Financial Data and Key Metrics Changes - Net sales for fiscal year 2025 increased by 4% to $20.5 million compared to $19.7 million for fiscal year 2024 [29] - Gross profit increased by 1% year over year to $9.74 million, but gross profit percentage decreased to 47.5% from 50% in the prior year [29] - Net income for fiscal year 2025 was $1.2 million or $0.08 per share, down from $1.4 million or $0.09 per share in the prior year [33] Business Line Data and Key Metrics Changes - Integrated coating system sales increased by 28% or $814,000 to $3.7 million, driven by success in the clean energy market [15] - Multi-axis coating systems saw sales grow by 6% or $603,000 to $10.7 million for the full fiscal year [18] - Medical sales declined by 22% for fiscal year 2025, primarily due to lower demand for stent and balloon coating systems [21] Market Data and Key Metrics Changes - Sales to the alternative clean energy market grew by 64% over the prior fiscal year [20] - U.S. and Canadian sales increased by 15% or $1.63 million, driven by the delivery of high ASP systems [23] - Latin America sales decreased by 34% or $412,000, influenced by a prior year float glass coating system sale that did not repeat [24] Company Strategy and Development Direction - The company is focusing on expanding into the clean energy sector, with significant growth in advanced solar cells and carbon capture applications [8] - A strategic shift to larger, more complex systems has broadened the addressable market and increased average unit selling prices [7] - The company is optimistic about future demand in the medical and semiconductor markets, leveraging expertise developed in clean energy [61] Management's Comments on Operating Environment and Future Outlook - Management noted some apprehension in the U.S. clean energy sector regarding order placements, but emphasized strong demand in the EU and Asia [45][47] - The company expects continued revenue growth and profitability in the first half of fiscal year 2026, supported by a solid backlog of $8.6 million [12][26] - Visibility into full-year revenue remains limited due to evolving conditions in the clean energy sector and potential tariff impacts [16] Other Important Information - The company invested $2.7 million in R&D for the fiscal year, down from $2.9 million in the prior year [27] - The company maintains a strong cash position with $11.9 million in cash, cash equivalents, and marketable securities, and no debt on the balance sheet [34] Q&A Session Summary Question: Clarification on backlog related to Alt Energy - Management confirmed that there are eight systems in backlog from the clean energy sector, all expected to ship in the current fiscal year [40] Question: Visibility on demand and potential pullback - Management acknowledged some apprehension in the U.S. clean energy sector but noted that the majority of their customers are financially stable [45][46] Question: Opportunities driving backlog in upcoming months - Management highlighted strong momentum in the medical and semiconductor sectors, with ongoing demand for high ASP products [60] Question: Medical market growth and geographical expansion - Management indicated that growth in the medical market is primarily coming from the U.S. and EU, with a shift towards more complex systems [78] Question: Semiconductor market commentary - Management noted that they are offering unique solutions that competitors cannot provide, which is driving progress in the semiconductor sector [83]

Financial Data and Key Metrics Changes - Consolidated net revenue decreased by 7% year over year to $555 million [21] - Consolidated AOI declined by 30% to $104 million, with a margin of 19% [21] - Adjusted EPS was reported at $0.52 [21] - Free cash flow for the quarter was $94 million, on track to achieve approximately $220 million for the full year [20][32] Business Line Data and Key Metrics Changes - Domestic operations revenue decreased by 7% to $486 million, with subscription revenue down by 3% due to a 12% decline in affiliate revenue, partially offset by 8% growth in streaming revenue [21][22] - Advertising revenue in domestic operations decreased by 15% year over year, primarily due to lower linear ratings [26] - International revenue decreased by 7% to $70 million, with subscription revenue down by 12% due to the non-renewal with Movistar in Spain [28] Market Data and Key Metrics Changes - Streaming subscribers remained flat at 10.2 million compared to the prior year, with a slight decline from 10.4 million at the end of 2024 [24][25] - Advertising revenue from streaming is still in the low single digits but provides incremental revenue opportunities [50] Company Strategy and Development Direction - The company focuses on programming, partnerships, and profitability, emphasizing the generation of free cash flow [6][34] - Plans to launch an ad-supported version of Shudder and a new fast channel, Acorn TV Mysteries, to enhance audience engagement and advertising opportunities [10][12] - The company is committed to maintaining a strong balance sheet with no bond maturities until 2029 and over $1 billion in total liquidity [30] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the