Financial Data and Key Metrics Changes - Total revenues for 2025 were approximately $3.2 million, an increase from $2.3 million in 2024, primarily driven by strong seed sales from the subsidiary Castera [9][26] - Research and development expenses for 2025 were approximately $4.8 million, down from $6.5 million in the same period last year, due to reduced R&D activities at Biomica and the discontinuation of operations at Canonic [10][27] - Total operating expenses for 2025 were approximately $7.7 million, significantly decreased from $11.1 million in the same period last year, attributed to reduced activity levels in subsidiaries [11][29] - The net loss for 2025 was approximately $7.7 million, compared to $9.8 million in the same period last year, reflecting decreased operating expenses and increased financing income [32] Business Line Data and Key Metrics Changes - Castera, the subsidiary responsible for seed sales, was the primary contributor to revenue growth, with revenues recognized for seed sales in 2025 [9][26] - Biomica is focused on completing its clinical trial expected in early 2026 and securing partners for its development programs, holding approximately $4 million in cash [17][21] - Laviv Bio's activities were largely sold to ICL, with a total consideration of $15.25 million, enhancing cash flow for Evogene [14] Market Data and Key Metrics Changes - The company is undergoing a strategic shift to maximize the value of Campus AI, focusing on AI-driven discovery and optimization in pharmaceuticals and agriculture [12][19] - The collaboration with Tel Aviv University aims to develop small molecule therapeutics targeting diseases caused by metabolite accumulation, leveraging Campus AI [13] Company Strategy and Development Direction - The strategic priorities include strengthening Campus AI, expanding collaborations in small molecule drug discovery, and streamlining operational expenses [12][19] - The company plans to establish a dedicated business development arm to accelerate growth in the pharmaceutical vertical and maintain strategic collaborations in agriculture [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the new strategic direction and the potential for increased investor interest as new collaborations are announced [40] - The company expects continued reductions in operating expenses in the third and fourth quarters of 2025 [42] Other Important Information - Evogene raised $4.4 million through an at-the-market facility, enhancing its financial position and providing an operational runway of approximately 18 months [18] - The company is focusing on operational discipline and long-term value creation, with plans to present its updated corporate strategy at industry conferences [23] Q&A Session Summary Question: How much caster seed inventory do you have today, both finished and expected to be finished after the harvest? - The company has a few hundred tons of castor seed ready for sale and plans to utilize its seeds for cultivation to sell grain to partners [35][36] Question: What steps need to occur before you can announce a castor oil business? - The company is currently focused on grain cultivation and selling grain to partners, with existing crushing oil factories eager for castor grain [38] Question: The stock is still low. When will it start going up? - Management indicated that they cannot control the stock market but are finalizing a new company presentation and plan to announce new collaborations that could positively impact stock value [39][40] Question: How representative are operating expenses in Q2 2025 for going forward operations? - Management confirmed that all cost reductions are fully reflected in the numbers, with expectations for continued expense declines [42] Question: What was revenue in Q2 2025? How should we think about peak sales given recent results? - The revenue in Q2 2025 was primarily from Castera, with expectations for future sales growth as the company engages with multiple partners [43][44] Question: For Campus AI platform, what catalyst milestones should we expect in the next twelve to eighteen months? - The company anticipates announcements of new collaborations and breakthroughs in technology development as key milestones [46][49]

Financial Data and Key Metrics Changes - Ituran reported record revenues of $86.8 million for Q2 2025, a 2% increase from $84.9 million in Q2 2024 [12] - Subscription fee revenues increased by 6% year over year to $63.8 million, while product revenues decreased by 6% to $23 million due to a temporary halt in sales during the conflict [13] - Net income for the quarter was $13.5 million, a 2% increase compared to $13.1 million in the same quarter last year, with diluted earnings per share rising to 68 cents [15] Business Line Data and Key Metrics Changes - The subscriber base expanded to 2,548,000, adding 40,000 net subscribers in the quarter, with a target of 220,240 new subscribers for 2025 [5][13] - The company launched new telematics products, including a motorcycle solution, which is gaining traction in various markets [6][8] Market Data and Key Metrics Changes - The geographic revenue breakdown showed Israel contributing 54%, Brazil 23%, and the rest of the world 23% [14] - The strengthening of the US dollar against local currencies had a slight deflationary impact on financial