Lithium Argentina (NYSE:LAAC) Q4 2025 Earnings call March 23, 2026 10:00 AM ET Company ParticipantsAnthony Taglieri - Equity Research AssociateCorinne Blanchard - Director of Equity ResearchKelly O'Brien - VP of Investor Relations and ESGSam Pigott - President and CEOConference Call ParticipantsBen Isaacson - Managing Director and Equity Research AnalystJoel Jackson - Managing Director and Equity Research AnalystMohamed Sidibé - Equity Research AnalystOperatorHello everyone, and welcome to Lithium Argentina ...

Lithium Argentina (NYSE:LAAC) Q4 2025 Earnings call March 23, 2026 10:00 AM ET Speaker6Hello everyone, and welcome to Lithium Argentina fourth quarter and full year 2025 earnings conference call. Please note that this call is being recorded. After the prepared remarks, there will be a question and answer session. If you'd like to ask a question during that time, please press star followed by one on your telephone keypad. Thank you. I'd now like to hand the call over to Kelly O'Brien, Investor Relations. Ple ...

Financial Performance - In 2025, TextMagic Group generated revenue of €13,549 thousand, a 7% decrease compared to 2024's revenue of €14,533 thousand, primarily due to unfavorable exchange rates [3] - The Group recorded an operating loss of €611 thousand in 2025, a significant decline from the operating profit of €1,844 thousand in 2024, largely attributed to increased depreciation and amortization expenses [4] - EBITDA for 2025 was €4,902 thousand, down from €5,939 thousand in 2024, resulting in an EBITDA margin of 36% compared to 41% in the previous year [5] Operational Changes - The year 2025 saw strategic decisions including the sale of one business line and the initiation of a subsidiary's liquidation, aimed at improving future performance and operational efficiency [2] - The TextMagic team was reduced to 43 employees by December 31, 2025, down from 79 at the end of 2024, with the full impact of personnel cost savings expected to materialize in the following period [6] Future Objectives - For 2026, the Group aims to improve cash flow and increase profitability, focusing on revenue growth and cost efficiency while transforming the marketing strategy of the TextMagic platform [7] - The management proposes to cover the loss for 2025 and distribute dividends of €0.14 per share, totaling €1,205,400, with a voting procedure scheduled to commence on March 25, 2026 [8][9]

Investment Rating - The report maintains a "BUY" rating for Ke Holdings (Beike) with a target price of US$23.00, reflecting a 36.1% upside from the current price of US$16.90 [3][6]. Core Insights - Ke Holdings' 4Q25 revenue declined by 28.7% year-over-year to RMB22.2 billion, aligning with forecasts, while non-GAAP net profit fell 61.5% year-over-year to RMB0.5 billion, exceeding the forecast of RMB0.4 billion [1]. - For 2025, total revenue is projected to grow by 1% year-over-year, but non-GAAP net profit is expected to decline by 30% due to industry challenges [1]. - The company anticipates a recovery in earnings for 2026, with a forecasted non-GAAP net income of RMB7.0 billion, indicating a 39% year-over-year growth [1]. Financial Performance - In FY25, Ke Holdings reported total revenue of RMB94.58 billion, with a slight growth of 1.2% year-over-year, while net profit decreased to RMB2.99 billion, down 26.4% [2]. - The adjusted net profit for FY25 was RMB5.02 billion, reflecting a 30.4% decline year-over-year [2]. - The company expects revenue for FY26 to be RMB89.98 billion, a decrease of 4.9% year-over-year, with a projected recovery in FY27 and FY28 [2]. Operational Efficiency - The report highlights improvements in operational efficiency, with total non-GAAP operating expenses decreasing from RMB5.6 billion in 4Q24 to RMB4.5 billion in 4Q25 [1]. - The contribution margin for home renovation and furnishing services improved to 31.4% in 2025, indicating enhanced operating efficiency [1]. Market Position - Ke Holdings continues to gain market share in the existing home transaction (EHT) business, with a 17% year-over-year decline in orders, which is better than the overall market performance [1]. - The company’s emerging businesses, including home renovation and furnishing, contributed significantly to total revenue, accounting for 43% in 4Q25 compared to 29% in 4Q24 [1]. Industry Outlook - The report notes that while sales in the new home and secondary home markets are improving, a full recovery remains challenging due to ongoing demand issues and high unsold inventory [7]. - For FY2026, new home sales are expected to decline by 6% year-over-year, while secondary home sales are projected to fall by 11% [7].

