Financial Data and Key Metrics Changes - 10x Genomics reported $166 million in revenue for Q4 2025, representing a 1% increase year-over-year and exceeding the high end of guidance [18] - Full-year revenue for 2025 was $599 million, excluding $44 million from patent litigation settlements [4] - Gross margin improved to 68% in Q4 2025 from 67% in the prior year, driven by lower inventory write-downs and costs [20] - Operating expenses decreased by 18% in Q4 2025, reflecting cost discipline and efficiency [21] - Cash balance increased by $130 million year-over-year, ending 2025 with $523 million [21] Business Line Data and Key Metrics Changes - Total consumables revenue grew by 6%, with single-cell consumables revenue up 3% and spatial consumables revenue up 14% [19] - Single-cell consumables volumes grew at a double-digit rate each quarter, driven by the adoption of lower-cost products like FLEX [5] - Spatial consumables revenue growth was primarily driven by the success of the Xenium platform [6] Market Data and Key Metrics Changes - Revenue from the Americas declined by 6%, while EMEA and APAC regions grew by 7% and 9%, respectively [20] - The operating environment remained challenging, particularly in the U.S. academic and government funding sectors, impacting customer purchasing decisions [4][20] Company Strategy and Development Direction - The company is focused on continuous innovation and expanding its product offerings, particularly in single-cell and spatial technologies [10] - 10x Genomics aims to leverage advancements in AI and biology measurement technologies to drive growth [11] - The company is pursuing clinical applications for diagnostics, collaborating with academic medical centers to generate clinical evidence [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's position amidst ongoing funding challenges, noting a gradual improvement in customer sentiment [27] - The outlook for 2026 includes revenue guidance of $600 million to $625 million, reflecting expectations of continued growth in single-cell and spatial consumables [22] - Management acknowledged the systemic turbulence in research funding dynamics but noted recent NIH budget approvals as a positive sign [22] Other Important Information - The company launched several new products in 2025, including the FLEX APEX assay, which has been well-received by customers [8] - The company is seeing strong demand for its Xenium platform, which is expected to continue driving growth in spatial analysis [10] Q&A Session Summary Question: Can you comment on ordering patterns and expectations for academic and pharma? - Management noted that the environment remains steady but cautious, with ongoing uncertainty in academic funding impacting purchasing decisions [27] Question: How did volume growth and pricing impact single-cell consumables? - Management indicated that while volume growth was strong, pricing dynamics are complex, with various factors influencing the overall revenue guidance for 2026 [31][35] Question: What are the expectations for clinical translational space? - Management highlighted a hybrid strategy to enable clinical evidence generation while also pursuing direct clinical applications [48][50] Question: How is the company addressing competitive dynamics? - Management expressed confidence in their competitive position, citing continuous innovation and strong customer sentiment for their products [76] Question: What is the outlook for the Visium platform? - Management acknowledged that while Visium did not grow in 2025, they will continue to support its applications while focusing on the growth of the Xenium platform [80]

Financial Data and Key Metrics Changes - Net sales increased by 11% year-over-year, with a price mix contributing 70 basis points to this growth, while volume declined by 2.2% due to pressures in certain product lines [16][17] - Gross margin as a percentage of sales decreased by 30 basis points to 48.5%, influenced by increased outside purchases related to the Simple Mills business model [17] - GAAP diluted EPS for the quarter was a loss of $0.32, a decrease of $0.52 from the prior year, primarily due to a $136 million non-cash impairment of intangible assets [18][19] Business Line Data and Key Metrics Changes - The fresh packaged bread category saw Flowers maintain unit share, with Dave's Killer Bread gaining 20 basis points, while traditional loaf unit sales declined by 4% in Q4 [3][4] - The cake business experienced a 5% growth in unit sales, driven by the strength of the Wonder brand, despite a 3% decline in category unit sales [11] - Specialty premium loaf gained 60 basis points of unit share, largely driven by DKB, which added 50 basis points [10] Market Data and Key Metrics Changes - The overall bread