we advanced our individualized neoantigen therapeutic vaccine, INTV, TG4050, supported by compelling clinical and translational data in head and neck cancer that reinforce our confidence in its potential to prevent relapse in patients. I would say that there were 3 crucial moments this year that confirm our conviction that the myvac platform can bring benefit to patients. First of all, our Phase I data being presented already at ASCO in the same section as 2 Phase III trials in head and neck cancer. Second, the immunogenicity data that we present at the SITC conference in November in the United States of America; and third, the completion of EUR 105 million fundraising that provides financial visibility until the first quarter 2028 to support our priority programs. With these 3 major achievement, Transgene is on track to continue building the scientific and operational capability to execute our strategy. Now on Slide 5. TG4050, the first INTV based on our myvac platform is currently being evaluated in international randomized Phase I/II clinical trial in the adjuvant treatment of HPV-negative head and neck squamous cell carcinoma, a setting with significant unmet medical need as more than 30% of patients relapse after 3 years despite the recent advances in the innovation with checkpoint inhibitors. At ASCO, we presented Phase I data showing that all patients with HPV-negative cancer who received TG4050 after surgery and the standard chemo radiotherapy remained disease-free after at least 2 years of follow-up. Importantly, the trial met all endpoints for both safety and feasibility. This 100% disease-free survival rate compared with 3 relapses observed in the control arm provides the first clinical evidence supporting TG4050 potential to prevent cancer recurrence in early head and neck cancer patients. In November, at the Society for Immunotherapy of Cancer Annual Meeting, we presented a compelling translational data that further strengthened the clinical proof of principle for TG4050. In particular, the data showed that TG4050 induced neoantigen-specific T cell responses in 73% of evaluable patients. Importantly, these responses were durable, persisting 24 months after the start of treatment and showed cytotoxic and effector phenotype markers up to 1 year after the end of treatment. Together, these findings demonstrated that TG4050 can generate potent and long-lasting immune responses capable of targeting and eliminating tumor cells contributing to the prevention of relapses. In January 2026, a comprehensive analysis of the Phase I clinical and translational data was published on the preprint platform of [ Med Archive ] and is currently under review by peer-review journal. I'm on Slide 6 now. Let me now turn on the ongoing Phase II part of the Phase I/II trial. The randomized Phase II part of the trial is in the same setting as the Phase I. All patients are close to being randomized, and this will be a key operational milestone for the program. The primary endpoint on the Phase I/II study is 2-year disease-free survival that is very well recognized by the health authorities being an important and critical milestone, and we expect this efficacy readout once all patients reached 2 years of follow-up from randomization. In second half 2026, we also expect to share the first immunogenicity data from patients from the Phase II cohort of the Phase I/II study. For the Phase I part of the study, we plan to report 3-year follow-up data on disease-free survival in second, third quarter 2026, followed by 4-year follow-up in second, third quarter 2027. Beyond head and neck cancer, we are working to broaden the spectrum of opportunity for myvac across additional solid tumor types where significant unmet medical needs remain. The platform, as you know, is designed to generate individualized neoantigen therapeutic vaccine tailored to each patient's tumor mutational profile. As mentioned, we are currently in the start-up phase of the new Phase I trial in a second not yet disclosed indication in early treatment setting, and our goal is to initiate this trial in 2026. We are actively optimizing our manufacturing process, improving turnaround time and preparing for increased production volumes. Importantly, part of the proceed is dedicated to advancing industrial and regulatory readiness, including the alignment with the FDA and the EMEA requirements as we move toward late-stage development. Now turning on Slide 7, BT-001, which is our intratumor administered oncolytic virus developed with our partner, BioInvent. At ESMO 2025, we presented a poster data evaluating BT-001 in combination with pembrolizumab in patients with advanced refractory tumors. This data shows positive abscopal and sustained antitumor activity in both injected and non-injected lesions. The immune-mediated tumor shrinkage observed is consistent with our mechanistic hypothesis. BT-001 in combination with pembrolizumab can convert cold tumors into immunologically active hot tumors. This data supports further development of BT-001 and you should be hearing from us about this development in the next couple of months. Now I would like to turn over to Lucie for the financial update. Lucie? Lucie Larguier: Thank you, Alessandro. So if we look at our financial position and what happened in 2025, we can definitely say that the most significant financial event of the year was the successful fundraising in December 2025 and through which we raised approximately EUR 105 million. And together with the conversion of EUR 39 million debt with TSGH into equity, Transgene strengthened its balance sheet, reduced its financial liabilities. The company is now virtually debt-free, and we are now ready to move and fund it until early 2028. If we look at our cash burn over last year, it was approximately EUR 38.2 million. So it reflects the investment in our Phase II trial, the fact that we manufacture and enroll patients into this Phase II in head and neck cancer. So I think that -- and I'm convinced that with the budget that we have, the money that we have, we have funded to deliver on key milestones, which include the development of 4050, the myvac platform, the planned Phase I trial in the second indication and also the work on manufacturing and process optimization, preparing late-stage development. So Alessandro, if you want to comment on outlook. Alessandro Riva: Yes. Thank you, Lucie. As we look ahead, our priorities as you know, are very clear. We remain focused on TG4050, our first INTV vaccine from the myvac platform. We intent being to continue to establish Transgene as a key player in the INTV field that is growing across the community, and it attracts a lot of interest. With the progress we have made so far and with the finance sources that Lucie just mentioned, we believe that we have what do we need to execute on the next phase of development. So overall, when we look at the next 24 months that are covered by our recent fundraising, we see a clear path of execution, multiple meaningful milestones and the financial visibility, as mentioned to support them throughout early 2028. Before opening the Q&A, let me also mention that we'll be participating in investor access events in Paris on April 9 and to the Life Science Conference in Amsterdam on April 16. And we would, of course, be very pleased to meet with those of you who may be attending. With that, the team and I will be happy to take your questions. Operator, please up to you. Operator: [Operator Instructions] And now we're going to take our first question. And it comes from the line of Chiara Montironi from Van Lanschot Kempen. Chiara Montironi: I actually have a couple. So the first one, how should we be looking at the 3 years DFS data that are approaching in Q2, Q3, given that the primary endpoint and the benchmark are 2 years? What do you expect to see here? And what will be a good result? And the second question is on the immunogenicity Phase II data in H2 '26? At which follow-up will be those data, we'll be able to see the induction of the immune response also to understand that these immune responses are durable? Alessandro Riva: Thank you, Chiara. So first question is on 3-year disease-free survival data. First of all, we plan to send an abstract for the ESMO conference in Q3 2026. And what we should expect, of course, we don't know because we have not analyzed the data. I mean the base case scenario is, of course, that we continue to see that the 2 curves stay separated throughout the additional follow-up. So that's the base case scenario. The best case scenario, which is which is not good for patients that have been randomized to the observation is to serve more relapses in the arm that did not receive the TG4050. And therefore, this scenario will show a larger magnitude of the separation of 2 curves. And that's what -- and of course, there is a worst-case scenario that is that we start to observe relapses in TG4050. So -- but in the base case scenario, in best case scenario, this is going to be quite good for the program and of course, for patients. Then in terms of the immunogenicity data of the Phase II study, we expect to start having the first set of data by the end of 2026. And of course, we will start to analyze the patients that were randomized first, right? So therefore, we expect that those patients have at least 1 year kind of follow-up with the potential to show durability over 1 year in the Phase II study. And of course, this will be important to start also to strengthen the data that we have presented earlier in 2025 with the Phase I. Hopefully, this is clear. Operator: And the question comes line of Dominic Rose from Intron Health. Dominic Rose: It's Dominic here. I've got a couple as well. My first question is, how do you think the GMP manufacturing reconfiguration will change the ability to get a deal done towards the end of the year? So how impactful is that versus getting new data? And my second question is what, if anything, do you hope to learn this year from the Moderna data readouts? Alessandro Riva: Okay. So the first question is around the GMP manufacturing. So as you know, it is important to continue to optimize manufacturing for an individualized antigen therapeutic company like Transgene. So we plan to have full GMP manufacturing by 2027, Q3 2027. And of course, having a full GMP manufacturing is an important value creation for myvac program and, of course, we strengthened the [indiscernible] from pharmaceutical companies for the simple reason that having a GMP manufacturing allow us or the potential partner to move forward to a potential pivotal trial. So that's the reason why we are investing significantly on the GMP. Again, it is critical to succeed in the individualized neoantigen therapeutic vaccine. And then the second question was around Moderna data. I mean, I guess you're referring to the Phase II that they've already published, but also the potential Phase III in adjuvant setting melanoma. So first of all, I mean, the long-term follow-up data set that they have published just recently, I would say, confirm what they've already published a few years ago in terms of the efficacy of their INTV in adjuvant setting melanoma. And of course, they clearly say that they will disclose the Phase III data always in adjuvant melanoma by the end of the year, beginning of 2027. And of course, for the INTV community, the Phase III data will be quite important because if the data is positive, the data will continue to derisk the INTV approach. And of course, if the data is negative, then as you know, Transgene has a different technology with a different vector. And we think that we will have to wait our data set in head and neck, specifically the randomized Phase II study before making any conclusion because, again, our technology is different from Moderna one. But of course, for patients for the field, we hope that the melanoma data, Phase III is going to be positive, right? So -- but of course, we have to wait. So -- and from a bio and tech point of view, right? So as you know, they are doing some changes in their leadership and they have recently also announced that they plan to close their Phase II trial in the [indiscernible] cancer because the competitive landscape has changed significantly. And therefore, what they said, of course, they do some reprioritization and now they are staying focused on pancreatic cancer and colon cancer, and we don't know the data, the studies are still ongoing. And again, of course, we hope for all it will be there for all the studies that are in the INTV field in early setting because, again, all the data points will help to continue to derisk the field and, of course, for biotech companies to continue to accelerate the development. Lucie Larguier: So we have received a few questions on the chat. So I'll take and read [indiscernible] question, [indiscernible] from Biomed Impact. So the question is regarding the new indication, TG4070 program as shown on the website, could you give us more information, solid tumors as far as I understand, will the population of patients be homogenic or will you address several types of solid tumors, single or multiple injections? Alessandro Riva: So this is going to be one indication. It's not a basket protocol. It's going to be randomized Phase I study in a new indication that, I would say, very similar to what we did in head and neck, same type of methodology, but in another indication, where the medical need is quite significant. And the indication will be very different from head and neck from a biological standpoint and also in terms of the potential of being immunogenic tumor. And I cannot disclose exactly what we are going to plan. So we are in the kind of waiting for the regulatory feedback on the final protocol. And as soon as we have, of course, the approval from the agencies, we're going to disclose the indication and the time lines associated to. We're very confident that this study can start this year. Lucie Larguier: So we had a question from [ Jamie Land ], but I think with [indiscernible] from all investment, I think we've answered it given the current landscape. I also have a question from Martial Descoutures, ODDO BHF, which is, as you expand myvac platform, thanks to the additional tumor types, how do you see the long-term value? Could we think that you will look for partners in the future? Or could we think that you will continue alone for the long term? On TG4050, what level of efficacy could you consider as clinically relevant in the Phase II? Alessandro Riva: So let's start from the last question perhaps. So everything that is similar to what we have observed in the randomized Phase I makes a lot of sense for patients. And you know what we have disclosed and the disease-free survival curve. So having a flat curve without any relapses by itself is very important for early setting head and neck cancer patients. So we hope that we are going -- as I said also answering the question from Chiara, we hope to see the same kind of shape of the curve, the same type of separation and of course, the same durability of the plateau that we are observing in the Phase I study. So in terms of the long-term strategy for Transgene related to myvac, so I would say that, first of all, our priority is to continue to create value for patients. So -- and of course, by doing that to stay very open on potential opportunities in terms of having a kind of constructive dialogue with the scientific community with the pharmaceutical companies. And we think that, of course, as we generate more data in terms of Phase II, in terms of optimization of the manufacturing, in terms of showing that we are able to do a second indication with a manufacturing process that is even better than what we have used in the Phase I and the Phase II study. So all this kind of value creation activities and catalysts will help significantly to attract the interest of pharmaceutical companies. So the objective that we have is ultimately to bring the organization to a kind of starting block for launching a potential pivotal trial. And we hope that if we demonstrate that in the next 24 months, we can generate interest from potential partners and working them together to launch a potential Phase III trial. So value creation first dialogue in parallel with the industry and third potential collaboration to continue to accelerate our program. Lucie Larguier: Okay. We have a quick few follow-up questions from [indiscernible] from [ All Invest ]. So any update on the media conference where you plan to report Phase I data, particularly the 3-year survival. Should we assume it's ASCO? Should we expect Phase II patient randomization to be completed during Q2 2026? And finally, how should we think about the timing for initiating a Phase I trial in a new indication this year? Alessandro Riva: So I mean the 3 years survival data for the Phase I study of TG4050 will be potentially that's our plan presented at ESMO. And of course, this requires that ESMO accept our abstract. So we plan to submit it and then we'll keep you posted whether this is accepted and ultimately disclosed and presented at the ESMO meeting. So that's your first question. So the second question related to the randomized Phase II trial. So I mean, the randomization will -- I mean, will be completed certainly by Q2, right? So that's our plan, right? So -- and of course, we will obviously sign an announcement as soon as we have this milestone completed, but we are kind of optimistic that really we are close to the final recruitment. And then the third question, there was another one. Lucie Larguier: How should we think about the timing for initiating a Phase I trial? Alessandro Riva: Yes. As we mentioned, it's going to be in 2026. As soon as we have the formal approval from the health authorities, we're going to move forward. Lucie Larguier: And I think that we have at least -- I don't have additional questions, a few wins. Thank you very much, everyone, for your questions. Alessandro Riva: Thank you for the questions. So just to close, I mean we think that 2025 was a year of strong progress for Transgene. As I mentioned, we continue our journey to continue to establish Transgene as a key player in this field of individualized neoantigen therapeutic vaccine that can be potentially transformative for patients and can, as you have seen, can go beyond one single indication. Looking ahead, we are confident in our strategy in the transformative potential of the myvac platform. And with the financial visibility until early 2028 and a clear path to clinical readouts, so we are very well positioned to deliver meaningful value for patients and shareholders alike. We are grateful for your, of course, continued support and looking forward to keep you updated on our progress. With this, I would like to conclude today's call. Have a great rest of the day and talk to you soon. Operator, please? Operator: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.
Operator: Greetings. Welcome to Xiaomi's 2025 Annual Results Announcement Investor Conference Call and Audio Webcast. Today's conference will be recorded. If you have any questions or objections you may disconnect at this time. [Operator Instructions] Now we will have Mr. Xu Ran, General Manager of Group Investor Relations and Capital Markets Department to start. Ran Xu: Welcome, everyone. Welcome to the investor conference call and audio webcast for the company's 2025 annual results. Before we start the call, we would like to remind you that this call may include forward-looking statements, which are underlined by a number of risks and uncertainties and may not be realized in the future for various reasons. Information about general market conditions comes from a variety of sources outside of Xiaomi. This presentation also contains some unaudited non-IFRS financial measures, which should be considered in addition to, but not as a substitute for the company's financials prepared in accordance with IFRS. We have William Lu, Partner and President of Xiaomi Corporation; and Mr. Alain Lam, Vice President and CFO of the Corporation to talk to us. Mr. Lu will share recent strategic and business update. Thereafter, Mr. Lam will review the company's financial performance of 2025. And then after that, we will have the Q&A. Mr. Lu, please. Weibing Lu: Good evening. Thank you very much for coming to the 2025 full year call. Now this evening, I'll be talking about 3 points. First of all, review our main achievements in 2025. Second, share of breakthroughs in hard-core tech, in particular, in AI and embodied intelligence. And thirdly, we'll look ahead for the strategic direction focus in 2026. First of all, in 2025, some of our outstanding achievements. Well, in the year, our Xiaomi Group maintained high growth with both annual revenue and net profit reaching all-time highs. Total group revenue reached RMB 457.3 billion, surpassing the RMB 400 billion mark for the first time, up 25% year-on-year. Adjusted net profit reached RMB 39.2 billion, up 44% year-on-year. By segment, first of all, Smartphones. According to Omdia, in 2025, our global smartphone shipments ranked top 3. Market share was 13.3%, remaining global top 3 for 22 consecutive quarters. In Latin America and Southeast Asia, shipment ranking rose to second. In Europe and Africa, third. According to third-party data in Mainland China, our smartphone sales ranking rose to second. On premium models. In 2025, premium models in Mainland China accounted for 27.1% of total smartphone sales, up 3.8 percentage points. In RMB 6,000 to RMB 10,000 price bracket, our market share rose by 2.3 percentage year-on-year. We solidified our high-end base domestically and are making continuous breakthroughs in the RMB 6,000 to RMB 8,000 ultra-high-end market. By end of February 2026, we launched our first Leitzphone for global markets, priced at EUR 1,999, a new milestone in our overseas premium strategy. We'll continue achieving top-tier pricing in mature international markets and elevate our premium overseas sales to new heights. For IoT business in 2025, revenue surpassed RMB 120 billion for the first time, reaching RMB 123.2 billion and 18.3% year-on-year growth, hitting all-time high both domestically and internationally. For the home appliances revenue, it reached 23% plus growth with record shipments. Wearables ranked first globally, TWS earphones ranked second. Tablet shipments grew 25.2% year-on-year, ranked fifth. Our AI glasses released in June '25 ranked third globally and first in China. We continue to drive full category premiumization at home and abroad with overseas high-end products, achieving stellar performance. On premium strategy, in '25, our tech home appliances entered the European market already covering Spain, France, Germany, Italy and more. For autos, Xiaomi Auto delivered 410,000 units in 2025, far exceeding the 300,000 units target set at the year's start. February 13, '26, cumulative deliveries surpassed 600,000, and we are fully committed to delivering 550,000 units. In March 19, we officially launched a new generation SU7. It features major upgrades inside and out, including across the electric powertrain chassis, electronics architecture, et cetera. Within 34 minutes of launch, locked orders for SU7 exceeded 15,000, surpassing 30,000 orders after 3 days. For this year's MWC, we also showcased our Vision GT concept car, not just a concept car, this is Xiaomi Auto's latest exploration of design innovation built on hardcore technology. We are the first Chinese brand invited to participate, and it represents recognition by the world's top simulation driving platforms. For China's auto industry, it shows that in terms of design and innovation, Chinese automakers can already compete on par with the world's best. For hardcore tech, in '25, our R&D investment exceeded RMB 33 billion. For '26 we plan to invest over RMB 40 billion with more than RMB 16 billion for AI, embodied intelligence and other innovation fields. These investments build our solid product capability defenses. And for AI in 2025, we achieved breakthrough progress. For AI, it is an era of truly useful AI, undergoing historical leap from usable to truly useful, a paradigm shift from single tasks to complex tasks processing, from passive to active planning, from tool attributes to ecosystem attributes, and for us with rich terminal products and use cases across smartphones, cars, home appliances, IoT, real data value of AI far surpass the single category companies. Two, our foundation large models enter the leading global open-source tier. In March of the year, we released 3 models, Xiaomi MiMo-V2-Pro, MiMo-V2-Omni and MiMo-V2-TTS, completing our technical foundation for the Agent Era. MiMo-V2-Pro surpasses 1 trillion parameters, supporting 1 million token context windows and ranking 8th globally in Artificial Analysis Large Model Intelligence Index, fifth by global brand. During closed beta and public launch, these models rank first in weekly calls and held first place for many days on OpenRouter, single days as much as double in second place. And we will keep upgrading our foundation models as we move towards general intelligence. Three, we are poised to lead AI in the physical world, deep integration of AI in the physical world as the next frontier. We control over 1 billion hardware access points for its ecosystem. In March '26, our phone AI Agent, Xiaomi miclaw entered limited testing. We're the first OEM to attempt deploying [ launch ] Lobster on phone terminals, exploring the delivery of true AI phone and ecosystem to users. For auto, the new SU7 is equipped with our XLA Cognitive Large Model, achieving mall parking, navigation, complex scene understanding and voice control, improving both driving and experience. For SU7 Ultra, it's equipped with super shell AI, a smart cockpit and advanced AI. For the home in November '25, we launched our Miloco smart home solution, giving smart homes eyes and brains and hands and feet for the first time, a pioneering real world application of Xiaomi MiMo, laying a new vision for next-generation smart homes. Fourthly, for our AI is now Xiaomi core innovation engine in '25 with our tech-forward, about 2/3 of the winning projects used AI, reimagining work across fundamental materials, chipsets and OS, intelligent driving, tech home appliances and more, backed by China's strong AI industry. The coming decade belongs to China. And also Xiaomi is well positioned in person, car, home ecosystem. We'll invest RMB 60 billion in AI over the next 3 years. And in this era, we are confident that we'll place a new trade for Chinese AI. For embodied robotics, it is the ultimate integration platform for AI chips, OS and manufacturing capabilities, a high barrier field. In 2026, we launched a haptic-driven precision grasping, fine-tuning model, core tech for robotic dexterous hands. Shortly after, we open-source a Xiaomi Robotics VLA large model, Xiaomi-Robotics-0, achieving several new SOTA results. In March, Xiaomi embodied robot began internship in our car factory, achieving 90.2% deal size site simultaneous installation success for self-tapping nut workstations, meeting production line cycle times as quick as 76 seconds with 3 hours of auto operation. These are just starts. Over the next 5 years, we believe large numbers of embodied robots will work in Xiaomi's factories. And robots will break brown boundary between virtual and physical worlds. But there are challenges such as cost increase, et cetera. In the short term, there may be some pressure on our business. But on the other side, we will be steadfast in our strategy so that we will continue to have breakthroughs in AI, chips, OS and embodied intelligence. We are committed to scaling our global business model and advancing Chinese tech worldwide. This person, vehicle, home ecosystem is not just a product combination, but the platform for understanding users' full scenario data. We'll firmly seize the opportunities of AI era, and we are filled with endless possibilities and imagination. Alain Lam: Well, thank you, President Lu. As shared by Mr. Lu, in 2025, we have achieved historical leap. Our total revenue reached a record high of RMB 457.3 billion, setting a company best. This year, we achieved a year-on-year increase of 25%. Revenue in the fourth quarter is a new single quarter record. Overall, gross profit margin was 22.3%, up 1.3% year-on-year, historical high also. The second half of 2025 was more challenging for the first. For the full year, our smartphone times AIoT segment revenue was RMB 351.2 billion, up 5.4% year-on-year, which is also a new annual high. The smartphone times AIoT segment gross profit margin also reached a record 21.7%, up 0.5% year-on-year. For smartphones, for the year, revenue was -- sorry, RMB 186.4 billion, accounting for 40.8% of total revenue. In '25, our global shipments reached 165 million units. Our high-end strategy had significant results of continued product strength enhancement. Third-party data shows that in 2025, our high-end smartphone sales in the Mainland of China accounted for 27.1% of our total smartphone sales, up 3.8% year-on-year. In that, RMB 4,000 to RMB 6,000 price segment, our market share reached 17.3%, up 0.5% year-on-year. For RMB 6,000 to RMB 10,000 segment, our market share was 4.5%, nearly doubling year-on-year. According to third party in 2025, our global smartphone shipment volume ranked top 3 with market share 13.3%, maintaining a top 3 position globally for 5 consecutive years. In 58 countries and regions, our smartphone shipments ranked top 3. And in 70 countries and regions, we ranked top 5. Despite rising memory prices in 2025, our smartphone gross margin remained relatively healthy at 10.9% for the year. For IoT, for this year, our revenue and gross margin both performed remarkably. 