Financial Data and Key Metrics Changes - Fourth quarter net revenue was $118 million, a decline of 19% year-over-year compared to $446.1 million in the prior year period [15] - Full year net revenue was $319.9 million, a decline of 14% year-over-year compared to $372.8 million in 2024 [16] - Fourth quarter gross margins reached 40.1%, an improvement of nearly 310 basis points year-over-year [15] - Full year gross margins of 37.3% represented an improvement of 270 basis points year-over-year, marking the highest annual level since 2018 [16] - Net income for the fourth quarter was $17.6 million, compared to $20.1 million in the prior year period [15] - Full year net income was $15.7 million, representing a 3% year-over-year decline compared to $16.2 million in 2024 [17] Business Line Data and Key Metrics Changes - The company gained share in its core Turtle Beach headset brand despite overall market softness [5] - The company is launching over 50% more new products in 2026 compared to 2025, with significant releases beginning in Q2 [7][8] - The racing sim product line is performing well, with share gains year-over-year [25] Market Data and Key Metrics Changes - The North American gaming and accessories markets experienced unexpected softness [5] - The company anticipates a strong replacement cycle driven by major game releases, particularly Grand Theft Auto VI, scheduled for late 2026 [6][19] - The industry is entering a console refresh cycle with new platforms expected from major manufacturers [7] Company Strategy and Development Direction - The company implemented comprehensive cost optimization initiatives that drove gross margin expansion [8] - A strategic refinancing of debt lowered the base interest rate on the term loan by approximately 450 basis points, generating annual interest savings of over $2 million [10] - The company is actively assessing opportunistic bolt-on acquisitions to complement its growing platform [12] - The focus for 2026 is to leverage operational gains while positioning for growth as market conditions improve [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the trajectory of the business as it navigates through current market headwinds [7] - The company expects full year 2026 revenue to be in the range of $335 million-$355 million, representing 8% growth at the midpoint compared to 2025 [19] - Management believes the pressures faced in 2025 were cyclical and used the year to strengthen execution and foundation [21] Other Important Information - The company repurchased approximately 1.35 million shares for about $19 million in 2025, returning nearly $47 million to shareholders over the past two years [11][18] - A new 2-year $75 million share repurchase program was authorized, the largest in company history [11] Q&A Session Summary Question: How are the racing sim products performing and what about the 50% more products for 2026? - The racing sim category is performing well with share gains, and the 50% increase in SKUs will be across all categories, including exciting innovations in headsets [25][26] Question: Can you provide a revenue range related to GTA VI? - The second half of the year is expected to be strong, with guidance built on the assumption of GTA VI launching in Q4 [30] Question: What are the expectations for gross margin versus OpEx in 2026? - Continued improvements in gross margin are expected, with a similar OpEx structure to 2025, including investments in technology and brand [35] Question: What is the outlook for retail inventories? - The company ended the year with a lighter inventory position, but does not anticipate further declines in channel inventories [47] Question: What is the leverage threshold comfortable for the company? - A leverage range of 2-2.5 is considered comfortable, with potential for additional financing to enhance flexibility [56] Question: What are the drivers of optimism beyond GTA VI? - Multiple factors contribute to optimism, including an overdue accessories replacement cycle and new product innovations [63]