category experienced a 2% decline, while the food category saw a modest increase in unit sales [4] - The competitive environment remained rational but challenging, with the average price per unit in the bread category rising by 1.1% [26] - Consumer behavior is shifting towards value-seeking, with increased sales in club stores and a decline in center store volumes [28][29] Company Strategy and Development Direction - The company is conducting a comprehensive review of operations to reignite top-line growth and expand margins, focusing on optimizing the brand portfolio and enhancing supply chain capabilities [4][5] - Investments in marketing and innovation are expected to create near-term margin pressure but are deemed essential for long-term growth [5][22] - The integration of Simple Mills is progressing well, with expectations for significant growth driven by innovation and expanded distribution [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2026, anticipating continued category headwinds, particularly in traditional loaf, and inflationary pressures on inputs [21][22] - The company plans to balance investments in leading brands with the need to manage costs and maintain profitability [22][30] - Management remains committed to navigating current challenges while positioning for future success through strategic initiatives [30] Other Important Information - The company generated cash flow from operating activities of $446 million in 2025, an increase of $34 million over the prior year [20] - Capital expenditures decreased to $127 million, while dividends paid increased to $209 million [20] - The company is focused on maintaining a strong balance sheet, with net debt to trailing 12-month adjusted EBITDA at approximately 3.3x [20] Q&A Session Summary Question: What are the expectations for 2026? - The company expects total sales to be down 180 basis points to up 20 basis points, with category headwinds anticipated to be around 4% [21] Question: How is the Simple Mills integration progressing? - The integration is progressing well, with expectations for double-digit sales growth driven by innovation and expanded distribution [24]

Financial Data and Key Metrics Changes - The company achieved a net sales increase of 11% year-over-year, with a price mix increase of 70 basis points, while volume declined by 2.2% [16][17] - Gross margin as a percentage of sales decreased by 30 basis points to 48.5%, influenced by increased outside purchases related to the Simple Mills business model [17] - GAAP diluted EPS for the quarter was a loss of $0.32, a decrease of $0.52 from the prior year, primarily due to a $136 million non-cash impairment of intangible assets [18][19] Business Line Data and Key Metrics Changes - The fresh packaged bread category saw Flowers maintain unit share, with Dave's Killer Bread gaining 20 basis points, while traditional loaf unit sales declined by 4% in Q4 [3][4] - The cake business experienced a 5% growth in unit sales, driven by Wonder's brand recognition, despite a 3% decline in category unit sales [11] - Specialty Premium Loaf gained 60 basis points of unit share, largely driven by DKB, which added 50 basis points [10] Market Data and Key Metrics Changes - The overall bread category experienced a 2% decline, while the food category saw a modest increase in unit sales [4] - The competitive environment remained rational but challenging, with a 1.1% increase in average price per unit in the bread category [26] - Consumer behavior is shifting towards value-seeking, with increased sales in club stores and a decline in center store volumes [28][29] Company Strategy and Development Direction - The company is conducting a comprehensive review of operations to reignite top-line growth and expand margins, focusing on brand portfolio optimization and supply chain enhancements [4][5] - Investments in marketing and innovation are expected to create near-term margin pressure but are deemed essential for long-term growth [5][22] - The integration of Simple Mills is progressing well, with expectations for significant growth driven by innovation and expanded distribution [12][24] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2026, anticipating continued category headwinds, particularly in traditional loaf, and inflationary pressures [21][22] - The company plans to balance investments in leading brands with the need to manage costs and maintain profitability [22][30] - Management emphasized the importance of adapting to consumer trends by prioritizing better-for-you products and innovative offerings [29][30] Other Important Information - The company generated cash flow from operating activities of $446 million in 2025, an increase of $34 million over the prior year [20] - Capital expenditures decreased to $127 million, while dividends paid increased to $209 million [20] - The company is committed to maintaining a strong balance sheet, with a net debt to trailing twelve-month Adjusted EBITDA ratio of approximately 3.3 times [20] Q&A Session Summary Question: What are the expectations for growth in 2026? - The company expects fiscal 2026 net sales to be between $5.163 billion and $5.267 billion, with adjusted EBITDA of $465 million to $495 million, and adjusted diluted EPS of $0.80 to $0.90 [24][25] Question: How is the integration of Simple Mills progressing? - The integration is progressing well, with expectations for double-digit sales growth driven by expanded distribution and innovation [24]