2025 revenue from IoT grew rapidly by 18.3% year-on-year to RMB 123.2 billion, a new record. And both for domestic and international sales, it was at all-time highs, thanks to product structure optimization and improved product strength. For gross profit margin of IoT, it was a record high of 23.1%, up 2.8% year-on-year. By category, large smart home appliances performed exceptionally well with revenue up 23.1% year-on-year, a record high. Our wearable devices maintained rapid growth and an industry-leading position. Our wearable band ranked first in global shipments and TWS earphones ranked second. Tablet products continue to grow fast, ranking fifth globally with shipments up 25.2% year-on-year. Internet services. We continue to expand our user base. In December '25, our global MAU reached 750 million, up 7.4% year-on-year. Of these, Mainland China MAU reached 190 million, up 10.1% year-on-year. In 2025, our Internet service revenue hit a record RMB 37.4 billion, up 9.7% year-on-year. And of this, just in the fourth quarter 2025 alone, Internet service revenue reached RMB 9.9 billion. Throughout 2025, our Internet gross margin remained relatively stable at 76.5%. Advertising continued to drive Internet business growth with annual revenue of RMB 28.5 billion, a record high. Overseas Internet service revenue grew by 15.2% to a record RMB 12.6 billion, accounting for 33.8% of total Internet service revenue. Next, on EVs. Our EV and AI and innovation business segment, annual revenue for the segment reached RMB 106.1 billion, surpassing RMB 100 billion in less than 2 years, up over 200% year-on-year, accounting for 23.2% of the group's total revenue. Of this, Smart EV sales revenue was RMB 103.3 billion, with other related revenue at RMB 2.8 billion. For the year, gross profit margin for Smart EV and AI, innovation business segment was 24.3%, up 5.8% year-on-year. In 2025, the segment achieved positive annual operating profit for the first time, recording an operating profit of RMB 0.9 billion. We delivered a total of 411,082 new vehicles in 2025. In the fourth quarter alone, 145,115 new vehicles were delivered, a single quarter record high. The average post-tax unit price for the year was RMB 251,171, up 7% year-on-year. Next, over the past 5 years, our cumulative R&D expenditure was RMB 105.5 billion, up 37.8%. '25 alone, R&D expenditure was RMB 33.1 billion, up year-on-year, and we estimate starting from 2026, our cumulative R&D expenditure over the next 5 years will exceed $200 billion. For net profit in '25, the group's adjusted net profit was RMB 39.2 billion, a record high and up 43.8% year-on-year. For CapEx for '25, our CapEx reached RMB 18.2 billion, up 73% year-on-year. And of this, Smart EV and AI innovation accounted for 66% and over. We continue to enhance our shareholder value and we actively repurchased shares on the open market. In '25, our share repurchase was approximately HKD 6.3 billion. Since early '26, our share repurchase totaled about HKD 4.7 billion. In January '26, we announced an automatic share repurchase plan for a cap, with a cap of HKD 2.5 billion, demonstrating our confidence in our company's long-term future. We actively practice sustainable development. In low carbon initiatives in 2025, our group purchased more than 40 million-kilowatt hours of green electricity, over 10x of last year. In '25, our [ PV ] electricity usage in our auto plant exceeded 13 million-kilowatt hours, reducing carbon emissions by nearly 10,000 tonnes annually. On ESG ratings in '25 for CDP Climate Change and Water Security Survey, Xiaomi received a management level B score. Also, in March '26, we achieved our best-ever score of 81 in EcoVadis gold medal, marking another recognition of our ESG efforts. We will continue to follow a robust and enterprising operating strategy and look forward to an even greater achievement for 2026. Thank you so much. This ends my report for this evening. Next, we can have the Q&A session. Operator: [Operator Instructions] Morgan Stanley. Andy Meng: Greetings both. First of all, congratulations for 2025, revenue and profits have reached new record highs. I have two questions, one on memory. We see that memory prices have been rising significantly. Investors, what's most concerned about this for the segment of smartphones. And we noticed that there are already some smartphone selling price hikes in order to offset this memory prices hike. But your smartphone sets are still the same in terms of pricing. So perhaps in supply chain management and in inventory, you are better than your competitors so that in this challenging situation, you exceed your competitors in performance. Perhaps Mr. Lu can explain to us for your new thoughts concerning smartphones and what are your responses to this year's challenges? Weibing Lu: Right. For memory, yes, for each quarter, you have always been caring and concerning about this. And in different occasions, I have also talked about my views on this. In the past, I have said that this is a period that we are going through, and we have to look at 2027. And there may be high price hikes and we have done our work in this regard. But on the other hand, my own feeling is that the cycle of hikes may be longer than I had expected. First of all, there is the AI-led demand. And also for memory, the cost hikes magnitude, I think, is going to be higher and much higher than I had expected. My expectation in the industry was already forward, but I think it's going to be even higher in terms of price hikes for this. So it is longer cycles and the price hikes is going to be higher than I had expected. So for all the consumer items, it is going to impact greatly, not only for smartphones, which we are more concerned about. But for some categories, for some smaller capacity, categories with smaller memories, units, there is a situation where there is a cut in supply even. So this is an actual situation that's facing us in reality. The impact of that, we have a calculation which is very simple, and that is we look at the memory and it's part of the product. The more it is as a part of this product category, the more it will be impacted but less -- of course, it will be less impacted. And in our categories, smartphones, tablets, notebooks, they are more in terms of proportion. But on the other hand, there are some, for example, high-end smartphones. Relatively speaking, it is less for memory part. So for a company, if the products will have more memory as a part of their product then, of course, the impact will be higher, less will be less impact. So this is a very simplistic way of calculation I'm looking at it. In the past 2 weeks, looking at the memory price hikes, we already see some competitors raising their mid-priced smartphone prices. And I fully understand that. I think for annual smartphone manufacturer, if they do not unload to the consumer, it is very difficult to sustain this kind of price hikes. But I think it is inevitable for this. And for Xiaomi, our pressure is very, very large indeed. But as I say, we will try our very best to digest this to protect the consumer. And when we can do this no more, we will have to hike our smartphones prices, and we hope that our consumers and our customers will understand this. Yes, we are slower in price hikes, but it doesn't mean that we are immune from it. There are some competitive advantages for Xiaomi, which I can tell you. So for example, in home appliances, the category, for this category, it will be less impact. For smart cars, EVs, it would be higher because the memory part of that is higher. But on the other hand, compared to the proportion in smartphones, it will be lower. So with our variety of product segments, this is how I see it. And through this, I hope we will be able to better resolve this problem. For smartphones, tablets and notebooks, we are a company -- we are globally leading and also in EVs as well in the past few years. And for the memory suppliers around the world, we have built a very good relationship, mutual trust, and we have long-term supply contracts. So at this point, I do not feel that we have any risk of nonsupply or stopping of supply. So this is our competitive advantage compared to our competitors. The third point is that in my previous expectation, I was more pessimistic about memory price hikes. And therefore, I have been making more aggressive preparations. So in that case, our inventory sufficiency was higher. But overall speaking, for our terminal products cost, it is highly impactful. So this short-term pressure is definitely in existence, it is there. Andy Meng: Mr. Lu, this is very clear. My second question is about our vehicles. For the new generation of Xiaomi vehicles, there had been a successful announcement. And in the investor interaction, I noticed that some investors feel that we -- that Xiaomi doesn't -- no longer talk about or announce the data, but only for the unit data, well, and this is more negative. But for Xiaomi, what is the sale? I think it's going to be stable and it will be positive, and this is how I see it. Can you talk about these 2 investors' point of view? Unknown Executive: Andy, let me just answer that question. Well, for the announcement of sales from the users side, we see some phenomena. The first phenomenon is that for the first 3 days of sales, we already have achieved significant sales, 34 minutes, 150 locked-in sales. And after 3 days, it was over 30,000 units sales, and we have lived up to our commitment. And that is for the delivery starting from the fourth day of launch, we have already started delivery because we have already made preparations for the manufacturing of cars. And also, with some of the problems of the previous batch, they had to wait for a long time and before we could deliver to our users, those who have locked in their purchases. So we have absorbed our experience, and we had a new iteration. Well, as you have mentioned, why do we only disclose our locked-in contracts. We think that this is more fair. So it is not about preordering or big ordering. It is locked orders. Locked orders are solid, and that is the buyers are going to take delivery of these vehicles. And this governs our manufacturing cycle as well. So we think that's locked contracts or purchase is a fairer way of looking at it, and that is why we made the change. And in the industry, I'm sure people have their different practices, but this is what we maintain is the right way. So this is the first point. And also using this particular opportunity for our -- concerning the locked in contracts, let me share some information. So for the first point, it is that a lot of investors have asked about the locked orders. Buyers, are they from our previous buyers or new buyers or most of them we know are new buyers. For the locked orders, they come from new buyers. So it is not the original owners who are changing to -- changing from -- [ 2 Euro ] cars. For iPhone, about 50%, it is first generation. And for 60% of the new buyers, they are iPhone users. So for our locked contracts, the progress is faster than our first-generation users. So compared to the previous numbers, these locked orders are bigger. And also, you are very complementary of our allocation. About 60% of them are using the paid choice, the paid options. So compared to the previous generation, we think that the penetration is better. For example, female buyers, iPhone users penetration and also choosing different options of colors, for example, all these have been performing better in penetration than the last generation, the previous generation. Thank you for your question. Operator: Timothy Zhao from Goldman next. Timothy Zhao: I have 2 questions concerning AI. First of all, concerning in the past 2 years, there are some models and including the foundation models. So for AI capabilities in the ecosystem, what is our capability? And also for miclaw and also for the IoT, how is miclaw positioning? And how do we see it done with IoT? And how is miclaw going to be significant? And also, I would like to know how we consider AI in its users and also developers and internal to Xiaomi and its commercialization? In LLM, what are some KPI considerations for your team? You once said that in the next 3 years, there's going to be a RMB 60 billion expenditure? And how is this on OpEx and CapEx, the allocation, please? Unknown Executive: For 2023, we have used a lot of energy to consider our AI strategy going forward. So we have faced it. First of all, the infrastructure for AI, algorithm, et cetera. And out of the infrastructure, we had an exponential growth in terms of its application. And last year, we had already said that '26 was an explosive use of AI era. So from virtual, AI has moved into the physical world. And this is true to my earlier prediction. And with this prediction coming true, we will be developing our AI/LLM. We started investing in '24 and in 2025 in [ MiMo ] LLM or large language models, we have made a lot of progress. And we have been very clear last year in saying that this year, '26 will be the year of explosive use of AI. And last year, we were more considering about agents, AI agents. So in individual terminal, how can AI have a bigger usage so that people are able to do things that they were not able to use before. With OpenClaw, it's allowed us to very quickly roll out miclaw in testing. So at present, from the responses of our testing, it is very, very positive. And going forward, there is a huge market, and that is AI going to the physical world. So it will be in driving, in robots, in humanoids, et cetera. So in this area, Xiaomi has already made the deployment. And at the end, I think it will have to serve our entire ecosystem of Xiaomi. So this is a direction. This is a large direction, and we will continue to strategically follow that. And also, you mentioned miclaw. And for miclaw, this AI agent of Xiaomi, this is our own developed and it is an agent and it is going to test our modeling capability and also our limitation, and also, it's going to test how we are able to deeply integrate and also our data capability. And at Xiaomi, we will do our own integration with our own data from our users. So we will also be using cloud-based data. And also there will have to be certain integration into the system and also safety, we will be good in protecting safety. So for Xiaomi miclaw, it is going to be the prototype for the future AI agent. Now this is still early on. We do not have some specific commercialization model. And I don't have any KPI for the team yet because only when it is mature will the team has a certain KPIs. So as for the RMB 60 billion that you talked about, yes, my colleague will answer that question. Unknown Executive: That's right. For the [ RMB 16 billion ] and 3 years -- RMB 60 billion, it is -- it includes R&D and also CapEx. But of course, in R&D, it also includes the distribution from previous year's R&D. So it is our present period R&D and also our previous R&D and also CapEx. So there will be 3 parts. If you look at the 2026 [ RMB 16 billion ], most of it is R&D expenses, the present period. So it's a 70% present period R&D. So if it is CapEx plus the previous years, it would be the rest. So the next 3 years, every year, our CapEx will have some previous CapEx, which had been detained into this year. So it may be lower than the 70%. So it is for this period as well as a portion from the previous year's CapEx or amortization from previous year's CapEx. Operator: China Capital, Wen Hanjing next. Hanjing Wen: I have 2 questions. First question concerning our IoT business. We see 2025 IoT performance have been very, very good from revenue and also in progress and advancement. So for this year, there are 2 concern points. They are positive. And for home appliances, new highs reached. But some investors are concerned that with the domestic situation, what do you say the economy ramping down a bit? How do you see this? And also, what about IoT going overseas? What is the planning? And secondly, for vehicles in 2025, overall, for EVs, it is already profitable. And also for future planning for the entire year, how do you see profits for the entire year for vehicles? Weibing Lu: I'll be talking about IoT, and then Alain will answer the other question. For IoT for this business, because we have a number of different categories. I'll be talking about China market and overseas markets. For China market, I think there is an opportunity, and that is premiumization of IoT. For IoT business for us, even though it is very large scale, but our ASP is low. Last year, we had major progress made, but it is still far from our goal. Our watches, our, for example, our hairdryer, et cetera, I think still the average price is relatively low. So in R&D, with our investment in that, I think this year, we are going high end. I think there will be a lot, a lot of positive progress. So I think this is a huge opportunity. So for major home appliances, for our washing machines, our fridge, and it is 4 points. And for aircons, it is 10 points. So for ESG, I think there is still room for pricing. And for our IoT business, overall, last year, it is already at a very high level of AIoT as we will continue to do so. As for overseas business, I think there is a huge space for development because our market has always been the -- in China. If going to the North American market, it's going to be 3x of our original market size. And it's -- so that is to see it's going to be 6x if we reach our potential. It's going to be 6x or at least a few times our domestic China market. So there is a lot of empty room for us to fill in terms of overseas markets. We will send people. We will send our products. And with our IoT development, there had been a lot of overseas and information and testing, and there is huge room for overseas growth and development. So for our high ASP products, this is a high area of growth potential. So this is our overseas plan. Last year, it was 4.5 shops and it's going to grow to 10 or 10,000 shops. And I was in London in Xiaomi Home, I was able to observe that most of the products were high-end product selling. So you think that actually, our categories are very full in range, and these overseas markets, for example, in the U.K., they are selling at high end. So I think there is huge room for development in the overseas market. For the vehicle question, last year in 2025, we have delivered over 410,000 units, far exceeding the 300,000 unit target we set at the year start. So at the year start for this will be 550,000 units for this year's delivery target for 2026. So '26 compared to '25, there is growth. But for the overall situation in '26, there is pressure. So for our expectations, et cetera, we are still very confident that we'll be able to reach our target. As for our target profit. You would know for this category, it is AI and new business segment. So that would include our AI investment and also new development areas. So you cannot just look at the segment as just an auto segment. It includes other new businesses in this segment. But at present, the new businesses are still in the investment stage. As I've mentioned, in AI, for example, this year, we will continue to increase our investment in AI, including in robots. Robotics, we'll increase our investment there as well. So you have to look at 2 areas. One, auto in this segment. And secondly, AI plus new business investment. So for this particular segment, last year, it performed very well. For this year, as auto growth and also in other areas, the kind of fruit that we're going to pick from them, the results, this is going to be an encouraging segment. Operator: Kyna Wong, Citibank. Hiu King Wong: Can you hear me fine? Unknown Executive: Yes. We can. Hiu King Wong: I have 2 questions. First of all, I would like to know for the Middle Eastern situation recently, I don't know whether for the overseas business, including IoT, handsets, has it impacted you? Are there certain logistics and also cost of raw materials had presented issues to you? And also another question concerning your gross profit margin. For this year, for handsets or smartphones, is there a principle, let's say, under what kind of profit level will you be keeping it or making certain choices for adjusting the price. So for smartphone handsets to protect your profit margin, gross profit margin? And also for vehicles, there may be some pressure, as you have mentioned before. And how do you think this will be making your performance better than your competitors? Are there certain safeguards for profits and also AI, IoT because premiumization is a strategy of yours, you did say that for this kind of premiumization. What is your plan for AIoT, please? Unknown Executive: First of all, for Middle Eastern conflict, it's nothing that we want to see, certainly. I hope that there will be a solution for it because it's going to impact industries and economy around the world, it's going to impact big way. As for Xiaomi business, the Middle Eastern overall situation, for revenue from that part, it is not so much -- it is only in the single digits as a contribution to our profit. So in terms of the market from the Middle East, it's a small proportion of our overall at Xiaomi. So it is controllable from that regard. But at the same time, we also see that the oil situation from the Middle East, we already see some pellets, plastic pellets, and the raw materials is influenced or impacted. But overall speaking, it is still controllable. So that's for your first question. Second question, concerning cars, IoT and also smartphone handsets, the gross margin and what is our pricing strategy, well, for this, I would say, first of all, for memory, for memory components, we are to quantify that. I would say in the past, for a quarter, for example, we expect it to be at a certain high price, but actually, it's going to be at an even higher price, rising even higher. So we are very -- it's very hard for us to quantify that even for a small increase, it may because it is such a big part of the product, it will be impacting the cost of the product a lot. So it is very difficult to foretell early on, like what we had been able to do before. But for smartphones for this category, I think given our size and also our market share, it is very important for us. So if you say whether there's a principle, it would be that we hope. We try our best to make some balances. So my consideration is that we want to maintain our market position. That is very important to us because for smartphones, there are very few listed companies in this category. So I'm not being able to get a lot of accurate data from the industry competitors. But from my years of experience, I know the following. For example, in vehicles, the absolute number as a part of the overall car price, it is less in terms of its impact, but not as big as a smartphone part. For IoT, it is even -- it is also even lower in terms of memory, internal memory price impact. So different categories will have different impact. What is big impact would be smartphone, notebook and also tablets, less so for smart cars, less so for vehicles that is, and even less so for IoT. Operator: Next question, Citic, Xinchi. Xinchi Yin: I have 2 questions. First of all, on AI business. Miclaw has been introduced. And I was fortunate to have joined the launch. That was excellent. Can you give us more guidance? And that is at what point of maturity would you in big model or miclaw to commercialize them? And how would that be like in revenue? That's the first question. As for the second question for this year for chip, for example, do you think that you can have some progress to update us? Unknown Executive: For miclaw, I have already talked a lot about it, and I'm sure as a user, you will have felt this product, and you were there at the launch, and it's given us a lot of nice surprises, but it's a new product. And we still have a lot of -- there's a lot of room for improvement. And I, myself, also have gotten a lot of responses, so we have to improve on it. But I think the iterations will be very fast, and it will be a new version in a few days. So it's going to be -- it's going to have high speed iterations. For Xiaomi overall speaking, for AI, it's still going to be contributed to our users. For the commercialization of AI, I would say, at this point, it is still too early. Even though our large model, efficiency is high, our token commercialization, for instance. But from absolute numbers, it may be a little bit high. So at this point today, I would say commercialization is too early to talk about for us. And also, we already see our XLA model, XLA model. This is the XLA model, which is a cognitive large model. And SU7 is equipped with it from -- at present internally from our testing, it is very, very good in performance. So for these 2 models of cars, I am a user. And I personally would use -- if I use them, and if I have any questions in terms of use, I will put these cases to the team. And I personally experience these auto driving functions. It will be going forward step by step. And also our auto driving, whether the models or chips, we already have some deployments. So integration terminal to terminal, and when we have this ready, it's going to give a lot of new experience to our users. I don't know whether you've been driving our cars. Yes, watch out for its progress as we integrate more and more of our models into them for automotive. Operator: Because of time, this will be the last question from Zoe Xu of UBS. Zoe Xu: A lot of questions have already been asked by others. I have 2 questions to ask concerning new business investment and also IoT. For new business, with the models iterations faster, and you said that there will be more investment into AI. So for expenditure on new business, is chips side will be adjusted? Or do we see that there will be new chips introduced? Second question on IoT. Just now it's been mentioned for tablet and notebooks, there will be some cost impact. So will there be something like smartphones pricing strategy and that is to emphasize the experience for users, please? Unknown Executive: Well, for this year, we have increased a lot of R&D expenses. But for chip, it is a long-term strategic capability of ours. I have already said that this is a platform capability chip because it's going to provide capability for a lot of profit -- product types and product categories. So even though in AI, we have increased our investment, but we have not slackened our investment in chips. Actually, some of the chips, many of the chips. They are part of our big AI strategy. So we will definitely be steadfast with it. As for PC and tablets, we will follow more or less the same strategy as for smartphones. But please also notice that for the notebook that we have just launched, the Xiaomi NoteBook, after 4 years of development, it is selling very well. And it is the demand is even higher than we had expected. When we launched this NoteBook, we already knew that the memory part will be increasing in price. But on the other hand, the response has been so encouraging because of the product strength is good, even though it is more expensive, the users will be able to adopt it and they'll accept it. So I think product innovation, technological capability, these are important, even though memory is hiking in prices. But still, we will have ways to make our products attractive. In 2022, through our efforts, I think our company and our management team will still be able to deliver good performance for everyone. Operator: Thank you. We end the meeting here. Thank you very much for your participation. Thank you for your support for the company, Xiaomi. [Statements in English on this transcript were spoken by an interpreter present on the live call.]