results when denominated in US dollars, but local currency revenues grew by 4% year over year [12][13] Company Strategy and Development Direction - Ituran aims to continue its growth and profitability trajectory, focusing on expanding its subscriber base and launching new products [5] - The company is targeting the motorcycle market in Latin America, with a new partnership with BMW Motoraid in Brazil to enhance its market presence [7][8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of the war between Israel and Iran, which caused a temporary economic standstill but expressed confidence in ongoing growth [4][11] - The company remains optimistic about achieving its subscriber growth targets and exploring new avenues for business acceleration [11] Other Important Information - Ituran generated $22.4 million in operating cash flow during the quarter and declared a dividend of $10 million, reflecting strong profitability and cash flow [9][10] - The board of directors increased the dividend policy by 25% at the end of the previous year, now providing a solid annualized return of around 5% [10] Q&A Session Summary Question: How should growth be viewed in the second half, and is there a bounce back in Israel? - Management confirmed they are on track for subscriber growth of 220,000 to 240,000 in the second half of the year [20] Question: Can you provide more details on the BMW deal and its potential customer scope? - The partnership with BMW in Brazil is expected to yield tens of thousands of new subscribers annually, as they will install Ituran's motorcycle solution [21] Question: How should financial expenses be viewed going forward? - Financial expenses are linked to foreign exchange rates and cash deposits, with the current quarter's expenses affected by the strengthening of the Israeli shekel [22]

Financial Data and Key Metrics Changes - Total sales for the second quarter were $45.3 billion, an increase of 4.9% from the same period last year [5][25]. - Comparable sales increased by 1% year-over-year, with U.S. comps rising by 1.4% [5][25]. - Adjusted diluted earnings per share were $4.68, slightly up from $4.67 in the previous year [6][28]. - Gross margin was 33.4%, a slight increase compared to the previous year [26]. - Operating margin decreased to 14.5% from 15.1% in the previous year [27]. - Return on invested capital was 27.2%, down from 31.9% in the previous year [29]. Business Line Data and Key Metrics Changes - 12 out of 16 merchandising departments posted positive comps, including categories like storage, bath, hardware, and building materials [17][18]. - The average ticket increased by 1.4%, while comp transactions decreased by 0.4% [17]. - Online comp sales increased approximately 12% compared to the previous year [19]. Market Data and Key Metrics Changes - In local currency, Canada and Mexico posted positive comps, with total company comps negatively impacted by foreign exchange rates by approximately 40 basis points [26]. - The company experienced a positive comp performance in July, with U.S. comps at 3.3% [25][26]. Company Strategy and Development Direction - The company is focused on enhancing customer experience through technology investments and building a pro ecosystem to serve complex purchases [7][10]. - The acquisition of GMS is expected to complement the existing SRS business and broaden distribution capabilities [8][9]. - The company aims to grow market share by diversifying product sourcing and improving supply chain flexibility [10]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating market uncertainties and highlighted strong underlying demand for home improvement projects [9][30]. - The company reaffirmed its fiscal 2025 guidance, expecting total sales growth of approximately 2.8% and comp sales growth of about 1% [30][31]. - Management noted that economic uncertainty remains a significant factor affecting larger remodeling projects [44][72]. Other Important Information - The company opened three new stores, bringing the total store count to 2,353 [28]. - Merchandise inventories were $24.8 billion, up approximately $1.8 billion compared to the previous year [28]. Q&A Session Summary Question: Improvement in July and comp expectations for the second half - Management noted that July's improvement was due to better weather and broader engagement across the portfolio, with expectations for a slight uptick in comps for the second half [35][39]. Question: Potential impact of rate cuts and tax reform - Management indicated that lower mortgage rates could help alleviate the frozen housing market, but economic uncertainty remains the primary reason for deferring large projects [43][44]. Question: Clarity on large project activity recovery - Management expressed optimism about potential rate cuts and tax reforms but noted that the guidance does not assume improvements in larger project outlooks [48][49]. Question: Pricing and promotional activity - Management stated that over 50% of products are sourced domestically, and while some price movements are expected due to tariffs, the focus remains on maintaining value for customers [52][100]. Question: Category performance and regional insights - Management highlighted that 12 of 16 categories posted positive comps, with notable strength in pro-heavy categories and seasonal DIY products [17][21].