Financial Data and Key Metrics Changes - Net sales increased by 11% year-over-year, with a price mix increase of 70 basis points, while volume declined by 2.2% [16][17] - Gross margin as a percentage of sales decreased by 30 basis points to 48.5% compared to the same quarter last year [17] - GAAP diluted EPS for the quarter was a loss of $0.32, a decrease of $0.52 from the prior year, while adjusted diluted EPS was $0.22, consistent with the prior year [18][19] Business Line Data and Key Metrics Changes - The fresh packaged bread category saw Flowers maintain unit share, with Dave's Killer Bread gaining 20 basis points, while traditional loaf unit sales declined by 4% in Q4 [3][4] - The cake business improved revenues, with Flowers' cake unit sales growing by 5%, while the overall category unit sales declined by 3% [10] - Simple Mills contributed $57.5 million in net sales and $6.3 million to Adjusted EBITDA, indicating strong performance in the snacking categories [19][12] Market Data and Key Metrics Changes - The overall bread category experienced a 2% decline, while the food category saw a modest increase in units [4] - The competitive environment remained rational but challenging, with a 1.1% increase in average price per unit in the bread category [27] - Consumer behavior is shifting towards value-seeking, with increased sales in club stores and a decline in center store volumes [30] Company Strategy and Development Direction - The company is conducting a comprehensive review of operations to reignite top-line growth and expand margins, focusing on brand portfolio optimization and supply chain enhancements [4][5] - Investments in marketing and innovation are expected to create near-term margin pressure but are deemed essential for long-term growth [5][23] - The company aims to leverage leading brands to uncover growth opportunities in specialty premium loaf, sandwich buns, and breakfast segments [7][9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2026, anticipating continued category headwinds, particularly in traditional loaf [22] - The company expects total sales to be down 180 basis points to up 20 basis points, with inflationary pressures impacting margins [22][23] - Management emphasized the importance of maintaining a strong balance sheet and managing capital structure prudently amid a challenging macro environment [20][21] Other Important Information - A non-cash impairment of $136 million was recognized due to a review of the brand portfolio, indicating a lower long-term outlook for certain brands [18][19] - The company is committed to enhancing margins through efficiency initiatives and strategic acquisitions, with a focus on better-for-you products [31][32] Q&A Session Summary Question: What are the expectations for 2026 sales growth? - The company expects fiscal 2026 net sales to be between $5.163 billion and $5.267 billion, with adjusted EBITDA of $465 million to $495 million, and adjusted diluted EPS of $0.80 to $0.90 [25][26] Question: How is the Simple Mills acquisition performing? - Simple Mills is expected to drive double-digit sales growth, supported by expanded distribution and innovation, despite higher costs impacting margins [25][30]

Financial Data and Key Metrics Changes - The company reported GAAP diluted EPS of $2.94 and non-GAAP diluted EPS of $3.58, reflecting a 5.3% growth from 2024 on a non-GAAP basis [7][9][15] - The quarterly dividend is being increased by 1.5% to $0.67 per share [7] - The company is initiating 2026 earnings guidance in the range of $3.68-$3.83 per share, representing a 5% growth at the midpoint from 2025 results [8][16] Business Line Data and Key Metrics Changes - The improved margin reflects new rates and regulatory execution, although it was offset by mild weather and higher operating costs [10][12] - Adjusted earnings for the fourth quarter were $1.17, compared to $1.13 in Q4 2024, despite unfavorable weather impacts [11][15] Market Data and Key Metrics Changes - The company has made significant progress in data center growth opportunities, signing