Operator: Ladies and gentlemen, thank you for standing by. Good afternoon, and welcome to the BioCardia Year-end 2025 Financial Results and Business Update Conference Call. [Operator Instructions] Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call. I would now like to turn the conference over to Miranda Peto of BioCardia Investor Relations. Please go ahead, Miranda. Miranda Benvenuti: Good afternoon, and thank you for participating in today's conference call. Joining me from BioCardia's leadership team are Peter Altman, President and Chief Executive Officer; and David McClung, the company's Chief Financial Officer. During this call, management will be making forward-looking statements, including statements that address BioCardia's expectations for future performance and operational results, references to management's intentions, beliefs, projections, outlook, analyses and current expectations. Such factors include, among others, the inherent uncertainties associated with developing new products technologies and obtaining regulatory approvals. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors and cautionary statements described in Biocardia's reports on Form 10-K filed with the SEC today, March 24, 2026. The content of this call contains time-sensitive information that is accurate only as of today, March 24, 2026. Except as required by law, the company disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Dr. Peter Altman, BioCardia's President and CEO. Peter, please go ahead. Peter Altman: Thank you, Miranda, and good afternoon to everyone on the call. BioCardia's mission is to develop and enhance therapies to treat cardiovascular disease. We are doing this today with 3 primary platforms, our CardiAMP, autologous minimally processed cell therapy, our CardiALLO allogeneic off-the-shelf mesenchymal cell therapy and our Helix transendocardial biotherapeutic delivery system, which is used by both our CardiAMP and CardiALLO cell therapy programs. Our lead program remains the CardiAMP cell therapy for roughly 1 million patients in the United States and 150,000 patients in Japan with ischemic heart failure of reduced ejection fraction. These are patients who've had coronary disease may have had a heart attack and have subsequently developed heart failure characterized by a larger dilated heart that unfortunately pumps inefficiently. Cardiac therapy includes CD34 and CD133 cells that have long been recognized as endothelial progenitor cells that promote new capillary formation. Preclinical data also provides support that these cells reduce fibrosis in the heart. Based on these mechanisms to effectively treat microvascular dysfunction, CardiAMP cell therapy is introducing a new therapeutic modality to the significant unmet need in ischemic heart failure that is primarily managed today by neurohormonal modulation. The clinical outcomes with this approach have been excellent. We now have complete and final data from 3 clinical trials of the CardiAMP therapy with the latest results from our Phase III CardiAMP HF trial presented as a late-breaking clinical trial at the Technology and Heart Failure Therapeutics Meeting this month. The presentation was titled Autologous Cell Therapy may occur pathological ventricular remodeling in chronic ischemic heart failure of reduced ejection fraction patients selected for favorable cell characteristics. The key takeaway from these new results is in this title. The Cardiac HF echocardiography clinical results, which measure heart chamber sizes over time, by a truly blinded world-class echocardiography core laboratory, show reductions in left ventricular volume disease when the heart ventricle is fully dilated with a p-value of 0.06 and when the heart is fully contracted with a p-value of 0.09. For the prespecified subgroups of patients having elevated biomarkers of heart stress, the differences between the treated and control patients were both clinically meaningful, greater than 20 milliliters per meter squared and 15 milliliters per meter squared, respectively, and statistically significant with a p-value of 0.02 and p of 0.01, respectively. This echocardiographic data further supports our previous results of reduced fatal and nonfatal major adverse cardiac and cerebrovascular events and improve quality of life in the treated patients. They are similarly strongest in the prespecified subgroup of patients having elevated biomarkers of heart stress. When considered together with the significant reductions in left ventricular end systolic volume, and left ventricular end diastolic volume in the treatment group versus the control group, these results provide a basis for linking intramyocardial mononuclear cell therapy with suppression of pathological ventricular remodeling and beneficial clinical outcomes. This trial result is also considered consistent with observations from other heart failure of reduced ejection fraction therapies showing an association between suppression of pathological ventricular remodeling and improvement in mortality. This data is consistent across all 3 of our clinical studies, which saw reduced major adverse cardiac and cerebrovascular events and improved heart function. I also note that 2 of these trials were randomized, double-blinded clinical trials, which provide the greatest scientific rigor and the least investigator bias to study outcomes. This is the data we will soon be discussing with the Food and Drug Administration in the United States and which we have been discussing with Japan's Pharmaceutical and Medical Devices Agency or PMDA, regarding potential for approval with the rigorous post-marketing studies to collect further evidence with respect to both safety and efficacy. We expect to soon submit the Q-sub request on approvability of the CardiAMP system to FDA Center for Biologics Evaluation and Research, or CBER, based on the safety and compelling signals of patients benefits with elevated biomarkers of heart stress from our 3 clinical trials. This discussion is expected to focus on our already FDA-approved CardiAMP cell process platform to extend existing labeling from in vitro diagnostic use to a therapeutic indication for ischemic heart failure of reduced ejection fraction. The dedicated Helix transendocardial delivery catheter has a presubmission actively under review by FDA Center for Devices and Radiological Health. In Japan, we expect to soon have our formal clinical consultation to align with PMDA on the acceptability of the existing clinical data from our 3 trials to show -- to allow us to submit the CardiAMP system. If PMDA determines that existing clinical data is acceptable with respect to safety and efficacy, submission for Shonin approval would likely soon follow. BioCardia is not alone in seeking approvals to provide therapeutic options to these patients and the physicians who care for them today. Japan has recently granted conditional approval to another allogeneic cell therapy for ischemic heart failure that involves the placement of sheets of cells on the surface of the heart in a surgical procedure. A U.S.-listed company has announced that they will be filing for a biological licensing application for their allogeneic cell therapy to also treat patients in a surgical setting. We expect a third company will also soon be applying for approval for surgically delivered cells. The need here is great, and we wish each of these peers and potential future delivery partners every success ahead. In parallel to these efforts, to wrap up the CardiAMP HF trial and seek approvals based on this data, we have initiated the CardiAMP HF II confirmatory clinical study. CardiAMP HF II focuses on the patients who are the greatest responders in CardiAMP HF and applies all of our learnings with regard to endpoint and trial design. In October and November, University of Wisconsin at Madison and Henry Ford Health System in Detroit, Michigan and enrolled their first patients in CardiAMP HF II, respectively. Emory University in Atlanta, Georgia has also been activated as a study site. With Morton Plant Mease in Clearwater, Florida, there are 4 centers actively enrolling in this study today. If FDA supports an earlier approval, there is potential the trial design will be modified and become our post-marketing registry. There is also potential the CardiAMP HF II trial may benefit from the previous trial and a shorter pathway to approval be identified. We will have clarity here soon. We have made progress on our CardiAMP cell therapy clinical program for chronic myocardial ischemia and for our CardiALLO allogeneic cell therapy for heart failure. The status of these efforts is in our earnings announcement today. There could be significant upside from these clinical efforts in the near term. We have 4 catalysts before us in the next quarter. First, the FDA CardiAMP Heart Failure Q-submission for approval pathway under breakthrough designation has been drafted and is under legal review. We are targeting submission as soon as possible. Second, we have a formal clinical consultation scheduled with Japan PMDA on approvability of CardiAMP cell therapy. Third, we have an FDA substantive feedback meeting scheduled on approvability of our Helix transendocardial delivery system via the de novo pathway. And fourth, we have an abstract on CardiAMP and chronic myocardial ischemia that has been accepted for oral presentation at EuroPCR in May. I will now pass the call to David McClung, our CFO, who will review our fourth quarter 2025 financial results. David? David McClung: Thank you, Peter. Good afternoon, everyone. I'll now provide an overview of our financial results for the year ended December 31, 2025. Total expense accretes approximately 3% year-over-year to $8.3 million in 2025 and compared to $8.1 million in 2024. The primary driver of this change, research and development expense, increased to $5 million in 2025 compared to $4.4 million in 2024. The 13% increase was primarily due to the cost of closeout activities in the cardiac heart failure trial. Inception of enrollment in the CardiAMP HF II trial during the year and regulatory activities to advance CardiAMP in Japan. We anticipate R&D expenses will increase modestly in 2026 as we continue advancing our therapeutic candidates in both the United States and Japan. Selling, general and administrative expenses decreased 10% in 2025 to $3.3 million as compared to $3.7 million in 2024, primarily due to lower professional fees coupled with reduced share-based compensation expense. We expect 2026 SG&A expenses to remain close to these 2025 levels. Net loss increased modestly to $8.2 million in 2025 from $7.9 million in 2024. Net cash used in operations was approximately $7.5 million during the year into 2025. That's down from $7.9 million in 2024. The company ended the year with cash and cash equivalents totaling $2.5 million, very comparable to the $2.4 million as of December 31, 2024. We expect our cash burn will be relatively consistent in 2026, continuing our track record for carefully managing the use of resources and capital. This concludes management's prepared remarks. We are happy now to take questions from attendees. Operator: [Operator Instructions] And the first question will come from Joe Pantginis with H.C. Wainwright. Lander Egaña-Gorroño: Hello, everyone. This is Lander on for Joe. We have a few. So let me start with the echo data presented at THT. So I wonder if you can provide some color on the p-values for the diastolic and systolic volumes in the complete population? And how do you think this data can support the narrative you're presenting to the PMDA? Peter Altman: Thank you for the question, and I really appreciate your eye on the Echo data. So this data is remarkably lovely data. And just -- I'll start off for everybody, typically, in these trials for all these therapies, very few companies have long-term truly blinded echo data. It's a very rare thing, and we have it in this trial. And the Core laboratory at Yale University is world-class. And so your question, Lander, was across all patients, the p-values are not statistically significant, but they're approaching it but to even see that kind of trend is wonderful. So our expectation is that our approvals both in the United States and in Japan will not be for the full cohort, but will be for the subgroup with elevated NT-proBNP. And because those patients -- NT-proBNP is a marker that's released when the heart is under stress. And so when you have high stress in the heart, it continues to dilate. And so what we're seeing is that those patients who are decompensated and are continuing to dilate, the mononuclear cell therapy appears to stop that process. So that's what's exciting about this data. So we see it across the full population with a p-value just above the key 0.05 threshold. But in the subgroup, we're looking at p-value of 0.02 and 0.1 for echo measures. And these are large magnitude changes that were presented at the THT conference. Another value proposition above and beyond just talking to regulators with respect to this data, Lander, is this data is compelling to cardiologists who are trying to advance therapies for their patients and the patients that we have treated are on guideline-directed medical therapy. So the patients in this trial have already been advanced on everything that's available to them that's not extremely invasive and they still are dying at a rate of approximately 10% per year. The big limit in heart failure is that nothing is changing mortality. And here, we're seeing a therapy that not only appears at a high level to be reducing mortality in MACE, but it's also showing these changes in left ventricular volumes that have a long history of being correlated with reduced mortality as well. So I think there'll be a lot of excited in the cardiology community, and that will translate into excellent enrollment in the CardiAMP Heart Failure II trial when we put our full weight behind it. Lander Egaña-Gorroño: Perfect. That's helpful. Yes. And do you have an estimate of the CardiAMP submission to the FDA if everything goes according to plan? And how are you thinking about the potential requirements for post-marketing studies and their execution? Peter Altman: So for CardiAMP HF, we are -- as I shared in my remarks, we're imminently going to file for a discussion on approvable pathways. So they already have all of the data from the trial. We will be providing other analyses that have been done, but that's imminent. I expect the time line will be, because this has FDA breakthrough designation, it will be under a standard Sprint discussion, which I estimate is roughly a 45-day turnaround. And then the subsequent -- if they're supportive, it will take time for all of the details regarding a submission to be put forward. And there's 2 approval pathways. Even though it is regulated by CBER, it is a device system. And so the approval pathway, again, CBER, the Center for Biologics Evaluation and Research. The device pathway has both the PMDA and the de novo pathway. And because of the safety profile we see with CardiAMP, it actually could go down the de novo pathway, which is really interesting. De novo is for devices that are safe. And there's no safety issues that I'm aware of right now with respect to CardiAMP. So if that's the door that's open and we decide to pursue it, it could be a very short time line. and relatively straightforward to secure approval. But if it's a PMA pathway, which has certain strategic advantages, it could be a little longer. The key question for FDA and for Japan PMDA, is this data acceptable for safety and efficacy for market release. Now your second part of the question, Lander, was, how do you think about the post-marketing study post-marketing studies, you cannot have patients come in and not have an option to therapy can't truly randomize. So we would expect these to be relatively extensive studies on many hundreds of patients that we would follow over time, and we will be collecting long-term survival data potentially echo data, potentially biomarker data, it's something to be discussed with respect to the agency's guidance on this from each area. Those measures I just identified are standard measures. So it wouldn't necessarily put an enormous undue burden on BioCardia, echo measures and NT-proBNP measures and understanding survival could be done relatively cost effectively in an open-label setting. So that's how we think about it. Clearly, it's a partnership with the regulatory bodies on their past experience and securing their support based on this data is really the focus. Lander Egaña-Gorroño: Perfect. That makes sense. And you already talked about this a little bit, but how do you see CardiAMP HF competing or not with other cell therapies for heart failure that are currently in regulatory discussions? Peter Altman: So with respect to what I called the 4 pillars of therapy in heart failure are the patients that's guideline-directed medical therapy that's established. All of the patients in our CardiAMP HF and in our CardiAMP HF II trial are already on guideline direct to medical therapy. So it's not instead of but really it's in addition to, and we're seeing these benefits in addition to. With the newer cell therapies that are seeking approval in the United States, they're all surgical delivery so far. I believe that they've all expressed interest publicly on pursuing different approaches for minimally invasive delivery such as we are pursuing and we could be helpful to them there. I see the competitive landscape as one where at the end of the day, I think CardiAMP will always remain one of the leading therapies because of how straightforward it is and how cost effective it will be. At the same time, this is the nature of waves of therapy development. There will ultimately be head-to-head trials for different therapies and it's good for patients if they have different therapeutic options and they're well studied. My sense is from an efficacy perspective, I actually think the CardiAMP therapy is amongst the most robust therapeutic data that's out there. If you look at the magnitude of changes we're seeing compared to all of the pivotal trials for the guideline-directed medical therapy, the magnitudes are compelling. And so it's going to be interesting. I think the key thing is to continue to collect data for evidence of both safety and efficacy. And like all great therapies, things will evolve solely over time. But I'm not concerned about the competitive issues. I think it's great for these patients that there's a number of folks pursuing therapies because the need here is enormous. In the United States, just in our indication, it's 1 million patients. So that's how we see it. Operator: [Operator Instructions] The next question will come from James Molloy with Alliance Global Partners. James Molloy: I was wondering if you could talk a little bit about the enrollment in the HF II trial. I know a few patients enrolled. Talk about sort of how the how that's building any anecdotal sort of stories from the enrollment, the challenges they're facing or maybe the challenges you are facing? And what's sort of the best centers best practices are using to sort of get folks into this HF II trial? Peter Altman: Yes. No, great question, Jim, and I really appreciate you being on the call. So if you actually look at our updated corporate presentation that we just came out a little while ago, we have pictures of 3 of clinical teams at these sites for CardiAMP HF II. And we put the pictures in there, first off, because it's really these centers that do all the work. But second, because you can see everybody's smiling after these procedures. And that's the signal of how well it's going as we're doing these procedures and also the relationships around doing this work. Enrollment numbers right now, we haven't detailed, but we're starting this enrollment slowly because almost all of our clinical team is focused on the efforts, enormous efforts in taking a Phase III trial data set through for regulatory submission. But all of that is coming to a head. And the beauty of this effort is that, that data will be a primary driver in enrollment ahead. So our expectation is as soon as we complete these conversations with PMDA and FDA, we'll know whether or not the CardiAMP HF II trial should continue to be a randomized double-blind trial or should be migrated to a potentially open-label post-marketing study, and that impacts our efforts. And second, if it stays a randomized trial, our team will have the strength of this data set which will help on the enrollment side. So we have quite a few sites that are interested in getting involved in the study. It's primarily a bandwidth and a resource basis for why that has not gone faster, but that will come soon ahead. So I hope that answers your question, Jim. James Molloy: It does indeed. And then maybe moving over to the CMI. We're looking for the 6-month data here at the EuroPCR in Paris in May. What sort of good that equivalent, which should we be looking for as that data comes rolling out? Peter Altman: So I think that the data is as we've shared sort of a top line. I think you'll get more visibility into the physician and patient experience in that in that trial. And I think the interesting thing about the CMI trial is, right now, there's not a lot of options for patients with CMI. And the main value of -- we're right now not driving forward aggressively in enrolling the randomized portion of that trial, where we sort of put it on pause to focus on the heart failure program but from a business development perspective, it effectively doubles the market potential of CardiAMP HF. And so if we had resources, we could very easily advance the CardiAMP CMI trial all the way through its pivotal cohort. But those are some of the things that we're talking about in business development settings. James Molloy: And how would you characterize the environment for potential partnerships currently? Peter Altman: That's a big question. Right now, there's a lot of folks focused on different things. I'll keep you posted. I think in the past, we've been rather forthcoming on all the conversations we have with respect to our various assets and platforms. And I think what will happen, Jim, is with the first cardiac cell therapy approved in Japan on the 19th of February. This is still pretty brand-new stuff for all of those folks in business development who we're used to looking at years of runway with cash flow, I think there will be great interest. I think the interest in CardiAMP CMI will primarily be driven by the interest in CardiAMP HF. And my sense is with CardiAMP HF on a path to potential an early approval in the U.S. or in Japan, there will be great interest and support in CardiAMP CMI as well as in cardio. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Peter Altman for any closing remarks. Peter Altman: Thank you, Nick. Our efforts advancing our cell-based therapies for ischemic heart failure are showing important benefits for patients through the treatment of microvascular dysfunction. Our base plan remains to complete the confirmatory CardiAMP HF II trial while we engage with FDA and PMDA on potential near-term approvals. On behalf of our entire BioCardia team, I thank all shareholders for their continued support as you make our efforts possible. Thank you. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: Good afternoon, and welcome to Fractyl Health Fourth Quarter and Full Year 2025 Financial Results and Business Update Call. [Operator Instructions]. I'll now turn the call over to Brian Luque, Head of Investor Relations and Corporate Development at Fractyle. Brian, you may now begin. Brian Luque: Thank you. This afternoon, we issued a press release that outlines the topics we plan to discuss today. The release is available at www.fractyl.com under the Investors tab. Joining us on the call today are Dr. Hartih Rajagopalan, Chief Executive Officer; and Lara Smith Weber, Chief Financial Officer. During this call, we make forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. We provide a comprehensive list of risk factors in our SEC filings, including the annual report on Form 10-K filed today, which I encourage you to review. Any forward-looking statements on the call are subject to substantial risks and uncertainties, speak only as of the call's original date, and we undertake no obligation to update or revise any of the statements, even if subsequent events cause the company's views to change. It is now my pleasure to pass the call over to Harith. Harith Rajagopalan: Thank you, Brian, and good afternoon, everyone. Millions of Americans are starting GLP-1 therapy. Most of them will stop within a year. Data show that when they stop, the weight comes back, approximately 10% of their body weight within 6 months and approximately 15% within 12 months. Every one of those patients faces a moment with no durable off-ramp, no alternative to either resuming chronic pharmacotherapy or accepting the risk of regain. Revita is being built for that moment. For those of you who are new to the Fractyl story, Revita is our lead asset. It's like LASIK for obesity, an endoscopic procedure designed to durably maintain weight loss after GLP-1 discontinuation. And Rejuva is our smart GLP-1 platform targeting long-term metabolic remission from a single dose. Today, I want to tell you where we stand in the development of Revita for post- GLP-1 weight maintenance, what we have learned since we last spoke to you about the clinical data and share new favorable feedback we have received from the FDA on our filing strategy. I'd like to start by naming something directly. In January, we reported 6-month data from the REMAIN-1 Midpoint cohort. The past several weeks of analysis have given us a level of precision about which patients benefit most from Revita and at what procedural profile that we did not have before. This clarity has strengthened our conviction in Revita and has helped us finalize the pivotal study's key design elements to ensure we are set up for regulatory and commercial success. Today, we will share what we now know and why the picture is both more precise and more compelling than the headline p-value initially suggested. Let me walk you through 4 key pillars that give us conviction in the opportunity in front of us. Number one, the clinical signal is real. Number two, the pivotal is built to succeed. Number three, the path from data to commercial value is clearer than ever. And four, we have the runway to get to the definitive pivotal data without any planned incremental capital raise. Now let's start by discussing the clinical signal. You will recall that the Midpoint Cohort was a pilot randomized, double-blind, sham-controlled study that enrolled 45 patients with obesity who were GLP-1 naive. They were started on tirzepatide to achieve at least 15% total body weight loss and then randomized 2:1 to Revita versus sham. This 45-patient study was designed as an interim read to validate the design and the powering assumptions for the REMAIN-1 pivotal study, not as a powered stand-alone efficacy study. Nonetheless, the 6-month Midpoint Cohort data did not look as strong as the 3-month data. Early analysis that we shared at the time of data release was that site level heterogeneity appeared to account for the attenuation of the clinical signal in some patients. Further investigation has revealed that the site level heterogeneity is, in fact, differences in ablation length or treatment dose at early clinical sites and that these differences in ablation length are a key driver of efficacy differences between patients. Critically, we have not identified site level operational issues. What we did find was even better, a strong dose response relationship between ablation length and weight maintenance after GLP-1 discontinuation. This is a strong positive signal for the Revita mechanism of action and for the potential success of the pivotal study. We have long understood from our work in type 2 diabetes that Revita's treatment effect is proportional to the extent of duodenal resurfacing. Our first-in-human feasibility and dose escalation pilot study in type 2 diabetes was published in Diabetes Care in 2016 and prospectively demonstrated a clear relationship between ablation length and glucose lowering. Since that time, we have been systematically optimizing the procedure profile across successive clinical studies to deliver longer ablation length from 9 centimeters in the first in human to over 16 centimeters on average in REMAIN, and have seen greater potency in our studies without compromising patient safety. And because of this experience, our pivotal study already prespecified an ablation length dose response secondary endpoint. When we applied this dose response analysis to the Midpoint Cohort 45 patients, we observed a statistically significant p less than 0.05 monotonic and clear relationship between ablation length and weight maintenance treatment effect at 6 months. Participants who received more than 14 centimeters of ablation regained approximately half the weight of sham, whereas those individuals with subthreshold ablations accounted for the apparent narrowing of treatment effect between month 3 and month 6 that we saw in our January data release. This finding is consistent with our prior evaluation of ablation length on patients with type 2 diabetes, and it makes sense biologically. The duodenum is lined with enteroendocrine cells that drive key metabolic signaling pathways. The density of that cell population is distributed along the length of the duodenal mucosa and duodenal dysfunction from high fat high sugar diet extends along the length of the entire duodenum in animal models. A longer ablation resurfaces a greater proportion of that signaling surface, producing a more complete metabolic effect, which is exactly what our dose response data confirmed. In the REMAIN-1 pivotal study, we trained physicians to ablate from the ampulla of Vater to the ligament of Treitz, which are anatomical landmarks toward the beginning and the end of the duodenum, respectively. Based on our work in type 2 diabetes, we aim for an ablation of at least 10 centimeters, but encourage physicians to ablate more if they deemed it appropriate. In the pivotal study, the mean and median ablation length are more than 16 centimeters, providing ample opportunity to demonstrate an enhanced clinical signal reflecting more complete duodenal ablation. Notably, all pivotal investigators were successfully trained to achieve more than 14 centimeters of ablation, confirming procedural scalability and feasibility across diverse operators and patient anatomies. So taking a step back, what we have is a clear monotonic dose response, which is exactly what you would expect to see from a true biological intervention. All drugs and all procedural therapies that work like drugs should show a dose response relationship. That's what biological activity looks like. And ablation dose is a specific, measurable, controllable and standardizable metric for repeatable outcomes in a broad population. So having established ablation length as a key procedural driver of Revita's potency, let's turn to patient selection. The scientific community has long understood that the magnitude of initial weight loss on GLP-1s is proportional to the magnitude and speed of weight regain upon discontinuation. So we designed REMAIN-1 with a greater than 15% total body weight loss threshold at run-in, specifically because we expect the treatment effect to scale with the degree of pre-randomization weight loss. Midpoint Cohort results at 6 months confirm this relationship. Participants with greater than 17.5% weight loss showed an early, sustained and compounding separation from sham through 6 months. The pivotal has enrolled a population that is built to capture a large effect size that scales to the magnitude of initial weight loss as well with a mean run-in weight loss of 18.3% in the Pivotal Cohort. So when we now consider the right dose in the right patient, we observed the signal to be strongest among participants with higher weight loss who received longer length of duodenal ablation. And in these individuals, Revita-treated patients experienced only 2.9% weight regain at 6 months compared to 9.9% in the sham arm, approximately a 70% reduction in post GLP-1 weight regain. Like ablation length, the treatment effect scale monotonically with the magnitude of weight loss as well. Another way to think about it is that in this optimized patient cohort in the midpoint study, patients retained about 88% of their body weight loss on tirzepatide compared to only about 60% in the sham arm at 6 months. We believe this degree of weight loss maintenance will be highly compelling to key commercial stakeholders. It is a prospectively definable, commercially significant population. It is the exact population that the pivotal study has enrolled and will enable efficacy endpoints in our pivotal study later this year. This is also classic translational pharmacology applied to a procedural therapy, identification of the right patients and the right dose to optimize the clinical profile and achieve a large treatment effect. Turning now to the pivotal study statistical analysis plan and operational progress. Our plan was always to analyze the 6-month Midpoint Cohort to inform our understanding of the key drivers of effect size and then to use this information to prespecify the Pivotal Cohort statistical plan. The pivotal SAP, which we will file with FDA shortly, incorporates these parameters as prespecified analyses, and this will enable clarity on effect size and durability as a function of treatment dose and patient selection in the pivotal study. I also want to provide clarity about our endpoint structure. REMAIN-1 has 2 co-primary endpoints. The first is percent body weight regain in the Revita arm versus sham at 6 months. This is the data we expect in early Q4. The second co-primary is the proportion of Revita-treated patients who maintain at least 5% total body weight loss at 1 year after GLP-1 discontinuation. Both co-primaries are required to be met at p less than 0.05 for overall study success and we believe the pivotal is well powered at over 90% to achieve that result even under conservative assumptions. In addition to these co-primaries, we will present a comprehensive set of secondary endpoints, including a dose response analysis, a high responder population analysis, cardiometabolic markers and patient-reported outcomes, including reduction in cravings for sugary foods. In February, we completed randomization in the full study of the Pivotal Cohort with over 300 participants across more than 30 sites and over 20 operators across the United States, making this the largest sham-controlled GI endoscopy pivotal trial ever conducted. Every operational metric that predicts pivotal success is tracking favorably. Retention exceeds 95%. Medication resumption rates are below our model assumptions. The blinded adverse event profile remains encouragingly consistent with what we have seen in prior studies. And we remain on track to deliver top line 6-month primary endpoint data in early Q4 2026. Turning now to regulatory progress. Earlier this month, we received favorable FDA feedback on our De Novo classification request. You may remember that we aim to get that feedback in Q2, but our most recent discussion with FDA revealed that they have reviewed safety data to date, and they acknowledge that Revita's safety profile is consistent with a Class II device classification or a moderate-risk De Novo device. With this positive feedback now in hand, ahead of schedule, we are on track for De Novo submission in late Q4 2026 with 6-month pivotal data in hand. There are several advantages to the De Novo pathway compared to the PMA pathway. It is a more capital efficient, faster and strategically superior path. So now let's turn to the commercial opportunity because the landscape is evolving in ways that reinforce the urgency of what we are building and the path from clinical data to commercial value is becoming clearer and nearer than ever. With an anticipated filing via the De Novo pathway at the end of this year, we're also preparing ourselves for our potential commercial launch. There is a large and growing population on GLP-1 drugs with estimates projecting over 30 million users in the next several years. We estimate that as newer agents become more effective, more than 50% of patients are expected to lose more than 17.5% of their total body weight on GLP-1s and more than half of these are likely to discontinue. As a result, the post-GLP-1 unmet need is intensifying rather than abating. A large study published in BMJ Medicine last week following over 330,000 patients showed that GLP-1 cardiovascular benefits erode rapidly after discontinuation with the authors coining the term metabolic whiplash. Resuming treatment did not fully restore lost benefits, underscoring the need for durable maintenance solutions. Meanwhile, the payer landscape is shifting. CMS has expanded Medicare coverage of GLP-1s, driving a massive increase in the addressable patient population, but also intensifying the economic pressure on payers who are now grappling with the long-term cost of chronic therapy. This creates an unprecedented window for Revita, the first FDA breakthrough device designed for post-GLP-1 weight maintenance as a potentially durable, cost-effective solution that gives people an off-ramp from chronic pharmacotherapy while preserving the metabolic benefits they work so hard to achieve. On reimbursement, we now have a clear and validated pathway. We plan to file a Category III CPT code application this summer with a code expected to be effective in the summer of 2027. The payment economics work for hospitals from nearly day 1. Transitional pass-through payment by a CMS provides a separate incremental mechanism to cover the cost of the Revita disposable device on top of the facility rate, ensuring that hospitals can maintain a positive contribution margin while offering the procedure to patients. Revita is the only potential procedural therapy in development for post-GLP-1 weight maintenance, and we believe the commercial infrastructure will be ready to move quickly upon clearance. Briefly, let's turn to Rejuva, our smart GLP-1 platform targeting long-term metabolic remission from a single dose. We submitted clinical trial applications for RJVA-001 in type 2 diabetes to regulators in the EU and Australia, and we anticipate regulatory feedback in Q2 2026, expect reporting first-in-human dosing and preliminary data in the second half of this year. The Rejuva program is advancing within a disciplined spending framework that does not compete with Revita for capital, and we will share more on the platform at an upcoming Investor Day. Let me frame the anticipated catalyst-rich path ahead before I hand it to Lara. In Q2, we will see 1-year REVEAL-1 open-label data and receive CTA regulatory feedback on RJVA-001. In Q3, we will see 1-year REMAIN-1 Midpoint Cohort randomized data, and we expect to be able to demonstrate continued compounding treatment effect and durability at that time in a randomized data set. In early Q4, we will anticipate seeing top line 6-month randomized data from the REMAIN-1 pivotal study. This is the single most important catalyst in our company's history. And in late Q4 this year, potential De Novo marketing application submission for Revita in post-GLP-1 weight maintenance. In the second half of this year, we will also see human dosing of RJVA-001, subject to CTA authorization and preliminary safety and PK data. Each of these milestones move us closer to delivering the first potential procedural therapy for maintenance and weight loss after GLP-1 discontinuation, and it is a catalyst-rich year ahead. Lara? Lara Weber: Thank you, Harith. Research and development expenses were $16.5 million for the quarter ended December 31, 2025, compared to $20.3 million for the same period in 2024. The decrease was primarily due to our strategic reprioritization in Q1 2025, resulting in lower personnel-related costs and reduced costs associated with the pausing of the REVITALIZE-1 study, partially offset by continued investment in REMAIN-1 and Rejuva. SG&A expenses were $6.8 million for Q4 2025 compared to $4.9 million for the same period in 2024. The increase was primarily due to underwriters commissions associated with our August 2025 financing. We reported a net loss of $43.7 million for Q4 2025 compared to $25 million in Q4 2024. However, the $20.2 million of the increase was a noncash accounting change in the fair value of our warrant liabilities, which does not reflect a change in our underlying operating performance. Stripping that out, our operating expenses for the quarter were $1.9 million lower than the same period in 2024. Adjusted EBITDA was negative $21.2 million for Q4 '25 compared to negative $22.1 million for Q4 2024, reflecting the decrease in operating expenses. As of December 31, 2025, we had approximately $81.5 million cash and cash equivalents. Based on our current business plan, we believe this cash position, combined with the $4.1 million subsequent proceeds from warrant exercises received in January 2026 will fund operations into early 2027. Importantly, this funds the company beyond the anticipated REMAIN-1 pivotal data readout in early Q4 2026 and through a potential De Novo submission in late Q4 2026. With that, I'll turn it back to Harith for one specific item on capital strategy and a few closing remarks before we open for Q&A. Harith Rajagopalan: Thank you, Lara. Before we open Q&A, I want to address capital strategy directly and remove any ambiguity. We have closed our ATM facility, and we do not have plans to raise capital before we have pivotal data in hand. Our runway extends into early 2027. This is a deliberate commitment grounded in conviction. We expect the pivotal data will be positive, and we will operate with discipline within our existing capital envelope as a signal of management's alignment with shareholders through a key moment. A few final comments. First, we believe the clinical signal is real with a strong dose response and a clear GLP-1 responder target population. Second, the pivotal is built to win with strong powering on the full cohort and enrichment in an optimized cohort of patients with high running weight loss and longer ablation lengths. Third, we see a clear path to commercial value with favorable De Novo feedback and a large, defined and growing market opportunity. And lastly, we are funded to the key pivotal value inflection point without planned incremental capital raise between now and then. We have the science, the runway and the team to prove it. We look forward to sharing more data this summer and into the fall. I want to express my deep gratitude to our employees whose dedication and focus through a challenging year has been nothing short of extraordinary, to the physicians and investigators who believe in the science and bring it to patients with skill and care to the patients who trust us with their health and their hope and to you, our shareholders, whose conviction fuels everything we do. Operator, we are ready to take questions. Operator: [Operator Instructions]. And our first question comes from the line of Whitney Ijem of Canaccord Genuity. Angela Qian: This is Angela on for Whitney. Can you guys just remind us how the ablation length is determined again, is that it's after the patient is already like during the procedure, right? And so yes, I guess like how is that length determined? And then it sounds like 16 centimeters is the cutoff now like going forward, is that the target minimum ablation length? Harith Rajagopalan: Yes. Great question, Angela. Happy to clarify this point because it's important to how we think about standardizing this procedure as we go forward and how we are going to analyze the pivotal data as well. When we looked at the type 2 diabetes patient population, we saw a dose response where ablation was defined as the length of the total amount of duodenum that was ablated. When we did our first-in-human study, we saw that about 10 centimeters of ablation had more glucose lowering efficacy than 3 centimeters. We are seeing the same thing now in obesity, but at higher lengths of ablation. Our ablation balloon is 2 centimeters long. In the procedure, we count the number of ablations that are performed longitudinally along the length of the duodenum, and that allows us to calculate the ablation length. What is clear is that the ablation length for weight effects is greater than or equal to 16 centimeters. That will be our operating standard going forward and will be built into the key secondary endpoints in our pivotal study. And in those patients, we see a clinically meaningful and compounding treatment effect in the Midpoint Cohort. We believe this to be the reason for heterogeneity that we saw back in January, and we're very gratified to have the data to be able to give us clarity on the precision of what is needed in order to deliver benefit to patients. Angela Qian: Great. Maybe just a quick follow-up. I guess, does this impact how doctors are going to be trained in the future in terms of length of ablation? And was it -- were they conducting less ablation because they were less comfortable with it? Or if you could just provide more color around that? Harith Rajagopalan: Well, in the pivotal study, we advise patients -- doctors to ablate at least 10 centimeters and from the anatomical landmark at the beginning of the duodenum towards the end of the duodenum. But it was less to the physician's discretion how much ablations to perform. In that study, everyone was trained to be able to successfully perform greater than 14 centimeters of ablation across the board. And so we believe that we can easily train physicians to do that consistently now that we have the data to support that length being the efficacious dose. Operator: Our next question comes from the line of Michael DiFiore of Evercore ISI. Michael DiFiore: One on the De Novo pathway. It seems that you're increasingly more confident that the FDA could accept your De Novo submission based on early feedback. And I guess my question is, to what extent does efficacy play in the final determination here? Or is it all about safety? And then I have a follow-up. Harith Rajagopalan: Well, I think the De Novo pathway determination versus, say, a PMA determination is principally a safety consideration because what the FDA is thinking about is whether this is a moderate risk device in De Novo versus a high-risk device in a PMA. And then the efficacy threshold for PMA and De Novo are also nuanced -- have nuanced differences. The efficacy threshold for PMA is valid scientific evidence, whereas the efficacy threshold for a De Novo is reasonable assurance of safety and effectiveness. Michael DiFiore: I see. That's helpful. And then just back on the ablation length. I think I and a lot of other folks were under the impression that this was already standardized. But now you made it clear that in the pivotal studies, physicians were instructed to ablate at least 10 centimeters. And I guess my question is in the real world, based on the average patient, is 16 centimeters readily achievable? Or is the average patient's anatomy more conducive to less centimeter ablations? Harith Rajagopalan: In the Pivotal Cohort, mean and median ablation length was greater than 16 centimeters and is readily achievable by all of the investigators that we've trained, and we believe that will be translatable to the broader population. Operator: Our next question comes from the line of Jason Gerberry of Bank of America Securities. Chi Meng Fong: This is Chi on for Jason. Maybe a follow-up on the ablation length. Can you provide more color on the post-hoc analysis for the midpoint data set? More specifically, can you remind us the ablation length and GLP-1 induced weight loss from the Midpoint Cohort and how that compares to the metrics you provided for the Pivotal Cohort? And secondarily, how much variability in the ablation length you saw in the Midpoint Cohort compared to the Pivotal Cohort? And I guess, ultimately, how does this post-hoc analysis impact your confidence for the pivotal readout later this year? Harith Rajagopalan: Well, this is a post-hoc analysis in the Midpoint Cohort. It was already a prespecified analysis in the pivotal study and is consistent with prespecified studies we've conducted on dose in type 2 diabetes in the past. In the Midpoint Cohort -- sorry, in the Pivotal Cohort, mean and median ablation length are greater than 16 centimeters and the average ablation length is longer than it was in the Midpoint Cohort. And we feel confident that we can train physicians to perform longer ablations in the pivotal. All of this translates to a high degree of conviction in the pivotal study. Number one, we are very well powered at well over 90% for the full cohort, and we have key secondary endpoints that we have prespecified that will interrogate patients who receive more than 16 centimeters of ablation and in patients who receive -- who have more running weight loss on the GLP-1. And we are confident that each of those independently and collectively will drive larger and compounding treatment effects in the pivotal study and will provide clarity on how Revita can be used in which patient and at what dose in order to achieve a clinically meaningful signal that can translate to commercial utilization. Chi Meng Fong: Got it. So the ablation length for the Pivotal Cohort is what you have observed is longer than the ablation length in the Midpoint Cohort? Harith