Financial Data and Key Metrics Changes - For the fourth quarter, net sales were $114.6 million, representing a growth of 3.4% compared to $110.8 million in the prior year quarter, marking the seventh consecutive quarter of sales growth [14] - The adjusted operating margin was 9% in the quarter, a 340 basis point improvement over the prior year quarter, while the adjusted operating profit increased by 71% to $31.2 million for the fiscal year [5][7] - Free cash flow for the quarter was $19.1 million, contributing to an ending cash balance of $40 million [6][7] Business Line Data and Key Metrics Changes - Growth in core markets was driven by strategic accounts and new product introductions, particularly in the health and wellness category with ZCLINER products [5] - The company experienced a sales order backlog of $66.5 million at the end of the period, an increase of $6.9 million compared to the prior year [14] Market Data and Key Metrics Changes - The company noted soft market conditions and tariff uncertainty as industry headwinds, yet managed to achieve sales growth in both core and new markets [4][10] - The demand environment was characterized as "choppy," with retail traffic being soft during the summer months, influenced by uncertainty around tariffs and inflation [40] Company Strategy and Development Direction - The company plans to focus on further penetrating the health and wellness and case goods product categories, with an emphasis on innovation and marketing to drive brand awareness [9][10] - Strategic initiatives include enhancing customer experience, product relevance, and faster product launches to maintain growth momentum [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current environment, despite anticipating continued difficult industry conditions [10][21] - The company is actively working on cost savings initiatives to mitigate the impact of tariffs, including supply chain adjustments and pricing actions [11][12] Other Important Information - The company has increased its dividend twice in the past twelve months and maintains a healthy cash balance [7] - The effective tax rate for fiscal year 2026 is expected to be in the range of 25% to 27% [19] Q&A Session Summary Question: Initial reaction to pricing actions or surcharges - Management noted that they are closely collaborating with retailers to understand the impact of pricing changes on demand and believe they are positioned well despite the challenges [25][26] Question: New cost savings initiatives - Management confirmed that they are pursuing cost savings across the supply chain and these initiatives are factored into the first quarter guidance for margins [27][28] Question: Focus on new product innovation - Management indicated that the focus on new product innovation is a continuation of previous efforts, which have been key to their growth success [30] Question: Inventory management - Management expressed confidence in their inventory position and ability to serve customers, while also noting potential incremental costs due to higher tariff rates [31][32] Question: Capital allocation strategy - Management reiterated their capital allocation strategy of reinvesting 70% of operating cash flow back into the business and returning 30% to shareholders [33][34] Question: Demand characterization - Management characterized demand as choppy, influenced by external factors such as tariffs and inflation, but remains optimistic about long-term recovery [40][41]

Financial Data and Key Metrics Changes - Total revenue for the first half of 2025 reached RMB 3,731 million, representing a year-on-year increase of 74.3% [4] - Drug sales achieved RMB 641 million with a year-on-year growth of 53.5% [4][14] - Net loss for 2025 significantly narrowed to RMB 35.6 million, a year-on-year decrease of 86.7% [4][15] - Cash position stood at RMB 7,600 million, equivalent to approximately USD 1,100 million [16] Business Line Data and Key Metrics Changes - The company reported strong performance in its drug sales, particularly from relabotinib, which contributed significantly to revenue growth [14][19] - Tafasitamab was highlighted as a new growth driver, approved for treating DLBCL patients in China [15] - The company is transitioning to a diversified multi-franchise portfolio with several late-stage drivers expected to contribute to long-term revenue growth [15] Market Data and Key Metrics Changes - The market potential for ITP is estimated to be around RMB 1 billion to 1.5 billion in China, while the potential for SLE is around RMB 3 billion [64] - The company anticipates that the first-line CLL indication will significantly enhance its market position and sales potential [62] Company Strategy and Development Direction - The company aims to expand its international presence through strategic collaborations, such as the partnership with Prolyom for developing specific antibodies [17][18] - The focus is on advancing its clinical pipeline, particularly in hematology and autoimmune diseases, with several drugs in late-stage trials [24][50] - The company is committed to maintaining a strong R&D backbone, with R&D expenses increasing