a third letter of intent for a 500+ MW data center and advancing with Sabey to a development agreement [7][24] - The company is actively pursuing large load customers in both Montana and South Dakota, with ongoing discussions and agreements in place [26][27] Company Strategy and Development Direction - The company announced an all-stock merger agreement with Black Hills Corporation, expected to close in the second half of 2026, which aims to enhance scale and growth opportunities [4][20] - The updated five-year capital plan is set at $3.21 billion, a 17% increase over the prior plan, focusing on self-funded capital and maintaining high credit quality [8][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the legislative outcomes in Montana, which support transmission investments and wildfire risk management [5][6] - The company is optimistic about its ability to serve large load customers and the benefits of the merger, which is expected to create long-term value for both shareholders and customers [20][22] Other Important Information - The company has filed joint requests for merger approval in multiple states and is preparing for hearings in the second quarter of 2026 [23] - The company is addressing environmental concerns related to Colstrip and is prepared to invest in necessary upgrades if required [81][83] Q&A Session Summary Question: Update on large load tariff filing - The company plans to file a large load tariff once a signed ESA is in place, aiming for completion by the end of Q2 2026 [39][41] Question: Education plan for stakeholders regarding data centers - Management is focused on demonstrating the benefits of data centers and ensuring that they contribute fairly to system costs [42][45] Question: ESA strategy and financing implications - The company is working to ensure that ESAs protect customers while also addressing the unique needs of each data center [60][62] Question: Update on South Dakota plant and environmental upgrades - The South Dakota plant is expected to be completed by 2030, and the company is prepared to invest in environmental upgrades as necessary [78][81] Question: Concerns about merger regulatory delays - Management is confident in the timelines for both South Dakota and Montana, stating that the processes are progressing as expected [94][95]

Financial Data and Key Metrics Changes - The company reported GAAP diluted EPS of $2.94 and non-GAAP diluted EPS of $3.58 for the full year 2025, reflecting a 5.3% growth from 2024 on a non-GAAP basis [7][10][16] - The quarterly dividend was increased by 1.5% to $0.67 per share [7] - The company initiated 2026 earnings guidance in the range of $3.68-$3.83 per share, representing a 5% growth at the midpoint compared to 2025 results [17] Business Line Data and Key Metrics Changes - The improved margin for the fourth quarter was attributed to new rates and regulatory execution, although it was offset by mild weather and higher operating costs [11][12] - Adjusted earnings for the fourth quarter were $1.17, compared to $1.13 in Q4 2024, despite unfavorable weather impacting results [12][16] Market Data and Key Metrics Changes - The company is actively pursuing data center growth opportunities, having signed a third letter of intent for a 500+ MW data center and progressed with another from a letter of intent to a development agreement [4][7] - The company is focusing on large load customers in Montana and South Dakota, with significant interest from data centers in both states [27][28] Company Strategy and Development Direction - The company announced an all-stock merger agreement with Black Hills Corporation, expected to close in the second half of 2026, which aims to enhance scale, position, and growth opportunities [4][21] - The updated five-year capital plan is set at $3.21 billion, a 17% increase over the prior plan, reflecting the inclusion of new projects [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the legislative outcomes in Montana, which support transmission investment and mitigate wildfire-related risks [5][6] - The company is committed to maintaining high credit quality and is focused on self-funding its capital plan while managing equity issuance carefully [19][20] Other Important Information - The company has filed joint requests for merger approval in multiple states and is preparing for hearings expected in the second quarter of 2026 [24] - The company is also addressing environmental concerns related to its Colstrip operations and is prepared to invest in necessary upgrades if required [80][81] Q&A Session Summary Question: Update on large load tariff filing - The company plans to file a large load tariff in sync with a signed ESA, aiming for completion by the end of Q2 2026 [38][40] Question: Education