Rajagopalan: That's right. Chi Meng Fong: Okay. And given you have already fully randomized the Pivotal Cohort, basically, is it fair to assume that all the ablation had already occurred and you're talking about ablation length you have observed for all the procedures that conducted? Harith Rajagopalan: Yes, that's locked. And I think we're saying that we're more than 1 month out from the last randomization now. And the safety signal in our blinded analysis continues to be very encouraging. And so we feel quite confident that the efficacy is the question in the pivotal study and the data that we're sharing with you today meaningfully increase the probability of success on the efficacy angle as well. Operator: Our next question comes from line of Mike Ulz of Morgan Stanley. Michael Ulz: And maybe just another one related to ablation. Just curious how long it takes to sort of train these physicians to be able to do the procedure to ensure adequate ablation. Is that something that's fairly quick? Or how much experience does it take to kind of make sure that they're hitting that mark? Harith Rajagopalan: This training that we've built is -- works very well. It takes less than 3 to 4 cases to train a physician to perform ablations. The shorter length of ablations that we sometimes see in the Midpoint Cohort and the Pivotal Cohort are often reflective of the first couple of cases that the physician is performing and yet very soon, they get very comfortable with it and then are consistently delivering longer ablations. The huge advantage of a prospectively defined dose response in the pivotal is that it allows us to standardize the treatment -- the training regime and the treatment recommendation in commercial use. And I think that's going to help standardize real-world outcomes. Operator: Our next question comes from the line of Jeffrey Cohen of Ladenburg Thalmann & Company. Jeffrey Cohen: Sorry to be redundant. So on the -- in Q3, when we see the 1-year remain Midpoint Cohort, will we see further analysis by length as far as the data that you're reading out? Harith Rajagopalan: Yes. Jeffrey Cohen: Got it. And then could you talk a little bit about the energy delivery and the temperatures involved? Has anything changed as far as the delivery from the generator between the Midpoint Cohort and the Pivotal? Harith Rajagopalan: No, nothing has changed. And I think one point that you should take confidence in is that even though we went from a small number of sites in the midpoint to a much larger number of sites and operators and patients, the treatment that we've been able to train physicians to perform has been remarkably consistent and standardized over the course of time. The only difference that we are sharing with you now is that we can give specific guidance on what length of duodenum to aim for in obesity. And that is very useful information. We're glad to have it. Jeffrey Cohen: That's helpful. And then can you talk about the CPT code. So as I understand it, if you file during the midpoint somewhere in 2027 that, that could or would take effect January 1, '28. Are you also suggesting that it's possible that you'll have a T code that would take effect sometime in 2027? Harith Rajagopalan: We're anticipating filing for the Category III CPT code in June of this year. It's reviewed in September and should go into effect in the summer of '27, July 1. And we are also intending to file for a transitional pass-through payment through CMS immediately upon FDA authorization, and that's a quarterly review cycle. So that can go into effect very quickly upon launch. That's why we said that there was essentially no daylight between potential clearance authorization in the United States and reimbursement authorization for hospitals to begin to use it. Jeffrey Cohen: OOkay. And I'm assuming you'll also take on payer discussion late this year, commencing late this year as far as payer discussion? Harith Rajagopalan: That's right. And when you think about it, we will have a fully formed clinical profile by early Q4. 12-month randomized data from REMAIN-1, 12-month open-label data from REVEAL-1, 6-month randomized data from the full Pivotal Cohort of 300 patients. That's a fully derisked clinical package that we could then use to inform our payer discussions and drive towards our regulatory submission calendar. Operator: Our next question comes from the line of Joe Pantginis of H.C. Wainwright. Joseph Pantginis: So my first question is shorter, but maybe a more complex answer. So first, with the De Novo filing positive feedback, how would we view the totality of regulatory submissions over the next -- over the next year or so with regard to is it a multistep process? Or is it similar to a rolling BLA? Or how should we view it? Harith Rajagopalan: There are 3 main packages to the regulatory submission. There is a design history file, which is the device design. There's a manufacturing file, which reflects how we manufacture our systems. and then there will be clinical data. We will have a full package of 6-month data by the end of this year. There's -- we will also be ready to submit 12-month data in the first quarter of 2027, should that be necessary. Joseph Pantginis: That's great. And then if I heard you correctly, correct me if I'm wrong, it sounded like you're going to be filing the SAP relatively soon. So with regard to the ablation length that we've been discussing today, and it's very intriguing data, by the way, how would you look at -- and you mentioned it's a prespecified population. How would that factor into the statistical analysis plan and also the role of the secondary endpoints that you mentioned and the hierarchy of them? Harith Rajagopalan: Great question. Obviously, details on the hierarchy are going to be pending our conversation with the FDA, and we'll share that with you when we have it. I would make 2 points right now. Number one, the sweet spot of the enrollment and randomization of the pivotal study are exactly the patients in whom Revita appears to be working best. The mean ablation length was more than 16 centimeters, which is where Revita's efficacy is very clear based on the midpoint cohort. And the mean run-in weight loss was over 18% total body weight, which is where Revita's efficacy is also very clear. So the right down the middle of the fairway of our pivotal enrollment is exactly the sweet spot of where we are seeing efficacy. And so we're confident in that. And we have designed key secondary endpoints in order to be able to demonstrate that very clearly. Operator: Thank you. I'll now like to turn the call back to Dr. Rajagopalan for closing remarks. Harith Rajagopalan: Well, thank you, everyone. The science is working. The pivotal is on track and we look forward to delivering the definitive data this fall. Thank you all very much. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Jason Honeyman: Thank you. Good morning, and welcome to Bellway's half year results. As usual, I'm joined by Shane and Simon. We've lots of our senior management team also with us today. If I could take you to the first slide. We delivered a good first half performance despite a softer selling period through much of 2025. Half year volume increased to 4,700 homes. That delivered an operating margin of 10.5%. We have an order book of 4,400 homes and a strong land bank largely unchanged at 94,000 plots. Now since the start of the calendar year, trading conditions have markedly improved with a notable pickup in both homebuyer interest and reservations. However, the ongoing conflict in the Middle East clearly has the potential to dampen customer demand and clearly increases the risk of higher inflation. That said, to date, we have not seen any material impact upon sales rates. And for FY '26, given our half year results and our order book, we remain on target to deliver operating profit in the region of GBP 320 million to GBP 330 million. The full year is likely to deliver a higher volume than previous guidance with an operating margin similar to the half year. And while margin headwinds may well continue delivering higher volumes will certainly drive cash generation, and that very much supports our program to be more capital efficient. I will provide the usual detail on ops and outlook later, but first, for our results and update on capital allocation with Shane. Shane Doherty: Thank you, Jason, and good morning, everyone. As Jason said, we've delivered a robust performance in the first half despite ongoing challenges in our industry, supported by the order book at the start of the year and despite subdued trading throughout the autumn, volume output increased by 2.7% to 4,702 homes. There was growth in both private and social output and the proportion of social completions was in line with prior year at around 21%. The ASP was up by 3.7% to just over GBP 322,000 and in line with expectations. The increase in the ASP was driven by geographic and mix changes with headline pricing remaining broadly stable. Turning to gross margin. There was a 20 basis point reduction to 16.2%. This slight reduction reflects the benefit of higher-margin land in the mix, which was offset by incremental incentive usage, the absence of any HPI and low single-digit build cost inflation. These factors are also reflected in our order book and combined with the expected contribution of bulk sales in the second half, we currently expect gross margin in FY '26 to be similar to that achieved in the first half. These margin dynamics, together with embedded cost inflation carried in our work in progress are likely to remain a headwind to margin, at least in the near term. And there are clear risks of potentially higher build cost inflation stemming from the ongoing conflict in the Middle East. We'll be in a better position to comment on the potential impact of FY '27 when we report in our June trading update. Looking further ahead, we are working through our WIP balance and growing proportion of our output will benefit from newer high-margin land. With a stable market supported by a more favorable HPI BCI dynamic as seen in previous cycles, we are well positioned to drive ongoing improvements in our margin in future years. In line with our strategy to invest across the group to deliver greater efficiencies and long-term growth, the admin overhead increased to GBP 86 million, and the full year number is expected to be between GBP 170 million and GBP 175 million. Our investments include our new timber frame factory, combined with strategic investments across IT and strength in commercial and finance teams, which means we now have the right structure in place to effectively deliver on all of our strategic priorities. We expect that, that level of increase will not repeat in future years, whilst obtaining operating leverage from it as we drive towards 10,000 units if market conditions improve into the medium term will obviously be a key focus also. The effect of the increased overhead investment, together with the movement in gross margin led to a 50 basis point reduction in the underlying operating margin to 10.5%. Underlying PBT was slightly higher at GBP 151 million, and I'm pleased to report that the interim dividend has been increased by almost 10% to 23p per share. This slide has covered the group's underlying performance. Adjusting items shown in more detail in the income statement in Appendix 1. These include GBP 300,000 to admin expenses relating to the previously announced CMA investigation. The other adjusting items relate to build safety, which I will cover later in the presentation. Turning to our balance sheet. It is robust and well capitalized with a strong land bank and WIP position at its core foundation. These are key focus areas for our capital efficiency drive and critical to our plans for increasing cash generation. I will cover this in more detail shortly as part of our capital allocation strategy. First, to highlight the key balance sheet movements, reflecting our largely land replacement only land strategy, the land balance of GBP 2.5 billion has reduced slightly by around GBP 38 million since the year-end. During the first half, we entered into new land contracts on deferred terms totaling around GBP 130 million, and settled line creditor payments of around GBP 180 million. This led to period-end land creditors of GBP 290 million, representing 12% of our land balance. As previously guided, and as part of our strategy to run the business with a more efficient capital structure, there will likely be an increase in the use of land creditors over the medium term. The range is expected to be between 15% and 20% of land value, which is similar to historic norms. Jason will cover our land bank in more detail later. The work in progress balance, which includes site WIP, show homes and part-exchange properties reduced by GBP 39 million to GBP 2.3 billion. Breaking that movement down into 3 component parts. Firstly, the value of show homes remained flat, reflecting our broadly stable outlet position. The value of part-exchange properties rose by just over GBP 20 million. Part-exchange is an important selling incentive for customers. And whilst its usage increased, it has remained disciplined and represents a relatively modest 6% of our completions. Finally, site WIP reduced by GBP 61 million to just over GBP 2.1 billion. And this highlights some good early progress with our capital efficiency drive, which we spoke about to you in detail last October. To finish on the balance sheet, as you will see from the bottom of the slide, our adjusted, our adjusted gearing, including land creditors, remains low at 10.3% and our net asset value per share has now risen to just over GBP 30. We've continued to make good progress on build safety, and I'm pleased to report that the overall provision remains broadly stable. With regards to movements in the provision, in addition to the GBP 6.5 million adjusting finance expense, which was in line with previous guidance, there was a very modest net increase of GBP 4.2 million in the build safety provision through cost of sales, which relates to the refinement of overall cost estimates. We have now completed the terminations on all of our legacy buildings in England and Wales in accordance with the joint plan. Our provision is based on robust assumptions and prudent cost estimates for both internal and external works on the 457 buildings in scope for remediation. We have started our completed work on 172 buildings with the majority of spend expected by FY '30. We've spent GBP 212 million on legacy build safety since the start of the program, including GBP 21 million in the first half of FY '26. The strengthened team at our dedicated Build Safety division is focused on completing works as promptly and as efficiently as possible. For FY '26, we continue to budget for total spend of over GBP 150 million, although I must caveat that this level of spend remains dependent on receiving requests for payment from the government for works carried out on our behalf for the build safety fund totaling around GBP 90 million. I think it's important to point out today that for prudence, our shareholder returns capital allocation modeling assumes significant disbursements around build safety over the next 3 years. The provision at the 31st of January '26 was GBP 507 million, and I'm confident that we are well provided for the remediation works required across the legacy portfolio. In terms of recoveries, we've recognized GBP 81 million to date. We do, of course, continue to actively pursue further supply chain recoveries. But as these are not virtually certain at the balance sheet date, no additional reimbursements have been recognized. Turning next, just to remind you of our priorities for capital allocation, which we covered in detail last October. In short, it is a flexible framework with our strong balance sheet and well-invested land bank as the foundations of the business, which support our balanced approach to continue to invest for growth and delivering enhanced returns for shareholders from increased cash conversion and generation. As part of our strategy, we are sharply focused on driving greater efficiencies and our WIP balance presents a significant opportunity for much greater cash generation, which I will cover next. We generated good operating cash flow in the first half. The cash flow bridge chart shows the movement from a small net cash position to ending the period with modest net debt at GBP 72 million, in line with our plans to run a more efficient balance sheet and increase returns to shareholders. To run through our key movements, you can see the decrease in total WIP that I referenced earlier amounted to GBP 39 million. In relation to land, the monetization of land through cost of sales was GBP 283 million. This was slightly lower than the cash spent on land and together with the movement in land creditors, this led to a GBP 38 million decrease in land on the balance sheet in the period. After other working capital movements and tax, the operating cash generated before investment in land, build safety spend and distributions to shareholders was GBP 314 million. As a result, the conversion of operating profit to adjusted operating cash flow was 2x. As I highlighted in October, we are aiming to maintain the conversion level at a minimum of 2x over the 3 years to FY '28. As I've said previously, adjusted cash flow is the fuel for future investment opportunities in the business and ultimately, greater value creation and returns for our shareholders. In this regard, we invested GBP 302 million in land, including settlement of land creditors and dividend payments and share buybacks totaled GBP 105 million. We also spent GBP 21 million on build safety, which I referenced earlier. After taking account of all of these disbursements, we closed the half year with net debt at a modest GBP 72 million. I will now cover our cash generation targets for the second half, which I think is important in the context of what we're discussing this morning and the tougher trading backdrop that may emerge, together with our longer-term ambitions in the context of driving shareholder value against this potential backdrop. As I've said many times, driving WIP efficiency is a key area of focus across all of our 20 operating divisions and a significant opportunity for the group to deliver cash generation. We've increased our volume guidance for the year by between 100 and 300 units on our original volume guidance of 9,200 units. And the combination of this increased monetization with tighter controls around WIP spend will see us increasing our operating cash flow conversion targets significantly year-over-year. As the chart shows, operating profit will grow by between GBP 20 million and GBP 30 million year-on-year in FY '26. But we expect operating cash flow will increase substantially more than that by between GBP 100 million and GBP 150 million year-on-year. This leaves the company in a strong position to drive future value for shareholders by continuing to drive volume appropriately against this tougher trading backdrop. This will provide greater opportunity to invest in more high-margin land and potentially returning more excess capital to shareholders. Overall, we are targeting adjusted operating cash flow of between GBP 750 million and GBP 800 million for the full year. Looking beyond FY '26, we have a greater proportion of units at an advanced stage of build than a couple of years ago, which should support a faster monetization of our WIP balance. This drive for improvements in WIP turn and to lower our WIP balance will enhance asset turn and support cash generation. This will help fund our build safety disbursements, further land investment and returns for shareholders. We'll maintain our underlying dividend cover of 2.5x, and this will be supplemented by returns of excess capital. In this regard, we are making good progress on our GBP 150 million share buyback launched in October with around GBP 64 million completed so far, and we have a clear intention of returning excess capital in future years. To finish my section, a summary of guidance for FY '26. We, of course, recognize the risks to inflation and customer demand from the ongoing situation in the Middle East. Notwithstanding this and supported by a robust first half and our current order book, we are well placed to deliver FY '26 underlying operating profit in the range of GBP 320 million to GBP 330 million. So for guidance, we are targeting volume of between 9,300 and 9,500 homes, the final outcome of which is dependent on completions from our bulk sales pipeline. The average selling price will be around GBP 325,000 with the increase over FY '25 driven by mix. It's important to point out when we give that guidance, we are not in any way giving that guidance in the context of any potential negative impacts that it might have on FY '27. It's all based on the strong work that we've been doing, monetizing our WIP and broadening the pipeline of opportunities that we see both in private sales and potential bulk sales. The admin overhead will be between GBP 170 million and GBP 175 million. We currently expect the operating margin to be similar to the first half level at around 10.5%. The finance expense will be around GBP 20 million, and adjusted operating cash flow is expected to be strongly ahead of prior year at between GBP 750 million and GBP 800 million. Finally, land spend is expected to be in the region of GBP 500 million to GBP 600 million, reflecting our largely replacement-only land strategy. Despite the headwinds facing our industry, I'm confident that our self-help and drive for capital efficiency will mitigate the impact on our strategy to increase cash generation and value for shareholder returns. I'll now pass back to Jason, who will cover the operational review and outlook. Jason Honeyman: Thank you, Shane. But now for trading. In the first half, we achieved a private sales rate of 0.47 with January being our strongest month at 0.6, and that momentum has continued to build into the start of the spring selling season. With regard to the mortgage market, improved affordability and changes to lending criteria have both contributed to those better trading conditions. That said, recent increases in mortgage rates due to the events in the Middle East clearly has the potential to impact upon future demand. And that brings me on to current trading. In the first 6 weeks since the 1st of February, we have achieved a private sales rate of 0.66 and bulk sales made an additional but modest contribution of 57 homes. And from a geographical and mix point of view, the picture hasn't really changed much with Scotland, the North of England and the Midlands all remaining stronger than the South. But those regional differences are quite pronounced with Midlands and upwards all delivering a strong sales rate of around 0.75, significantly higher than the 0.5 being achieved in the South. Headline pricing remains firm, although incentives are full at 5%. And we find that prices for houses are more robust or more resilient than those for flats. And as I referenced in my introduction, the last 2 weeks of our current trading period have coincided with the conflict in the Middle East. Both of those weeks have delivered a consistent sales rate of 0.65 or the equivalent of 155 private homes per week. We continue to progress bulk sales to support both this year and next. We are over 85% sold for FY '26, hold an order book of over GBP 1.5 billion or 5,300 homes as at the 13th of March. The next slide shows our land bank totaling some 94,000 plots, half of which are owned and controlled and half are strategic. Now I'm happy with the size and the shape of the land bank. It supports our short-term growth ambitions. We are still buying land but with caution. In the period, we contracted on 4,700 plots across 15 sites including 1 site in Scotland for 1,900 homes that was converted from our strat pipeline. And strategic land continues to play an important role in our growth ambitions. Within this financial year, we will have 80 strat planning applications or around 17,000 plots in the system. And to put that into context, that has increased threefold in just 2 years. And that is a significant change in our business. And these strat plots will support both margin recovery and outlet numbers from FY '28 onwards. Overall, we have detailed planning consent on over 95% of our plots to meet our volume for FY '27. And as a consequence, we've got good visibility on outlets. We're on target to open 55 outlets this year and a further 55 to 60 next year. And we expect average outlet numbers to hold at around 240 for both this year and the next with growth up to 250 in FY '28. With regard to planning, I would describe planning reform as positive rather than perfect. Overall, and outside of London, the planning environment is generally supportive. Moving on to costs. Overall, cost inflation remains modest at around 1% or 2% and we currently have no issues with regard to availability, either labor or materials. That said, we are very mindful of the heightened inflationary risk caused by the events in the Middle East. And as a consequence, our focus on being more cost efficient seems ever more relevant today. And I'll give you a few examples of our approach to saving costs to support margin. Firstly, we intend to phase out the Ashberry brand as it is proving too expensive to fund a separate brand to sell just 9% or 10% of our volume. We plan to adopt a single brand approach that will play on our 80-year history. It will be clearer to the customer, a digital-first approach, less expensive and without any overall impact upon outlet numbers. Secondly, we will shortly launch our new house type range, the Bellway Collection, which has been designed to be timber-frame friendly. And by that, I mean, optimize panel widths and ceiling heights to improve both speed and efficiency and also reduce waste in the process. And with our new house type range, our single brand approach, we have the perfect platform to personalize homes and offer extras and additions on a much greater scale to drive incremental revenue and profit growth. And thirdly, we successfully opened our timber frame facility, Bellway Home Space back in January. And we have already started delivering timber kits to our divisions. Our investment in technology that supports Category 2 closed panel systems is hugely important as I firmly believe that Cat 2 is a key part of the future of housebuilding. And one final point before outlook, build quality and customer service. I'm pleased to report that we are rated as a 5-star housebuilder for the 10th consecutive year. But more important is our position with HBF's new scoring system, which has been designed to be more challenging. Housebuilders are now measured