to RMB 450 million in the first half of 2025 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving at least 35% growth for Orillah in 2025, driven by strong market demand and unique product positioning [21][62] - The company is optimistic about the upcoming approvals and market entries for its drugs, particularly in the autoimmune disease segment [23][64] - Management highlighted the importance of patient enrollment and clinical trial progress as critical factors for future success [10][12] Other Important Information - The company has made significant progress in its R&D pipeline, with multiple drugs in various stages of clinical trials, including BCL-2 inhibitors and BTK inhibitors [24][50] - The company is actively pursuing global clinical trials for its drugs, particularly in the AML and MDS indications, which are expected to enhance its market presence [78] Q&A Session Summary Question: Regarding the performance of Orillah and potential guidance adjustments - Management noted that Orillah's revenue exceeded 50% growth in the first half, indicating confidence in surpassing the 35% annual guidance [62][63] Question: Expectations for pricing negotiations related to new indications - Management is preparing for negotiations and believes that the unique value of their products will support strong sales momentum [70][71] Question: R&D expenses outlook considering global trials - Management indicated that R&D expenses are expected to grow by 15% to 20% over the next two years, with a focus on late-stage clinical trials [73][74] Question: Global trial plans for BCL-2 inhibitors - Management clarified that while they are focusing on the Chinese market for first-line CLL, they are prioritizing global trials for AML and MDS due to urgent market needs [78] Question: Progress on lupus indication and phase three trials - Management expects to have top-line results from the phase two trial by September, which will inform decisions on phase three trials [91]

Financial Data and Key Metrics Changes - Total revenue for the first half of 2025 reached RMB 3,731 million, representing a year-on-year increase of 74.3% [4] - Drug sales achieved RMB 641 million with a year-on-year growth of 53.5% [4][13] - Net loss for 2025 significantly narrowed to RMB 35.6 million, a decrease of 86.7% year-on-year [4][15] - Cash position stood at RMB 7,600 million, equivalent to approximately USD 1,100 million [15] Business Line Data and Key Metrics Changes - The company reported strong performance in its hematology oncology segment, particularly with the drug Orillah, which achieved over 50% growth in the first half of 2025 [18] - Tafasitamab was approved as the first CD19 antibody product for treating DLBCL patients in China, contributing to revenue growth [14][18] - The company is transitioning to a diversified multi-franchise portfolio, with several late-stage drivers expected to add durable revenue growth [14] Market Data and Key Metrics Changes - The market potential for ITP is estimated to be around RMB 1 billion to 1.5 billion in China, while the potential for SLE is around RMB 3 billion [60] - The company anticipates significant market opportunities in autoimmune diseases, with a focus on expanding its patient base [22][46] Company Strategy and Development Direction - The company aims to expand its international presence through strategic collaborations, such as the partnership with Prolyom for developing and commercializing ICP B02 [16] - The focus is on advancing its clinical pipeline, particularly in hematology and autoimmune diseases, with several drugs in late-stage trials [15][22] - The company is committed to maintaining a strong R&D backbone, with R&D expenses increasing to RMB 450 million, reflecting its commitment to innovation [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving at least 35% growth for Orillah in 2025, driven by strong market demand and unique product positioning [19] - The company is optimistic about the upcoming approvals and market entries for its drugs, which are expected to significantly enhance revenue streams [14][22] - Management highlighted the importance of patient enrollment in ongoing clinical trials to support future growth [9][10] Other Important Information - The company has made significant progress in its R&D pipeline, with multiple drugs in various stages of clinical trials, including BCL2 inhibitors and BTK inhibitors [5][10] - The company is actively pursuing global trials for its drugs, particularly in the areas of AML and MDS, to capitalize on unmet medical needs [36][41] Q&A Session Summary Question: Regarding Orillah's performance and future guidance - Management confirmed that Orillah achieved over 50% growth in the first half of 2025, exceeding the annual guidance of 35% [58] - The company is confident in its ability to raise guidance based on strong market performance and upcoming product approvals [59] Question: Expectations for pricing negotiations and R&D expenses - Management is preparing for negotiations related to pricing and expects to provide unique value to patients, which will support sales momentum [65] - R&D expenses are projected to increase as the company invests in late-stage clinical trials and global initiatives [69] Question: Global trials for BCL2 inhibitors - Management indicated that while there are excellent results for first-line CLL, the focus will initially be on launching in China before considering global trials [73] Question: Progress on lupus indication and ADC pipeline - Management expects to have top-line results for the lupus indication by September and is optimistic about the ADC pipeline's potential [88][90]