plan for stakeholders regarding data centers - Management highlighted ongoing discussions to educate stakeholders on the benefits of data centers and the importance of a tariff that protects customers [41][44] Question: ESA strategy and financing implications - The company is focused on ensuring that ESAs are aligned with tariffs to protect customers, with plans to file by the first half of 2026 [58][60] Question: Update on South Dakota plant and turbine queue - The company is investing in turbines for the 131 MW plant, expected to be completed by 2030 [76][78] Question: Environmental upgrades at Colstrip - Management indicated readiness to invest in environmental controls if necessary, while maintaining a focus on keeping Colstrip operational [80][81] Question: Concerns about merger regulatory timelines - The company is working with regulators in South Dakota and Montana, expressing confidence in the timelines despite some delays [92][93]

Financial Data and Key Metrics Changes - The company reported GAAP diluted EPS of $2.94 and non-GAAP diluted EPS of $3.58 for the full year 2025, reflecting a 5.3% growth from 2024 on a non-GAAP basis [6][9][15] - The quarterly dividend was increased by 1.5% to $0.67 per share [6] - The company initiated 2026 earnings guidance in the range of $3.68-$3.83, representing a 5% growth at the midpoint compared to 2025 results [7][17] Business Line Data and Key Metrics Changes - The improved margin for the fourth quarter was attributed to new rates and regulatory execution, although it was offset by mild weather and higher operating costs [10][12] - Adjusted earnings for the fourth quarter were $1.17, compared to $1.13 in Q4 2024, despite unfavorable weather impacts [11][15] Market Data and Key Metrics Changes - The company is focusing on data center growth opportunities, having signed a third letter of intent for a 500+ MW data center and progressed with another from a letter of intent to a development agreement [6][24] - The company has seen a significant interest in large load customers in South Dakota, with established processes for accommodating them [27] Company Strategy and Development Direction - The company announced an all-stock merger agreement with Black Hills Corporation, which is expected to close in the second half of 2026, aiming to enhance scale and growth opportunities [4][21] - The company is committed to maintaining high credit quality while pursuing a self-funded capital plan, with an updated five-year capital plan of $3.21 billion, a 17% increase over the prior plan [7][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the legislative outcomes in Montana, which support transmission investments and clarify wildfire-related risks [5] - The company is optimistic about its ability to serve large load customers and enhance reliability and affordability for its customers [30][100] Other Important Information - The company has completed its acquisition of the Avista and Puget Colstrip interests, increasing its ownership in Colstrip from 30% to 55% [30] - The company is actively working on regulatory approvals for its merger and has filed necessary documents with multiple state commissions [24][92] Q&A Session Summary Question: Update on large load tariff filing - The company plans to file a large load tariff once a signed ESA is in place, aiming for completion by the end of Q2 2026 [38][40] Question: Education plan for stakeholders regarding data centers - Management noted ongoing discussions to educate stakeholders on the benefits of data centers and the importance of a tariff that protects customers [41][45] Question: Concerns about delays in merger approvals - Management indicated no concerns regarding the timelines in South Dakota and Montana, stating that the processes are progressing as expected [92][93] Question: Update on the South Dakota plant and turbine queue - The company is investing in turbines for the 131 MW plant, expected to be completed by 2030 [76][77] Question: Environmental upgrades at Colstrip - Management stated that they will invest in necessary upgrades to keep Colstrip operational, depending on regulatory requirements [78][81]