by their customers at both 8-week and 9-month intervals and based upon both quality and service. Bellway have achieved an overall score of 4.38, the highest of any national listed housebuilder, a phenomenal effort by our ops teams and a direct result of their hard work. And finally, outlook. We're on track to deliver a volume of 9,300 to 9,500 homes. As you've heard from Shane, regardless of the wider backdrop, we have a sharp focus on improving cash generation, and we expect to deliver a significant increase in operating cash flow this year. And should we find ourselves in a prolonged turbulent period. Our business is in good shape. We have a flexible capital allocation framework and a strong and experienced management team and are well able to navigate our way through any challenges. Thank you. Now happy to take questions. Allison Sun: Allison from Bank of America. Two questions from my side. So first, if the -- let's assume the market activity will be muted given all the impact. Are you guys ready to give out more incentives or not? I think are we expecting maybe incentives will go beyond 5% for the rest of this year? And the second question is what type -- what kind of inflation assumption you put in your fire safety remediation work? Jason Honeyman: Sorry, I didn't get the second question. Allison Sun: The inflation assumption you have for the fire safety remediation work. Jason Honeyman: So I'll take the first and you take the second. With regard to incentives, it was our intention at the start of the year to tighten up that incentive level to support margin growth into '27. Today, that looks a little bit too optimistic. But no, I don't have any plans to increase incentives. They're at a level that we're happy with, and we're delivering a sales rate that we're quite comfortable with. Can I hand over to you? Shane Doherty: Yes, 3% on the inflation, [ build ] safety. Aynsley Lammin: Aynsley Lammin from Investec. Just two for me, please. Just trying to understand the change in guidance a bit more, more volume and obviously less margin. Is that driven by kind of changing view of the market, what you expect going forward? Or is it just more opportunities to do some bulk sales and you can release some of that WIP? Any color around that would be quite interesting. First question. And then just on the second question, I guess, a bit more color again last couple of weeks, have you seen any change in cancellation rates, the vibe on the ground in terms of the sales rates? Is it kind of beginning to feed through in confidence what we're seeing in the mortgage market? Jason Honeyman: Thanks, Aynsley. Shall I'll start with the last question and I'll hand back to you. No, sales rates, Aynsley, have held up and likely to hold up through March. And when I think about it in a little detail, it's probably not too much of a surprise. If you're planning to buy a home now, you probably made a decision a month or 2 ago, and you've already got the benefit of a mortgage offer, which probably looks quite good value Aynsley at the moment. So no -- we've seen no immediate impact. And I think our buyers and customers in the market have got a little bit of crisis fatigue. We've been through Brexit and pandemics and Ukraine and Middle East. So there's a bit more resilience amongst our buyers. But I would expect that sales rates to soften into April, not now because you'll see the impact of the margin increase. And I don't think it will be material. I just think it will dampen a little bit. And all that's caveated to what's going on in the Middle East. But you'll probably see a softening into April, but not significant. Shane Doherty: Yes. In terms of the guidance, it's probably along the lines and what we flagged when we came out in early February. It's very much probably reflective of what we were seeing in the first half of the year. It's probably easy enough to forget that now because I like the crisis fatigue. That's what it feels at the minute. But the run-up to the budget was a difficult time for everyone. And what we did in the run-up to the budget was we traded appropriately in relation to the value creation thesis that we set out last October, which is that we will drive pricing as appropriately as we need to. But sales rates in the run-up to Christmas were less than 0.5% across the sector. So what you're seeing is the margin uptick that we're seeing coming through is really just reflective of the fact that with good visibility with good forward order book coming into the year, sales rates have picked up. And whilst the kind of 50 basis point margin reduction seems quite significant, those margin reductions become exaggerated, unfortunately, in a market like this where there is very little HPI for the reasons that Jason has outlined and you have kind of BCI running even at 1% or 2%, that is going to hit you to the tune of about 50 basis points on your margin. So that's all you're talking about. It's probably GBP 2,000 per unit in overall terms. It's a pretty small number. The market has picked up quite significantly in the early part of this year across all of our divisions. And if that sales rate was to maintain, I think it's important to make that point, notwithstanding the caveat we put around the emergent situation, that sales rate was to hold at kind of 0.65. We will be looking at a kind of -- we never gave formal guidance into next year, but we did talk about the fact that we were going to get to 10,000 units. So if you storyboard that from the original guidance that we gave, 9,200, 96,000, maybe 10,000, we would have assumed off the current sales rates that we would still be forward sold to the tune of probably 35% of getting to a 9,000, so a flattish volume next year, notwithstanding the emergent situation. So that volume uptick that we're seeing is not at the expense of the overlying market growth opportunity that's still there. And it's very easy to kind of talk yourself into a doom loop because of what might happen at the moment. But the broad reality is as you look out beyond maybe whether it's the end of this year or beyond next year, the demand-supply imbalance still holds. Jason talked about the strat land margin coming through. There will be good, strong underlying margin progression coming through our business. And we've got good volume opportunity, and we've got 20 outlets. So really, what you're seeing at the moment is just us trading appropriate through what has been a challenging environment and emerging from that with little debt and the ability to return capital to shareholders. Zaim Beekawa: Zaim Beekawa, JPMorgan. The first is just to come back on the incentives. Can you give some indication on the cash, noncash portion? And then secondly, in light of the mortgage volatility you sort of alluded to and potential impact, what's your view on your own shared equity scheme like some of your peers? And then third, if I could go on the bulk sales, sort of any indication on the discount on those bulk sales compared to maybe a year ago or 6 months ago? Jason Honeyman: Should I start with? Shane Doherty: Yes. Jason Honeyman: Sorry, on incentives, it's mostly cash and some additions. I did want to set out a chart to show you the regional differences across -- because you can understand there's probably more in the South than there is in the North at the moment. But nothing surprising in what you see regarding incentives. And in terms of -- shall I do shared equity products. We don't think they're a big part of the market. I get a little bit frustrated because they can confuse customers when you've got a whole series of schemes across the industry. And I've always preferred a housing association on something government backed that people can trust and look into. So we look at it and watch with interest to see if that market moves, but I've got no ambition to bring out a bespoke shared equity product at the moment. Sales are good enough. Shane Doherty: What I'd say in relation to bulk is -- I'm not trying to dock the answer. What we do is we tend to take an NPV approach to bulk pricing, and that's kind of using a 10% hurdle rate because whilst you may need to reduce your baseline pricing, you will find savings in other areas, not least your sales costs will be lower and also your running cost as a site can be lower as well, and you may have forward funding opportunities. So looking at it through all those lenses, when we baseline that against private pricing and sales rates and if it has -- and using a hurdle rate of 10%, if that's NPV accretive, then we'll go after that deal. What I'd say in broader macro terms in terms of buyer appetite, it's a lot stronger now than it was 12 months ago, insofar as a lot of the indicative pricing that probably was coming back 12 months ago was reflective of where interest rates were, and you could be looking at maybe 20% discounts on pricing, which is not something that we'd be interested in. But certainly -- and it's not reflected in the numbers at the moment, but it's certainly reflected in our pipeline of opportunities. The gentleman sitting in front of you there is actually living and breathing it at the moment, the 2 actually. We've got a significant pipeline of bulk opportunities, and we'd be confident that we'll see some of that coming through between now and year-end. Jason Honeyman: Can I just add to that? So there's lots of questions here about incentives. But from a bulk point of view, we did about 600 homes last year. This year, we'll probably do something similar. It's not a major part of our business. And incentives across the board, we've got a strong order book. Our sales rates are good. We were very well organized as we come out into January in the new year. So we've maximized what opportunity is there in the market. And I've got no intention to start discounting properties and being desperate. We can make good decisions. We're in a good place. So I think we're fine at the moment. William Jones: Will Jones from Rothschild & Co Redburn. Three as well, please. First, around build costs, if that's okay. Just what you've heard from manufacturers since Iran kicked off, visibility you've got generally and whether you have any framing of how you might look at your build cost basket in an energy context, any sensitivities around that? Second, on the balance sheet and the returns, helpful guidance on the operating cash flow for the full year. Do you have any view at the moment as to how that might shake out, net cash net debt, please? And when you think about the ongoing buyback, hopefully, beyond the current year, how would you think about the sensitivity of that to -- broadly speaking, to a lower profit environment if it came through? Or do you think that actually continuing to optimize the assets would mean that, that buyback can carry on? And then the last one just around Ashberry, just a reflection there. What, I guess, proved different to your expectation to make it too expensive? And any implications do you think on sales rates as that winds down? Jason Honeyman: Okay. I'll pick up build cost in Ashberry and I'll hand back to Shane, Will, if that's okay. On build costs, most of our supplier agreements are fixed from the start of '26 and generally last for around 12 months. If it gets really bad, Will, that counts for nothing. We know that we've been through the pandemic. All we've seen to date is lots of suppliers asking for increased delivery charges, haulage costs, fuel surcharges, those sorts of things, which is all manageable. What has got our interest is where you've got high energy-dependent materials such as bricks, blocks, concrete chips and those sorts of things. So that's where we'll keep an eye on to see if there's any movement there. And like everyone, Will, we look every morning for a quick resolution to the problems in the Middle East to hope they don't transpire, but time will tell. So at the moment, mostly delivery and haulage costs is what's coming our way. And on Ashberry, we did a thorough review of our brands. And I don't want to suggest for a moment that a one-brand approach is better than a multi-brand approach, but it certainly is for Bellway because Ashberry, after our research, our customers were confused with the product. And some people in this room used to get confused when you ask me about what is Ashberry and what does it do? And I found that Ashberry was confusing our customers because it was asking for or selling the same product on the same site, and it was more expensive. So we decided to refresh that Bellway brand. We're going to offer 3 tiers of specification going up to Bellway premium. It's going to be very digital focused, both in our sales offices and on the Internet. And we think we'll make savings and be less confusing to our customers and deliver the dual outlets where we can. And you must remember, Will, we don't have lots of large sites. We've got handfuls of them where we can offer a dual outlet without making any sort of serious impact on outlet numbers. Shane Doherty: So in terms of net debt, I mean, I anticipate at the moment, like it's probably worth just saying stripping out the build safety component, if I just assume that's constant, even though I expect that might come in slightly lower, even allowing for that, I think our net debt figure is probably going to be in the region of GBP 100 million, GBP 120 million type range between now and year-end. And that would probably see the buyback running at probably close to maybe GBP 100 million, GBP 120 million by year-end as well. So you have a decent clip of that coming through within that. So we're in good shape from a cash perspective. The only thing, as I say, Will, I could bring that down would be if the build safety spend is lower. But I think it's important to talk about it in the context of it being at normal run rate. So I think that gives us a lot of confidence in terms of the fact that the capital allocation strategy is working against the backdrop of kind of 2 tough economic events running in the background and lower margins, we're still throwing off cash, and that is the underlying strategy going forward. We'll have plenty of cash to buy land. We'll buy land probably -- I won't quite say on a net replacement basis. We may make some incremental investment if we do it, though, it's because it's a compelling opportunity. So we'll be very much focused on the returns to shareholders, I think, in the context of the cash that we'll continue to generate. And the fact that we've identified between 100 and 300 units this year, that's effectively ring-fenced upside from an operating cash perspective, even if it's not necessarily coming through on profitability. But as we all know, the share price is trading at a fundamental discount at the moment to what its net asset value is. And we look at our strat land opportunity. We look at the land margin upside that's coming through. And so it's very compelling for us to continue to look at buyback opportunities in that context. Rebecca Parker: I'm Rebecca Parker from Goldman Sachs. Just 2 questions. In terms of your outlet opening program, just wondering if you could talk to a bit around why you're expecting, I guess, outlets to be flat into '27. And I think the guidance for '28 has slipped by about 10 outlets there. And then secondly, on that increased proportion of higher margin land coming through, when do you expect that contribution to have more of a material impact? Is that more into 2028? Or can we start to see that come through in '27? Jason Honeyman: Rebecca, I'll start on outlet numbers. The growth -- let's start with '28, we'll go back to '27. So the growth is a product of our strat land coming through the system. Those 17,000 plots. So if that comes good, we'll get a natural increase in outlet numbers. Outlets are flat this year and next, probably because we had a big jump back in '23, '24, where we opened 80 outlets in 1 financial year. And we've just been buying replacement land. So it's difficult to see how we can grow outlets without that strike coming through. So we've held them flat. And then as long as we get a decent run through the strat planning system, then we're likely to see a little bit of growth again. Shane Doherty: In terms of margin progression, again, it's probably easier to talk about that in the context of how we were planning this before. And we have to take note of what we're hearing at the moment in terms of all the stagflation risks that are there in terms of potential BCI risk and interest rates going up. But we know that, that can also change quickly. So therefore, I think to answer your question most effectively, it's probably worth just talking about what the underlying margin upside that we were seeing coming through on the land bank. So in simple terms, gross margin this year is going to be around 16.3%. We had in our head that, that could be probably getting up to 18%, maybe even 18.5% over the next 2.5 years as you get to FY '28. So you would have been looking at margin progression of probably 17% and then 18%. And I think the big question, Rebecca, that we're all asking is what impact is that 17% now coming under as a result of what's happening globally. I think the comfort that you can take today is that hedging, it seems to be order the day at the moment. Everyone is talking about hedging in the context of BCI and stuff like that. I think our land margin uptick that you're seeing coming through is an effective hedge for what's potentially coming down the track in terms of higher interest rates and potentially higher costs. So that's the most effective way I can answer that question at the moment for you. Jason Honeyman: Can I -- sorry, Rebecca, can I just add to that because we've taken a more sober view of the outlook. We take the view that even if the war stops in the morning, there's still going to be a ripple of cost inflation in the system. That's already in existence. It's unlikely that the trading environment is going to change from a deal led market. So there's no house price inflation in the market. So we've just taken a more cautious realistic view of what's happening in the world. And then we see margin progression probably feeding through back end of '27 into '28. That's a sensible view to take today. Alastair Stewart: Alastair Stewart from Progressive. A couple of questions, please. First, in terms of the trading over the last 2 or 3 weeks, I think we're on week 4 now from what I hear. But in terms of that, you've been clear in terms of the weekly sales rates been holding up. But in terms of anecdote from sites, if there is any reticence anywhere among your potential buyers, is there a trend? Is it more traders up are more comfortable than the first-time buyers? And is there a regional disparity in terms of comfort about the situation? That's the first question. In terms of the second, it's more of a sector-wide question. You're chasing the supply chain for recoveries. Everybody says that. But in terms of the bigger picture, are you and other housebuilders chasing -- do you see more upside in terms of recoveries from, say, big materials groups who have strong balance sheets, but also very strong lawyers? Or is it from the supply chain that probably have very little legal status, but no balance sheet to depend on really? Jason Honeyman: I'm just going to start recoveries with Simon, who can talk -- turn around without a microphone it would be fine. Simon Scougall: Hear me now? That's better. So it's aimed at not just the supply base and their insurance, of course, it is also aimed at the larger suppliers and manufacturers. So we're very actively considering our options there. And there's quite a bit going in that space. I can't say any more at this moment in time, but we are very determined to secure as much recoveries as we can from as wide a pool as possible. Alastair Stewart: But just if you had to take one side of the divide, the big guys, the small guys, who do you think you've got most chance to get? Simon Scougall: Well, it's a real mixed bag because even the small guys as it were, we're looking at them from their insurance position. So it's big guys behind them. So it's a real wide pool that we're looking at. But just to reassure, there's lots going on in that area. Jason Honeyman: And I'll come back to your trading point, Alastair. And I'm not sure I was surprised, but there's certainly resilience amongst our buyers because they have got crisis fatigue. It seems to be -- it's just too often, but I'm not naive enough to think it won't come and get them in the end, but everyone is very sensitive to the news at the moment. So I certainly think that March will continue with -- until we get to the end of March, there will be some decent sales rates we'll deliver. And there's new spring buyers coming to the market, there may be a little more caution where people take the view, well, I might just wait for this war to end because mortgage offers are going to -- mortgage rates are going to come down. So there will be more caution in the market. I don't think significant, but I think it will just take the gloss off the very good sales rates that people in this room have been delivering so far this year. Christopher Millington: Chris Millington, Deutsche. First one, just following on what you just said there, Jason. If we're going to see a slowdown in April, do you think you would have seen anything in inquiries, visitor levels? Is anything happening to that extent at the moment? Well, let's go one at a time. Jason Honeyman: Yes. We've just noticed visitor rates slowed down this week, which leads me to think that's not inquiries. It's what passing traffic. So serious buyers are still there, Chris. So just starting to moderate. And when you say sales start to slow down, I don't think we're going to move back to 2025. I just think the gloss will come off ourselves. We've been working quite hard to deliver that sales rate. But it seems to me it's a little bit inevitable unless something changes in the news, Chris, in the short term. That's my view. Christopher Millington: Next one is about buying land. I mean as you say, you're on replacement, but you're still expending a lot of money. How do you deal with kind of the price cost inputs when you're going through trying to work out whether or not you should be committing to this stuff in times like this? Jason Honeyman: I think that's a very good point. And last October, I spoke to you about we're going to adopt a replacement-only policy, Chris, for land because that was going to help Shane's capital efficiency program. I'm not sure we'll ever do that this year. That's the level of caution. And you're quite right, until I can understand what that ripple of cost inflation that is almost inevitable going to come into the market, it's probably best to buy as little as possible or just the good deals that you've got on the table. That's probably my approach. Christopher Millington: Sorry, I've got 2 more, but one is pretty quick. Affordable. Any sign that market is starting to wake up at all? Or is it still pretty? Jason Honeyman: Yes, murmuring. And certainly, the new grant round that comes into play now and next month has got the housing associations more active. I mean we'd like to materially move that market and start delivering more affordable homes and get building, Chris. But it's moving better. It was stuck. It's now got some life in it. Christopher Millington: And sorry, my last one. Just about this land bank evolution. You've hopefully given that slide about pre-'24 plots, post '24 plots. Perhaps you can give us a little bit of help with the margins in each category or just talk around kind of what benefit that would have given you. Jason Honeyman: Well what I was going to do in -- I might get Simon to do a presentation to you on strat land in October, so we can show in a bit more detail. But sometimes on strat land, there's lots of hope. So I'd like to see those 17,000 plots come through the system. So that crystallizes the land value and the margins, Chris. So certainly, it's margin accretive. I'm not sure we can spell out today what that all means. Can you add anything on that, Shane? Shane Doherty: Simon, do you want to? Simon Scougall: I'll add one quick one there. Back to the margin point that Jason was talking about. Strat land obviously has the benefit to us because you get a discount to market value in the option terms we agree. But the other benefit is that we're not agreeing land value until we've got planning permission, a detailed planning permission. So half of our land bank there hasn't got a land value yet ascertained, which clearly benefits from what we're talking about with the risk in Middle East and build cost inflation, et cetera. We'll agree a price relevance at the time. So it would be better margin protection as well as a consequence of that. Charlie Campbell: Charlie Campbell at Stifel. Just one actually, just on the WIP and obviously, well plans in place to reduce that. And as you said, you've made good progress. Does that get more difficult in a slower sales environment where buyers are more choosy, more careful and maybe want to see more finished stock on the ground. Just wonder how you juggle the WIP reduction in a more difficult market. Jason Honeyman: Can I start? May be you can look at the headlines. Yes. We put the properties on the market, Charlie, that are more advanced. So that's what's for sale. So we're not particularly selling anything other than stock. So we engineer what we sell on those sites. And I wouldn't describe today's market as bad. A selling rate in 2/3 of the U.K. at 0.75. It's not bad at all. It's in the South of England and the Southwest of England, where we're probably a little bit more sensitive to the investment in WIP and sales rate. Are you okay to talk about the headline numbers, please, Shane? Shane Doherty: Yes. Well, I mean, I think you've probably answered the bulk of the question insofar as, look, clearly, there's a volume correlation in terms of how many units you're selling. That's the tightest control you can have around WIP. But we have put a lot of hygiene -- additional hygiene controls in place around WIP spend in itself as well. So clearly, if we're in a situation where unit output wasn't where we anticipate it's going to be next year, that would actually have an impact on with monetization. But we are well set up to manage our WIP spend proactively in relation to that. And we can see that in terms of KPIs that we have in place around a number of foundations, number of unreserved production. All of those percentages are substantially lower than where they were a couple of years ago. So if we maintain those at that level and run our business that way, you will see a commensurate reduction in WIP spend vis-a-vis what you're monetizing. But clearly, the opportunity to get to 10,000 units and doing that without overspending on WIP is where the significant cash monetization opportunity is. Kate Middleton: A few from me, if possible. So Kate Middleton, Panmure Liberum. The first one is just on timber frames and vertical integration. So just wondering how many of the business units are currently utilizing timber frames and whether the rollout is phased or more discretionary and perhaps how that will link in with the new house types that you're bringing in? The second is on cancellation rates and if you've seen any movement on those since the beginning of this year? And just finally, I know you've alluded to no real house price inflation, but just wondering whether on a regional perspective, you're seeing any underlying variation in ASPs at all? Jason Honeyman: Okay. I'll do those. On timber frame, we've started on our journey, and we've got 7 divisions out of 21 feeding into our facility. And we'll -- until we get up to speed and more proficient at it, we'll keep it with just those 7 surrounding the factory. The next step for us was to scale it up within the factory, work 2 or 3 shifts in a day and possibly in the future, build another factory somewhere else in the U.K. That's our thoughts. In terms of cancellations, we've not seen anything yet. Who knows what's going to happen in the month of April? I certainly don't. And sorry, your third question was on. Kate Middleton: Whether you're seeing any regional underlying movements in ASPs? Jason Honeyman: No, we haven't. You always get a good site that's selling really well that you might be a bit braver on. I think the market is sensitive. It's deal led. Our next step won't be to push house prices. It will be to reduce incentives, which is sort of the same thing, but you're keeping your headline the same. So it will be in those better selling areas in Scotland and the North of England, we've discussed as a team, should we reduce incentives down to 2%, for instance. I'm not quite brave enough to do that just yet, but maybe across the spring, early summer. Is that okay? All done? Thank you very much, indeed. Thank you. Shane Doherty: Thank you.