advertising market despite macroeconomic uncertainties, noting strong engagement with advertising partners [26][34] - The company anticipates revenue growth from streaming due to pricing actions and new series debuts [60][62] - Management acknowledges challenges in the linear advertising market but believes in the strength of their programming and advanced advertising capabilities [64] Other Important Information - The company has made refinements to its streaming subscriber definitions to better reflect its distribution strategy [22] - The company is focused on creating high-quality programming while maintaining cost efficiency [72] Q&A Session Summary Question: Can you tell us about the streaming subscribers coming in through bundled video packages? - Management expressed satisfaction with the integration with Charter and the anticipated take rates for embedded streaming services [37] Question: Are you seeing any risk of cannibalization on the a la carte side? - Management believes that expanding distribution will create a healthier video ecosystem and additional revenue opportunities [40] Question: How much of your advertising is coming from streaming? - Streaming advertising contributes incremental revenue, with a focus on integrated partnerships [50] Question: When will you lap the subscription revenue issues from the Spanish drop? - Management indicated that the impact of the non-renewal with Movistar was anticipated and plans are in place to offset revenue changes [51][53] Question: What are your expectations for content spend and amortization this year? - Management stated that cash content spend is expected to be slightly down, but the volume of productions remains flat year over year [69]

Financial Data and Key Metrics Changes - Consolidated net revenue decreased by 7% year over year to $555 million [21] - Consolidated AOI declined by 30% to $104 million, with a 19% margin [21] - Adjusted EPS was reported at $0.52 [21] - Free cash flow for the quarter was $94 million, on track to achieve approximately $220 million for the full year [20][31] Business Line Data and Key Metrics Changes - Domestic operations revenue decreased by 7% to $486 million, with subscription revenue down by 3% due to a 12% decline in affiliate revenue, partially offset by 8% growth in streaming revenue [21][22] - Advertising revenue in domestic operations decreased by 15% year over year, primarily due to lower linear ratings [25] - International revenue for the first quarter was $70 million, down 7%, with subscription revenue decreasing by 12% due to the non-renewal with Movistar in Spain [27] Market Data and Key Metrics Changes - Streaming subscribers at the end of the quarter were 10.2 million, flat compared to the prior year, with a slight decline from 10.4 million at the end of 2024 [24] - Advertising revenue from streaming is still in the low single digits but provides incremental revenue opportunities [48][49] Company Strategy and Development Direction - The company is focused on programming, partnerships, and profitability, emphasizing the generation of free cash flow [5][32] - Strategic initiatives include launching ad-supported versions of AMC Plus and Shudder, and expanding partnerships with distributors like Charter and Comcast [7][10] - The company aims to enhance its content distribution ecosystem and improve viewer experience through partnerships [36][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic direction despite macroeconomic uncertainties affecting the advertising market [32] - The company anticipates streaming revenue growth to accelerate as the year progresses, driven by pricing actions and new series debuts [25][31] - Management remains vigilant regarding potential impacts from the advertising market but has not seen meaningful indicators suggesting a material pullback [32][44] Other Important Information - The company has a healthy cash position with net debt of $1.5 billion and a consolidated net leverage ratio of 2.9 times [29] - The company has no bond maturities until 2029 and maintains over $1 billion in total liquidity [29] Q&A Session Summary Question: Can you tell us about the streaming subscribers coming in through bundled video packages? - Management is pleased with the integration with Charter and the anticipated take rates for embedded streaming services [35] Question: Are you seeing any risk of cannibalization on the a la carte side? - Management believes that expanding distribution will create a healthier video ecosystem and additional revenue opportunities [38] Question: How much of your advertising is coming from streaming? - Streaming advertising delivers incremental revenue, and the company is confident in its genre-based services [49] Question: When will you lap the subscription revenue issues from the Spanish drop? - Management anticipates growth in the Spanish market with other partners and is optimistic about future relationships with Movistar [50][51] Question: What do you expect content spend and content amortization to be this year? - Content amortization is expected to be slightly lower year over year, with cash content spend also down slightly [69]