Financial Data and Key Metrics Changes - Pre-tax income for Q4 2025 was $113 million, down from $134 million in Q4 2024, with full-year pre-tax income at $561 million compared to $584 million in 2024, reflecting a decline of 4% [3] - Net income for Q4 2025 was $81 million, or $8.65 per share, compared to $111 million, or $11.56 per share in Q4 2024; full-year net income was $419 million, or $44.44 per share, down from $462 million, or $48.22 per share in 2024 [3][4] Business Line Data and Key Metrics Changes - Petroleum Additives sales for Q4 2025 were $585 million, down from $626 million in Q4 2024; operating profit for this segment was $107 million, compared to $136 million in the same period last year [4][5] - For the full year, Petroleum Additives sales were $2.5 billion, down from $2.6 billion in 2024, with operating profit at $520 million compared to $592 million in 2024 [6] - Specialty Materials sales for Q4 2025 were $49 million, up from $27 million in Q4 2024, with operating profit increasing to $7 million from about $2 million [7][8] - Full-year Specialty Materials sales were $182 million, compared to $141 million in 2024, with operating profit rising to $47 million from $17 million [9] Market Data and Key Metrics Changes - Shipments in the Petroleum Additives segment declined by 6% in Q4 2025 and 4.9% for the full year, attributed to market softness and strategic decisions to manage profitability [5][6] Company Strategy and Development Direction - The company is focused on investing in technology, optimizing inventory levels, and improving portfolio profitability, with a commitment of approximately $1 billion towards expanding capacity in the Specialty Materials segment [9][10] - The company aims to promote long-term value for shareholders and customers, emphasizing a safety-first culture, customer-focused solutions, and technology-driven products [11] Management's Comments on Operating Environment and Future Outlook - Management noted challenges from ongoing inflation, tariffs, and market softness impacting shipments, but expressed confidence in the strength of the petroleum additives and specialty materials segments [6][10] - The company generated solid cash flows in 2025, allowing for shareholder returns through share repurchases and dividends, while also reducing total debt by $88 million [10] Other Important Information - The effective tax rate increased in 2025 compared to 2024, significantly impacting net income and EPS [4] - The company reported a net debt to EBITDA ratio of 1.1 times as of December 31, 2025, slightly down from 1.2 at the end of 2024 [10] Q&A Session Summary - No specific questions or answers were provided in the content, indicating that the conference call concluded without a Q&A segment [12]

Financial Data and Key Metrics Changes - Pre-tax income for Q4 2025 was $113 million, down from $134 million in Q4 2024. For the full year, pre-tax income was $561 million in 2025, compared to $584 million in 2024, a decline of 4% [3] - Net income for Q4 2025 was $81 million, or $8.65 per share, compared to $111 million, or $11.56 per share for Q4 2024. Full year net income for 2025 was $419 million, or $44.44 per share, down from $462 million, or $48.22 per share in 2024 [3][4] Business Line Data and Key Metrics Changes - Petroleum Additives sales for Q4 2025 were $585 million, down from $626 million in Q4 2024. Operating profit for this segment was $107 million in Q4 2025, compared to $136 million in Q4 2024, driven by a 6% decline in shipments and lower selling prices [4][5] - For the full year, Petroleum Additives sales were $2.5 billion in 2025, down from $2.6 billion in 2024. Operating profit for 2025 was $520 million, compared to $592 million in 2024, with shipments down by 4.9% [5][6] - Specialty Materials sales for Q4 2025 were $49 million, up from $27 million in Q4 2024, with operating profit increasing to $7 million from about $2 million in the same period [7] - Full year sales for Specialty Materials were $182 million in 2025, compared to $141 million in 2024, with operating profit rising to $47 million from $17 million [9] Market Data and Key Metrics Changes - The company experienced market softness throughout 2025, impacting shipments and profitability in the Petroleum Additives segment [6] - The Specialty Materials segment showed growth due to higher volume demand at Ampac and the acquisition of Calca Solutions [9] Company Strategy and Development Direction - The company is focused on investing in technology, optimizing inventory levels, and improving portfolio profitability. It has committed approximately $1 billion to expand capacity in the Specialty Materials segment [9] - The company aims to promote long-term value for shareholders and customers, emphasizing a safety-first culture and technology-driven products [11] Management's Comments on Operating Environment and Future Outlook - Management noted challenges from ongoing inflation, tariffs, and market softness impacting shipments. However, they expressed confidence in the performance of the Petroleum Additives and Specialty Materials segments [6][10] - The company generated solid cash flows in 2025, allowing for shareholder returns through share repurchases and dividends, while also reducing total debt [10] Other Important Information - The effective tax rate increased in 2025 compared to 2024, contributing to the