Financial Data and Key Metrics Changes - Q3 2025 marked the strongest quarter in Gorilla's history with revenue exceeding expectations and operating profit turning positive, resulting in a breakeven bottom line [2][12] - The company reported a cash position of over $121 million, with $109 million being unrestricted cash and $15.1 million in debt, leading to a net cash position of $106 million [3][4] - For 2025, the revenue guidance is set between $100 million and $110 million, with EBITDA margins expected to be over 20% and net income margins between 15% and 20% [4][5] - The gross margins for the first nine months were slightly over 35%, with expectations to reach the 35%-40% range for the full year [4] Business Line Data and Key Metrics Changes - The company is advancing AI infrastructure programs across Southeast Asia, Latin America, and the Middle East, securing multi-billion dollar projects [2] - The signed contract with Freyr is valued at $1.4 billion, contributing over $400 million annually once fully operational [7][8] - The company anticipates that over 50% of revenue will come from Southeast Asia next year, with a good mix between government and enterprise clients [8][9] Market Data and Key Metrics Changes - The company has a strong pipeline of $7 billion, primarily driven by government and telco contracts focused on national AI and digital sovereignty strategies [16][53] - The demand for GPU servers is high globally, with supply chain constraints being a significant challenge [38] Company Strategy and Development Direction - Gorilla aims to diversify its business and reduce reliance on government contracts, focusing on a mix of government and enterprise clients [9] - The company is actively pursuing acquisitions in India and the U.S. to enhance capabilities and expand into high-growth markets [68][92] - The strategy includes building a unified AI infrastructure that integrates data centers, GPU services, and software solutions to create a sustainable revenue model [100][102] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the structural growth of the business, emphasizing that profitability is not a one-off event but a result of operational discipline [14][15] - The company is optimistic about the future, with a clear backlog and a demand curve that exceeds current guidance [17] - Management highlighted the importance of operational readiness and the ability to scale as customer demand increases [39] Other Important Information - The company has improved its credit quality and is now in a strong net cash position, allowing it to fund significant new deployments [10][11] - The management team has a proven track record, with revenue increasing significantly since going public in 2022 [10] Q&A Session Summary Question: What are the assumptions for the 2026 guidance regarding the large deal contribution? - The guidance for 2026 is based on contracted backlog and the first phase of the Southeast Asia data center project, which alone contributes $100 million from 2026 to 2028 [22] Question: Any color on EBITDA margins for 2026? - The guidance for EBITDA margins is in the range of 15%-25% [26] Question: Can you provide more detail on deliverables for the large contract in 2026? - The first $100 million is expected to come from a phased rollout of data center capabilities, with revenue ramping up as infrastructure is commissioned [28] Question: How does the company gauge potential upside in guidance? - There is more upside potential due to the timing of customer deployments and supply chain constraints, with a focus on getting programs live by 2026 [36][39] Question: What is the magnitude of the backlog? - The backlog is strictly defined at $85 million for 2026, with additional potential from ongoing negotiations and bids [47] Question: Why is Gorilla winning contracts against competitors? - Gorilla's long-standing relationships, operational discipline, and ability to deliver sovereign-grade AI infrastructure are key competitive advantages [56][58] Question: What are the plans for cash utilization? - The cash will be used for capital needs related to major contracts, including performance guarantees and working capital for data center projects [71] Question: How does the company plan to grow its sales team? - The current sales team is well established, and the CEO is personally involved in key customer engagements [66] Question: What is the strategic role of the company in the AI compute infrastructure? - Gorilla is building a comprehensive AI infrastructure, integrating data centers, GPU services, and software to create a sustainable revenue model [100][102]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported revenue of $346.9 million, an increase of 1.8% compared to $341 million in Q3 2024, driven by higher fleet combined time charter equivalent (TCE) rates despite lower available days [16] - EBITDA for Q3 2025 was $193.9 million, while net income was $56.3 million, with earnings per common unit at $1.90 [4][18] - For the first nine months of 2025, total revenue decreased by $23 million to $978.6 million, with adjusted EBITDA down by $29 million to $519.8 million and adjusted net income down by $67 million to $196 million compared to the same period in 2024 [19][20] Business Line Data and Key Metrics Changes - The TCE rate for the combined container and tanker fleet