Financial Data and Key Metrics Changes - In Q2 2025, the company facilitated RMB38.99 billion in loans, representing a 10.9% sequential increase and a 71.4% year-over-year growth [6][11] - Total revenue reached RMB2.27 billion, up 17.3% sequentially and 65.6% year-over-year [7][11] - Non-GAAP adjusted net income for Q2 was RMB593.2 million, reflecting a robust year-over-year growth of 58.3% [12][14] - Return on equity improved to approximately 27.9%, indicating enhanced capital efficiency [15] Business Line Data and Key Metrics Changes - The total outstanding loan balance, excluding loans delinquent more than sixty days, reached RMB64.91 billion, a 55.3% increase from Q2 2024 [11] - The total number of loans facilitated increased to approximately 3,720,000, reflecting a growth of 70.8% year-over-year [11] - The average loan size was RMB10,476, with an active borrower base growing to approximately 2,850,000, a notable 73.7% increase year-over-year [11] Market Data and Key Metrics Changes - The thirty-one to sixty-day delinquency rate improved to 1.16%, down from 1.29% a year ago, reflecting nearly a 10% improvement year-over-year [8] - The ninety-one to one hundred and eighty days delinquency rate was 2.91%, substantially lower than the 4.38% in Q2 2024, demonstrating a meaningful 33% reduction year-over-year [8] Company Strategy and Development Direction - The company is focused on expanding market opportunities through new partnerships and enhancing its technology platform and underwriting models [6] - There is a deliberate moderation in growth expectations for 2025, with a projected total return amount of facility and originate in the range of RMB32 billion to RMB34 billion, emphasizing asset quality over pure volume growth [18] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the company's strategic path, emphasizing robust underwriting practices and prudent risk controls [20] - The regulatory environment in China is evolving, and the company is committed to compliance while viewing regulatory changes positively as they support a sustainable industry landscape [18] Other Important Information - The company has a share repurchase program with approximately US$68.2 million remaining under its new US$100 million authorization, effective through November 30, 2026 [16] - A cash dividend of US$0.28 per ADS has been approved, with payments expected around October 15, 2025 [17] Q&A Session Summary Question: Can you provide some light on the pivot from loan growth to asset quality? - Management clarified that asset quality has always been a priority, and while there was an initial focus on loan growth, the emphasis remains on maintaining asset quality [25][26] Question: Do you see opportunities to run the company leaner through artificial intelligence? - The company is already leveraging AI in client management, including collections and customer service, and plans to continue developing AI capabilities to reduce future costs [27][28]

Financial Data and Key Metrics Changes - The company reported Q1 revenue of €8.6 billion, growing 8.4% reported and 4.8% organic, in line with guidance [38] - Adjusted EPS was €1.26, exceeding the midpoint of guidance by €0.03 [42] - Adjusted gross margin was 65.1%, down 80 basis points year over year, but stable compared to Q4 [38] Business Line Data and Key Metrics Changes - Cardiovascular grew 7% this quarter, driven by nearly 50% growth in Cardiac Ablation Solutions [21][22] - Neuroscience grew 3%, with high single-digit growth in neurosurgery and neuromodulation [11][28] - MedSurg grew 2%, with high single-digit growth in Advanced Energy [31] - Diabetes grew 8%, with 11% growth in international markets [34] Market Data and Key Metrics Changes - The U.S. market showed slower growth in certain segments, particularly in diabetes and pelvic health, while international markets performed better [60] - The company expects to ramp up procedures for the SIMPLICITY system following CMS's proposed national coverage decision [25][27] Company Strategy and Development Direction - The company is focused on accelerating growth through innovation and strategic investments in high-growth areas like CAS and Ardian [19][20] - A planned separation of the diabetes business is expected to enhance focus on core businesses and improve revenue and earnings growth [19][37] - New board committees have been established to enhance focus on growth and operational efficiency [48][49] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in accelerating growth in the second half of fiscal 2026, driven by strong demand and new product launches [7][19] - The company anticipates