decline in net income [4] - The company reported a net debt to EBITDA ratio of 1.1 times as of December 31, 2025, slightly down from 1.2 at the end of 2024 [10] Q&A Session Summary - No specific questions or answers were provided in the content, indicating that the conference concluded without a Q&A segment [12]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported net income of approximately $32 million, or $0.23 per diluted share, on revenues of approximately $708 million, compared to net income of approximately $15.5 million, or $0.11 per diluted share, on revenues of approximately $608 million in Q4 2024 [18][19] - Adjusted EBITDA for Q4 2025 was approximately $126 million, up from approximately $108 million in Q4 2024 [20] - For the full year 2025, net income attributable to GEO operations was approximately $254 million, or $1.82 per diluted share, on revenues of approximately $2.63 billion, compared to $32 million, or $0.22 per diluted share, on revenues of $2.42 billion in 2024 [23][24] Business Line Data and Key Metrics Changes - Owned and leased secure service revenues increased by approximately $70 million, or 23%, in Q4 2025 compared to Q4 2024, primarily driven by new contracts with ICE [20] - Managed-only contracts revenues increased by approximately $26 million, or 17%, due to the joint venture for the North Florida Detention Facility and transportation revenue increases [21] - Revenues for electronic monitoring and supervision services increased by approximately 3%, reflecting a favorable technology and case management mix shift [22] Market Data and Key Metrics Changes - The census across active ICE facilities increased from approximately 22,000 in Q3 to approximately 24,000, the highest level recorded [6] - The current ICE detention census is approximately 70,000, distributed over 225 locations, primarily short-term jail facilities [11] - The company has approximately 6,000 idle beds at six company-owned facilities, which could generate over $300 million in annualized revenues at full capacity [12] Company Strategy and Development Direction - The company aims to capture new growth opportunities that could generate up to $520 million in annualized revenues, marking the most successful period for new business wins in its history [3][32] - The company is exploring participation in the federal government's initiative to purchase and retrofit commercial warehouses for detention capacity, while also focusing on utilizing its idle facilities [13][42] - The company is pursuing additional opportunities in mental health services at the state level, indicating a diversification strategy [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential of the ICE contract, particularly with the increase in monitoring services and case management [9][10] - The company expects 2026 to be as active as 2025, with potential upside across diversified business segments [32] - Management acknowledged the impact of government funding processes on operations but indicated strong liquidity and support from lenders [14][29] Other Important Information - The company completed the sale of the Lawton, Oklahoma facility for $312 million and the Hector Garza facility for $10 million, resulting in a significant pre-tax gain [24][30] - A share repurchase program was initiated in August 2025, with approximately 5 million shares repurchased for about $91 million by year-end 2025 [16][30] - The company closed 2025 with approximately $70 million in cash and approximately $1.65 billion in total debt [28] Q&A Session Summary Question: Regarding ICE's focus on warehouse initiatives and contract delays - Management indicated that ICE is pursuing both warehouse initiatives and utilizing existing private sector bed capacity, estimating a need for at least 20,000 new beds to reach a target of 100,000 [40][41] Question: On ISAP contract participant levels and capacity - Management confirmed readiness to scale monitoring devices and case management services to meet increased participant levels as outlined in the new ISAP contract [44] Question: Stock buyback strategy given current stock price - Management acknowledged the potential for more aggressive buybacks at current stock levels, emphasizing a diligent approach to capital allocation [46][47] Question: Monitoring service margins and mix shifts - Management explained that margin compression is primarily due to a shift in service mix, with increased demand for higher-cost ankle monitors impacting overall margins [51][52] Question: Guidance for 2026 and startup expenses - Management provided insights into conservative guidance for 2026, factoring in startup expenses related to activating idle facilities, with expectations for margin normalization in the latter half of the year [70][71]