increased by 3.7% and 1.7% to $31,832 and $26,238 per day, respectively, while the TCE rate for the dry bulk fleet decreased by 3.5% to $17,976 per day [17] - The company added $745 million of long-term contracted revenue during the quarter, with total contracted revenue amounting to $3.7 billion, including $1.3 billion from tankers, $0.2 billion from dry bulk, and $2.2 billion from containerships [15][16] Market Data and Key Metrics Changes - The geopolitical environment has shifted trading routes, impacting the tanker and dry bulk markets positively due to sanctions on Russian, Venezuelan, and Iranian oil [22][26] - The dry bulk market is expected to benefit from strong Atlantic basin iron ore growth, with significant new projects in Guinea and Brazil anticipated to create demand for additional vessels [24][25] Company Strategy and Development Direction - The company is focused on modernizing its fleet, with an average fleet age of 9.7 years compared to the industry average of 13.5 years, and aims to maintain a low net loan-to-value (LTV) ratio of 20.5% [4][5][7] - The company has a strong risk management culture, continuously monitoring and assessing risks while maintaining a diversified fleet [5][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the prospects for 2026, with 58% of available days fixed and a reduced cost break-even of $894 per day [8][12] - The company remains focused on capital allocation and opportunistic purchases, with a strong backlog of contracted revenue providing visibility in an uncertain environment [11][15] Other Important Information - The company completed a $300 million senior secured bond issuance at a coupon of 7.75%, which will be used to refinance existing floating rate debt, thereby reducing interest rate risk [9][21] - The company has returned $42.2 million under its dividend and unit repurchase programs, with a remaining purchase power of $37.3 million [10] Q&A Session Summary Question: How does the company plan to fix its vessels going forward into 2026? - Management indicated that they are using maximum flexibility, with the majority of open vessels being dry bulk, and they are comfortable with fixing the fleet based on market assumptions [31][32] Question: Is there an opportunity to build smaller ships against contracts? - Management noted increased activity in the market for smaller vessels, emphasizing the importance of counterparty and duration in such projects [36][37] Question: How will the proceeds from the recent bond issue be deployed? - The proceeds will enhance optionality, as the company has $1.2 billion of debt-free vessels, maintaining the same net debt before and after the bond issuance [39]

Financial Data and Key Metrics Changes - For fiscal year 2025, the company reported a net sales growth of 16% and an adjusted EBITDA margin of 20.8% [5][21] - Adjusted EBITDA for the year was $482 million, with cash flow from operations amounting to $261 million [21] - The company repurchased approximately 7% of its outstanding shares, totaling 9 million shares for $473 million [21] Business Line Data and Key Metrics Changes - The ready-to-drink (RTD) shake category grew by 15%, with Premier shake consumption increasing by 20% due to promotional events [6][22] - Premier Protein's net sales grew by 15%, while Dymatize's net sales surged by 33% [22][23] - Adjusted gross profit margin decreased by 620 basis points to 29.7%, primarily due to input cost inflation and increased promotional activity [23] Market Data and Key Metrics Changes - The RTD shake category has doubled in retail sales since 2019, reaching $8.7 billion, with Premier Protein holding approximately 50% market share [7][8] - Household penetration for RTD shakes is at 54%, indicating significant growth potential compared to mature CPG categories [7] - The competitive landscape includes insurgent brands and declining legacy brands, with expectations for consolidation around top-performing brands [8][10] Company Strategy and Development Direction - The company plans to focus on expanding distribution, increasing advertising investment, and launching innovative products [14][16] - Long-term revenue growth is now projected at 7-9%, with Premier Protein expected to drive this growth [10][11] - The company aims to maintain an adjusted EBITDA margin of 18-20%, supported by cost savings initiatives [11][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the category's momentum and Premier's leading position despite increased competition [35][36] - The first quarter of fiscal 2026 is expected to be softer, but stronger performance is anticipated for the remainder of the year [11][30] - Management highlighted the importance of innovation and advertising in driving future growth [16][19] Other Important Information - The company is focusing on cost savings initiatives to mitigate the impact of inflation and tariffs on margins [25][26] - New product launches, including almond milk shakes and coffee house shakes, are part of the innovation strategy for 2026 [17][18] Q&A Session Summary Question: Changes in the competitive landscape and its influence on 2026 plans - Management noted that while competition has increased, the category's momentum remains strong, with Premier Protein maintaining its leading position [35][36] Question: Insights on repeat rates for new entrants in the category - Management indicated that they expect their major club customer to maintain an expanded set, and they are monitoring repeat rates closely [41][42] Question: Growth expectations in the club channel - Management expects major growth to come from outside the club channel, with improvements anticipated as comparisons ease [48] Question: Consumption trends and innovation contributions - Management expects consumption to accelerate in the second half of December, driven by new partnerships and advertising [54][56] Question: Insights on EBITDA margin pressures - Management highlighted that the primary drivers of margin pressure include tariffs, inflation, and increased advertising [68][70] Question: Market share potential of insurgent brands - Management believes that while some insurgent brands may succeed, the complexity of scaling nationally will limit their growth [76][78] Question: Pricing expectations and promotional activity - Management anticipates a low single-digit headwind related to pricing for Premier Protein, with increased promotional activity expected [85][90]

Financial Data and Key Metrics Changes - Revenue for fiscal year 2025 grew 32% year over year to $98.4 million, driven by seven new game launches generating approximately $32.3 million [3][4] - Operating loss recorded at $1.1 million compared to operating income of $6.7 million in the previous year, attributed to strategic investments in AI and marketing [4][5] - Adjusted EBITDA decreased to $8 million from $12 million in fiscal year 2024, reflecting higher personnel and marketing investments [5][6] - Cash and cash equivalents stood at $12.2 million as of July 31, 2025, with no debt on the balance sheet [6] Business Line Data and Key Metrics Changes - Segment profit increased by $4.3 million year over year to $31.3 million, indicating improved operational efficiency [5] - The two top-performing titles were "So I'm a Spider, So What? - Ruler of Labyrinth" contributing $14.2 million and "Arifureta: Rebellion's Soul" contributing $9.3 million [3][4] Market Data and Key Metrics Changes - Growth was strong across all major regions, with significant international expansion noted, particularly outside Japan [4][6] - The company is focusing on enhancing advertisement spending in markets outside Japan to support growth [14] Company Strategy and Development Direction - The company plans to translate recent investments into growth and operating leverage, with a focus on AI systems and creative infrastructure [7][8] - Expansion into the U.S. market is a priority, with plans to open a new office in New York City to build local capabilities [7][8] - The company aims to maintain financial discipline while investing in talent, infrastructure, and marketing expansion [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued top-line growth driven by an expanding global presence and upcoming releases [7][8] - The company anticipates increased operating expenses due to investments in talent and infrastructure but remains focused on long-term value creation [7][8] Other Important Information - The company completed its initial public offering on Nasdaq, raising $12 million in gross proceeds [6] - The return on advertising spend improved significantly, indicating effective allocation of marketing resources [5][6] Q&A Session Summary Question: What is driving accelerated revenue growth in the second half? - The growth is attributed to the addition of new titles and increased advertisement spending in international markets [12][13][14] Question: What is the expected timeline for launching games in pre-registration and backlog? - Most games in pre-registration are expected to launch within the current fiscal year, with efforts to expedite the process [17][18][19] Question: What are the expectations for the North American market? - The North American market is expected to grow significantly, with potential to match or exceed the Japanese market in certain titles [21][22][23] Question: What sets CTW apart from its competitors in securing attractive anime IP? - Strong relationships with IP holders, a frictionless HTML5 platform, and advanced AI-backed marketing tools are key competitive advantages [24][25] Question: What initiatives are in place for growing the U.S. market? - The company is focusing on organic growth and exploring M&A opportunities, particularly with local marketing channels [29][31] Question: Do you expect U.S. users to become higher spenders than those in Japan? - There is potential for North American users to become significant spenders, with expectations of increased whale customers in the region [30][32][33] Question: What capabilities are being developed in AI-driven user acquisition? - Investments are being made in optimizing advertisement management systems and enhancing AI tools for game development and marketing [39][40][41]