significant revenue growth from its PFA portfolio and other upcoming product launches [13][14] - Management highlighted the importance of maintaining pricing discipline and improving operational efficiencies to support growth [38][45] Other Important Information - The company is increasing investments in R&D, with a 7.7% increase in adjusted R&D spending [40] - The anticipated impact of tariffs has been adjusted, with expectations now at approximately €185 million for fiscal 2026 [44] Q&A Session All Questions and Answers Question: Update on CAS growth and its impact on U.S. growth - Management confirmed that CAS growth is accelerating and will positively impact U.S. growth, despite some segments showing slower growth [56][58] Question: Impact of new board committees on governance and operations - The new committees will provide focused oversight on growth and operational performance, with increased interaction with management expected to drive improvements [68][70] Question: Commitment to CAS annual sales target - Management reaffirmed the commitment to achieving $2 billion in annual CAS sales, indicating strong confidence in the growth trajectory [76][78] Question: Discussion on capital allocation and potential changes - Management indicated that the new board members and committees will facilitate discussions on capital allocation and value creation strategies [81][89] Question: Overall portfolio growth expectations - Management stated that while significant growth opportunities exist, they will not neglect the rest of the business and expect to see incremental growth from various segments [99][100]

Financial Data and Key Metrics Changes - Total full year revenue reached $986 million, exceeding guidance by $11 million, while adjusted EPS was $1.54, surpassing the high end of guidance by $0.11 [14][15] - Fourth quarter net revenue was $258 million, a 1% increase sequentially but a decline from the prior year due to higher fee share from contract renewals [14][15] - GAAP net income was $18 million or $0.22 per share, down from the prior year mainly due to lower revenue [15] - Adjusted EBITDA for the fourth quarter was $71 million, flat sequentially, with a margin of 27.6% [15] Business Line Data and Key Metrics Changes - Supply Chain Services segment performed above expectations, with gross administrative fees growing over 3% in fiscal year 2025, driven by higher contract penetration and onboarding of new members [16][17] - Performance Services segment showed sequential improvement in advisory business, although it was lower compared to the prior year due to rebuilding the sales funnel [18] - Other supply chain services revenue grew by 17% in the co-management business and 15% in the digital supply chain business [17] Market Data and Key Metrics Changes - The company noted increasing demand for margin improvement solutions among member hospitals due to ongoing cost pressures and reimbursement uncertainty [11][12] - The acquisition of Illumicare is expected to enhance the company's ability to deliver real-time insights and expand its addressable market [10][49] Company Strategy and Development Direction - The company is focused on helping health systems transition from short-term cost containment to structural changes that enhance operational resilience [8][9] - The acquisition of Illumicare is part of a strategy to strengthen clinical decision support capabilities and leverage AI for better healthcare outcomes [10][49] - The company anticipates returning to positive growth in total net revenue, adjusted EBITDA, and adjusted EPS in fiscal year 2027 [22][24] Management Comments on Operating Environment and Future Outlook - Management highlighted ongoing financial pressures for member hospitals and the need for value-based strategic support [7][8] - The company expects fiscal year 2026 to be a year of stabilization and transition, with a return to growth anticipated in fiscal year 2027 [21][22] - Management expressed confidence in the ability to drive growth due to the strength of the business and the commitment of the team [12][24] Other Important Information - Free cash flow for fiscal year 2025 was $181 million, with a conversion rate of 69%, and is expected to be in the range of 70% to 80% for fiscal year 2026 [19][20] - The company completed a $200 million accelerated share repurchase program, bringing total repurchases to $800 million under a $1 billion authorization [15][20] Q&A Session Summary Question: Changes in customer buying behavior in Supply Chain Services - Management noted no significant pull forward in buying behavior due to tariffs, with some increases attributed to regional issues [26][27] Question: Momentum in the advisory business - The advisory business is driven by market dynamics and the expertise of the newly hired leadership, with recent large engagements contributing to growth [28][30] Question: Cadence of admin fee renewal and growth assumptions - Management expects fee share to increase to the mid-60% range in fiscal year 2026, with broad-based growth across key categories [36][38] Question: Size and impact of Illumicare acquisition - Illumicare is projected