Research Frontiers (NasdaqCM:REFR) Q4 2025 Earnings call March 05, 2026 04:30 PM ET Company ParticipantsArt Grady - InvestorJeff Harvey - InvestorJoe Harary - President and CEOJohn Nelson - InvestorMichael Forster - InvestorOperatorGood afternoon. Welcome to Research Frontiers investor conference call to discuss the fourth quarter and year-end 2025 results of operations and recent developments. The company will be answering many of the questions that were emailed to it prior to this conference call, either ...

Research Frontiers (NasdaqCM:REFR) Q4 2025 Earnings call March 05, 2026 04:30 PM ET Speaker4Good afternoon. Welcome to Research Frontiers investor conference call to discuss the fourth quarter and year-end 2025 results of operations and recent developments. The company will be answering many of the questions that were emailed to it prior to this conference call, either in their presentation or as part of the Q&A session at the end. In some cases, the company has responded directly to email questions prior t ...

Group 1: Market Demand and EV Strategy - High-end luxury sports car makers are assessing the demand for electric vehicles (EVs), with Lamborghini indicating a minimal market for electric supercars, while Ferrari is moving forward with its EV plans despite downsizing them [1][4] - The global push for electrification is challenging automakers to balance investments in EV technology with the preferences of customers who may be hesitant or uninterested in EVs [2] Group 2: Ferrari's Market Position and Sales - Ferrari sells approximately 14,000 cars annually, yet its market value surpasses that of Lamborghini's parent company, Volkswagen Group, due to the high price range of its vehicles, starting from the low hundreds of thousands to millions [3] - Ferrari has revised its expectations for EV sales to 20% of total sales, halving its previous target, while continuing to produce internal combustion vehicles, including its renowned 12-cylinder engines [4] Group 3: Analyst Insights - Analysts recognize Ferrari as one of the most successful companies in Europe, not just in the automotive sector, highlighting its overall success [4] - The strategy of Ferrari is seen as a way to hedge its bets and cater to a diverse customer demographic while maintaining its core identity centered around internal combustion engine cars [5]

Group 1 - Ferrari N.V. has announced the agenda and explanatory notes for the 2026 Annual General Meeting of Shareholders (AGM) scheduled for April 15, 2026, in Amsterdam at 9:00 a.m. CEST [1] - The AGM materials, including audited financial statements, are available on Ferrari's corporate website and can be requested in hard copy free of charge by shareholders [2] - The 2025 Annual Report and the annual report on Form 20-F are also accessible on the corporate website and through the SEC's EDGAR database [2]

Core Insights - The acquisition of Veloce Media Group for $61 million is expected to significantly enhance SEGG Media's revenue, with projections of over $20 million in revenue for 2026 [1][2][8] Revenue Expansion - The acquisition materially expands SEGG Media's top line and strengthens its international presence, transitioning into a global sports and digital media platform [2][12] - Veloce operates a diversified revenue model across five core verticals, reducing dependency on single revenue streams and creating cross-selling opportunities [3][8] Digital Media Network - Veloce's media network includes over 45 racing and gaming channels globally, generating $620,000 in revenue since the launch of its creator agency division in 2025 [4][10] - The creator agency has established partnerships with major brands such as Audi, Ferrari, and Mercedes-Benz, enhancing direct-to-consumer engagement [4][10] Quadrant Growth - Quadrant, acquired in July 2025, is a key growth driver, leveraging commercial assets and a creator network to deliver sponsorship-driven and consumer-driven revenue streams [5][12] Esports and Sustainable Motorsport - Veloce maintains a leadership position in esports and sim racing, generating $3.36 million in revenue from fee-for-service and sponsorship in 2025 [6][10] - The company has also established credentials in sustainable motorsport, with confirmed participation in the FIA Hydrogen World Cup in 2026 [7][10] Strategic Impact - The acquisition enhances SEGG Media's consolidated revenue base and supports its strategic objective of building a scalable, cash-generative international sports and digital media platform [12][17] - Management's focus for 2026 includes integrating Veloce into SEGG Media's broader ecosystem and driving margin expansion through operational integration [13][17]

Core Insights - SEGG Media has acquired a controlling interest in Veloce Media Group for $61 million, significantly enhancing its revenue streams and international presence [1][2] - The acquisition is expected to generate over $20 million in revenue for SEGG Media in 2026, driven by Veloce and its subsidiary Quadrant [2][10] Revenue Model - Veloce operates a multi-pillar revenue model across five core verticals, reducing dependency on single revenue streams and creating cross-selling opportunities [3] - In 2025, Veloce's media network generated $2.17 million in digital advertising revenue and hundreds of millions of views across its channels [4] - The creator agency division has generated $620,000 in revenue since its inception, with partnerships with major brands like Audi and Ferrari [4] Quadrant Expansion - Quadrant, acquired in July 2025, is a key growth driver, combining athlete-led brand equity and digital engagement to create diverse revenue streams [5] Leadership in Esports and Sustainable Motorsport - Veloce holds a leadership position in esports and sim racing, providing services for Formula 1 teams and operating its own professional esports events [6] - The company has established credentials in sustainable motorsport, previously operating a championship-leading Extreme E team and entering the FIA Hydrogen World Cup in 2026 [9] Financial Performance - In the second half of 2025, Veloce achieved 1 billion brand impressions and generated $2.45 million in partnership and digital revenue [7] - The company also generated $3.36 million in fee-for-service and sponsorship revenue from its development academy in 2025 [8] Strategic Impact - The acquisition of Veloce enhances SEGG Media's consolidated revenue base and supports its goal of building a scalable international sports and digital media platform [13] - Management's priorities for 2026 include expanding international sponsorship partnerships and integrating Veloce into SEGG Media's ecosystem [14][17]