Financial Data and Key Metrics Changes - In Q4 2025, revenues increased to $437 million from $403 million in Q3, with adjusted EBITDA rising to $61 million and an adjusted EBITDA margin of 14%, compared to $41 million and 10% in Q3 [24][25] - For the full year 2025, revenues totaled $1.94 billion, with adjusted EBITDA of $310 million and an adjusted EBITDA margin of 16% [24] - Free cash flow improved to $14 million in Q4 from -$29 million in Q3, totaling $25 million for the full year 2025 [24][25] Business Line Data and Key Metrics Changes - Stimulation services revenues rose to $384 million in Q4 from $343 million in Q3, with adjusted EBITDA increasing to $33 million and margins improving to 8.7% from 5.7% [25][26] - Proppant production segment revenues surged to $115 million in Q4, up from $76 million in Q3, with adjusted EBITDA doubling to $16 million and margins increasing to 14% from 10.5% [26][27] - Manufacturing segment revenues decreased slightly to $43 million in Q4 from $48 million in Q3, with adjusted EBITDA remaining steady at $4 million [28] Market Data and Key Metrics Changes - The company noted that the completions industry faced challenges in 2025 due to tariff-driven economic uncertainty and OPEC's supply increases, which affected commodity prices and operator activity levels [6][7] - Despite these challenges, the company highlighted a favorable outlook for North American onshore activity, with expectations for increased operator activity to combat natural production declines [8][9] Company Strategy and Development Direction - The company is focused on a $100 million cost optimization program targeting annualized savings, with significant progress already made in labor, non-labor, and capital expenditure efficiencies [10][11][12] - The introduction of the Machina technology platform aims to enhance well optimization and operational efficiency, integrating real-time data and AI-driven decision-making into the completion lifecycle [14][15][23] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning for 2026, citing improved operational momentum and a tightening calendar despite weather-related disruptions in early Q1 [10][19] - The ongoing conflict in the Middle East is expected to impact supply-demand balances, potentially leading to higher oil prices, which could benefit the company [8][9] Other Important Information - The company reported total cash and cash equivalents of approximately $23 million as of December 31, 2025, with total liquidity of approximately $152 million [31] - The company has made amendments to its credit facility to enhance liquidity and flexibility, including reducing amortization payments and extending maturity dates [32][33] Q&A Session Summary Question: Inquiry about new technology rollout and customer education - Management explained that the new technology is installed on every fleet and allows real-time data integration for well optimization, with a focus on increasing the number of open perforations [37][38] Question: Expectations for Q1 performance compared to Q4 - Management indicated that Q1 results are expected to be softer than Q4 due to January disruptions, but operational momentum is building, suggesting potential improvement in Q2 [42][63] Question: Discussion on market activity and operator sentiment - Management noted an increase in discussions with operators and a potential uptick in activity, particularly regarding DUCs being pulled forward, although it remains too early to predict a material increase in rig count [50][51] Question: Clarification on proppant segment demand and operational challenges - Management acknowledged that operational challenges, particularly weather-related disruptions, impacted the proppant segment, but they expect to see improvements as conditions normalize [66]

Financial Data and Key Metrics Changes - In Q4 2025, revenues increased to $437 million from $403 million in Q3, with adjusted EBITDA rising to $61 million and an adjusted EBITDA margin of 14% compared to 10% in Q3 [24][25] - For the full year 2025, revenues totaled $1.94 billion, with adjusted EBITDA of $310 million and an adjusted EBITDA margin of 16% [24] - Free cash flow improved to $14 million in Q4 from -$29 million in Q3, totaling $25 million for the full year 2025 [24][31] Business Line Data and Key Metrics Changes - Stimulation services revenues rose to $384 million in Q4 from $343 million in Q3, with adjusted EBITDA increasing to $33 million and margins improving to 8.7% from 5.7% [25][26] - Proppant production segment revenues surged to $115 million in Q4 from $76 million in Q3, with adjusted EBITDA doubling to $16 million and margins increasing to 14% from 10.5% [26][27] - Manufacturing segment revenues decreased slightly to $43 million in Q4 from $48 million in Q3, with adjusted EBITDA remaining stable at $4 million [28] Market Data and Key Metrics Changes - The company noted that the completions industry faced challenges in 2025 due to tariff-driven economic uncertainty and OPEC's supply increases, which affected commodity prices and operator activity [7][8] - Despite these challenges, the North American onshore activity setup remains compelling, with expectations for increased operator activity to combat natural production declines [8][9] Company Strategy and Development Direction - The company is focused on a $100 million cost optimization program targeting annualized savings, with significant progress reported in labor, non-labor, and capital expenditure efficiencies [10][11][12] - Technology differentiation is a key focus, with the introduction of the Machina optimization suite aimed at enhancing operational efficiency and real-time decision-making [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about emerging from a challenging 2025, highlighting the strength of the business model and the benefits of vertical integration [7][9] - The recent geopolitical conflicts are expected to impact supply-demand balances, potentially leading to higher oil prices, which could benefit the company [8][9] Other Important Information - The company reported a total cash and cash equivalents of approximately $23 million as of December 31, 2025, with total liquidity at approximately $152 million [31] - The company has made amendments to its credit facility to enhance liquidity and flexibility heading into 2026 [33] Q&A Session Summary Question: Can you provide more details on the new technology and its rollout? - The technology is installed on every fleet and allows real-time data integration for well optimization, with expectations for a significant educational process for customers [37] Question: What is the expected production uplift from the new technology? - It is too early to quantify production increases, but the focus is on improving the number of open perforations [39][40] Question: How do you see Q2 performance compared to Q4? - Management indicated that Q2 is expected to perform better than Q4 based on current trends [42] Question: Are there more discussions with operators due to the situation in the Middle East? - There has been an increase in discussions and inquiries from operators, particularly regarding DUCs and existing activity [51] Question: What are the plans for utilizing spare capacity in the fleet? - The company plans to remain disciplined with fleet counts and will respond to true calls for increased activity as they arise [72][73]