Financial Data and Key Metrics Changes - Revenue for fiscal year 2025 grew 32% year over year to $98.4 million, driven by seven new game launches generating approximately $32.3 million [3][4] - Operating loss recorded at $1.1 million compared to operating income of $6.7 million in the previous year, attributed to strategic investments in AI and marketing [4][5] - Adjusted EBITDA decreased to $8 million from $12 million in fiscal year 2024, reflecting higher personnel and marketing investments [5][6] - Cash and cash equivalents stood at $12.2 million as of July 31, 2025, with no debt on the balance sheet [6] Business Line Data and Key Metrics Changes - Segment profit increased by $4.3 million year over year to $31.3 million, indicating improved operational efficiency [5] - The two top-performing titles were "Soul Ama: Spider's Soul World - Ruler of Labyrinth" contributing approximately $14.2 million and "A Rift of Rita: Rebellion's Soul" contributing about $9.3 million [3][4] Market Data and Key Metrics Changes - Growth was strong across all major regions, with significant advertising and marketing investments made outside Japan to support international expansion [4][14] - The company is expanding its footprint in the U.S. and plans to open a new office in New York City to enhance local capabilities [7][8] Company Strategy and Development Direction - The company aims to translate recent investments into growth and operating leverage, focusing on efficiency gains across marketing and user engagement [7] - Plans to continue disciplined investments in talent, infrastructure, and marketing to support a larger global footprint [7][8] - The company is exploring potential M&A opportunities in the U.S. market to enhance growth [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued top-line growth driven by an expanding global presence and upcoming game releases [7][8] - The North American market is expected to grow significantly, with potential for it to lead in revenue generation for certain titles in the future [22][33] Other Important Information - The company completed its initial public offering on Nasdaq, raising $12 million in gross proceeds [6] - The focus remains on long-term value creation while maintaining a healthy balance sheet and positive operating cash flows [8] Q&A Session Summary Question: What is driving accelerated revenue growth in the second half? - The growth is attributed to the addition of new titles and increased international marketing efforts, particularly outside Japan [12][14] Question: What is the expected timeline for launching games in pre-registration and backlog? - Most games in pre-registration are expected to launch within the current fiscal year, with efforts being made to expedite the process [17][19] Question: What are the expectations for the North American market? - The North American market is anticipated to grow significantly, with potential to match or exceed the Japanese market in certain titles [22][33] Question: What sets CTW apart from its competitors in securing attractive anime IP rights? - Strong relationships with IP holders, a frictionless HTML5 platform, and advanced AI-backed marketing tools are key competitive advantages [24][25] Question: What initiatives are in place for growing the U.S. market? - The company is focusing on organic growth, opening a local office, and exploring M&A opportunities with established marketing channels [31] Question: Are North American users expected to become higher spenders than Japanese users? - There is potential for North American users to become significant spenders, with expectations of increased whale customers in the mid to long term [32][33] Question: What new capabilities are being developed in AI-driven user acquisition? - Investments are being made in optimizing advertisement management systems and enhancing AI tools for game development and marketing [39][41]

Financial Data and Key Metrics Changes - Q3 2025 marked the strongest quarter in Gorilla's history with revenue exceeding expectations and operating profit turning positive, achieving breakeven on the bottom line [2][12] - The company reported a cash position of over $121 million, with $109 million being unrestricted cash and total debt reduced to $15.1 million, resulting in a net cash position of $106 million [3][4] - Revenue guidance for 2025 is set between $100 million and $110 million, with EBITDA margins expected to be over 20% and net income margins between 15% and 20% [4][5] - For Q3, actual revenue was $26.5 million, gross profit was $9.9 million, and operating income was $4.4 million, showing significant improvements over estimates [12][13] Business Line Data and Key Metrics Changes - The gross margins for the first nine months were slightly over 35%, with expectations to reach the 35%-40% range for the full year [4] - The company has secured a large signed contract with FRAIR worth $1.4 billion, which is expected to contribute over $400 million annually once fully operational [7][8] Market Data and Key Metrics Changes - The company anticipates that over 50% of its revenue will come from Southeast Asia in the next year, with a balanced mix between government and enterprise clients [8] - The pipeline for future projects is robust, with a total of $7 billion identified, primarily from government and telecommunications sectors [16][53] Company Strategy and Development Direction - Gorilla aims to diversify its business and reduce reliance on government contracts while improving client quality and creditworthiness [9][16] - The company is focused on building long-term relationships with governments and enterprises, positioning itself as a full-stack AI operator [56][100] - Future growth is targeted at $500 million in annual revenue by 2027, with significant investments planned in India and the U.S. to capitalize on emerging markets [68][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the structural growth of the business, emphasizing that profitability is not a one-off event but a result of disciplined operations [14][15] - The company is optimistic about the demand for AI infrastructure and national programs, indicating that the demand curve is larger than what is currently reflected in guidance [17][39] Other Important Information - The company is actively pursuing acquisitions to enhance its capabilities and expand its market presence, particularly in high-growth regions like India and the U.S. [70][92] - Gorilla is in discussions with banks for financing to support capital needs for major contracts, ensuring sufficient cash flow for upcoming projects [72][73] Q&A Session Summary Question: What are the assumptions for the large deal contribution in 2026 guidance? - The guidance for 2026 is based on contracted backlog and the first phase of the Southeast Asia data center project, which alone contributes $100 million from 2026 to 2028 [22] Question: Any color on EBITDA margins for 2026? - EBITDA margins are expected to be in the range of 15%-25% [26] Question: Can you provide details on deliverables for the large contract in 2026? - The first $100 million will come from planned phases of the data center project, with revenue ramping up as infrastructure is commissioned [28][29] Question: How does the company gauge upside potential against market risks? - Management believes there is more upside potential than downside risk, with a focus on timely customer deployments and supply chain constraints [36][39] Question: What is the magnitude of the backlog? - The backlog is strictly defined at $85 million for 2026, with additional potential from ongoing negotiations and bids [47] Question: Why is Gorilla winning against competitors? - Gorilla's speed of execution, operational discipline, and ability to deliver sovereign-grade AI infrastructure are key competitive advantages [56][58] Question: What are the plans for cash utilization? - Cash will be used for capital needs related to major contracts and potential acquisitions to support growth [72][73]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was reported at $346.9 million, a 1.8% increase from $341 million in Q3 2024, while revenue for the first nine months of 2025 was $978.6 million, a decrease of $23 million compared to the same period in 2024 [4][18] - EBITDA for Q3 2025 was $193.9 million, adjusted EBITDA decreased by $1.4 million compared to Q3 2024, while EBITDA for the first nine months of 2025 was $519.8 million, a decrease of $29 million from the previous year [4][19] - Net income for Q3 2025 was $56.3 million, down from $97 million in Q3 2024, and adjusted net income for the first nine months of 2025 was $196 million, a decrease of $67 million compared to the same period in 2024 [4][19] Business Line Data and Key Metrics Changes - The combined time charter equivalent (TCE) rate for Q3 2025 increased by 2.4% to $24,167 per day, with container and tanker fleets seeing increases of 3.7% and 1.7% respectively, while the dry bulk fleet's TCE rate decreased by 3.5% to $17,976 per day [16][17] - For the first nine months of 2025, the TCE rate for containers increased by 3.1% to $31,213 per day, while dry bulk and tanker TCE rates decreased by approximately 9.2% and 3.5% respectively [19] Market Data and Key Metrics Changes - The company reported a low net loan-to-value (LTV) ratio of 34.5% and a gross LTV of 40.6% at the end of Q3 2025, with a target net LTV of 20.5% [5][8] - The company has a revenue backlog of $3.7 billion, with 92% of container days and 73% of tanker days fixed for the fourth quarter of 2025 [8][16] Company Strategy and Development Direction - The company focuses on fleet modernization, with an average fleet age of 9.7 years compared to the industry average of 13.5 years, and aims to maintain a strong risk management culture [4][5] - The company has a reinvestment program that includes acquiring new vessels and opportunistically selling older ones, with plans to invest $1.9 billion in 25 newbuilding vessels through 2028 [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the prospects for 2026, with 58% of available days fixed and a reduced cost break-even of $894 per day [8][12] - The geopolitical environment, including the Ukraine war and changing global trade patterns, is seen as a challenge but also an opportunity for the company to adapt and thrive [10][22] Other Important Information - The company successfully issued a $300 million senior secured bond at a coupon of 7.75%, which will be used to refinance existing floating rate debt, thus reducing interest rate risk [9][21] - The company has returned $42.2 million under its dividend and unit repurchase programs, with a remaining purchase power of $37.3 million [10] Q&A Session Summary Question: How does the company plan to manage its vessels in 2026 given the current flexibility? - Management indicated that they are comfortable with their current position and will continue to assess the market for fixing vessels, particularly in the dry bulk sector where they see significant upside [31][32][34] Question: Is there an opportunity to build smaller feeder ships in response to market demand? - Management acknowledged increased activity in the market for smaller vessels but emphasized the importance of careful evaluation of counterparties and contract durations [36][37] Question: How will the proceeds from the recent bond issue be deployed? - The proceeds will enhance the company's financial flexibility and maintain a strong balance sheet, with a focus on optionality given the significant amount of debt-free vessels [39]