Zach Spencer: Good morning, and thank you for joining Comstock Inc.'s Full Year 2025 results and business outlook. I'm Zach Spencer, Director of External Relations. Today is Tuesday, March 24, 2026, we are streaming live and this session is being recorded. A recording will be posted shortly after we adjourn in the Investor Relations section of our website. Today, we filed our Form 10-K for the year ended December 31, 2025, and issued a press release summarizing year-end results. Both documents are available on our website. As a reminder, Comstock is listed on NYSE American with the ticker LODE. Joining me today are Corrado De Gasperis, Comstock's Chief Executive Officer; and Judd Merrill, Comstock's Chief Financial Officer. After their prepared remarks, we will take questions. We received more than 35 questions in advance of the call. If you have additional questions during the call, please use the Zoom Q&A window, and we will address as many as time allows. Today's discussion will include forward-looking statements. Actual results may differ materially due to risks and uncertainties detailed in our SEC filings. Full risk disclosures can be found in our filings on the Investor Relations page and on the SEC website. With that, it is my pleasure to introduce our Chief Financial Officer, Judd Merrill. Judd you may begin. Judd Merrill: Thanks Zach and thanks for everyone being on this call. I have a few remarks, and then we'll turn it over to Corrado, but I just want to look at the company dashboard here and just announced from a CFO's perspective, 2025 was really a transformational year for Comstock. We really doubled the size -- doubled our asset base. We strengthened and simplified our balance sheet. We eliminated legacy debt and other legacy obligations and we fully positioned the company for its next phase of growth. And our balance sheet really is the strongest it has been and it's positioned to be even stronger as we monetize noncore assets, and it's giving us kind of a speed advantage on our recycling competitors. Our capital structure is also very clean and our shareholder base continues to strengthen. We continue our targeting and our outreach for what is still relatively a less known story. Less known metal story, less known financial execution and monetization priorities. And at the same time, we are beginning to see the early results of that investment, particularly in metals. Our commercialization efforts are moving us into a second more sophisticated phase. Here are some specifics that all freeing up cash and cash equivalents are stood at 56-point -- or approximately $56 million at March 20, 2026. And our common shares outstanding are 74 million shares at March 20, 2026. And this is reflecting the recent offering which ended up being really outstanding, if not transformational. It's a change in our shareholder base with significant Hood River, Gratia, MA Capital, those are just 3 that represent the top -- some of the top investors that we have an engagement with them and support has been amazing, including what we just recently announced enhancements to our Board. And really, all this is critical part of our foundation for building a global multibillion potential company and a testament of the capabilities that we have positioned. We did complete that second oversubscribed equity offering earlier this year, which brought in about $57.5 million gross proceeds, which was approximately $53 million net of offering expenses. And again, this was really driven by the demand from leading institutional investors. And what it does is it removes the largest single risk to the spend needed to capture the solar market. These funds allow us to deploy our first industry scale metals recycling facility without distraction. Secure and permit and fund facility #2, which positions us to corner the entire Southwest market right here from Nevada. We announced and build additional permitted storage sites like California, Ohio, Texas and others accelerate our refining solution and capability, including strategic partners and really position us for the best, fastest monetization of SSOF and our other noncore assets. When we look back when we started 2025, it was with huge developed potential, but really no capital resources and many, many counterparty obligations that we required to able to develop our platforms. We have effectively eliminated those obligations from our balance sheet. We did have revenues too. Comstock Metals had revenues for 2025 that was approximately $1.4 million compared to 2024 which was about $0.4 million. In addition to the reported revenue, we did generate additional billings, approximately $2.2 million in 2025. We call it deferred revenue and that's associated with our early operations. So about $3.5 million for all of 2025, just as we guided to. It's also important to note that our 2025 results included several nonrecurring items associated with the transformation of our balance sheet. These costs include debt conversion and extinguishments as well as noncash impacts from changes in the fair value of derivative instruments, which is all now behind us. So last year was a deliberate effort to simplify our capital structure and eliminate legacy obligations. And these actions, we believe, significantly strengthen the company going forward. And from a liquidity standpoint, we are in a strong position. We believe our current cash, combined with expected revenues from metals recycling later this year and priority asset sales and monetization, all that keeps us strong and in a leading position as we execute on the metals plan. And lastly, we are lining up and diligent seen and positioning more traditional nondilutive sources, which includes grants and industrial bonds, which we will qualify for and we'll have access to once our first facility is up and running this year. So those are my remarks. I'll turn it over now to Corrado to dive deeper into our metals progress and monetization. Corrado De Gasperis: Thanks, Judd. Thanks, everyone, for being here. We probably have a record attendance for this call. So I'm really -- I'm excited about the update. Let me start with the announcement that we made just after the market closed today, which for us is incredibly exciting and encouraging. As Judd mentioned, at the end of January, we had a robustly oversubscribed offering. We had tremendous quality of institutional investors. He named a few, Hood River, MA Capital, Gratia. I mean the list continues on down to a solid 25, 30 institutions that joined. What was even more encouraging was Steve Pei, Gratia, Craig and Mike Kaufman, the interest that was taken in the company is very, very high, including site visits, including reviews and tours of all of our assets and quite frankly, extremely constructive engagement about support and help for how do we position this company to be a truly global, truly dominant, metal recycling company. I think that reflects a view that our technology is differentiated. I think it reflects a view that we have a really, really early adopter head start. I think it reflects a view that we did make good progress with this balance sheet. If you go back to the shareholder letter from last January, it was a tough letter, but the message was we need to clean things up. We need to get recapitalized and we need to fund these growth businesses. So if people go back and look at that letter, we could say, wow, we made huge progress. But now we have that posture. So the hard work is now the execution. And how do you take a platform that's regional? Sure, half of the end-of-life market is in the Southwest region. United States, absolutely Nevada and these Nevada permits and platform positions us to capture it. But it's much bigger than that. The United States has over 1.3 billion panels deployed. They're coming end of life rapidly, and that's only 1/8 of the world. The world has just as big of a dilemma, 8x relative to the U.S. So the conversation was around expanding governance, expanding international business competency, accessing capital markets competency. So we're thrilled to announce the addition of 3 new independent directors. Donald Colvin, who has extensive and frankly, complex financial management background, but a very, very strong solar industry experience being the Chair and a Board member of a public solar manufacturer of global footprint and just the global public company governance posture from chairing boards to chairing audit committees. And then Steve Pei, as I mentioned, with extensive, I mean, quite remarkable capital markets background, entrepreneurial, what was intriguing was the notion of investing in smaller early-stage companies and watching them become national or international successes and watching those values increase dramatically. And then Bob Spence, who has an exceptional background in refining, in recycling and electrification recycling to boot, including international operations, 30-plus international sites in public and international governance experience, both from audit, from acquisition, from oversight. We really could have spent a couple of years working on the searching and recruiting and aligning and onboarding of our Board. We really jump-started that. So I think from a perspective of really, really strong platform that can really handle all of the things that are coming, sweeping across the U.S. We've got a really good plan for that. But this won't stop there. This market is just extraordinary. So we're welcoming our expanded Board. And I guess the final takeaway is when 2 of your top 4 investors are represented on your Board, that screams a lot. We couldn't be more thankful Steve Pei of Gratia. Michael Kaufman at MAK, Craig and the rest of the team that just worked so, so diligently to make all this happen for us. We thank you very, very much. And for 2026, that team, that governance structure, that capital base is aligned, right? We're aligned on these objectives, which is very, very much, first and foremost, to monetize our noncore legacy mining assets. We've gone from a few years ago talking to less than credible people to talking to marginally capable people to now being engaged with very, very serious mining counterparties that absolutely like what we have here, what we've maintained here, which is a great mining district, great resources. If there's any question about this decision, let me put everybody's mind at rest. Every dollar that we take from the mining assets and put into the recycling assets multiplies exponentially. And let's be clear, if we were going to mine these assets it would take $30 million, $40 million, maybe $50 million of capital to put a mine into production. That's with an existing resource and a permitted platform. There would still be a lot to do. So in that context, it's money that doesn't go to solar recycling. That's a nonstarter for us. It never was a starter for us, frankly. But every dollar that we can then pull out of that nonproductive asset and put into the recycling business, I think a few of you heard me say, our mining assets, which we believe have good value and are very attractive, have about 2.5 million ounces of silver in situ just in the Dayton resource alone. And yes, that would take 6 or 7 years to mine once the mine got up and running. 2 of our facilities in Nevada, which we now know where they're going to be and they're up and getting up and running, would produce that much silver annually, okay? That's just 2, not 7. So you can see the difference in throughput and cash generation from what you could call 2 different silver mines. We also want to monetize our noncore legacy real estate. I'm going to give you more transparency on that today simply because we finally came to sufficient progress, both with Sierra Springs' Board and company and with third parties that are very, very interested in these assets. The value is higher, the ownership is higher. So the amount that we're going to monetize here, hopefully, will be pleasantly higher than anyone might have been expecting. So we're going to do both of those things. Green Li-ion, we also want to monetize. It's less within our control. The company is making extraordinary progress, truly exceeded my expectations in terms of their journey to profitability. They have an operating facility in Oklahoma. We own 13% of the company. And they've announced that they're going to move into a public listing in Australia sometime later this year. So once Green Li-ion is successful in its endeavor to becoming a public company, then we'll have a much easier and clearer exit strategy for that investment. We've worked very, very hard on all these monetization items. This is the crux of the corporate objectives. We've had to put more capital into Sierra Springs but at great gain. That wasn't clear before because the deals weren't structured and they weren't announced, but they are now structured. And we've already taken effectively what was just under 17% of Sierra Springs to well over 36%, 37%. That number could end up easily at well over 50% for something that we think has hundreds of millions of dollars of value. We don't think that based on conjecture, there is monster engagement in Northern Nevada right now because if you're able to secure sufficient power to the land, it's in immediate demand. If you're not able to secure sufficient power to the land, there's no interest, okay? So we're on the verge of something very meaningfully here. I think 2026, credibly now, we'll see monetization of mining, monetization of noncore real estate. And frankly, timing couldn't be better. So we're really all about supporting the exponential growth of the metals business, not just for national dominance really for setting the global standard in this recycling business. We crushed it in '25. And when I say we, I mean the metals team, Fortunato, Paul, Kayla, I mean, they got the permits, first of its kind. Leo was absolutely instrumental in supporting us, one of our Board members in navigating through that regulatory regime. We didn't only get first-of-its-kind permits. We were held to what we originally thought was a ridiculously high standard. But now with hindsight, it looks like it will be very difficult for any existing competitor that we know of to even set foot in Nevada and even get permits within 2 years. So to the extent Nevada sits on 50% of the end-of-life market, certainly between now and 2030, now and 2035, wow, we're literally on the beachhead of a battle that doesn't see any competitors anywhere near of what we've positioned here. We don't want to stop in the Southwest region because that's only half the market. We want to get to the rest of the U.S., and that will come, as Judd said, with less resistance and much more rapidly. We also have designed the engineered process for recovering the metals from our tailings. I'll give you a little bit more color on that. But we did that with leveraging a handful of partners between universities and companies that have existing assets and existing infrastructure that allows us to take Fortunato's engineered design and very efficiently test up to a demo, which we hope to have here by the end of this year. So all that work in 2025 really positioned us to move fast, right? So what do we want to do? We want to get this facility up and running. Substantially all of the equipment has arrived. The ovens are arriving now and the ovens literally represent -- I just looked at the final truck schedules, represents 20 full 18-wheelers. So you start to get a sense of the magnitude of this process and these systems. Some of you have come and visited and I'll show some pictures of some of the equipment as it's getting assembled here. But it's all coming in, we're on schedule. It wouldn't be right to say that 3 or 4 weeks of slippage hasn't occurred, but that was already buffered in our schedule. So commissioning in Q1, operating in Q2 holds. We're very happy about that, bringing the thing online. And another thing that's happening is that we're starting to see -- it's almost like if you're in the fourth quarter of a football game, you're starting to see some of our competition, take a knee or move aside. Really, that's an analogy to say that our customers, the true utility scale companies that are now very seriously engaged in a very big end-of-life problem. They're almost only -- they're certainly not talking to the 2 or 3 people that we previously talked about as showing up most often. So there's a really good trend there. Something even more strategic is happening. Some of these institutions are either very, very large or part of even larger organizations, and they've engaged us for more strategic things. You've heard me talk about co-locating on one of the sites or venturing into a third or fourth site. This all ties to getting market share, right? So we want to dominate the market share. We're very happy with how those underlying conversations are going. And we've identified the second site. We are pinning it down, final stages. The permits actually have already been submitted. So we're excited about it. It will be in Clark County. It will be just outside of Las Vegas, exactly where we wanted to position the second site for this Southwest region. And California is permitted up and running. Ohio is coming up in line. Those right now are primarily either storage and/or transition activities, prep activities, logistics activities. There's no processing. There's no processing that we're planning at all for California, but certainly, Ohio would evolve into that, and we're looking as well at a specific site in Texas. So that side of things are moving very, very quickly and we're continuing all of those efforts. '26 is going to be -- as foundational as '25 was '26 is going to show the light. '26 is going to show the large industrial system running. It's going to show it turning profitable. It's going to show volumes increasing. And you're going to see revenue goes from $100,000 a month to $200,000 a month to $1 million a month to $2 million a month. That's our profile for 2026. And we don't see any reason why that isn't going to come together just like that. So we don't need to talk that much about silver demand. Every one of you that I've talked to seems to understand the supply and demand equation for silver and is very bullish on it. Even with some pullback, we're sitting at $70 silver, which is above anything that we've modeled in our process. As I mentioned previously, even at $60 silver, our offtake revenue isn't $125 a ton. It's $375 a ton. So we already have an enhanced profile given the current realities. You see the inside of 600 Lake in this picture, that was 7 months ago. Now when you look at the inside of 600 Lake, it's assembling equipment. That shine that you see on the floor there is an epoxy that we had to lay down that outlines perfectly the footprint of the large system. You can't see the ends of the footprint. It's extremely large, 80, 90, 100 feet of processing, fully integrated, fully automated. We are testing the robotic arms. We are assembling the front-end crushers. We are pulling together all of the equipment. And we're heavily finalizing the grading and the preparation. Fencing is going to go up next week for the storage. And it just gives you some context here. If you're looking at this picture, hopefully, that building there in the background is where our demo facility sits, okay? So we're talking about major -- I kept saying like this enormous expansion or massive expansion for storage, you're starting to get a sense of it. I was annoyed earlier, one of our investors posted 4 beautiful pictures. They must have been circling the site or something. I criticized my team and said, these guys are getting better pictures than I'm getting. So if you're on Twitter or X, you can see some even more elaborate pictures of this development that's happening real time. And the holy grail is not getting $125 a ton for tailings or $375 a ton for tailings. Those numbers reflect us capturing 50% or 60% of the silver value and leaving the silicon metal and leaving the copper and depending on the types of panel, leaving the gallium or the tellurium or the iridium behind, what we've applied it for a grant on and what we've already started the development work on is being able to capture the substantial majority, we'd love to say substantially all of the value from those critical metal recoveries from the tailings. So we've been ridiculously busy site preparing. We've been ridiculously busy receiving equipment. We've been busy expanding the market, and that would be satisfactory. But it's been exceptional that the team has made and forced the capacity to design this refining solution. We don't -- when we say we feel like we're a couple of years ahead in recycling, we're humble about that. We're not arrogant about it. We want to expand it. We want to assume we're 1 day ahead. We don't want to assume we're 2 years ahead. But we're talking about recycling. We're not talking about refining. We don't see anybody even talking about these types of refining solutions. And the reason this is so important, and I think the reason our capital base is so interested is 3.5 million panels last year would load one of our production lines. In 4 years, that number is going to be 33 million. We would need 10 production lines to do that. And I'm not sure if people appreciate it. One production line that $13 million of one production line can do 3.3 million panels a year. But that facility that you just saw, it was permitted for 2.5 production lines, really 3 production lines with the capacity of doing 250,000. So if this Southwest region does anything close to what we think it's going to do, it's doubling the capacity, 2.5x in the capacity of that facility will have literally 0 permitting lead time. 0 permitting lead time. It's already permitted. What it will require, of course, is equipment ordering lead time, which we can let the market tell us when to trigger that. And this is the old map that most of you have seen. But for any of you that haven't, here's Arizona, Nevada, California. These are the 1.3 billion, 1.4 billion panels that are deployed in the U.S. The fatter the circle, the older the panel. That's why these 2 facilities in Nevada are so critical and why we're going after this half of the market so diligently, so vigorously. But an enhanced metal value, you're not talking about $55 million or $60 million of cash flow from one facility running full. You're talking about $75 million to $80 million for one facility running full. And that doesn't consider the enhancement that would come with the refining solution. Now let me just spend a little bit more time on this monetization of noncore assets. Some of you may have seen previously a higher NPV that we calculated for our mining assets. That number was correct. It stays correct. But as I said earlier, these assets take some capital to put into production. As I said earlier, we're engaged with some very, very serious counterparties. They have capital. That's, I guess, the litmus test for me on, are they serious? They have capital. They have capital to deploy, and we're talking about a range of value of, let's say, $50 million or $60 million. We're not necessarily talking about all cash upfront, but we are talking about full monetization. What we would like to do is sell it for all cash or we'll sell it for cash with some very relevant or meaningful milestones. Any dollar that we pull out of nonproductive assets to put in our solar business, we believe, is a home run. With the Sierra Springs, we have been allocating capital to that. You'll see that it increased. But we have agreement now to convert that into ownership at extraordinary values. And I'm going to talk about that a little bit more. I'm going to give you a little bit more color. But I've been busy with this because it's super active, right? Nevada went through a monstrous hyperscale data center expansion. It's listed right now as fifth or sixth in the U.S. with projects under construction with 29 projects under construction, and it's every big name. We have an industrial park very, very close to us, not the Tahoe-Reno Industrial Park. Everybody knows about that. Another one that's very close to us in Silver Springs that is out soliciting industrial lands for this purpose, and they secured access to power other than the grid. The grid is tapped out. The grid is not available until God knows when. So we secured similarly access to that power required some small financial commitment initially, a small bond, $1 million, $1.5 million of posting, which was easy, but it opened up the whole world for us. Now we've got -- I'll be very frank, like I'm behind in being responsive to them. And if that's annoying to