Financial Data and Key Metrics Changes - The net loss attributable to common stockholders for Q4 2025 was $36.9 million, representing an 11% year-over-year improvement, while the full year net loss was $116.7 million, showing a 24% improvement [22] - Non-GAAP adjusted net loss for Q4 2025 was $17.5 million, a 9% improvement year-over-year, and for the full year, it was $54.1 million, reflecting a 49% improvement [22] - Total consolidated revenues for Q4 2025 were $29.5 million, a 7% year-over-year increase, while for the full year, revenues were $130.4 million, essentially flat compared to the previous year [23] Business Line Data and Key Metrics Changes - Hospitality segment revenues declined by 23% in Q4 2025 on a pro forma basis, primarily due to lower performance at the Tin Building [24] - Entertainment segment revenues increased by 68% year-over-year in Q4 2025, driven by the internalization of Enchant operations in Las Vegas [28] - Landlord segment rental revenue increased by 14% year-over-year in Q4 2025, mainly from private events rental revenue [30] Market Data and Key Metrics Changes - The Seaport neighborhood was approximately 90% leased or programmed as of December 31, 2025, leaving roughly 47,000 sq ft of vacancy [16] - The company anticipates additional stabilized EBITDA of more than $30 million from over 220,000 sq ft leased or programmed since becoming a standalone public company [16] Company Strategy and Development Direction - The company aims to position itself as a scalable, real estate-centric hospitality and entertainment company, focusing on improving existing assets and exploring new opportunities [3] - The Balloon Museum and Meow Wolf are expected to complement each other, enhancing the overall visitor experience at the Seaport [67] - The company plans to expand the Pier 17 event space from 17,500 sq ft to over 40,000 sq ft, targeting premium corporate and social events [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's progress and the potential for long-term financial stability following the sale of 250 Water Street, which eliminated $7 million of annual cash burn [6][9] - The company is optimistic about the upcoming events and programming, including the FIFA World Cup and America's 250-year anniversary, which are expected to drive visitation [52] Other Important Information - The company has a cash balance of over $87 million, which would increase to $163 million pro forma after the sale of 250 Water Street, providing liquidity for future investments [39][40] - The company is exploring the sale of its 21-unit apartment building at 85 South Street, which is nearly fully leased and cash flowing [70] Q&A Session Summary Question: How much of the $163 million cash is committed to current projects? - The company expects to spend around $70 million-$90 million to stabilize current projects, having spent about $30 million in 2025 [43] Question: What are the criteria for the buyback program? - The buyback program will be executed opportunistically, with no specific parameters or timing provided [62][63] Question: How does the Balloon Museum complement the Meow Wolf experience? - Both experiences are seen as complementary, enhancing the overall visitor experience and encouraging longer stays at the Seaport [67] Question: What is the status of the apartment building at 85 South Street? - The building is nearly 100% leased and cash flowing, with significant interest in the marketing process [70]