Financial Data and Key Metrics Changes - Fundings for the last quarter totaled $126.6 million, with net originations at $103.1 million, while exits and prepayments declined to $23.5 million [4] - Interest income rose 14% to $23.8 million, driven by a 16.2% increase in average earning assets, although the weighted average portfolio yield declined by 30 basis points to 12.5% [4][9] - Net investment income for the period was $11.4 million, with net realized losses of $6.3 million related to the exit of FES Resources [5][9] - Total assets increased to $908 million, with net assets rising to $482 million, and NAV per share increased from $21.25 to $21.34 [10][11] Business Line Data and Key Metrics Changes - The portfolio turnover did not materially impact the investment mix, with new originations predominantly in first lien debt, which rose to 72% of the portfolio's fair value [5] - PIC income increased to $2 million, representing 8.4% of interest income, largely from two recent investments [6] Market Data and Key Metrics Changes - The company experienced a significant increase in fair value of the investment portfolio by $63 million for the fiscal year, despite challenges in fiscal 2025 [6][7] - The company maintained a conservative leverage position with net debt at 82.5% of NAV [8] Company Strategy and Development Direction - The company continues to focus on investing in growth-oriented lower middle market businesses, supporting mid-sized private equity funds [15] - The strategy includes expanding private equity sponsor relationships and positioning as the lead lender in most deals [7][15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the lower middle market remaining insulated from spread erosion and leverage escalation [7] - The company is well-positioned to increase investments as new private equity platforms seek growth through acquisitions [7] Other Important Information - Monthly distributions for November and December will be $0.15 per common share, with an annual run rate of $1.80 per share [11] - The company is considering share repurchases due to the stock price being at a discount [33] Q&A Session Summary Question: Update on the pipeline and mix of new versus add-on opportunities - The company is tracking approximately $100 million of potential volume, with a mix of new and follow-on acquisition opportunities [20][21] Question: Decline in portfolio yield - The decline was primarily due to lower base rates, with new deals still maintaining attractive spreads [25][26] Question: Consideration of share repurchases - The company is tempted to consider share repurchases given the stock price and low leverage [33] Question: Dividend reduction reasoning - The reduction was a proactive measure to maintain financial flexibility in light of potential rate compressions [39][41] Question: Outlook for elevated repayment activity - Management believes that while some larger transactions may turn over, the overall portfolio remains stable, and they are not overly concerned about repayment activity [46][48] Question: Credit concerns in the portfolio - Management noted that while there are some challenges in certain businesses, the overall leverage position remains secure [49][51]

Financial Data and Key Metrics Changes - Revenue for fiscal year 2025 grew 32% year over year to $98.4 million, driven by seven new game launches generating approximately $32.3 million [4][5] - Operating loss recorded at $1.1 million compared to operating income of $6.7 million in the previous year, attributed to strategic investments in AI and marketing [5][6] - Adjusted EBITDA decreased to $8 million from $12 million in fiscal year 2024, reflecting higher personnel and marketing investments [6][7] - Cash and cash equivalents stood at $12.2 million as of July 31, 2025, with no debt on the balance sheet [7] Business Line Data and Key Metrics Changes - Segment profit increased by $4.3 million year over year to $31.3 million, indicating improved operational efficiency [6] - The two top-performing titles were "Soul Ama: Spider's Soul World - Ruler of Labyrinth" contributing approximately $14.2 million and "A Rift of Rita: Rebellion's Soul" contributing about $9.3 million [4] Market Data and Key Metrics Changes - Growth was strong across all major regions, with significant international expansion efforts noted [5] - The company is focusing on enhancing advertisement spending in markets outside Japan, which remains the largest market [15] Company Strategy and Development Direction - The company plans to translate recent investments into growth and operating leverage, with a focus on AI systems and creative infrastructure [8] - Expansion into the U.S. market is a priority, with plans to open a new office in New York City to build local capabilities [9] - The company aims to maintain financial discipline while supporting global expansion and technology investments [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued top-line growth driven by an expanding global presence