Core Insights - Ferrari N.V. has published its 2025 Annual Report and filed its annual report on Form 20-F with the United States Securities and Exchange Commission, which includes financial statements for the fiscal year ended December 31, 2025 [1] - The 2025 Sustainability Statement, prepared voluntarily in accordance with the European Sustainability Reporting Standard (ESRS), is included in the 2025 Annual Report [1] Financial Information - The 2025 Annual Report and the annual report on Form 20-F are accessible under the Investors section on Ferrari's corporate website, where they can be viewed and downloaded [2] - Shareholders can request a hard copy of the audited financial statements free of charge [2] Availability - The 2025 Annual Report, which includes information regarding The Netherlands as the Home Member State, is available on Ferrari's corporate website and the SEC's EDGAR database [3]

Group 1 - Ferrari N.V. announced the publication of its 2025 Annual Report and filed its annual report on Form 20-F with the United States Securities and Exchange Commission, including financial statements for the fiscal year ended December 31, 2025 [1] - The 2025 Sustainability Statement, prepared voluntarily in accordance with the European Sustainability Reporting Standard (ESRS), is included in the 2025 Annual Report [1] - The 2025 Annual Report and Form 20-F are available for viewing and downloading on Ferrari's corporate website under the Investors section [2] Group 2 - Shareholders can request a hard copy of the 2025 Annual Report, which includes audited financial statements, free of charge [2] - The 2025 Annual Report includes information regarding The Netherlands as the Home Member State [2] - Additional information can be accessed through the company's media relations contact [2]

Sales and Shipments - Annual shipments of new cars increased from 7,255 units in 2014 to 13,663 units in 2023, with projections of 13,752 units in 2024 and 13,640 units in 2025[478]. - In 2025, approximately 84% of new cars were sold to clients who already owned at least one Ferrari, indicating strong brand loyalty[478]. - Total shipments in 2025 were 13,640 cars, a decrease of 112 units or 0.8% compared to 2024, with the 296 GTS, Purosangue, and Roma Spider being the primary drivers[530]. Financial Performance - Net revenues for 2025 were €7,146 million, an increase of €469 million or 7.0 percent compared to €6,677 million for 2024[527]. - Net revenues from cars and spare parts for 2025 were €6,005 million, an increase of €277 million or 4.8 percent compared to €5,728 million for 2024[528]. - Sponsorship, commercial, and brand revenues increased from €670 million in 2024 to €820 million in 2025, representing a growth of 22.4 percent[504]. - Operating profit (EBIT) for 2025 was €2,110 million, representing 29.5 percent of net revenues, an increase from €1,888 million or 28.3 percent in 2024[523]. - Net profit for 2025 reached €1,600 million, an increase of 4.8% from €1,526 million in 2024 and 27.3% from €1,257 million in 2023[620]. Research and Development - Capitalized development costs amounted to €421 million in 2025, €476 million in 2024, and €448 million in 2023, with capitalized costs as a percentage of total R&D decreasing from 45.8% in 2024 to 41.5% in 2025[495]. - Total research and development incurred was €1,014 million in 2025, with €593 million expensed and €421 million capitalized[496]. - Research and development costs for 2025 were €919 million, which is 12.9 percent of net revenues, compared to €894 million or 13.4 percent in 2024[523]. - The company aims to integrate hybrid and electric technologies across its product portfolio, including the launch of the Ferrari Luce, its first full electric model[490]. Costs and Expenses - Cost of sales for 2025 was €3,453 million, accounting for 48.3 percent of net revenues, compared to €3,330 million or 49.9 percent in 2024[523]. - Selling, general and administrative costs for 2025 were €642 million, an increase of €81 million or 14.5%, representing 9.0% of net revenues[545]. - Financial income for 2025 was €168 million, while financial expenses increased to €214 million, resulting in net financial expenses of €46 million[523]. Cash Flow and Investments - Cash flows from operating activities for 2025 were €2,349 million, primarily due to an increase in net profit excluding non-cash items of €217 million[581]. - Capital expenditures for the year ended December 31, 2025, totaled €1,013 million, compared to €1,064 million in 2024 and €911 million in 2023, reflecting ongoing investments in product portfolio and infrastructure[597]. - Free Cash Flow from Industrial Activities for 2025 was €1,200 million, compared to €1,100 million in 2024, indicating a growth of 9.1%[645]. Shareholder Information - Exor is the largest shareholder with a 21.33% stake, translating to approximately 32.32% voting power due to the loyalty voting mechanism[655]. - As of February 4, 2026, approximately 54.31 million Ferrari common shares, or 28.00% of the outstanding shares, were held in the United States[664]. - The Ferrari Family's right of first offer is limited to prevent them from acquiring more than 30% voting interest in common shares[673].

Financial Reporting - Ferrari N.V. filed its report under Form 20-F for the month of February 2026[2] - The report is signed by Chief Financial Officer Antonio Picca Piccon, indicating official financial disclosures[6] Performance Metrics - The press release issued on February 19, 2026, contains key financial updates and performance metrics[3]