Core Insights - The company is shifting its corporate strategy from cost optimization to profitable market share-driven growth, supported by a leaner cost structure established in 2025 [1] Financial Performance - A 280 basis point gross margin expansion was achieved through structural cost actions, including facility consolidation, lower storage and handling costs, and the integration of higher-margin acquisitions [1] - There was a 2.2% decline in net sales, attributed to broader discretionary spending trends affecting basketball, outdoor games, and e-commerce channels [1] - Operational discipline led to a 10% year-over-year inventory reduction, reflecting a strategic effort to enhance working capital management and improve free cash flow [1] Market Segmentation - Performance varied by consumer segment, with strong demand for premium brands like Bear Archery and Brunswick, contrasting with weaker demand for opening price point products [1] Strategic Acquisitions - The recent acquisition of Gold Tip archery was confirmed as accretive in the fourth quarter, validating the company's strategy of targeting niche categories with high brand equity [1]

Financial Data and Key Metrics Changes - In 2025, production averaged 28,233 barrels of oil equivalent per day, exceeding guidance despite lower oil prices, with fourth quarter volumes averaging 28,351 barrels of oil equivalent per day [4][5] - Adjusted EBITDA for the full year reached $277 million, with fourth quarter Adjusted EBITDA at $46 million, reflecting lower realized prices and non-recurring items [5][6] - Operating costs averaged $13.4 per barrel for the year, with G&A at $4.8 per barrel, both within guidance [6][7] Business Line Data and Key Metrics Changes - In Colombia, production stabilization was achieved earlier than anticipated, supported by resilient base production in Llanos 34 and successful drilling in Llanos 123 [5] - Argentina's production began contributing ahead of plan, with assets integrated safely into operations [5] - The polymer injection recovery project in Llanos 34 delivered solid results, with plans to expand the project further [6][60] Market Data and Key Metrics Changes - Realized prices averaged $58.1 per BOE in 2025, down from $65.6 per BOE in 2024, reflecting a materially lower oil price environment [5] - Over 84% of 2026 production is hedged through three-way collars, ensuring cash flow protection [7][8] Company Strategy and Development Direction - The company is focused on protecting and maximizing cash-generating assets in Colombia while scaling a transformational unconventional platform in Argentina [10][11] - A significant acquisition of Frontera Energy's Colombian upstream assets is expected to double the reserve base and significantly expand production capacity [9][10] - The company targets production of 44,000-46,000 BOE per day by 2028, with Adjusted EBITDA of approximately $490 million-$520 million [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational platform's resilience and disciplined capital allocation, despite challenges from lower oil prices [6][10] - The board remains committed to strong governance and disciplined capital allocation, with a focus on long-term value creation [12][13] - The company is optimistic about the integration of Frontera's assets and the potential for increased production and cash flow durability [10][11] Other Important Information - The company achieved $32 million in structural cash savings, setting a lower cost base expected to generate annualized savings of approximately $45 million in 2026 and beyond [7] - The board declared a quarterly dividend of $0.03 per share, with plans to reassess shareholder distributions following the normalization of free cash flow [11] Q&A Session Summary Question: What is the expected cost development for the year? - Management indicated that lifting costs are expected to be in the $13-$15 per barrel range for 2026, with G&A around $4 per barrel [25][26] Question: How is the Frontera acquisition situation evolving? - Management confirmed that they are progressing with Frontera and have received necessary approvals, emphasizing the importance of creating long-term value for shareholders [30][33] Question: What is the status of the polymer injection project? - The polymer injection project is progressing well, with plans to incorporate additional wells and expectations of improved recovery factors [60][63] Question: What is the current production status in Argentina? - Management reported that operations in Argentina are advancing well, with plans to start drilling in Vaca Muerta soon, targeting an exit rate of 5,000-6,000 barrels of oil per day by year-end [43][50]