Core Insights - Cathexis successfully completed the sale of Yondr Group to DigitalBridge and La Caisse for $5.8 billion, marking a successful exit for Cathexis since founding Yondr in 2018 [1][2] Company Overview - Yondr Group is a global developer, owner, and operator of hyperscale data centers, focusing on meeting the complex capacity demands of major technology companies [2][5] - The company has over 420MW of committed capacity for hyperscalers and additional land for potential capacity exceeding 1GW, positioning it well to benefit from the growing demand for advanced data processing [2] Leadership and Transition - William Harrison, CEO of Cathexis, expressed pride in Yondr's journey and confidence in DigitalBridge and La Caisse as partners for Yondr's next growth phase [3] - New leadership appointments at Yondr include Aaron Wangenheim as CEO and Sandip Mahajan as CFO, tasked with leading the company through its next phase with the new owners [3] Investment Strategy - Cathexis is a private investment holding company with a value-oriented and opportunistic investment strategy, focusing on private equity, growth equity, and venture capital across various sectors including data centers [4]

Financial Data and Key Metrics Changes - Revenue for the quarter was $42,400,000, reflecting a subscriber growth of 3.3% across the global customer base [3] - Adjusted EBITDA increased 17% year over year to $12,700,000, representing an adjusted EBITDA margin of 30.2% [4] - Total revenue was $42,200,000, down slightly from $43,000,000 in the prior year period due to the expiration of a customer contract [13] - Adjusted gross profit was $33,400,000 or 79% of total revenue, benefiting from cost efficiencies [14] - Net loss was $3,800,000 or a negative $0.37 per share, primarily due to $5,600,000 in non-cash foreign exchange losses [15] - Cash and cash equivalents were $29,100,000 as of 03/31/2025, with free cash flow at negative $3,000,000 [16] Business Line Data and Key Metrics Changes - Quarterly recurring revenue was 93.1% of total revenue, indicating a stable cloud business model [13] - Cloud subscriber growth was 3.3%, driven by demand for the personal cloud platform [13] Market Data and Key Metrics Changes - The company is seeing accelerated adoption at AT&T through streamlined digital onboarding, increasing cloud awareness and elevating take rates [8] - Positive retail sales momentum for Anshin Data Box at SoftBank resulted in subscriber additions ahead of expectations [9] - Verizon's cloud offer transition to a premium My Plan PERC has led to continued growth in cloud PERC adoption [9] Company Strategy and Development Direction - The strategic transformation to a leading global cloud solutions provider has resulted in a more predictable and stable business model [3] - The company is focused on enhancing its personal cloud platform and pursuing growth opportunities, supported by a new $200,000,000 term loan [6] - The company is optimistic about new customer prospects and aims for double-digit revenue growth in the future [11] Management Comments on Operating Environment and Future Outlook - Management reiterated annual guidance metrics despite challenging macroeconomic conditions, including tariffs and global trade uncertainties [4] - The company is closely monitoring industry headwinds, particularly tariffs that could impact device costs and upgrade cycles [12] - Management expressed confidence in the sales pipeline, which is stronger than the previous quarter [11] Other Important Information - The company completed a refinancing of its debt, strengthening its capital structure and extending debt maturity to 2029 [6] - The company is committed to cost control, having cut overall operational expenses by 11.5% year over year [6] Q&A Session Summary Question: Cost structure and further reductions - Management believes the current cost structure is largely where it wants it to be, with major reductions made at the end of 2023 and 2024 [20] Question: New customer prospects - Opportunities for new customers are global, with active conversations in the U.S., Asia Pacific, Europe, and Africa [22] Question: Expected free cash flow - Free cash flow is expected to be between $11,000,000 and $16,000,000 for the year, with a consistent performance anticipated [26] Question: Growth comparison between AT&T and SoftBank - Both AT&T and SoftBank are growing at a healthy pace, contributing significantly to the first quarter's growth [27] Question: Modeling gross margins - Adjusted gross margins are expected to remain between 78% and 80% throughout the year [28]