you, it should be because it's annoying to me. But the dollars that we're talking about are not $45 million or $50 million like we talked about before. It's a couple of hundred million. And that doesn't include our properties that we own 100% and directly. So as you can see, it's in everybody's interest for us to prioritize and monetize these assets. The mining assets last year, we acquired the Haywood quarry. You see it right here, this Haywood target on the map. We also sold some of the northern properties, which are now taken off of this map. But in selling those northern properties, we also got these green -- there's about 240 acres that we added that fully support and surround both the mining of the Dayton asset and the processing for the Dayton asset. We have those 230 acres at no additional consideration. So between the Haywood property, which is ideal for processing Dayton and those other properties, which fully support the mining and the processing of Dayton, we've made this much more salable much more monetizable. And as I said earlier, we're fully engaged. When we first announced that Haywood purchase, some people were like, I thought we weren't interested in mining. I thought we were trying to monetize the mining. And I just want to make it clear, that's exactly what those moves were designed to position us for. And these properties, they're flat, they're expansive and they're very, very attractive to real miners. So we're really having productive conversations. Judd is getting very, very close, and I really appreciate that helping that support. Now just more transparency on Sierra Springs because there's approval on the Sierra Springs side, right? There is approval for Comstock to take the lead, for Comstock to drive this thing to the finish line, for Comstock to enable this bigger monetization. And of course, Comstock needs to benefit dramatically from that capacity. What where we are is we're sitting in the largest opportunity zone, if not the largest, one of, by far, the largest opportunity zones in the United States. It's not only an expansive amount of land sitting right by Lake Tahoe, the fact that it's 10 miles from the California border and maybe more importantly, 1 truck day away from 7 different states and 75 million people is one of the biggest reasons that all of these data centers and all of these manufacturing companies are locating here. The other reason is that it's the environmental climate is almost perfect for optimal cooling of these data centers. But it's even more than that. It's literally Nevada -- Northern Nevada is literally one of the safest places in the country when it comes to the hazard map or the disaster avoidance map. We don't have hurricanes. We don't have hailstorms. We don't have all of these impediments. And so it's not coincidence that Google, Apple, Microsoft Switch, Tract and at least 2 dozen more are locating here for mega hyperscaling. And for us, it was when USA Parkway was built from a nonexistent road to a dirt road to a 4-lane super highway, connecting Reno right down into Silver Springs where my better lucky than good comment keeps coming out. We were sitting right there ready to receive that ball. It's still somewhat pioneering 2 years ago. Everything was happening in the Tahoe-Reno Industrial Center. Everything is happening up in Fernley. And people kept saying, well, what about Silver Springs? What about Silver Springs? Well, if you look at the map this way, you see this connecting highway. Tesla's gigafactor is really what put us on the map, but the data centers are really what exploded the map. It comes right down to our properties. You see the Comstock load here just 30 minutes down the road, Highway 50, and then you see the congregation of this asset here. I haven't spoken about this much because we spend -- Fortunato and the team spent 110% of their time on Comstock Metals. I like to think I spend 50% of my time supporting Comstock Metals. I want that to be 90% of my time. Judd is handling the monetization of the mining assets. I'm handling the monetization of Sierra Springs. And I think it's also important to say I've never took a penny from Silver Springs. I've never gotten any compensation from Sierra Springs. I only own stock there because I bought it with my own money, and I've agreed to rectify that. Like we are going to align my interest only and solely with LODE. There is no even debate or discussion about it. I've already committed to it, right? What you're going to see with hopefully some foresight, but certainly soon with hindsight is that load investors own something very, very valuable here. As exciting as monetizing something that's worth a couple of hundred million potentially would be, what can be done with that money in solar recycling is a whole other level of excitement. You can read up all the articles about what's happening in Northern Nevada. It's very easy to see them. But what's really important to see is that -- when I talk about these values, I'm not pulling them out of the air. When we first started this thing, we were getting these properties for dirt. I mean, literally dirt cheap with almost like water rights coming for free. But Industrial Park was at $2 to $3, $4 a square foot. Then it was $4 to $5 a square foot. Then it was $6 to $8 a square foot. Then Microsoft lands and starts pushing $10 a square foot. Those are incredible numbers. If those numbers -- if we're even close to those types of numbers, my numbers will be understated. So when Tract CEO came out and said that they're going to invest $100 billion in the next 10 years in Northern Nevada. And that means from the Peru shelf right up here by Switch to right across the street from our properties in Silver Springs. There's 3 major developments that they're breaking ground on right now. If you don't understand it or if you'd like to see it, it will only take you 20 minutes for Reno to see Monster trapped platforms being built and positioned. So that only enhances the value like everything in this area. And if you look at this map, the airport being the blue center, everything else in color around us is part of our portfolio that I want to monetize for us, except the top of #11 here. That's where Microsoft came in. And then right alongside of it, Tract is coming in. So you go from literally being out in the middle of nowhere on the loneliest highway in America to USA Parkway plugging into us to track and Microsoft coming in across the street. I mean it's extraordinarily exciting, but none of it would mean anything if the he Great Basin natural gas transmission company didn't show up 4 months ago and say, we're going to spend a couple of billion dollars, and we're going to expand gas into this area, into firmly into Tri-Center, literally right into Silver Springs. If they didn't come out and say that, we'd still be talking about why the hell are we going to -- why can't we sell these properties. But with that power commitment, the game has changed dramatically, and we're going to see something really exciting happen. So it took a little bit longer than I was expecting. I apologize. But Zach, please let's just jump into Q&A. Zach Spencer: All right. Thank you, Corrado. As I mentioned at the beginning of the call, we received more than 35 questions prior to the call. And I can see that we have a number of additional questions coming through Zoom. And Corrado, you did touch on a lot of these questions that we have. So perhaps you can just provide a little more color. And pardon me if I do repeat the question. Okay. The first question is, how do you allocate your time versus Judd's time versus the rest of the team's time. Corrado De Gasperis: Yes. So I think right now, in fairness, Judd's spending -- obviously, you can see the time we spent from a corporate perspective on recapitalizing and funding and now over the last month or so on the governance. So that's really positive and took a little bit more of our time critically, critically constructive and needed. I think probably I will spend 40% to 50% of my time, and I expect Judd the same on monetizing these noncore assets, okay? It's a priority. And thank God, the metals team is full, and they'll spend 110% of their time. They do nothing but metals all day long and all night long. But I do feel like if we were directly just a solar panel recycling company, just a metal company, we would go from having a strong, capable, sufficient management team to overwhelming force. And so I think ultimately, we'd like to see 80% metals, 20% corporate. But that will only happen once we monetize the assets. So 50% ours, 50% corporate, but that 50% is heavily dedicated to monetizing these assets. And the prerequisites needed to monetize those assets. Zach Spencer: All right, Corrado, thank you for that. What is the pipeline of solar panels that will be available to recycle through the Silver Springs facility once it is open? Corrado De Gasperis: Yes. So that's one of the most major fronts of our efforts. We're signing master service agreements. We're signing master service agreements all the time right now. We've signed a couple of extraordinary ones with e-recyclers, the folks that have already established recycling businesses. That's about 10% to 15% of the market. We generally think about the major utilities as being 80% of the market. And so what's happening right now is we're signing up -- we're -- I don't -- I can't think of a major utility that we've had a setback on -- and that includes NextEra, Florida Light and Power, everyone is pretty familiar with RWE, Nevada Energy, which is a Berkshire Hathaway, Berkshire Energy company, Brookfield. Edison. I mean we're really making hay with signing these folks up, right? The second point is we're signing up. I think we may have just signed up. We're not yet allowed to release it specifically, but one of the largest, if not the largest e-recyclers in the country, right? So those are the people we want to engage. We've also signed up our first actual solar manufacturing company, which I was talking to Don about this as we were going through the Board process. But the solar manufacturers are not really our customers. They do have some amount of breakage and waste. So they're steady Eddie. They ship us a truck or 2 a week, but they're a very, very small part of the end-of-life market. Of course, they're the beginning of life market. But they also point us to their customers, and they also integrate us with their returns. And so that's all coming along. But to answer your question, locking in the customer is the most critical prerequisite, making sure that we're qualified through their audits and their certification processes. It's not a super long lead time process, but it's a pretty meaningful lead time process. So we've been doing that steadily for the last 2 years. And so as I think I mentioned earlier, and there is a breakthrough, too. There's a number of customers who -- their attitude is where you're certified, you're qualified, you're wonderful. When the big machine is up and running, we'll start sending more panels because we want our certificate of destruction pretty rapidly, okay? So but the profile should be a couple of hundred thousand dollars a month to $0.5 million a month to $1 million a month to $2 million a month. $2 million a month is $25 million -- $24 million, $25 million run rate of revenue that will be remarkably profitable, and then we just grow it from there. We still believe that by the end of 2027, Facility #1 will be running full. Facility #2 should be in the 20% to 30% capacity utilization range. But those are really rough estimates, right? Because we don't see a smooth linear up progression here. We see a lot of spiking. We see a lot of deferred maintenance. We see a lot of deferred recycling. So once we click in, then the spikes will be bumpier. We have the capacity to handle it, and then we have the storage to handle it. Now one critical point here. We are now being engaged by not just the largest utilities, but the owners of the largest utilities, very strategic discussions. There is a recognition here that they need to lock up some capacity, right? So it's finally coming through and those hope to have some very meaningful discussions this year. What I mean to say is we're having very meaningful discussions now, very meaningful outcomes this year in terms of what specifically that will mean, right, to forward volumes. It's coming, right? It's just -- it's slower than anyone would ever hope, but the -- setting the foundation is the critical thing. One of the ways I've described this to people is if our business this year was 20,000 or 30,000 tons, the same exact customer flow in 2030 would be 300,000 tons. Right? These are the customers who are going to see a 10x increase in their end of life. They may even be higher because they're going to lead that increase in end of life, the 3.5 million from last year to 33 million in 2030. So we're positioning for great -- almost organic growth. It's kind of a perverse or backwards way of thinking about it, but locking in the customers that really have the biggest installations means locking in the biggest end-of-life replacement scheme. Sorry for that. It was a little long-winded, but... Zach Spencer: This might be a short one for you. Where do we stand with the delivery of the first recycling facility in terms of timing and cost? Corrado De Gasperis: So we have -- I think we received all of our equipment and started to receive the components for the oven. I just -- It was mentioned it earlier, I just looked at the shipping schedules for the ovens. It's literally like 20 monster 18-wheel truckload containers. I was surprised at the magnitude of the logistics, right, to get those ovens to us. Those are starting -- the schedule said they start coming next week. They stop coming within 2 weeks, then we have everything. And then we've already started installation. We've already started testing and commissioning the equipment. If those ovens had arrived 4 weeks ago, they would be sitting around because the sequence is pretty precise in terms of what needs to be installed and tested and then processed. So in that regard, we feel again, maybe 3 or 4 weeks of slippage that was fully buffered in our plans, right? So we'll be up and running in Q2, and I think that's going to be a huge milestone. Zach Spencer: And speaking of Sequence, please review the timetable for the second recycling project. So its initial revenue and probable location. Corrado De Gasperis: Yes. Yes. It's going to be outside of Vegas. Clark County for sure. That's where all the infrastructure is. There's more infrastructure in Clark County in Vegas than there is in Silver Springs, frankly. We have a site. We're in final stages of locking down the terms. We've already submitted the permit because we know where the site is. I think the question is when do we order the equipment. Last time I asked Fortunato, he said as soon as we possibly can because the equipment lead times from -- when we first -- we raised the money in August, we ordered the equipment the next day. We were looking at a 5- to 6-month lead time. It turned out to be 7 to 8, okay? So if 7 to 8 is the real lead time, although I think there's some arguments now that we've gone through this process that it would be shorter, then we probably want to order the equipment sooner rather than later. So if you're quoting equipment in May, you could have it arriving in December, the process should look and feel maybe 3 months faster from a calendar perspective than the first facility or could mirror it very closely, right? Commissioning in Q1, operating in Q2. I'd love to see commissioning in Q4 operating in Q1. And as soon as we order the equipment, we'll be able to communicate that. Zach Spencer: Okay. And sticking with Comstock Metals, you've outlined a 7-facility national model with a central refinery hub. What is the capital requirement per facility at the scale you're targeting? Corrado De Gasperis: So we've always said recycling facility 12 to 15, okay? And really, that range is tied to if we're leasing a facility, it's $13 million. That's where we're ending up, right, with facility #1. If we had to buy a facility, you might have to put a deposit down, it might be $15 million, maybe $16 million at the most. So it's a nice tight range. It's not a lot. $12 million to $15 million, we'll stick with, maybe $13 million to $16 million is buffered. That's a good number. And that's for each facility. As you heard earlier, $75 million plus in cash flow and they're running full. So that profile is beautiful. The central refinery, though, is still conceptual, like we are certainly not going to build 7 refineries. Ideally, there could be 1 maybe very centrally located. For the math on that is if a recycling facility is taking in 100,000 tons and 10% to 15% are tailings, you're going to get midpoint, 12,500 tons of tailings per year per facility. If you have 7 facilities, that's 100,000 tons of tailings. That's a pretty good sized refining operation. You could start with one in Nevada, and that would be -- if you did that, you'd probably either have one big one there or you might have one on the West Coast, Nevada-based, one on the East Coast, then you'd have 2. We don't know the answer to that yet. We still need to get to FID on the engineering, but we're projecting the capital for one large refining operation like that 100,000 ton of intake level to be about $30 million, right? So in the scheme of -- in the universe of refining capital, it's low, right? When people talk about aluminum refineries and pyrolytic refineries and smelters, they think in the billions, like not in our scenario. We're very precise, very fine industrial tailing. So that's more what we're looking like. I hope that answers the question. Zach Spencer: Corrado, pivoting to SSOF. The values sound high. What are the prerequisites for monetizing these assets? And what's the time line? Corrado De Gasperis: Yes. So I think, look, there's probably 5 prerequisites. Let's just think them through. industrially zoned land, check, flat developable land, super check, water rights, check, fiber check, electricity, right? That fifth one is where as we sort of hit the wall, if I could give people context, right, the Great Basin Transmission Company came out with an open bid. This is a FERC-regulated utility bid. We committed to like 50,000 dekatherms a day. I think they got bids for 800,000 dekatherms. So if our number is 300 megawatts, their number is 15x that, 13x that. So that's real. That's certified. That tells you what's happening in Northern Nevada in terms of people needing, wanting and committing capital to power. So what we need to do is we need to close out on the land position. There's still some capital required to do that, close out on the land position, have clean title, clean and final environmental reports. We've already done Phase 1 previously, super clean, so no issues. You just need to be updated, right? Water rights certification we have thousands of acre feet of water rights. That allows for a lot of flexibility with the data centers. Some are -- there was a phase of all electric cooling, then the grids ran out of electricity. Now everybody is hell bent on the technologies that reduce water in data cooling, but you got to have water rights, right? So if we do those 3 things, right, just perfect the land, perfect the power, I feel there's a little capital there, but there is also administrative work, like probably 60 days' worth of work. That timing would be perfect, data room would open up and then 60- to 90-day process. So we're looking at -- we're absolutely looking at 2026, getting this done in 2026. Zach Spencer: Thank you, Corrado. We do have a question on Bioleum management. Please provide an update on the Bioleum team. Corrado De Gasperis: Absolutely. So I think most people appreciate that in March of last year, Marathon Petroleum invested directly into what was previously known as Comstock Fuels. And then in May, a large investor came in with another direct investment. It's about $35 million in total of, call it, Series A investment directly into the newly reestablished Bioleum Corporation. There's a really strong core group of founders, I say 10 people, David Winsness, Rahul Bobbili, but there's Chad, Michael Black. There's a strong group of founders there, but there's an even bigger group. There's probably 40 professionals. And let me just say this. Their whole claim to fame, they're equivalent of Fortunato's zero landfill, highly efficient thermal solution is their ability to unlock lignin in woody biomass. So we call it lignocellulosic technology. But that company's roster includes like Dr. Christian Dahlstrand from Sweden, Dr. Marcus Jawerth from Sweden, Dr. Colin Anson from Madison, Jordan Thutt from Wausau, Dr. Elvis Ebikade from New York, originally from Nigeria, Dana Hatch, Bob Rzmirek, Andrew Hell, these are all chemists and chemical engineers. And then you have Dr. Gregg Beckham at the National Laboratory of the Rockies, previously known as NREL, Dr. Yuriy Roman at MIT. Like you're literally talking about the top 10 lignocellulosic professionals like in the world. And what their coming out with here is the highest yielding lowest carbon ability to take waste into low carbon fuels. But it kind of -- people probably feel -- so that's the management answer, right? Chad Michael Black is the President. Chad is leading this incredible group, right, of primarily engineers and material scientists, right, to final investment decision that allows them to move into biorefining. We haven't gone stealth per se with Bioleum, but there was a concerted effort for them to be independent for them to have their own capital source, for them to ultimately go Series B and IPO. So as you hear me talk about monetizing assets, I don't -- I'm happy to be supportive. I'm happy to be helpful and I am intimate with what they're doing. But their success will be our success, right? We want to put our calories into growing a literally international dominant metal recycling business. Zach Spencer: Thank you, Corrado. Looking at our mining assets, what is the timing on the potential monetization of the mining assets? Would it be a JV deal or something different? Corrado De Gasperis: I think I'm hopeful that the timing is sooner. We are in pretty deep conversations. We are pretty specific around terms. And we're only talking to people that have credible and immediate -- not immediate, but credible and almost immediate access to capital. Like we're not talking about people who are blue skying possibilities here. So the people that we're talking to have done quite a bit of diligence, like, I would say, a tremendous amount. But just from a legal, administrative final processes, you're probably looking at 75 to 90 days. Is it guaranteed -- could something bust for sure, but we're feeling pretty good about it. Zach Spencer: Thank you for that. Pivoting again, is there any intention for issuing additional shares in the near term, resulting in any more dilution? Corrado De Gasperis: No. I would like to repeat, though, what I had said earlier. We had 7 or 8 years of excruciatingly poor access to the capital markets, bad structures, bad efforts, probably with hindsight, using a junior mining penny stock structure to capitalize to high-growth innovative technologies was not the smartest thing in the world. But at the same time, we did it, right? We created an incredible opportunity. And I think our investors that stuck with us and our new investors that came in are really, really, really going to profit from that scenario. If there's a perception that we enjoyed raising the capital that way or the dilution that resulted and even more painfully, the low valuation that comes from having other than intermediate and longer-term capital partners, we hated it. So just in case anybody is curious, like we hated it. But we did get this business launched, and we're running now. But what's more important is we have capital partners. We have capitalized and funded. And I think if we had no noncore assets, the positive of that would be that we would be more fully dedicated to metals. But the positive of having them is, as I said earlier, if we monetize those assets and redeploy them, if we monetize those assets and redeploy them, then we have a bonanza on our hands here. We are derisked from distraction. We are derisked from having to slow down. We see some of our recycling competitors struggling to raise capital. We've seen some take capital from very bad sources and do a 180-degree turnaround on their strategy. So we're just going to keep flying forward, and we don't see any -- we have no -- we don't see any reason looking forward, right, that we would have to raise money. If something unknown happened, and we can talk about it, but like we don't see it unequivocal, no. Zach Spencer: Thank you, Corrado. We're coming up on time, and I think we've covered several important questions. If we did not get to your question, please send it to ir@comstockinc.com. and we'll do our best to respond either directly or we'll post the response on X. For anyone who is not following us on X, our main account is at Comstock Inc. Please follow us. Corrado, before we wrap up, please give us some final thoughts for the final week of Q1 and the rest of 2026. Corrado De Gasperis: Yes. I'm super excited about our new Board members. They've already reached out wanting to start engaging and coming back out to visit. I'm super excited about the work leading up to the annual meeting in May. I think that if you can come to the meeting in person, we're going to take a bus down to Silver Springs. And on the way to Silver Springs, we'll go to the Tahoe Reno Industrial Center and you'll see about 10 million square feet under construction on the way to it. It's probably relevant to point out that 600 Lake Avenue, this incredibly ideal location for solar panel recycling and 800 Lake Avenue, the Monstrous like storage facility right next door, our Sierra Springs properties. Sierra Springs owning those properties allowed us to pivot very, very quickly into the solar recycling business. And I think with hindsight, speed is the winner in all fronts here. And then stay tuned for customer announcements, stay tuned. We're going to -- we'll be more active next week, the week after the week after and the week after with pictures of the ovens, the assemblies, the commissioning and then panels starting to go through the machine. We're really at the inflection point here of 3.5, 4 years of incredibly hard work. So pretty exciting. Zach Spencer: Thank you very much, Corrado. That concludes Comstock's year-end 2025 earnings call and business update. Thank you all for joining us. Corrado De Gasperis: Thank you all.
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