and upcoming releases [8] - The company anticipates increased operating expenses due to investments in talent and infrastructure, but remains committed to long-term value creation [8] Other Important Information - The company completed its initial public offering on Nasdaq, raising $12 million in gross proceeds [7] - The focus on AI-driven marketing systems has improved return on advertising spend from 99% in fiscal year 2024 to 116% in fiscal year 2025 [6] Q&A Session Summary Question: What is driving accelerated revenue growth in the second half? - The growth is attributed to the addition of new titles and increased advertisement spending in international markets [14][15] Question: What is the expected timeline for launching games in pre-registration and backlog? - Most games in pre-registration are expected to launch in the current fiscal year, with efforts to expedite the process [19][20] Question: What are the expectations for the North American market? - The company has high expectations for North America, anticipating it could lead the Japanese market in certain titles in the long run [23][24] Question: What sets CTW apart from its competitors? - CTW has strong relationships with IP holders, a frictionless HTML5 platform, and an AI-backed marketing tool that enhances monetization [26][27] Question: What initiatives are in place for growing the U.S. market? - The company is looking at both organic growth and potential M&A opportunities to enhance its presence in the U.S. [34] Question: Do you expect U.S. users to become higher spenders than those in Japan? - There is potential for North American users to become significant spenders, with expectations of more whale customers emerging in the region [35][36] Question: What capabilities are being developed in AI-driven user acquisition? - Investments are being made in optimizing advertisement management systems and enhancing AI tools for game development [38][39]

Financial Data and Key Metrics Changes - For Q4 2025, revenues increased by 7% to $54.9 million from $51.3 million in Q4 2024, with organic growth of 4.5% and $1.3 million from acquisitions [9] - Recurring revenues rose by 9% to $41.3 million in Q4 2025 compared to $37.8 million in Q4 2024, accounting for 75% of total revenues [9] - Adjusted EBITDA slightly declined to $14.4 million for Q4 2025 from $14.6 million for Q4 2024, with adjusted EBITDA as a percentage of revenues at 26.2% for Q4 2025, down from 28.5% in Q4 2024 [10][11] - Adjusted diluted earnings per share from continuing operations was $0.27 for Q4 2025 and $1.05 for the fiscal year [11] Business Line Data and Key Metrics Changes - SaaS revenues grew by 25%, offsetting an 8% decline in maintenance revenues [9] - Transactional-based revenues and recurring software services increased by 10%, while payments revenue grew by 11% [9] - Non-recurring sales of software licenses declined by $1.9 million, reflecting a shift to SaaS [9] Market Data and Key Metrics Changes - Justice is the largest market, representing approximately 25% of revenues, with utilities, transportation, education, and public administration contributing equally [13] - The company expects revenue distribution for FY 2026 to be approximately Q1: 23%, Q2: 25.5%, Q3: 24.5%, Q4: 27% [13] Company Strategy and Development Direction - The company has divested its merchant services and healthcare revenue cycle management businesses, focusing on providing software solutions for the public sector [4][8] - Investments in new products and markets are underway, particularly in justice and utility sectors, expected to accelerate in 2026 [5] - The company aims to enhance its public sector vertical through strategic acquisitions and internal development [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue opportunities tied to investments, anticipating durable recurring revenue growth in the long term [5] - For FY 2026, the company expects revenues between $217 million and $232 million, with recurring revenues projected to grow at 8%-10% [12] - Despite a decline in non-recurring professional services, management believes these markets are well-positioned for recovery in FY 2027 and beyond [12] Other Important Information - The company has $85 million in cash on hand with no debt and a $400 million borrowing capacity under its revolving credit facility [11] - The net dollar retention rate for fiscal 2025 was 104%, with expectations for modest price increases contributing to future growth [10][24] Q&A Session Summary Question: Clarification on 2026 organic growth outlook - Management indicated a focus on recurring revenue and expects professional services to decline in 2026 due to timing and cadence of projects [21][22] Question: Details on dollar retention and pricing - Management noted that historical price increases have been conservative, with expectations for a gradual increase in the contribution from price increases moving forward [24][25] Question: Justice tech investment and expectations for 2026 - Management confirmed that investments in justice tech are in line with expectations and will continue into the next fiscal year [26][27] Question: M&A versus buyback strategy - Management refreshed the buyback authorization to $50 million, emphasizing a disciplined approach to both M&A and buybacks, with potential for meaningful acquisitions in 2026 [28][31]