to generate $8 million to $10 million in revenue for fiscal year 2026, with breakeven EBITDA [49][50] Question: Advisory business growth visibility - Advisory business is expected to grow above 25% in fiscal year 2026, largely driven by recent large contracts [61][62] Question: Free cash flow guidance and TRA impact - The TRA benefit is included in free cash flow guidance, with expectations for improved cash flow in fiscal year 2026 [66][67] Question: Demand for technology post July 4 - There remains strong interest in clinical decision support capabilities, with technology driving demand for performance improvement [93][97] Question: Unique advisory contracts and differences from consulting - Advisory engagements focus on comprehensive performance improvement strategies, with consulting and advisory viewed as interchangeable terms [104][106] Question: Life sciences or pharma support business updates - The life sciences business is performing as expected, with growth opportunities anticipated moving forward [107][108]

Financial Data and Key Metrics Changes - In Q2 2025, the company achieved total revenues of RMB 18.27 billion, representing a 125.3% increase year over year and a 15.6% increase quarter over quarter [21] - Vehicle sales revenues were RMB 16.88 billion, marking a 147.6% increase year over year and a 17.5% increase quarter over quarter [21] - Gross margin improved to 17.3% compared to 14% in the same period of 2024 [23] - Vehicle gross margin increased to 14.3%, up from 6.4% year over year [24] - Net loss narrowed to RMB 480 million from RMB 1.28 billion year over year [25] Business Line Data and Key Metrics Changes - Deliveries reached 103,181 units, a 242% increase year over year [6] - The Mona M03 MAX accounted for over 80% of total Mona M03 sales, indicating strong performance in the product line [6] - Free cash flow exceeded RMB 2 billion in Q2, with total cash on hand surpassing RMB 47.5 billion [7] Market Data and Key Metrics Changes - Overseas deliveries exceeded 18,000 units in the first half of the year, increasing over 200% year over year [18] - The company ranks as the best-selling Chinese NEV startup brand in 10 markets, including Norway and France [18] - Q3 delivery forecast is between 113,000 to 118,000 units, reflecting a year-over-year growth of 142.8% to 153.6% [19] Company Strategy and Development Direction - The company aims to strengthen core capabilities in technology leadership, organizational strength, commercialization, and globalization [9] - Upcoming launches include the G7 and the new P7, with expectations to surpass 40,000 units in monthly sales starting in September [12] - The company plans to introduce several super electric models with advanced features and capabilities [12] Management Comments on Operating Environment and Future Outlook - Management emphasized a focus on sustainable growth despite intense price competition [6] - The company is confident in leading the market at scale while advancing operational efficiency toward sustainable profitability [20] - The introduction of the one vehicle dual energy strong product cycle is expected to significantly strengthen the company's market position [20] Other Important Information - The company is committed to full-stack in-house development of core hardware and software technologies, which has enabled significant advancements in AI capabilities [12] - The Turing AI SoC is expected to provide a generational lead in computing power for mass-produced vehicles [13] Q&A Session Summary Question: Brand Position and Product Pricing - Management is focusing on product layout, leveraging technology, aesthetics, and brand to increase average selling price (ASP) and improve profitability [29][33] Question: Smart Driving Technology - The company believes its Turing chip provides a significant advantage in smart driving technology, with expectations for substantial differentiation from competitors [34][36] Question: Cooperation with Volkswagen - The expanded collaboration with Volkswagen includes electrical and electronic architecture, with potential revenue growth expected from this partnership [41][44] Question: Robotaxi Business - Future vehicles will include L4 capable models, with pilot programs planned for 2026, pending regulatory approvals [46][48] Question: P7 Strong Order Performance - The P7 has received high interest and presales orders, exceeding expectations, with a focus on aesthetics and performance [53][56] Question: Vehicle Gross Margin Improvement - The increase in vehicle gross margin is attributed to product mix changes, cost reductions, and scale [64][66] Question: R&D and Marketing Expenses - R&D expenses are expected to remain high due to ongoing investments in AI and technology, while marketing expenses will increase with new product launches [68][71] Question: Product Strategy Shift - The company is prioritizing design and aesthetics in its product strategy, reflecting a long-term transformation [75][78] Question: Response to Anti-Dilution Policy - The company is focused on innovation and quality, aligning with the new regulatory direction to improve competitiveness [79][82]